conversion of debt into equity

SMC Gold Limited – Debt Conversion Page 1 of 2
9 August 2006 SMC Gold Limited
ACN 071 349 249
Level 3
457 Upper Edward Street
Brisbane
Queensland, Australia
PO Box 313
Spring Hill Qld 4004
Telephone +61 7 3839 4166
Facsimile +61 7 3839 7644
ASX ANNOUNCEMENT
Conversion of Debt into Equity
o Debt for Equity swap frees up cash for expansion & exploration
o Debt to be converted into equity at 10c/share
SMC Gold announces that it has reached agreement with its two primary lenders to convert all
debt and accrued interest, totalling some $7.0 million, into SMC Gold shares.
Under the proposal, debt will be converted at 10 cents per share issued, unless the Company
commits to a capital raising at a price lower than this prior to the shares being issued. The share
issue is subject to shareholder approval at a General Meeting. The Board of SMC Gold expects
to set a date for a General Meeting shortly.
The conversion of this debt is expected to add approximately 70 million shares to the register,
taking total issued capital to some 511 million shares. SMC Gold’s Chairman, Hugh Callaghan
said, “The Company is now in a strong position to capitalize on its ungeared balance sheet and
strengthening cash flows to fund on-going expansion at Punitaqui and expand its regional
exploration effort.”
SMC Gold Limited – Debt Conversion Page 2 of 2
SMC Gold recently announced an (unaudited) net profit for the June quarter of A$3.723m, and
has commenced a US$3.5m expansion of its Punitaqui mill and concentrator in Chile, which will
increase production by 50% by January 2007.
Hugh Callaghan
Non Executive Chairman
For more information visit our website at www.smcgold.com.au
For further information contact:
Simon Brodie
Chief Financial Officer
Tel: (+ 61 7) 3839 4166, Mob 0411 558 544
Email: [email protected]