Crowflight Clarifies 2010 Convertible Note Issuances

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 31, 2011) - CROWFLIGHT MINERALS INC. ("Crowflight" or the "Company") (TSX:CML) wishes to augment is 2010 disclosure record to provide additional information in respect of $23.05 million of unsecured convertible debenture notes ("Notes") issued in three tranches in the latter half of 2010 to King Place Enterprises Ltd., a company that was at the time a related party of Crowflight.

The first Note was issued on August 27 (for $10.05 million), the second on September 23 (for $3 million), and the third on November 29 (for $10 million). As already disclosed in the Company's news releases following each of these issuances, the Notes each had a six month term and were convertible at a five day volume weighted average price less the maximum allowable discount permitted by TSX. A maximum of 58,356,471 common shares could be converted prior to disinterested shareholders approval of the Notes. At the time of the initial Note purchase, King Place owned 42.5% of Crowflight shares. The Notes were not issued in pre-arranged tranches but rather were the result of individual negotiations and related to specific business purposes. The Note proceeds were urgently required due to working capital deficiencies being experienced by Crowflight in order to pay essential creditors to keep Bucko nickel mine open. In particular, the first and second Note issuances were made to address short term cash flows and operational issues at the Bucko Lake mine and the third Note issuance was made to address certain outstanding accounts payable. 

A material change report dated September 3, 2010 was filed for the August Note, although no material change reports were filed following the September and November Note issuances. News releases disclosing the material terms of the Notes were promptly issued following each Note issuance. King Place did not have representation on the Crowflight board at the time of the August Note issuance and had only one director nominee at the time of the September and November Note issuances. All of the Notes were unanimously approved by the Crowflight board, with the King Place nominee abstaining from the deliberations and voting with respect to the September and November Note issuances.

On August 6, 2010 King Place was acquired by Hebei Wenfeng Iron and Steel Co. Ltd. ("Hebei"), a private Chinese steel producer, which thereby became the ultimate control person of Crowflight. Mr. Wenfeng Liu, a former senior executive of Hebei, was appointed Crowflight's Chairman in conjunction with the November Note issuance. Furthermore, one of the conditions of the final Note was that there be a change of at least a majority of the Crowflight board in favour of King Place nominees.

In connection with the Notes, Crowflight did not require any formal valuation or minority shareholder approval because the fair market value of each of the Notes constituted less than 25% of Crowflight's market capitalization at the time it was agreed upon and, in addition, the Crowflight board also determined the company to be in serious financial difficulty at the time. It was not possible at the time the Note issuances were effected to determine the number of Crowflight shares into which the Notes could have been converted beyond the 58,356,471 shares allowed before shareholders approval. There were no agreements involving third parties in connection with any of the Note issuances. 

On December 29, 2010, $2,617,288 of the Notes including interest were converted into 58,356,471 Crowflight shares which raised King Place's shareholdings to 305,386,442 shares or 47.6% of outstanding shares at that time. On March 9, 2011, the Company repaid $10 million of the Notes from the proceeds of a private placement and on March 28, 2011 the Company announced that it had received a notice of conversion of the final $10 million principal amount Notes and will issue approximately 258.8 million shares to settle the remaining balance of the Notes ($11.3 million inclusive of $0.9 million of interest). The TSX has conditionally accepted notice of the conversion subject to Crowflight obtaining disinterested shareholder approval by way of a shareholders meeting or by written consent resolution. The Company is currently making a further submission to TSX demonstrating that it has in-hand the required minimum number of executed consent resolutions so that completion of the final Note conversion is expected to occur in the immediate future. Upon completion of the conversion, King Place will own or control 564,316,145 shares, or 37.6% of the 1.5 billion shares then issued and outstanding of the Company.

About Crowflight Minerals Inc.

Crowflight Minerals Inc. (TSX:CML) is a Canadian junior mining company that owns and operates the Bucko Lake Nickel Mine near Wabowden, Manitoba. The Company also holds nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.

Cautionary Note on Forward-Looking Information
This press release contains forward-looking statements under Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks of the Company described in its annual information form that is available under its profile on SEDAR at www.sedar.com. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.