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Search Minerals announces closing of non-brokered financing, issuance of shares-for-debt and warrant extension application

February 10, 2014

TORONTO, Feb. 10, 2014 /PRNewswire/ – Search Minerals Inc. (“Search” or the “Company”) (TSXV: SMY) is pleased to announce that it has closed the second and
final tranche of a non-brokered private placement (the “Private Placement“). Pursuant to the second tranche, the Company issued an aggregate of
3,695,382 units (the “Units“) at a price of C$0.07 per Unit for gross proceeds of C$258,767.70.
Including Units sold pursuant to the first tranche of the Private
Placement, the Company issued a total of 8,906,464 Units for aggregate
gross proceeds of approximately C$623,450.

Each Unit is comprised of one common share of the Company and one-half
of one common share purchase warrant, with each whole common share
purchase warrant (a “Warrant“) entitling the holder to purchase an additional common share (a “Warrant Share“) at a price of $0.10 for a period of 24 months from the closing of the
Offering.

A Control Person (as that term is defined under the policies of the TSX
Venture Exchange) of the Company has acquired Units pursuant to the
financing. All securities issued pursuant to the financing are subject
to a four-month re-sale restriction.

ISSUANCE OF SHARES FOR DEBT

In addition to the cash proceeds from the offering, Search has agreed to
settle an aggregate of $121,250 of indebtedness owed to certain
directors and officers of the Company through the issuance of an
aggregate of 1,732,412 common shares at a deemed issuance price of $0.07 per common share. All
common shares issued in connection with the shares for debt transaction
are subject to a four-month statutory hold period. The transaction
remains subject to final TSX Venture Exchange (“TSXV“) approval.

Pursuant to Multilateral Instrument 61-101 – Protection of Minority
Security Holders in Special Transactions (“MI 61-101“), the shares for debt transaction and the purchase of Units by an
insider pursuant to the Private Placement constitute “related party
transactions” as related parties will receive 1,732,412 common shares of the Company in connection with the debt settlement and
have purchased an aggregate of 2,200,000 Units pursuant to the second
tranche of the Private Placement. The Company is relying on exemptions
from the formal valuation and minority approval requirements of MI
61-101, based on the fact that the securities of the Company are not
listed on any of the markets specified in section 5.5(b) of MI 61-101
and a determination that the fair market value of the transactions,
insofar as they involve related parties, does not exceed $2,500,000
and/or 25% of the market capitalization of the Company, the Company
has one or more independent directors in respect of the transactions,
and all of the independent directors have approved both the Private
Placement and the shares for debt settlement. A material change report
will be filed less than 21 days before the closing date of the
transactions. This shorter period is considered reasonable and
necessary in the circumstances as the Company wishes to address its
short term funding requirements and improve its financial position by
reducing its accrued liabilities.

USE OF PROCEEDS

The Company will use the proceeds from the Private Placement for due
diligence and expenses related to the Transaction between MSFA and the
Company (see “Search Minerals Announces Reverse Takeover Acquisition of Mineração São
Francisco de Assis Ltda
.”, January 27, 2014), for maintaining and evaluating its rare earth
element (“REE“) properties in the Port Hope Simpson REE District, and for general
working capital.

The Company is focused on critical metals and minerals with strong
market fundamentals and increasing use in innovative technologies.
These critical metals and minerals include tin, neodymium, dysprosium
and other elements that the Board and Management agree are strategic in
nature.

APPLICATION FOR WARRANT EXTENSION

The Company has also applied to the TSXV to extend the expiry date of an
aggregate of 25,400,000 issued and outstanding common share purchase
warrants (the “Warrants“) in accordance with TSXV Policy 4.1.

The warrants were initially issued by the Company on March 21, 2013 and
October 16, 2012. The Warrants are exercisable at prices of $0.10 and
$0.20 per common share, respectively, and were set to expire on March
21, 2014 and April 16, 2014, respectively. Subject to TSXV approval,
the Company proposes to extend the terms of the Warrants as follows:

     _____________________________________________________________________
    |  Number of | Exercise|   Original   |    Original  |     Amended    |
    |   Warrants | Price   |Issuance Date |  Expiry Date |   Expiry Date  |
    |____________|_________|______________|______________|________________|
    | 24,000,000 |   $0.10 |March 21, 2013|    March 21, | March 21, 2015 |
    |            |         |              |     2014     |                |
    |____________|_________|______________|______________|________________|
    |  1,400,000 |   $0.20 |  October 16, |April 16, 2014| April 16, 2015 |
    |            |         |    201 2     |              |                |
    |____________|_________|______________|______________|________________|

The exercise price of the warrants will remain unchanged.

2013 ANNUAL FINANCIALS

The Company has filed on SEDAR its consolidated financial statements for
the three- and twelve-month period ended November 30, 2013 and the
related management’s discussion and analysis.

About Search Minerals:

Search Minerals Inc. (TSXV: SMY) is a TSX Venture Exchange listed
company focused on creating value through finding and developing
mineral assets with growing demand and constrained or restricted
supply, and with increasing use in innovative technologies. The Company
is actively pursuing opportunities and partnerships in critical metals,
including, but not limited to, tin, tungsten, dysprosium and neodymium,
prioritizing projects that can be partnered, funded and developed in a
relatively short period of time, in strategic, friendly jurisdictions.

Search is the discoverer of the Port Hope Simpson REE District, a highly
prospective light and heavy REE belt located in southeast Labrador,
where the Company controls a dominant land position in a belt 135 km
long and up to 12 km wide. In addition, Search holds a number of
additional mineral prospects in Newfoundland and Labrador in its
portfolio, including claims in the Strange Lake Complex (where Quest
Rare Minerals has a Joint Venture with Search); and at the Red Wine
Complex (where Great Western Minerals Group has a Joint Venture with
Search).

All material information on the Company may be found on its website at www.searchminerals.ca and on SEDAR at sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility of the adequacy or accuracy of this release.

Cautionary Statement:

This news release contains forward-looking statements that are not
historical facts. Forward-looking statements involve risks,
uncertainties, and other factors that could cause actual results,
performance, prospects, and opportunities to differ materially from
those expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially from these
forward-looking statements include those risks set out in Search’s
public documents filed on SEDAR at www.sedar.com. Although Search believes that the assumptions and factors used in
preparing the forward-looking statements are reasonable, undue reliance
should not be placed on these statements, which only apply as of the
date this news release, and no assurance can be given that such events
will occur in the disclosed time frames or at all. Except where
required by law, Search disclaims any intention or obligation to update
or revise any forward-looking statement, whether as a result of new
information, future events, or otherwise.

SOURCE Search Minerals Inc.


Source: PR Newswire



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