MacDonald Mines to Acquire 100% Interest in Highly Prospective Base Metal Property in Sachigo Greenstone Belt

TORONTO, Oct. 9 /CNW/ - MacDonald Mines Exploration Ltd. (TSX VENTURE: BMK.V) ("MacDonald" or the "Company") is pleased to announce it has signed a Letter of Agreement with Shoreham Resources Ltd. (TSX-V: SMH.V)("Shoreham") to option 100% of Shoreham's interest in the northwest region of Sachigo Greenstone Belt.

The Property

The now named "Saracourt Property" consists of approximately 36 claim blocks, which includes the northwest and southeast blocks, or 440 units, totaling 9000 hectares. It is located in the Sachigo Greenstone Belt in Northwestern Ontario quadrant of the James Bay Lowlands This area is currently undergoing extensive exploration driven by the recent significant nickel-copper-precious metal discovery by Noront Resources.

Potential of the Property

The Property hosts several highly prospective base metal target areas. In 1970, a major international mining company conducted reconnaissance airborne geophysical surveys in the James Bay Lowlands. These surveys identified a number of high priority targets, which the company followed up with diamond drilling programs. The intention at that time was to explore for potential extensions of the Thompson nickel belt into Ontario.

MacDonald is in the midst of outlining an exploration program, which will focus on drilling approximately three high priority targets before "freeze up", usually at the end of October. Target selection will be based on historical information that was the catalyst for the Company to enter into this arrangement to acquire the Property.

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 an agreement between MacDonald and Shoreham. The current market conditions have allowed us to capitalize on this opportunity, and acquire a land position in the mineral-rich Sachigo Greenstone Belt where targets of interest were reportedly identified by a major international mining company. This arrangement reflects MacDonald's ongoing commitment to exploration success in this important region. As well, given MacDonald's ongoing effort to create strong working relationships with the native communities, the Company will to continue to follow this course of action with the communities in the area."

Terms of the Agreement

Subject to Exchange approval, the terms of the Agreement call for MacDonald to make cash payments to Shoreham of $75,000 within 60 days of signing the Letter Agreement (the Effective Date) and pay a further $75,000 on or before the third anniversary of the Effective Date. In addition, MacDonald will issue to Shoreham 150,000 common shares and 300,000 warrants of MacDonald within 30 days of the Effective Date and a further 150,000 shares and 300,000 warrants on or before the first anniversary of the Effective Date. The warrants are exercisable at $0.40 per share. Shoreham will retain a 2-1/2% Net Smelter Royalty (NSR) interest in the Property subject to a buy down provision whereby MacDonald can reduce the royalty to 1-1/2% by paying Shoreham $1 million. The NSR applies to an Area of Influence of approximately 391 square kilometers.

WARNING: The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein.

Contacts

MacDonald Mines Exploration Ltd.
Email: info@macdonaldmines.com
Website: www.macdonaldmines.com
1-800-818-5442
(416) 364-4986
(416) 364-2753 (FAX)
Brent Nykoliation
Vice President
Business Development

J. A. Kirk McKinnon
President & CEO

Richard Schler
Chief Operating Officer & CFO