Mr. Garth Braun reports

HULDRA SILVER LAUNCHES SECURED CONVERTIBLE DEBENTURE PRIVATE PLACEMENT

Huldra Silver Inc. is now launching its previously announced secured convertible debenture financing to raise gross proceeds of up to $8-million. The financing is expected to be completed in multiple tranches. The company seeks to raise at least $5-million pursuant to the first tranche of the financing.

The company seeks to issue secured convertible debentures in the first tranche which will include the following key terms:

• The minimum aggregate principal amount of the debentures issued pursuant to the first tranche will be $5-million;
• The debentures will bear interest at a rate of 10 per cent per annum, which interest shall be payable annually as to 50 per cent in cash and as to 50 per cent by the issuance of common shares in the capital of the company at a price per share equal to the market price at the time of issuance;
• The debentures will mature three years after the date of issuance, and the principal amount of the debentures, together with any accrued and unpaid interest, shall be payable on the maturity date;
• The principal amount of the debentures shall be convertible into shares prior to the maturity date, at the option of the holder, at a deemed price of 5.5 cents per share;
• For each $1,000 in principal amount of debentures, the company will issue 1,000 common share purchase warrants, with each warrant exercisable into one additional share for four years from the date of issuance of the warrant at an exercise price of 7.5 cents per warrant share in the first year after issuance and 10 cents per warrant share thereafter;
• The repayment of the outstanding principal and interest of the debentures will be secured against the assets of Huldra, but will rank subordinate to the debt owed to Waterton Global Value LP until such time as the debt owing to Waterton is repaid in full;
• Upon repayment by the company of all amounts owed to Waterton, the holders of the debentures issued pursuant to the first tranche will be granted an aggregate 2-per-cent net smelter returns royalty with respect to the company's Treasure Mountain mine, provided that each holder of debentures issued pursuant to the first tranche shall only be entitled to their pro rata share of such royalty based on their individual investment pursuant to the first tranche.

The terms of the debentures offered pursuant to subsequent tranches of the financing, other than the first tranche, including the interest rate, maturity date, conversion price and exercise price of the underlying warrants, have not been determined at this time. Such terms, when determined, will be subject to approval of the TSX Venture Exchange.

The proceeds of the first tranche are intended to be used to settle amounts owed to certain creditors of the company in accordance with the plan of compromise and arrangement which was approved by creditors on Sept. 23, 2014, to further the company's postrestructuring business plan, and for general working capital purposes. The plan remains subject to final approval of the Supreme Court of British Columbia.

The closing of the financing, including the first tranche, remains subject to approval of the exchange. The company may pay finders' fees in connection with the financing. All securities issued pursuant to the financing are expected to be subject to a hold period of four months and one day. In addition, the exchange may impose additional escrow requirements with respect to certain securities issued to insiders pursuant to the financing.

For additional details regarding the financing, please see the company's news releases dated June 10, 2014, Aug. 8, 2014, and Aug. 25, 2014.

Huldra's postrestructuring business plan

Following completion of its restructuring under the Companies' Creditors Arrangement Act (Canada), the company intends to focus on transforming its Merritt Mill property into a processing facility for mill feed for other gold and silver mining companies, as there are significant costs associated with securing land, and purchasing and building a processing mill and a lined tailings facility. Such a facility would provide the opportunity for other companies to avoid the significant capital expenditure requirements necessary to build such a processing facility. In addition, the company intends to resume exploration activities at its Treasure Mountain project.

We seek Safe Harbor.