Yellowhead announces Rights Offering

TSX: YMI

VANCOUVER, Aug. 21, 2015 /CNW/ - Yellowhead Mining Inc. ("Yellowhead" or the "Company") (TSX: YMI) is pleased to announce that, further to its news release on August 4, 2015, the Company will be offering rights (the "Rights Offering") to holders of its common shares (the "Common Shares") of record at the close of business on September 1, 2015 (the "Record Date"). The Rights Offering will be made in each of the provinces in Canada except Quebec.

Rights Offering

Shareholders of record on the Record Date will receive one right (a "Right") for each Common Share held and four Rights plus the sum of $0.045 will entitle the holder to subscribe for one Common Share (the "Basic Subscription Privilege"). Rights will be evidenced by transferable rights certificates (each, a "Rights Certificate"). The Rights expire at 2:00 p.m. (Vancouver time) (the "Expiry Time") on September 29, 2015 (the "Expiry Date"), after which time unexercised Rights will be void and of no value. Shareholders who fully exercise their Rights are entitled to subscribe pro rata for additional Common Shares, if available, that were not subscribed for initially on or before the Expiry Time.

Use of Proceeds

If the Rights Offering were to be fully subscribed, then the Rights Offering would raise gross proceeds of approximately $1.1 million. The net proceeds of the Rights Offering will be used for general corporate and working capital purposes and to repay a previously announced $500,000 bridge loan from Matco Investment Ltd. ("Matco").  The net proceeds will not be sufficient for the Company to complete the environmental assessment (the "assessment") for the Harper Creek Project, and accordingly, the Company will require additional funding in order to undertake the technical work necessary to continue and complete the assessment.

Matco, who currently holds 35,555,556 Common Shares, has committed to exercise its Basic Subscription Privilege with respect to the Rights it receives under this Rights Offering.

Listing of Rights on Toronto Stock Exchange

The Rights will be posted for trading on the Toronto Stock Exchange and will trade under the symbol "YMI.RT".  Trading of the Rights is expected to continue until 9:00 a.m. (Vancouver time) on the Expiry Date.  A rights offering circular, together with Rights Certificates, will be mailed to eligible shareholders on or after the Record Date. Eligible registered shareholders wishing to exercise their Rights must forward the completed Rights Certificates along with the applicable funds to Computershare Investor Services Inc. by the Expiry Date. Shareholders who own their shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

About the Harper Creek Project

Harper Creek is a proposed 70,000 tonnes-per-day open pit copper mine with a 28 year mine life, located in the Thompson – Nicola region of British Columbia near Vavenby. Harper Creek has a four year development period, with the initial two years focused on environmental and construction permitting, and the second two years dedicated to construction.  When developed, Harper Creek will provide up to 600 jobs during construction and up to 450 permanent jobs during operations.

About Yellowhead Mining Inc.

Yellowhead Mining Inc. is a development stage company with a 100% interest in the Harper Creek Project, located in the North Thompson - Nicola region of British Columbia, Canada.  The proposed Harper Creek mine will be a large scale, long life, low cost open pit copper mine, has a NI 43-101 compliant feasibility study, and is currently in the environmental permitting phase of development.

Forward Looking Statements

Except for statements of historical fact, this news release contains certain "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements and information include statements regarding the completion of the Rights Offering, the gross proceeds to be raised by Yellowhead under the Rights Offering, the use of proceeds, and the exercise of rights by Matco. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, including, among others, receipt of TSX and securities regulatory approvals, completion of the Rights Offering, the gross proceeds raised by Yellowhead under the Rights Offering, the use of proceeds, the exercise of rights by Matco, the accuracy of mineral grades and related assumptions, inherent operating risks, planned expenditures, proposed exploration and development at the Harper Creek Project, operating and economic aspects of the Harper Creek Project, as well as those risk factors identified in the Company's Annual Information Form filed under the Company's SEDAR profile. Yellowhead undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. More detailed information about potential factors that could affect projected results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Yellowhead.

SOURCE Yellowhead Mining Inc.