Orvana Obtains US$15 Million Bridge Loan Commitment and Amends Shareholder's Pre-Emptive Rights to Facilitate Equity Offerings

TORONTO, ONTARIO -- (Marketwire) -- 05/16/11 -- Orvana Minerals Corp. (TSX: ORV) announced today that it has entered into an agreement with Fabulosa Mines Limited ('Fabulosa'), which owns 51.6% of Orvana's issued and outstanding common shares, under which Fabulosa has committed to provide Orvana with a six-month, secured convertible US$15,000,000 bridge loan bearing interest at a rate of 8% per annum. Fabulosa has also agreed to amend its pre- emptive rights to acquire Orvana common shares. The amendments will facilitate Orvana's ability to undertake conventional forms of public equity financings. In addition, Orvana and Fabulosa have resolved a difference of opinion between them regarding the application of Fabulosa's pre-emptive right to the issuance of common shares upon the exercise of stock options. As consideration for the amendments and the provision of bridge loan financing, Orvana will issue to Fabulosa 1,969,999 common shares (the 'Consideration Shares') and five-year warrants to purchase up to 2,725,000 common shares (the 'Warrant Shares'). Following the issuance of the Consideration Shares, Fabulosa will own 52.4% of Orvana's issued and outstanding common shares. The warrants will be exercisable only upon the issuance of, and in equal numbers to, common shares issuable upon the exercise of any of Orvana's currently outstanding stock options. 1,300,000 warrants will be issued three months after the issuance of the Consideration Shares and 1,425,000 warrants will be issued nine months after the issuance of the Consideration Shares. All of the warrants will have an exercise price equal to the volume-weighted average price of the common shares for the five trading days preceding the date such warrants are issued. The transactions are subject to obtaining the approval by the Toronto Stock Exchange (the 'TSX') of the issuance of the Consideration Shares and the Warrant Shares.

'As Orvana continues to execute its strategy of growth and diversification, including the development of the EI Valle-Boinas/Carles Mine in Spain and the Copperwood Project in Michigan, ready access to financing on acceptable terms will be increasingly important. This US$15,000,000 bridge loan will provide the Corporation with significant short-term flexibility. In addition, these amendments to Fabulosa's pre-emptive rights will provide longer term flexibility in accessing the capital markets to raise equity,' said Roland Horst, Orvana's Chief Executive Officer.

Bridge Loan

The bridge loan will have a maximum principal amount of US$15,000,000, and will be secured against all personal property of Orvana (excluding the shares of Orvana Minerals Asturias Corp. and all proceeds therefrom). Amounts will be advanced to Orvana under the loan in one or more tranches, at Orvana's discretion. The loan will have a term of six months and will accrue interest at a rate of 8% per annum. The outstanding amount of the loan may be repaid by Orvana at any time without penalty. Should Orvana complete an equity offering prior to repayment of the loan, subject to TSX approval, the outstanding amount of the loan may, at Orvana's sole discretion, be converted into common shares at the price shares are sold under the equity offering, provided that the number of common shares issued on such conversion does not exceed 50% of the number of shares issued by Orvana under such equity offering. At maturity, at Fabulosa's option and subject to TSX approval, the outstanding amount of the loan (including accrued and unpaid interest) will be convertible into common shares based on a share price that is the volume-weighted average trading price for the five trading days preceding the maturity date less the maximum allowable discount permitted by the TSX. The bridge loan remains subject to the completion of customary loan documentation and approval of the issuance of the Consideration Shares and the Warrant Shares by the TSX.

New Agreement on Fabulosa's Pre-Emptive Rights

Under an agreement entered into on September 12, 2001 in connection with the initial investment in Orvana by Fabulosa, Fabulosa has a pre-emptive right to acquire additional common shares on a one-for-one basis in connection with Orvana's issuance of common shares to parties other than Fabulosa. Fabulosa's existing pre-emptive right requires that Orvana provide Fabulosa with notice of the terms of any proposed issuance of common shares at least 30 days' in advance of the completion of any such issuance. This notice requirement effectively precluded Orvana from undertaking certain types of equity financings, including bought deals and marketed public offerings. In addition, the application of Fabulosa's pre-emptive right to the issuance of common shares upon the exercise of options has been a matter of dispute between the parties. With a view to Orvana obtaining the flexibility to complete equity financings and settling the disagreement between them regarding the application of the pre-emptive rights to shares issued upon the exercise of options, Orvana and Fabulosa have agreed to terminate the prior agreement and enter into a new agreement regarding Fabulosa's pre-emptive rights.

As part of this new agreement, Orvana has agreed to approve the implementation of a normal course issuer bid ('NCIB') within the next nine months, subject to TSX approval. The purpose of the NCIB will primarily be to acquire common shares of Orvana to mitigate the dilutive effect of common shares issued upon the exercise of stock options granted under Orvana's Stock Option Plan after May 16, 2011.

As Fabulosa is an insider of Orvana, the transactions were negotiated by a special committee comprised of independent directors of Orvana. The special committee retained its own legal counsel and an independent financial advisor to assist it in connection with such negotiations.

About Orvana

Orvana Minerals is a gold producer with a strong balance sheet and is transforming itself into a multi-mine gold and copper producer. Orvana's primary asset is the El Valle/Boinas-Carles gold-copper project in northern Spain, which is expected to be in production in mid-2011. Orvana also owns and operates the Don Mario Mine in Bolivia where a newly completed leaching-precipitation-flotation plant is processing its copper-gold-silver Upper Mineralized Zone deposit. In addition, Orvana is advancing its Copperwood copper project in Michigan, USA. Additional information is available at Orvana's website (www.orvana.com).

Forward Looking Disclaimer

Certain statements in this press release constitute forward-looking statements or forward- looking information within the meaning of applicable securities laws ('forward-looking statements'). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as 'believes', 'expects' 'plans', 'estimates' or 'intends' or stating that certain actions, events or results 'may', 'could', 'would', 'might', 'will' or 'are projected to' be taken or achieved) are not statements of historical fact, but are forward-looking statements.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Orvana as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions of Orvana on which statements in this news release are based may prove to be incorrect, and they include, but are not limited to, the various assumptions set forth herein and in the Company's most recently filed Annual Information Form, as well as permitting and development at the EI Valle-Boinas/Carles Mine being consistent with the Company's current expectations and there being no significant disruptions affecting the Company's activities at the mine.

A variety of inherent risks, uncertainties and factors, many of which are beyond the Company's control, affect the operations, performance and results of the Company and its business, and could cause actual results to differ materially from estimated or anticipated events or results expressed or implied by forward looking statements in this press release. Some of these risks, uncertainties and factors include the Company's ability to obtain and maintain all necessary regulatory approvals and licenses; challenges to the Company's interest in its property and mineral rights; and other risks generally associated with mine development, including the risks identified in Orvana's Annual Information Form.

Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and except as required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers are cautioned not to put undue reliance on forward-looking statements.

Contacts:

Orvana Minerals Corp.

Natalie Frame

Investor Relations

(289) 200-7640


Orvana Minerals Corp.

Roland Horst

Chief Executive Officer

(416) 369-1629


Orvana Minerals Corp.

Malcolm King

Vice President and Chief Financial Officer

(416) 369-1629
ask_us@orvana.com
www.orvana.com