Marengo Mining and its PNG subsidiaries have signed a debenture purchase agreement setting out the terms for a financing with its major shareholder, Sentient Executive GP IV Ltd for the General Partner of Sentient Global Resources Fund IV LP. Proceeds will primarily be for a new drilling program at the Yandera project.

The funds will enable Marengo to increase exploration activity at the copper-gold project and support the company's operations, working capital and general corporate purposes.

The company has previously described efforts to increase geological knowledge of the site and is pleased to report that this work has resulted in the identification of drilling targets which the company will now pursue. As contractors are immediately available, and a rig remains mobilized on the site, the company intends to begin drilling these targets immediately.

Pursuant to the terms of the agreement, Marengo, the PNG Subsidiaries and Sentient have agreed to a transaction which will see Marengo and the subsidiaries issue and sell to Sentient 9.0% senior unsecured convertible debentures up to a principal amount of US$7.5 million. The debentures will mature on June 30, 2017.

Sentient and its related entities currently hold approximately 22% of the issued and outstanding common shares of Marengo and would hold approximately 88% 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 under the prior financings.

Assuming they fulfill certain conditions precedent, including receipt of shareholder and TSX and ASX approvals, Sentient and Marengo plan to complete the issuance of the Debentures in December.

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