First Metals Inc. Announces Closing of $10,200,000 Initial Public Offering and Listing on the Toronto Stock Exchange
Friday September 1, 10:24 am ET


TORONTO, ONTARIO--(MARKET WIRE)--Sep 1, 2006 -- First Metals Inc. ("First Metals" or the "Company") (TSX:FMA.TO - News) is pleased to announce today that it has completed its initial public offering by issuing 3,674,455 flow-through common shares (the "Flow-Through Shares") at $1.10 per Flow Through Share and 6,158,100 Units (each a "Unit" and, together with the Flow-Through Shares, the "Offered Securities") at $1.00 per Unit (the "Unit Offering Price"), for total gross proceeds of $10,200,000 pursuant to its final prospectus dated August 25, 2006 (the "Prospectus"). Each Unit consists of one common share of the Company (each a "Common Share") and one-half of one Common Share purchase warrant (each an "IPO Warrant"), with each whole IPO Warrant entitling the holder to purchase an additional Common Share at the price of $1.25 per share until September 1, 2008, subject to acceleration in the event the closing price of the Common Shares exceeds $2.00 for 20 consecutive trading days. First Metals has been advised by the TSX that its Common Shares will commence trading on the TSX today under the symbol "FMA".

Of the $10,200,000 in gross proceeds raised under the Offering, the $4,041,900 from the issue of the Flow-Through Shares will be used by the Company to incur qualifying Canadian exploration expenses ("CEE"), as that term is defined in the Income Tax Act (Canada), which CEE will be renounced by the Company in favour of the Flow-Through shareholders.

Jennings Capital Inc. acted as agent under the Offering and was paid a cash commission of 7% of the gross proceeds raised under the Offering and was also issued compensation options to purchase up to a total of 688,278 Common Shares (being 7% of the total number of Offered Securities sold pursuant to the Offering) at the Unit Offering Price for a period of two years.

The Prospectus also qualifies the distribution of 9,000,000 Common Shares and 4,500,000 Common Share purchase warrants issuable by the Company upon the exercise of special warrants previously issued pursuant to private placements completed in May 2006 for aggregate gross proceeds of $3,100,000.

C.E.O. James Beatty remarked: "First Metals has been established to capitalise on the current favourable metals cycle. The listing is a critical milestone in our plan to effectively and efficiently become a near term producer."

First Metals is a junior mining exploration and development company engaged in the acquisition, exploration and development of mineral prospects in Canada. First Metal's activities are currently focused in the Abitibi Greenstone Belt Region near Rouyn-Noranda in Quebec, Canada, where it owns a 100% interest in the mining claims comprising the Fabie Bay, Magusi River and Duprat projects.