VANCOUVER, BRITISH COLUMBIA, Oct 22, 2008 (MARKET WIRE via COMTEX) ----Pine Valley Mining Corporation (TSX: PVM)(OTCBB: PVMCF) (the "Company" or "Pine Valley") reports that it has received approval by way of a final order ("Final Order") from the Supreme Court of British Columbia (the "Court") of a definitive plan of compromise and arrangement (the "Definitive Plan") under the Companies' Creditors Arrangement Act (Canada) (the "CCAA"). Prior to receiving Court approval, the Definitive Plan was approved at a meeting (the "Meeting") of the affected creditors (the "Creditors") of Pine Valley, its wholly-owned subsidiary, Globaltex Gold Mining Corporation ("Globaltex"), and former creditors of Pine Valley's former subsidiary, Falls Mountain Coal Inc. ("FMC"). As previously reported, on October 20, 2006, Pine Valley and its subsidiaries were granted protection under the CCAA by an initial order (the "Initial Order") of the Court, which stayed the Creditors from enforcing their rights until November 15, 2006. Such protection was extended by subsequent orders of the Court. Pursuant to the Initial Order, Ernst & Young Inc. was appointed as monitor (the "Monitor") in the CCAA proceedings.

Since filing for CCAA protection in 2006, the Company has worked with certain of the Creditors to develop a workable plan of arrangement and compromise that is fair and reasonable to all of the Creditors. This process has culminated in the Definitive Plan, which will facilitate a compromise and arrangement of all indebtedness of the Company and Globaltex as well as dealing with the claims of the former creditors of FMC. Most Creditors will receive a payment in respect of their proven claims and thereby derive a benefit through the Definitive Plan that might not otherwise have been available.

As previously reported, on June 29, 2007, pursuant to an agreement amongst the Company, FMC and Cambrian Mining PLC ("Cambrian") dated April 26, 2007 (the "Sale Agreement"), the Company completed the sale of its shares in FMC, which held all of the Company's interests in the Willow Creek coal mine in north-eastern British Columbia (and related coal properties) to Cambrian. The sale was contemplated under a plan of arrangement (the "Initial Plan") approved by the Creditors on June 19, 2007. In an order dated June 25, 2007 (the "June 2007 Order"), the Court approved, and authorized and directed the Company and FMC to implement, the Initial Plan. As a result of the Initial Plan and the June 2007 Order, FMC and its subsidiary, Pine Valley Coal Ltd., were released from the CCAA proceedings and only Pine Valley and Globaltex, remained as petitioners.

The Sale Agreement provided for the following consideration:

- $15.65 million in cash paid on closing;

- previously issued Western Canadian Coal Corp. ("WCC") debentures in the principal amount of $11.0 million delivered on closing;

- quarterly royalty payments to Pine Valley payable by Cambrian of $1.00 per tonne, subject to annual escalation at a rate of 2.0% per year to a maximum of $1.50, for each tonne of coal from FMC's coal properties or from WCC's Brule mine that is loaded from FMC's train loading facilities in the aggregate amount of up to $26.0 million (the "Royalty Payments"); and

- Royalty Payments are due within 30 days after the end of each quarter beginning with the fiscal year ending June 30, 2009 and are subject to a minimum quarterly payment of $50,000 (up to an aggregate maximum of $2.0 million, such amount being included in the $26.0 million cap). The Company has received the first minimum Royalty Payment of $50,000.

Pine Valley has subsequently sold in the market the WCC debentures and realized approximately $10.43 million from such sale.

Under the Sale Agreement Cambrian had the right to assign the Sale Agreement to WCC and have WCC assume the obligation to make the Royalty Payments. Cambrian has now completed this assignment. Upon such assignment WCC became liable for the Royalty Payments and Cambrian was released from such obligation.

The Initial Plan provided for certain payments of secured debt, transaction costs and other matters but did not provide for the final distribution of sale proceeds to the Creditors. This further distribution will be governed by the Definitive Plan. On July 5, 2007, $12.06 million was paid by virtue of the order of the Court to Pine Valley's secured creditor, The Rockside Foundation.

