Marengo Mining has entered into an agreement with its major shareholder Sentient Executive GP IV, Limited, in connection with the proposed issuance of US$14 million of convertible unsecured debentures.

Marengo’s wholly-owned PNG subsidiaries, Yandera Mining Company Ltd and Marengo Mining (PNG) Ltd, have executed the letter agreement as guarantors of the company’s obligations under the debentures.

Funds will primarily be for drilling and exploration work at the Yandera project in Papua New Guinea, exploration work at the La Cobota project in Mexico, working capital and general corporate purposes.

Sentient intends to subscribe for up to US$14 million in debentures to be issued in two tranches, with the first tranche of US$7 million to be completed following the approval of Marengo's shareholders at the annual general and special meeting to be held on November 13, 2015, and the second tranche of US$7 million to be completed five months after shareholder approval is obtained.

Subject to obtaining the necessary shareholder approval, Marengo will complete a share consolidation whereby for every 100 Marengo common shares, one post-consolidation Marengo common share will exist.

Sentient and its related entities hold approximately 22% of the issued and outstanding common shares of the company and would hold approximately 95% of the common shares of the company, assuming the conversion of all the debentures issued in connection with the transaction and the conversion by Sentient of all debentures issued and issuable pursuant to the prior financings.

“This financing allows Marengo to continue the budgeted work programs for the company’s Yandera and La Cobota projects, and potentially pursue other base metal opportunities globally,” said Marengo’s president and CEO Pieter Britz.

Marengo recently appointed Andre Wessels as vice-president projects, responsible for commencing the work necessary to initiate the feasibility study for the Yandera project. He has more than 23 years’ experience in mining and related fields, steel, financial services and technology industries.

The company has also appointed Jon Powell as vice-president PNG operations to oversee all project related activities in PNG. He is an accomplished manager with more than 25 years of international experience in the geophysical/mining exploration sector and has extensive background in global personnel management, logistics and operations.

Marengo has also appointed Dr Nathan Chutas as its exploration manager for the Yandera project. He has more than 15 years of experience in mining and exploration, having worked on a variety of metallic resource projects in the US, Alaska, Mexico, South Africa and PNG.

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