Mr. Bruce McFadzean reports

MAWSON WEST CLOSES FINANCING AND DEBT RESTRUCTURING PACKAGE

Mawson West Ltd. has completed portions of its previously announced transaction with Galena Private Equity Resources Fund LP, whereby Galena has provided the company with an immediate $19.3-million (U.S.) in financing. Galena has also agreed, subject to certain conditions, to backstop future additional financing efforts by Mawson West by subscribing for additional shares of Mawson West for a minimum of $8.64-million and up to $21.6-million. The total gross proceeds raised following completion of the additional financing will be approximately $33.4-million (U.S.). In addition, Galena's affiliate entity Trafigura Pte. Ltd., the company's current offtaker and senior lender, has provided additional financial assistance to the company through amendments to its prepayment facility with Trafigura, and an extension to the term of its offtake agreement with Trafigura.

Highlights:

• $5-million private placement by Mawson West of 41.67 million shares at a price of 12 cents per share to Galena Private Equity Resources Fund LP;
• $10-million (U.S.) secured loan facility from Galena to Mawson West, repayable in September, 2017, with interest of 12 per cent per annum, with 75.76 million warrants exercisable at 15 cents issued to Galena;
• $5-million (U.S.) unsecured bridge loan from Galena to Mawson West, repayable on or before Feb. 28, 2015, with interest of 12 per cent per annum, with 7.58 million warrants exercisable at 15 cents issued to Galena;
• Galena to backstop Mawson West by agreeing to purchase additional shares for a minimum of $8.64-million and up to $21.6-million at a price of 12 cents per share under contemplated future financing efforts by Mawson West;
• Maturity date of the Trafigura prepayment facility extended by nine months to June, 2017, $19-million (U.S.) in repayments deferred, and flexibility of proceeds account structure increased to assist with cash flow.

The closing of these portions of the transaction follows the company's receipt of permission from the Toronto Stock Exchange to rely on a financial hardship exemption in order to complete the transaction, as described in the company's press release dated Dec. 11, 2014.

The transaction with Galena included, among other matters, a private placement of ordinary shares of Mawson West to Galena, a loan by Galena to Mawson West's subsidiary, Anvil Mining Congo SA (AMC), and a bridge loan by Galena to Mawson West. The proceeds from the private placement and the loans will be used to provide the company with sufficient working capital to manage the uninterrupted ramp-up of the Kapulo copper mine through to positive cash flows, and strengthen its balance sheet to manage its debt repayment requirements.

Private placement

Under the private placement, Mawson West issued 41,666,667 ordinary shares in the company to Galena on a private-placement basis at an issue price of 12 cents per share for gross proceeds of $5.0-million. In connection with the financing, Mawson West paid Galena a 3-per-cent brokerage fee satisfied through the issuance of a further 1,164,094 shares at the same price, with the balance paid in cash. The shares issued to Galena under the private placement are subject to resale restrictions under Canadian securities laws and the rules of the TSX expiring on April 19, 2015.

Loan facilities

Under the loan to AMC, Galena has provided a $10-million (U.S.) loan facility to AMC, which has been fully drawn by AMC. The loan facility has a maturity date of Sept. 30, 2017, and bears interest at a rate of 12 per cent per annum. The facility is secured against the shares the company indirectly holds in AMC, but is subordinate to the existing $50-million (U.S.) copper concentrate prepayment facility between AMC and Trafigura announced by the company on April 16, 2014, and is guaranteed by the company. AMC has the right to prepay the facility in partial repayments of $2-million (U.S.) at its sole discretion.

Under the bridge loan to Mawson West, Galena has provided a $5-million (U.S.) bridge loan facility to the company, which has been fully drawn on by Mawson West. The bridge loan has a maturity date of Feb. 28, 2015, and bears interest at a rate of 12.0 per cent per annum. The bridge loan is unsecured, and is subordinate to the prepayment facility between AMC and Trafigura.

As partial consideration for providing the loan and bridge loan facilities, the company has issued a total of 83,333,334 ordinary share purchase warrants to Galena having an exercise price of 15 cents per share, expiring on Sept. 30, 2017, and being subject to standard anti-dilution adjustments. The issuance of Mawson West shares upon exercise of the warrants is subject to the receipt of shareholder approval.