For the Definitive Plan to be approved by the Creditors in accordance with the CCAA, it had to be accepted by an affirmative vote of not less than a majority in number of Creditors representing two-thirds (66 2/3%) in value of the claims in each Creditor class voting at the Meeting.

"The CCAA process, started in October 2006, is drawing to an end. Approval of the Definitive Plan by the Creditors and Final Approval by the Court marks another important step in the process of implementing a compromise that is fair and reasonable to all Creditors," said Mark Smith, President and Chief Executive Officer of the Company.

The essential terms of the Definitive Plan provide for the distribution of total assets of $37.11 million, which includes rights to the aforementioned Royalty Payments ($26.0 million) and the remaining cash held on behalf of FMC mentioned above ($11.11 million). Former creditors of FMC will have their claims settled as follows:

- for former creditors of FMC with claims of $10,000 or less, an immediate cash payment of 40% of the proven claim in full satisfaction of that claim.

- for former creditors of FMC with claims in excess of $10,000, an immediate cash payment of 23.8% of the claim, plus a proportionate interest in the Royalty Payments of 55.8% of the claim, to be paid to Pine Valley over an extended time, as described in the Definitive Plan.

- an offer to the former creditors of FMC with claims in excess of $10,000 to exchange 61.4% of their entitlement to Royalty Payments in the future for a cash payment of 18.85% of that amount now. The Definitive Plan details the position of each creditor to whom this offer is being extended.

- the Company will continue to have and maintain all of its rights provided in the Sales Agreement and, in particular, in relation to the Royalty Payments. In the event the Company wishes to settle the future Royalty Payments for an amount to the Company that is less than 35% of the remaining balance outstanding at the time of settlement, the Company will be required to obtain approval of the majority in dollar value of the creditors, other than the Company, having a share in the Royalty Payments.

The Definitive Plan also provides for the settlement of Pine Valley's claim against its former subsidiary FMC. This claim arose by virtue of the fact that in order to finance the ongoing operations to bring the mine into production, Pine Valley advanced funds to FMC. As a result, in the CCAA proceedings Pine Valley initially made a claim against FMC in the amount of approximately $42 million (the "Inter-company Claim"). The Monitor was prepared to accept $27.1 million of this amount. However, certain creditors took issue with the Inter-company Claim and sought to have it disallowed on a variety of theories. In order the avoid the uncertainty of litigation, while still preserving significant value for the shareholders, the Company agreed, in the Definitive Plan to compromise the Inter-company Claim to $18 million. Accordingly, the Company will participate in the distribution based on the Inter-company Claim being reduced from $27.1 million to $18 million. Total claims against FMC, including the claim of Pine Valley, amount to approximately $46.6 million.

The Definitive Plan provides that direct creditors of the Company will be paid in full, except for Marubeni Corporation as is more fully described in the Definitive Plan. Payments to be made to Tercon Mining P.V. Ltd. ("Tercon") are also specifically addressed in the Definitive Plan and include a payment towards Tercon's legal expenses relating to its challenge of the Inter-company Claim against FMC.

The Definitive Plan provides that those former FMC creditors with claims in excess of $10,000 may accept an additional cash payment in exchange for a portion of their future Royalty Payments. 34 of such Creditors, representing $10,274,938 in claims, have so elected such that $663,300 in additional cash will be paid from the funds on hand of Pine Valley in exchange for a portion of their share of the Royalty Payments. As a result, the Company will be entitled to 69.1% of the Royalty Payments. Subject to the performance of the Definitive Plan, the treatment of claims under the Definitive Plan will be final and binding on the Company and all Creditors, and the Definitive Plan shall constitute a full, final and absolute settlement of all rights of the Creditors in consideration of the distributions to such Creditors in accordance with the terms of the Definitive Plan.

After the Definitive Plan is implemented, the Monitor will issue and file with the Court a certificate of completion, which states that the sum of $11.11 million, being the remaining funds arising from the Sale Agreement, and $50,000, being the Royalty Payments already received by the Company, has been distributed in accordance with the Definitive Plan. Upon the filing of such certificate by the Monitor, the Company and Globaltex shall be released from CCAA protection.

