HALIFAX, Oct. 23 /CNW/ - Etruscan Resources Inc. (EET.TSX) announced today that it has completed the previously announced private placement with Endeavour Financial Corporation ("Endeavour") of US$43,000,000 of common shares at a price of C$0.30 per common share. The private placement was part of a comprehensive financial re-engineering undertaken by Etruscan which included a substantial restructuring of Etruscan's debt facilities. This re-engineering addresses Etruscan's near-term financial needs, improves Etruscan's operating cash flow, increases Etruscan's leverage to rising gold prices and positions Etruscan for future growth initiatives. The private placement was subject to approval by the shareholders of Etruscan which was obtained at a special meeting of shareholders held yesterday.

Gerald J. McConnell, President of Etruscan, stated:

"Etruscan is very pleased that Endeavour has made this strategic investment in Etruscan. Endeavour is well known in the global mining markets for its ability to implement significant and rapid growth plans for its clients, often leading to premium market valuations. Endeavour's track record of success includes its role in the creation and growth of Wheaton River, which ultimately became Goldcorp. We welcome Endeavour's ongoing active role in guiding Etruscan to drive growth and share value."

Neil Woodyer, Chief Executive Officer of Endeavour, stated:

"Endeavour has a gold-focused investment strategy to create significant value through strategic investments in gold producers with a vision of creating an intermediate sized gold growth company. We believe in long-term rising gold prices and see investment opportunity in companies, like Etruscan, facing short-term financial challenges but with quality underlying gold mining assets. We look forward to working with the Etruscan team to drive the growth of the Company."

Use of Private Placement Proceeds

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US$23 million of the Endeavour private placement proceeds are being used to repurchase approximately 42% of Etruscan's $700 per ounce gold call options resulting in less than 20% of the current life-of-mine production being hedged. Approximately US$8.5 million of the proceeds have been used to repay outstanding unsecured convertible debt. Of the remaining US$11.5 million, US$5 million has been allocated for working capital purposes and improvements at the Youga Gold Project and the balance of approximately US$6.5 million will be used for Etruscan's general corporate working capital requirements.

Restructuring of Youga Project Senior Debt

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Endeavour's investment provided the funding to facilitate a restructuring of the senior debt facility and related hedging provided by RMB Australia Holdings Ltd. and Macquarie Bank Limited to finance the development of the Youga Gold Project. In addition to the hedge reduction, the senior lenders' agreed to defer principal payments on the Youga senior debt facility until December 31, 2010, remove the requirement for the Youga Mine to pass a completion test and relax certain financial and other covenants on the Etruscan group. This will provide significant relief from current financial pressures and will allow Youga sufficient time to reach targeted production levels.

As part of the senior debt facility restructuring, the senior lenders converted US$3 million of the US$33 million outstanding on the senior debt facility together with approximately US$443,000 of interest to common shares of Etruscan at the same price as the Endeavour private placement (C$0.30 per common share). In addition, Conus Partners Inc. and affiliates converted US$2 million of unsecured convertible promissory notes together with approximately US$80,000 of interest to common shares of Etruscan at C$0.30 per common share. A total of 19,673,148 common shares were issued as a result of these debt conversions.