MacDonald Mines Partners with Co-Discoverer of Voisey’s Bay Adds Key Ground in the “Ring of Fire”, James Bay Lowlands

MacDonald Mines Exploration Ltd. (TSXV:BMK) (“MacDonald”) and 1289839 ALBERTA LTD (“Alberta Ltd.”), an Alberta corporation, and wholly owned subsidiary of Coordinates Capital Corporation (“CCC”), owned and operated by Chris Verbiski, and VP Morton Verbisk

Toronto, Ontario – MacDonald Mines Exploration Ltd. (TSXV:BMK) (“MacDonald”) and 1289839 ALBERTA LTD (“Alberta Ltd.”), an Alberta corporation, and wholly owned subsidiary of Coordinates Capital Corporation (“CCC”), owned and operated by Chris Verbiski, and VP Morton Verbiski, are pleased to announce that they have entered into a Letter of Agreement pursuant to which MacDonald has agreed to acquire a 60% undivided right, title and interest in a new land position in the James Bay Lowlands. The new property, “Wellington West” consists of approximately 528 unpatented claim units totalling approximately 8,250 hectares southwest of, and directly contiguous to the Wellington Property in the “Ring of Fire”, Northern Ontario, near Noront’s prolific nickel-copper-PGE discovery.

Kirk McKinnon, President and CEO of MacDonald Mines stated, “We are very pleased to have concluded a Letter of Agreement outlining the principle terms of agreement between Alberta Ltd. and MacDonald. The CCC team is a seasoned and very knowledgeable group. They are very well funded and have a bias for action as demonstrated in their very rapid staking program in the James Bay Lowlands. MacDonald is well aware that the ground staked by Alberta Ltd., was of significant interest and had committed to stake this ground in initial staking efforts. This arrangement reflects MacDonald’s ongoing efforts to add very successful mining individuals whose skills will enhance our exploration and business initiatives. The CCC team will add considerable insights into nickel exploration, gleaned from their experience with their very successful Voisey’s Bay discovery and delineation.”

MacDonald will be contracting an airborne geophysical survey to fly the newly acquired claims and will follow up immediately with ground geophysical surveys over the most promising targets.

The Agreement

In order to acquire its interest in the property from Alberta Ltd, MacDonald is required to:

a) make cash payments of $280,000 to Alberta Ltd. as follows:

  • $10,000 within 5 days of signing the LOA; and
     
  • $10,000 within 5 days of signing the formal Option and Joint Venture Agreement; and
     
  • $260,000 within 5 days of the Effective Date (“Effective Date” means the date that the Toronto Venture Stock Exchange grants approval of the formal Option/Joint Venture Agreement.

b) issuance to the Alberta Ltd. of 2,000,000 MacDonald free-trading (subject to the required 4 month hold period) fully paid and non-assessable common shares and 1,000,000 warrants to purchase 1,000,000 MacDonald free-trading fully paid and non-assessable common shares, as follows:

  • One-Million (1,000,000) common shares and five-hundred thousand (500,000) warrants within 30 days of the Effective Date. Warrants are exercisable at $0.75 per share for a period of 24 months from date of issuance;
     
  • Five-hundred thousand (500,000) common shares and two-hundred & fifty thousand (250,000) warrants on or before the first year anniversary of the Effective Date. Warrants are exercisable at $1.00 per share for a period of 24 months from date of issuance;
     
  • Five-hundred thousand (500,000) common shares and two-hundred & fifty thousand (250,000) warrants on or before the second year anniversary of the Effective Date. Warrants are exercisable at $1.00 per share for a period of 24 months from date of issuance.

c) incur an aggregate work commitment of two-million ($2,000,000) on the property as follows. (Note: Any work commitment expenditures in excess of the required amounts will be carried over)

  • Incur a work commitment of seven-hundred & fifty thousand dollars ($750,000) in exploration expenditures on or before the first anniversary of the Effective Date.
     
  • Incur a work commitment of an additional seven-hundred & fifty thousand dollars ($750,000) on or before the second anniversary of the Effective Date.
     
  • Incur a work commitment of an additional five-hundred tho usand dollars ($500,000) or before the third anniversary of the Effective Date.

Alberta Ltd. shall have a carried interest until MacDonald has spent an aggregate of $3,000,000 in exploration expenditures on the Property in addition to the aggregate work commitment of $2,000,000 required to satisfy the “option” as described in item c) above. Once the aggregate exploration expenditure of $3 million has been satisfied, then each party will be responsible for contributing to future exploration expenditures based on their respective participating interests in the Joint Venture arrangement.

Closing of the transaction remains subject to MacDonald’s satisfactory due diligence, the approval of the TSX Venture Exchange, and both MacDonald & CCC’s Board of Directors and execution of a definitive agreement of purchase and sale and joint venture agreement.

***

For further information please contact:

Brent Nykoliation, Director of Business Development

MacDonald Mines Exploration Ltd., 416.364.7024

or

J. Kirk McKinnon, President & CEO

MacDonald Mines Exploration Ltd

Richard Schler, Vice President and CFO

MacDonald Mines Exploration Ltd

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Forward Looking Statements:

Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of MacDonald are forward looking statements that involve various degrees of risk. The following are important factors that could cause MacDonald’s actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital.

For further information: please contact J. A. Kirk McKinnon, President and CEO (416)364-4986,(416) 364-2753 (FAX), , or Richard Schler, Vice President & CFO, (416) 364-4986, (416) 364-2753 (FAX), This email address is being protected from spambots. You need JavaScript enabled to view it. , www.macdonaldmines.com/