HudBay Minerals to Acquire 9.9% Equity Position in MacDonald Mines

MacDonald Mines Exploration Ltd. (TSX.V:BMK) ("MacDonald Mines” or the "Company") announces it has entered into a subscription agreement for a non-brokered, private placement financing of $3,430,800 through the sale of 19,060,000 Units ("Unit") to HudBay Minerals Inc. (TSX:HBM) (“HudBay”) at a price of $0.18 per Unit. Each Unit consists of one Class A share and one half of one Class A share purchase warrant (a “Warrant”).

Each whole Warrant entitles HudBay to purchase one Class A share of the Company at an exercise price of $0.25 for a period of 36 months from the date of issuance. Upon completion of the financing, which is subject to customary closing conditions, HudBay will hold 9.9% of the issued and outstanding shares of MacDonald Mines on a non-diluted basis and 14.15%, assuming full exercise of the Warrants.

In connection with the equity investment the companies also executed a Memorandum of Understanding which outlines the intentions of the parties on such matters as strategic joint ventures and the disposition/acquisition of mineral properties. In the Memorandum of Understanding, HudBay has also expressed its intention to provide MacDonald Mines with technical support and expertise relating to the Company’s exploration activity.

Kirk McKinnon, President and Chief Executive Officer of MacDonald Mines comments, “The HudBay Minerals investment in MacDonald Mines is a very important step in highlighting the growing potential of the mineral wealth in the James Bay Lowlands “Ring of Fire” region. We are very pleased that HudBay has made this investment in the Company, which we believe demonstrates HudBay’s belief in the quality and potential of our mineral properties and the Ring of Fire area generally. HudBay is now the second major mining company to make an investment in the area.”

Further commenting, McKinnon stated, “In conjunction with the very significant investment already made by Cliffs Natural Resources (approximately $400 million to date with projections to exceed $1 billion) and this initial step taken by HudBay, it should help to add to the Government of Ontario’s recognition of the potential mineral wealth of this region and its importance to the province’s economy. As a junior mining explorer, MacDonald Mines understands the need for provincial government involvement and looks forward to further exploration success and the resulting benefits to all interested stakeholders, including the First Nation Communities, the mining companies and the provincial government.”

Additional Subscription Terms

As part of the terms of the subscription agreement (the “Agreement”), HudBay shall, at is option, be entitled to maintain its proportionate equity interest in MacDonald Mines through a right to participate in any subsequent issuances of equity or securities convertible into equity.

The Company’s primary use of the proceeds from this financing will be to fund exploration on the Butler Property (formerly known as the McNugget Property) which is expected to commence next week. The Butler Property is located within the southern portion of the emerging “Ring of Fire” area exploration play in the James Bay Lowlands region of Northern Ontario

About MacDonald Mines Exploration Ltd

MacDonald Mines is a mineral exploration company with an established exploration history in the Canadian Northlands. MacDonald Mines has set upon a strategic direction of exploration with particular focus on nickel, chrome, copper and zinc in the “Ring of Fire” area of the James Bay Lowlands of Northern Ontario.

As detailed in the Company’s recent press releases, MacDonald Mines has several significant mineral opportunities across multiple properties in the James Bay Lowlands. On its Butler Property, new volcanogenic massive sulphide (VMS) mineralization of substance has been discovered. Four VMS mineralized greenstone fold limbs, all of which have now yielded VMS mineralization over a potential cumulative strike length of approximately 20 kilometres, have been identified and the Butler Property has the potential to host a new VMS camp with characteristics similar to those seen at Matagami or Noranda in Quebec.

MacDonald’s highly prospective Hulbert-Salo Property contains very conductive and discrete targets within a layered magnetic structure, which is typical of magmatic massive sulphides containing nickel. The Hulbert-Salo appears to have the potential to host a Voisey’s Bay-type nickel deposit.

The Company’s Sanderson Property (formerly the Big Mac Property) exhibits high-priority nickel and copper targets with geological and geophysical signatures similar to the significant chrome discoveries of Freewest and KWG-Spider.

More detailed information about the Company is available on the website at www.macdonaldmines.com

For more information, please contact:


Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Website: www.macdonaldmines.com/

(800) 818-5442

(416) 364-4986

(416) 364-2753 (FAX)

Brent Nykoliation, Vice President, Business Development


Quentin Yarie, P.Geo, Vice President, Exploration


Kirk McKinnon, President & CEO

Cautionary Statement:

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

The foregoing information may contain forward-looking statements relating to the future performance of MacDonald Mines Exploration Inc. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from MacDonald Mines plans and expectations. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by MacDonald Mines with the TSX Venture Exchange and securities regulators. MacDonald Mines does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.