The Company will now implement the Definitive Plan and the distributions to the Creditors in accordance with the terms of the Definitive Plan will commence. Based upon the cash the Company currently has on hand and the receipts and disbursements contemplated under the Definitive Plan, the Company will have approximately $430,000 remaining. These funds and cash received by the Company for its share of the Royalty Payments may be available, subject to the discretion of the Company's board of directors, for distribution to the Company's shareholders, subject to appropriate reserves for future administration and other anticipated expenses to be incurred in operating the Company for the purpose of managing the distribution over the period of time that the Royalty Payments are made, which could exceed ten years. There is also $0.5 million being held in escrow under the Sales Agreement with Cambrian in respect of possible claims. Assuming there are no claims this money would also be available for distribution to the Company's shareholders. The Company's board of directors will monitor the distribution and may revise the manner in which the distribution is made to shareholders based on prudent planning and advice received. The Company currently has 75,732,878 common shares outstanding. The Monitor's website at www.ey.com\ca\pinevalley contains a discussion of the Definitive Plan and other matters. All materials circulated to the Creditors in advance of the Meeting can also be found on this website.

As reported in its news release dated August 20, 2006, as a consequence of the Company's financial circumstances, the Toronto Stock Exchange (the "Exchange") suspended trading in the Company's shares and advised the Company that it intended to delist the Company's shares unless the Company remedies all of the conditions which resulted in the suspension and demonstrates to the Exchange's satisfaction that the Company meets all of the Exchange's requirements for an original listing. The Company expects that once it is released from CCAA protection, the Exchange will proceed with delisting the Company's shares. The Company's shares may continue to trade in the United States on the OTC Bulletin Board.

As reported in its news release dated August 10, 2007, the Company was unable to release its financial statements, management's discussion and analysis or its Form 20-F for the year ended March 31, 2007 as a result of a decision by its auditors to decline to issue an audit opinion. Since that time the Company has failed to file additional continuous disclosure documents required by applicable securities laws and is noted as being in default by the securities commissions in each of British Columbia, Alberta and Ontario (the "Commissions"). The Company expects that once it is released from CCAA protection, the Commissions will proceed with issuing a cease trade order prohibiting trading in the Company's shares.

The Company's board of directors continues to oversee the operations of the Company, including the administration of the distribution of Royalty Payments to the Creditors in accordance with the terms of the Definitive Plan. If, as expected, the Commissions issue cease trade orders prohibiting trading in the Company's shares as a result the Company being in default of its reporting obligations under applicable securities laws, trading in the Company's shares, including in the United States on the OTC Bulletin Board, may be further limited. Although the Company will continue to be a reporting issuer under applicable securities laws, the Company does not expect that it will be in a position to bring itself into compliance with its reporting obligations. Accordingly, on an ongoing basis, the Company's shareholders will have only the right to receive the distributions noted above.

Forward-Looking Statements

This news release contains certain "forward looking statements", as defined in the United States Private Securities Litigation Reform Act of 1995, Securities Act of 1933, Securities Exchange Act of 1934 (as amended), and within the meaning of Canadian securities legislation, that involve a number of risks and uncertainties. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, most of which are entirely beyond the Company's control. Such statements include, without limitation, statements regarding possible payments to creditors and shareholders resulting from future Royalty Payments. Without limiting the foregoing cautionary statements, the Company does not have any information regarding the quantity of coal that might be processed through FMC's loading facilities, and gives no assurances that WCC will ever be obligated to or will ever make any Royalty Payments. Any such events will be determined by the actions of WCC and will be exposed to the risk factors associated with WCC's business discussed in its public disclosure documents available to readers on SEDAR (www.sedar.com). In this regard, while readers might benefit from reviewing such disclosures, the Company cannot provide any assurances about the sufficiency or accuracy of WCC's public disclosure record. In addition, readers are urged to review the risk factors and other material information concerning the Company discussed in greater detail in the Company's various filings with the Securities and Exchange Commission and Canadian securities regulators.

PINE VALLEY MINING CORPORATION

Mark Smith, President and Chief Executive Officer

   Contacts:
   Pine Valley Mining Corporation
   Mark Smith
   President and Chief Executive Officer
   (604) 682-4678
   Email: pinevalleymining@shaw.ca
   
   
   

SOURCE: Pine Valley Mining Corporation

mailto:pinevalleymining@shaw.ca
   

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