Mawson West will call a general meeting of its shareholders to be held in February, 2015, to seek approval for the issuance of the Mawson West shares upon exercise of the warrants, among other matters, as described in the company's press release dated Dec. 11, 2014. Should shareholder approval not be obtained at the shareholders meeting, the warrants will be satisfied by a cash settlement mechanism that will require Mawson West to, on demand by Galena on any single occasion prior to Sept. 30, 2017, pay the difference between the exercise price for the warrants and the most recent closing price of the company's ordinary shares on the TSX on the date Galena demands payment. There is no maximum to the potential payment under the cash settlement mechanism. The interest rate of the loan and bridge facilities will also increase to 15 per cent per annum in the event that shareholder approval is not received for the issuance of Mawson West shares upon exercise of the warrants.

Galena early warning reporting

As a result of the private placement and the loan facilities, Galena (of Maples Corporate Services Ltd., PO Box 309, Ugland House, South Church St., George Town, Grand Cayman, KY1-1104, Cayman Islands) owns and controls 42,830,761 ordinary shares of the company, representing 19.99 per cent of the issued and outstanding ordinary shares following completion of the placement, as well as 83,333,334 warrants of the company. Assuming exercise of all of the warrants held by Galena, Galena would have ownership and control over 126,164,095 ordinary shares of the company, representing approximately 42.4 per cent of the issued and outstanding shares of the company postwarrant exercise. The company is advised that Galena acquired these securities for investment purposes, and has no present intention to acquire further securities of the company other than under the backstop agreement with the company in respect of the additional financing (as defined below), although it may, in the future, acquire or dispose of securities of the company, through the market, privately or otherwise, as circumstances or market conditions warrant. A copy of the early warning report required to be filed by Galena with applicable securities commissions in connection with this acquisition is available for viewing under the company's profile on SEDAR, and a copy of the early warning report may be obtained by contacting media relations for Galena at 41-0-22-592-4528 or by e-mail.

Additional transaction terms:

• Galena has agreed, subject to certain conditions, to backstop Mawson West in additional financing efforts it intends to undertake by purchasing additional shares in any such financing for a minimum of $8.64-million and up to $21.6-million at a price of 12 cents per share. Any exercise of the backstop agreement is subject to approval by Mawson West's shareholders. Mawson West will be obliged to repay the Galena bridge loan facility from the proceeds of any additional financing undertaken. Mawson West has engaged Paradigm Capital Inc. as agent in connection with the additional financing.
• The prepayment facility with Trafigura has been amended to extend its maturity date and defer a number of principal repayments. The maturity date of the prepayment facility has been extended from Sept. 30, 2016, to June 30, 2017. The principal repayment schedule has also been amended so that the $50-million (U.S.) of principal repayments that were due between March, 2015, and Sept. 30, 2016, under the original repayment schedule have been reduced by $19-million (U.S.), with this amount deferred and now repayable during the period Dec. 31, 2016, to June 30, 2017. In addition, Trafigura has agreed to allow additional withdrawals from an offshore proceeds account AMC is required to operate under the prepayment facility, which will assist AMC with managing available cash to meet its costs and other obligations during 2015. No other changes have been made to the prepayment facility, and the principal amount owing under the facility of $50-million (U.S.) remains fully repayable by the revised maturity date of June 30, 2017.
• AMC's existing offtake agreement with Trafigura, which has a current term of four years and entitles Trafigura to 100 per cent of the copper concentrate produced from the Dikulushi and Kapulo projects, has been extended for up to a further five years. Trafigura has been given a right to match any third party offtake arrangements for an additional five years thereafter.
• Mawson West has entered into ancillary rights agreements with Galena and Trafigura, under which a number of rights have been provided to Galena and Trafigura in consideration of the financing provided under the transaction and the amendments to the prepayment facility agreements, including for Galena, the right to nominate up to two representatives to the Mawson West board of directors, pre-emptive rights, and certain prospectus filing and piggyback registration rights, as disclosed in the company's press release dated Dec. 11, 2014.

Filing of documents

Copies of the material documents relating to this transaction will be filed under Mawson West's profile on SEDAR.

About Galena Asset Management

Galena Asset Management SA is a Switzerland-based fund manager operated by independent specialist management as part of the Trafigura Group. Galena seeks to draw on the commodity, metals and mining, and technical expertise of the Trafigura Group in managing a number of fund products. The Galena Private Equity Resources Fund LP, closed in September, 2014, is a $400-million (U.S.) closed-end Cayman Islands limited partnership designed to invest in the natural resources sector. Galena invests in late-stage and producing assets in a variety of jurisdictions and commodities around the globe.

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