Besra Signs Replacement Investment Deal; First funds flow

Toronto, Canada: 9 October 2014 –Besra (TSX: BEZ) (ASX: BEZ) (Frankfurt: OP6) is pleased to announce the signing of an investment deal with George Molyviatis that will see between CAD$10 and $15 million injected into the company by 17 December 2014. Mr Molyviatis has already disbursed CAD$140,000 as a first instalment.

The deal provides for a first committed tranche of $10 million by 17 October 2014, including the CAD$140,000 already advanced, in exchange for a secured Convertible Note converting upon maturity at CAD$0.05 per share (if not converted earlier at Mr Molyviatis’ option at any time prior to maturity) into a maximum of 200,000,000 common shares (including conversion of the first instalment of CAD$140,000). Mr Molyviatis also will receive 66,666,667 common share purchase warrants each to acquire one common at an exercise price of $0.10 (each a “Warrant”).  The Convertible Note is secured by a first lien on Besra’s interest in the Bau gold project in Malaysia.

The second uncommitted tranche, which is at Mr Molyviatis’ option, is for CAD$5 million for a Convertible Note on the same terms as the previously described Convertible Note. Mr Molyviatis will also receive one Warrant for each three shares issuable under the Convertible Note and thus if Mr Molyviatis exercises his investment in respect of the full CAD$5 million on the second tranche, he will receive 33,333,333 Warrants.

Mr Molyviatis currently owns beneficially 3,016,000 common shares of Besra. Assuming Mr Molyviatis invests and exercises the full CAD$15 million of Convertible Note and exercises all Warrants, he will beneficially hold 397,016,000 common shares or 50.9% of Besra’s issued and outstanding shares.

Besra CEO John Seton said, “This initial transfer of funds is a good faith first investment instalment while documentation is being completed and the necessary approvals are being sought. My continued discussions with Mr Molyviatis give me a high degree of confidence that this agreement will be executed in full and on time. Mr Molyviatis has extensive experience in investment banking and the mining industry, and I look forward to his involvement in Besra as a significant investor.”

The maturity date for the Convertible Notes is 2 years from the date of drawing, with interest payable at 6% pa on closing.

Subject to corporate law requirements and regulatory approval of any nominees, the Noteholder is to be provided with the right to have one representative nominated to the board of directors provided it holds issued Convertible Notes representing at least 125,000,000 Common Shares, and two representatives provided it holds issued Convertible Notes representing at least 250,000,000 Common Shares, such representatives to be acceptable to the Chairman of Besra, acting reasonably.

After giving effect to the prepayment of interest, the net proceeds to the Company will be CAD$13.2 million. The net proceeds of the financing will be used to rectify the Company’s continuous disclosure default, to pay interest owing under the Company’s existing convertible notes, to make payments as part of the Company’s on-going acquisition of its interest in the Bau Gold Project, to support pre-developments and costs associated with the Bau gold project and for general working capital purposes.

No commission is payable on the financing. Closing of the financing is subject to receipt of all necessary regulatory approvals, including the Toronto Stock Exchange. To that end, the Company will be making application to the TSX to reinstate its listing. As previously announced by the Company and the TSX, the Company is subject to delisting from the TSX on 17 October 2014.

In relation to the previously announced subscription agreement with Tradora Limited, Besra has today provided notice to Tradora of the termination of the subscription due to the failure by Tradora to satisfy the conditions to the subscription agreement.

There can be no assurance that the financing will close on the terms described herein or at all.

Exchanges

OTC: BSRAF
See our media release of 17 October 2014. Previously listed on:
TSX: BEZ
ASX: BEZ
FRANKFURT: OP6

Important note

Besra is currently subject to Cease Trade Orders (CTOs) by Canadian regulators and is working towards curing its filing defaults, having the CTOs lifted and returning to growing shareholder value.