Discovery of a Natural Gas Reservoir in the Lower St Lawrence Region

MONTREAL, QUEBEC--(Marketwired - Dec. 9, 2013) - J.A.G. Mines Ltd. (TSX VENTURE:JML) and its subsidiary, Olitra Inc., wish to emphasize the strategic importance to Quebec of the discovery of the first conventional natural gas field in the Lower St Lawrence region. The discovery recently announced by the company Petrolympic Ltd., a partner company of Resources and Energy Squatex, has just demonstrated the hydrocarbon potential of this under-explored part of the Quebec Appalachians.

More specifically, this discovery south of Rimouski stresses the importance of Siluro- Devonian coral reefs in trapping hydrocarbons. These carbonate reefs are present in the northern part of the Témiscouata property of JAG-Olitra, which is adjacent to the Lower St Lawrence property of Petrolympic-Squatex.

Since 2006, JAG and Olitra Inc. have explored more than 331,000 hectares of land in the Lower St Lawrence and demonstrated the presence of soils highly enriched in C1- C4 hydrocarbons in the areas of St-Eusèbe, the northern part of the Owen ZEC (Lake Ango), and the southern part of the Rimouski reserve. These domains enriched in methane and condensates (ethane, propane, butane) are located above a gravity low, suggesting thickening of the sedimentary basin.

Over the JAG and Olitra permit areas, these gravity lows are partly associated with the presence of coral reefs covered by Silurian shales of the Témiscouata Formation. In such a context, coral reefs similar to those of the Sayabec Formation could form rich hydrocarbon reservoirs, while Témiscouata shales may constitute an impermeable barrier or seal. The discovery of conventional natural gas is particularly compelling because, in the event that the reserves are sufficient for commercially viable exploitation, production of this resource would be undertaken without the use of hydraulic fracturing.

In 2014, JAG and Olitra intend to revive their exploration programs in search of conventional natural gas and condensate in the Rimouski reserve, and in the Témiscouata and Pohénégamook areas.

For the description and location of JAG's and Olitra's prope 51-101 F1 and F2 prepared by Marc Richer LaFlèche, geologist, INRS-ETE and filed on SEDAR, dated May 5, 2013.

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