MBMI Signs Definitive Agreements With New Partner in Philippines

Marketwired

RICHMOND HILL, ONTARIO--(Marketwire - Nov 2, 2012) - MBMI RESOURCES INC. ("MBMI")(TSX VENTURE:MBR) is pleased to announce that, further to its press release dated September 21, 2012 and in accordance with the Memorandum of Agreement that was signed at that time (the "MOA"), it has entered into definitive agreements relating to MBMI''s Alpha, Bethlehem, and Rio Tuba properties in the Palawan province of the Philippines (the "Palawan Properties"). As disclosed in MBMI''s press release of October 9, 2012, the transaction has received conditional approval from the TSX Venture Exchange.

The Palawan Properties are owned by three development companies (the "DevCos"). MBMI owns a 40% interest in the DevCos and the remaining 60% is owned by three holding companies (the "HoldingCos").

At the time of first announcing the transaction, MBMI owned approximately 33% of the shares of the HoldingCos ("HoldCo Shares"). MBMI continues to hold an option to purchase a 40% interest in the HoldingCos (the "Option Shares" and, together with the HoldCo Shares, the "Total Shares") from another HoldingCo shareholder pursuant to certain call option contracts (the "Call Option Contracts"). Pursuant to a definitive agreement (the "Omnibus Agreement") dated as of October 30, 2012 between that shareholder, MBMI, and DMCI Mining Corporation ("DMCI"), and as contemplated in the MOA, MBMI has agreed to assign to DMCI the Call Option Contracts once certain conditions are satisfied.

As disclosed in the press release dated September 21, 2012, the purchase price due to MBMI for the Total Shares is US$13,200,000 (the "Purchase Price"). Under an account agreement between MBMI and DMCI, DMCI will be depositing a portion of the Purchase Price (the "Available Funds") into an account jointly controlled by MBMI and DMCI. The Available Funds will be devoted primarily to paying certain agreed upon expenses, including those relating to the ongoing litigation of permitting issues faced by MBMI, the HoldingCos and the DevCos in the Philippines (the "Pending Cases").

There are several conditions that must be met prior to the payment of the remainder of the Purchase Price, the assignment of the Call Option Contracts, and certain other matters contemplated by the Omnibus Agreement. Most notably, the Pending Cases must be resolved by the courts in favour of MBMI, the HoldingCos and the DevCos (as the case may be) thereby allowing the HoldingCos and/or the DevCos to resume mining operations at the Palawan Properties, and such favourable decisions must be final.

Having executed deeds of assignment in favour of DMCI, MBMI has now transferred the HoldCo shares. While the MOA contemplated these shares being held by an escrow agent, the parties determined that a direct transfer was necessary. MBMI and DMCI have also agreed to arrangements that would allow the HoldCo Shares to be returned to MBMI if the Pending Cases are not resolved in MBMI''s favour. The Omnibus Agreement also sets a deadline beyond which, should the Pending Cases remain unresolved, MBMI could insist that the HoldCo Shares be returned to MBMI.

As disclosed in the press release of September 21, 2012, a primary aim of the transaction is to strengthen MBMI''s position in the Pending Cases, which to some extent turn on the degree of foreign ownership of the HoldingCos and DevCos. While the execution of the definitive agreements marks an important step forward in this regard, a number of challenges remain to be overcome before the Palawan Properties can enter production in earnest. In particular, MBMI expects that it will be required to secure additional financing for its other operations and prospects in the Philippines, for its Canadian oversight and management operations, and to fund the maintenance of MBMI''s operations on the Palawan Properties until the Pending Cases are resolved.

Cautionary Statement:

The foregoing information may contain forward-looking statements relating to the future performance of MBMI Resources Inc. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from MBMI''s plans and expectations. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by MBMI with the TSX Venture Exchange and securities regulators. MBMI Resources Inc. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
MBMI Resources Inc.
John Wong
President and CEO
905-886-3888
mbmi@mail.com
www.mbmiresources.com

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