Trelawney Mining and Exploration Inc.

Trelawney Mining and Exploration Inc.

June 26, 2009 10:08 ET

Trelawney Signs Letter Agreement to Acquire Interest in Chester Property

TORONTO, ONTARIO--(Marketwire - June 26, 2009) - Trelawney Mining and Exploration Inc. (TSX VENTURE:TRR) is pleased to announce the acquisition of a gold property located in northern Ontario that was developed to the 550 foot level in the 1980s, but not put into production. A term sheet (the "Letter Agreement") has been signed between the Corporation and Treelawn Investment Corp. ("Treelawn") wherein Trelawney has been granted the exclusive right to earn up to a 70% interest in certain mining claims located in Chester Township, Ontario (the "Property"). By executing the Letter Agreement, the parties agree to proceed to the execution and delivery of a definitive option agreement no later than July 16, 2009.

Mr. Greg Gibson, the President of the Corporation stated:

"The Chester property is a unique situation. The underground development would be worth nearly $20 million at today's prices, but, other than one 650 ton bulk sample, the ore body was never mined. The development was done in the 1980s using modern ramp methods and can be re-developed expeditiously and at relatively low cost. It is only four kilometres from Highway 144 approximately 100 kilometres southwest of Timmins, Ontario and approximately 200 kilometres northwest of Sudbury, Ontario. The area hosts excellent access to services and skilled labour.

We will move quickly to file appropriate permit applications for advanced exploration with a view to transitioning to production if results are as expected. This property also offers great exploration potential as it is open to depth below 600 feet and on strike to the north and south."

Measured ore reserves are reported at 159,000 tons at a grade of 0.43 opt, accessible from the current underground workings (McBride 2002) at a mining rate of 200 tpd; production would be approximately 1,800 ounces of recoverable gold per month. Trelawney has already commenced negotiations for a custom milling agreement.

Under the terms of the Letter Agreement the Company can acquire an initial 50% interest in the Property (the "First Option"), in exchange for:

- $10,000 in cash which has been paid;

- $25,000 in cash, payable upon signing the definitive agreement;

- 2,000,000 common shares ("Common Shares") of Trelawney and 1,000,000 common share purchase warrants ("Warrants"), with each Warrant exercisable at a price of $0.135 per share for a period of five years from the date of issuance;

- on or before August 31, 2009, the Company shall issue to Treelawn an additional 2,000,000 Common Shares;

- within 12 months following the signing of a definitive agreement, the Company shall obtain the necessary work permits and commence a work program on the Property;

- on or before the 18th month anniversary of obtaining the work permits, the Company shall have brought the Property into commercial production; and

- on or before the sixth month anniversary of achieving commercial production, the Company shall issue an additional 1,000,000 Common Shares to Treelawn.

After exercising the First Option, the Company can acquire an additional 10% interest in the Property (the "Second Option") by issuing an additional 1,000,000 Common Shares to Treelawn on the date which is the later of: Treelawn receiving $2.5 million from its share of the net profits from commercial production from the Property and the Property achieving 12 months of continuous commercial production.

The Company can acquire an additional 10% interest in the Property on the date that is 12 months from the exercise of the Second Option by issuing an additional 1,000,000 Common Shares to Treelawn.

Completion of the transaction is subject to regulatory approval, including the approval of the TSX Venture Exchange and the entering into of a definitive agreement.

Mitchell Lavery, P. Geo. is a "Qualified Person" as defined in National Instrument 43-101 and is responsible for the technical information presented in this news release.

Shares Issued: 20,259,357

This press release contains forward looking statements within the meaning of applicable Canadian and U.S. securities regulation, including statements regarding the future activities of the Company. Forward looking statements reflect the current beliefs and expectations of management and are identified by the use of words including "will", "anticipates", "expected to", "plans", "planned" and other similar words. Actual results may differ significantly. The achievement of the results expressed in forward looking statements is subject to a number of risks, including those described in the Company's annual information form as filed with the Canadian securities regulators which are available at Investors are cautioned not to place undue reliance upon forward looking statements.

Neither the 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.

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