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Gold/Mining/Energy : Flag Resources (FGR.A A) -- Ignore unavailable to you. Want to Upgrade?

To: Berry Picker who wrote (4071)	10/21/2003 1:14:47 PM
From: ali	Read Replies (1) \| Respond to of 4269

CALGARY, Oct. 21 /CNW/ - Flag Resources (1985) Limited ("Flag") announced today that it has received regulatory approval for a shares for debt transaction with Golden Briar Mines Limited ("Golden Briar") as previously described in a press release dated August 25, 2003. Flag will issue 2,000,000 common shares, valued at $0.12 per share, to Golden Briar in settlement of cash advances of $240,000 made by Golden Briar to Flag. In addition, Flag will issue 41,667 common shares to Samuel Stern, a director of Flag, to settle a loan made by Mr. Stern to Flag, and 38,617 shares to a third party in settlement of amounts owing by Flag in respect of geophysical services rendered by the third party. Following the issuance of the foregoing shares, Flag will have 24,876,455 issued and outstanding common shares. Golden Briar will hold 2,080,284 shares of Flag or approximately 8% of the issued and outstanding shares of Flag. As the majority of the Board of Directors of each of Flag and Golden Briar are compromised of the same individuals, the Flag shares for debt transaction has been allowed under the financial hardship exemption available under the related party policies of the TSX Venture Exchange for companies seeking to improve their financial position. The shares for debt transaction is intended to strengthen the balance sheet of Flag. Subject to regulatory approval and approval by Golden Briar shareholders, Flag has agreed to accept 10 million shares of Golden Briar Mines Limited, an associated company, valued at $0.10 per share, as settlement of indebtedness of $1,157,192. The proposed transaction would give Flag a 35% controlling interest in Golden Briar. Flag would also transfer a 50% working interest in its Exploratory Licence of Occupation, subject to the approval of the Ontario Ministry of Northern Development and Mines. The 1,750 acre E.L.O. is in Rathbun and Aylmer Townships, 20 miles north of Sudbury, Ontario, near the northeast flank of the Sudbury Structure.