MacDonald Mines Exploration Ltd.

MacDonald Mines Exploration Ltd.

October 14, 2008 14:10 ET

MacDonald Mines Increases its Newly Acquired, Highly Prospective Base Metal Property in Sachigo Greenstone Belt by Entering into JV with Escape Gold

TORONTO, ONTARIO--(Marketwire - Oct. 14, 2008) - MacDonald Mines Exploration Ltd. (TSX VENTURE:BMK) ("MacDonald" or the "Company") is pleased to announce it has signed a Letter of Agreement with Escape Gold Inc. (TSX VENTURE:EGT)("Escape") to acquire a 40% interest in Escape's Sachigo Lake Property in the northwest region of Sachigo Greenstone Belt. Escape's 100% owned property consists of 5,312 hectares and immediately surrounds MacDonald's newly acquired "Saracourt" Property.

Land Position of Consequence

The "Saracourt Property" would increase from approximately 216 claim units or 3,456 hectares, (which includes the northwest and southeast blocks) to 548 claim units, totaling approximately 9,000 hectares. As a result of the joint venture, MacDonald would have the option to own 40% of the entire expanded land position 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 a joint venture agreement between MacDonald and Escape Gold. The current market conditions have allowed us to capitalize on the opportunity to further expand our 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."

Terms of the Agreement

Subject to Exchange approval, the terms of the Agreement call for MacDonald to make cash payments to Escape of $50,000 within 10 days of signing the Letter Agreement (the Effective Date). In addition, MacDonald will issue to Escape 300,000 common shares and 300,000 warrants of MacDonald within 30 days of the Effective Date and a further 300,000 shares and 300,000 warrants on or before the first anniversary of the Effective Date. The warrants are exercisable at $0.40 per share for a period of 24 months from date of issuance. MacDonald will have an exploration work commitment of $360,000 during the twelve-month period commencing on the Effective Date.

MacDonald has an option to acquire a further 10% interest in the additional Sachigo Lake Property by spending an additional $1,140,000 on exploration during the three-year period from the first anniversary date to the fourth anniversary date of the Effective Date.

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.

SEDAR: 00004560E

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • MacDonald Mines Exploration Ltd.
    Brent Nykoliation
    Director, Business Development
    (800) 818-5442 or (416) 364-4986
    (416) 364-2753 (FAX)

    MacDonald Mines Exploration Ltd.
    J. A. Kirk McKinnon
    President and CEO
    (800) 818-5442 or (416) 364-4986
    (416) 364-2753 (FAX)

    MacDonald Mines Exploration Ltd.
    Richard Schler
    Vice President & CFO
    (800) 818-5442 or (416) 364-4986
    (416) 364-2753 (FAX)