The Board of Directors of Endomines proposes incentive programme including issue of subscription options

The press release can be downloaded from the following link:
Press Release PDF

Endomines is facing challenges in the near future, where a great
commitment and a significant amount of work will be required from the
company's management and certain key employees in order to achieve
the established goals. The board has concluded that it is an
important competitive advantage in future recruitments to be able to
offer participation in an incentive programme. An incentive
programme, which was conditional upon that a decision was made before
30 September 2009 to execute the Pampalo project, was adopted by the
annual general meeting 2009. Since the financing of the Pampalo
project was not in place at such time, it was not possible to make an
investment decision. As a result, the earlier incentive programme has
now lapsed. The reasons for an incentive programme remain, however,
and the board of Endomines therefore makes a new proposal for an
incentive programme to the extraordinary general meeting on 12
November 2009.[1] The terms and conditions of the new programme is in
all material respects identical with the earlier incentive programme,
except that the number of options that can be issued has been
increased in order to be adapted to the new issue of shares that the
board resolved upon on 9 October 2009 and that was announced today.

Main terms and conditions for the incentive programme


  * A maximum of 1,807,991 options can be issued, which are secured
    with a corresponding number of subscription options and, in
    addition thereto, a maximum of 71,009 subscription options in
    order to cover costs for the programme (social security
    payments).
  * Persons eligible to be awarded options are members of the group
    management and certain key employees in the group, however no
    more than a total of eight persons. The intention is to
    distribute the options evenly between the eligible persons,
    although it is intended that the CEO, the CFO and the CTO shall
    be awarded a larger share of the options than others (CEO no more
    than 500,000 options and CFO and CTO no more than 350,000
    options).
  * The award of options shall be made during January and/or February
    of 2010. Options are awarded free of charge.
  * Each option entitles the holder to purchase one (1) share in the
    company. The options are divided into three different tranches,
    with a different earning period. The options shall be evenly
    divided between the tranches, based on when the options can be
    exercised in accordance with the following.
    (i) Tranche 1: The options can be exercised between 1 March 2011
    - 1 September 2014;
    (ii) Tranche 2: The options can be exercised between 1 March 2012
    - 1 September 2014;
    (iii)  Tranche 3: The options can be exercised between 1 March
    2013 - 1 September 2014.
  * The exercise price shall correspond to 130 percent of the
    Endomines share's average volume weighted share price on the
    NASDAQ OMX First North during a measuring period of ten days from
    the date of the Board's allocation resolution.

Other
In order to be able to execute the proposed incentive programme in
the desired manner, the Board has proposed that the general meeting
resolves to issue subscription options to a wholly owned Swedish
subsidiary. Such subscription options shall entitle to subscription
of a total of no more than 1,879,000 shares. If the subscription
options are fully exercised and full subscription is made, the
company's share capital will increase with SEK 5,637,000. Based on
the total number of outstanding shares after full subscription of the
shares that may be issued through the resolution by the Board on 9
October 2009, the incentive programme will involve a dilution of 2,5
percent of the share capital in the company, in case of full exercise
of all subscription options. The company's earnings per share will
not be affected at the time of implementation of the incentive
programme, since the exercise price of the options exceed the share
price at the time of implementation.

Shareholders representing a total of approximately 46.3 percent of
the shares and votes in Endomines have expressed their support for
the proposed incentive program. They have furthermore expressed their
intention to vote for the Board's proposal on the extraordinary
general meeting.

Costs
According to  the  accounting standard  IFRS  2, the  costs  for  the
incentive programme shall  be accounted for  in the income  statement
and apportioned  over  the  earning  period. The  board  has  made  a
preliminary calculation of the theoretical value of an option in  the
company. Assuming a share  price of SEK 4.14  and an average term  of
three years and five  months, the value of  an option amounts to  SEK
1.06, that  involves  a  maximum  cost  for  the  proposed  incentive
programme of approximately SEK 1.9 million. The expected cost in  the
income statement, based on historical employee turnover in the group,
for  the  incentive  programme  has  been  calculated  to  amount  to
approximately SEK 1.71 million.  The incentive programme is  expected
to involve costs for the company in form of social security  payments
for employees  in Sweden,  which employees  are expected  to be  12.5
percent of the total number of participants in the programme. For the
remaining participants,  who  are  employed  in  Finland,  no  social
security payments are expected  to encumber the  company. Based on  a
theoretical assumption that the share price of SEK 4,14 will increase
with 10  per cent  annually during  four years,  the social  security
payments are calculated to amount  to a maximum of approximately  SEK
43,000. The social security payments will increase with approximately
SEK 64,000 for  every Swedish  crown that the  share price  increases
with above SEK 4,14.


For further information, please contact
Markus Ekberg, CEO, +358-40-706 48 50
Karl-Axel   Waplan,   Chairman   of    the   Board   of    Directors,
+46-70-510 42 39


Endomines  AB  (publ)  explores  and  develops  mineral  deposits  in
Finland. The Company owns mining concessions and claims over all  the
known gold  deposits  along the  Karelian  Gold Line,  including  the
Pampalo mine  where the  Company aims  to start  mining in  2010.  In
addition, Endomines has claims for gold deposits in Finnish  Lapland.
Besides gold, and  through its  subsidiary Kalvinit  Oy, the  Company
plans to develop its deposits  of the industrial mineral ilmenite  in
Central Ostrobothnia.

Endomines applies  SveMin's and  FAERI's common  reporting rules  for
public mining and exploration companies. Endomines report its mineral
resources according to the internationally accepted JORC or NI-43-101
code. Endomines applies  International Financial Reporting  Standards
(IFRS) for  its accounting  principles. The  use of  IFRS allows  for
comparison  of  the  Company  with  foreign  exploration  and  mining
companies.

The shares of Endomines AB are quoted on First North Premier  segment
in Stockholm under  ticker ENDO. Erik  Penser Bankaktiebolag acts  as
Certified Adviser and Liquidity Guarantor.

Read more about Endomines's on www.endomines.com
[1] For further information on the board's proposal, please refer to
the notice to the extraordinary general meeting, which is published
today and will be entered in Svenska Dagbladet and Post- och Inrikes
Tidningar on 15 October 2009.