Covenant Resources Closes Private Placement

Covenant Resources Ltd. (CVA - CNSX),(the "Company") announces that it has closed on $487,500 of its private placement previously announced on May 7, 2010. The Company will be issuing 9,750,000 common shares and 9,750,000 common share purchase warrants.

On May 7, 2010, the Company announced that it had negotiated a non-brokered private placement for a maximum of 12,000,000 units at a price of $0.05 per unit, for total gross proceeds of a maximum of $600,000. Each unit is comprised of one (1) common share and one (1) share purchase warrant. Each warrant entitles the holder to purchase one (1) additional common share of the Company for a period of two years at a price of $0.05 per share. All securities will be subject to a hold period of four (4) months from the date they are issued.

The greenback has been underpinned by the US stocks giving back its opening gains after the news about another gradual step from China for re-evaluating its Yuan during the weekend could contain the market sentiment pushing its Asian counterparts stocks markets up and helping the commodities currencies which gets benefits from the Chinese buying to have a strong opening this week across the broad supporting the market risk appetite which has been already improved recently weighing on the greenback versus the single currency which made a new 4 years low at 1.1875 2 weeks ago to open the week above 1.2452 after closing above 1.234 by the end of last week.

The risk appetite is still improving putting pressure on the greenback since the end of last week. The single currency which made a new 4 years low at 1.1875 last week could creep up above 1.23 again today versus the greenback in spite of the germane disappointing ZEW economic sentiment which has fallen to 28.7 from 45.8 in May while the market was waiting for 42 and Moody's new downgrading of the Greek debt yesterday to junk which effected negatively yesterday on the equities markets before getting back this loses again with current market sentiment improving which continued again today. The market seemed ready enough to continue pushing the single currency lower selling it again below 1.2 versus the greenback before even one correction to bring it back above this psychological level versus the greenback with no new shocks from Europe or Trichet who has assured that the current interest rate is still appropriate and the single currency is a very credible currency last Thursday after the ECB decided to keep the interest rate unchanged again at 1%.

The market was curiously waiting today for Trichet's press conference after the ECB meeting today which took the decision to keep the interest rate unchanged again at 1% as expected to know more about its buying bonds plans and its current policy in the face of the debt crisis amid the falling of the single currency across the broad which effected negatively on the investors recently. Trichet has not surprised the market with any new comments he has assured that the current interest rate is still appropriate and the single currency is a very credible currency instead of its recent falling and the debt crisis however he has shown his increased uncertainty about the growth down side risks over the medium term.