MacDonald Mines Makes New VMS Discovery in the Ring of Fire

TORONTO, ONTARIO--(Marketwire - Aug. 16, 2012) - MacDonald Mines Exploration Inc. (TSX VENTURE:BMK) ("BMK") is pleased to announce results from the most recent drill program on the Butler 3 target on its Butler property located just 36 kilometres west of the Big Daddy Chromite deposit. (Link to location map).

HIGHLIGHTS

• Hole BP12-Cu14 intersected 41.5m of 0.4 Cu, 3.26% Zn and 6g/t Ag
• Including:
  • 12.5m of 8.54% Zn and 6.24 g/t Ag
  • 5.0m of 1.18% Cu, 3.86% Zn and 14.48 g/t Ag
• Hole BP12-Cu16 intersected 14.0m of 0.56% Cu, 1.83% Zn and 11.31 g/t Ag

(More complete intersections provided below)

Quentin Yarie, BMK's Senior VP Exploration states: "The drilling results and the follow-up borehole pulse electromagnetic surveys at Butler support our interpretation that this is a highly mineralized area. The mineralization is especially encouraging as it is typical for past and present producing Canadian districts¹."

Executive Summary

• The last drill program hit zinc-rich massive sulphide mineralization with tenors typical of past and current producing VMS mines - the zinc rich sulphides are generally found on the periphery of these types of deposits
• VMS systems typically get more copper-rich the closer one gets to the centre of extrusion
• VMS mineralization identified on the Property suggests there are multiple centres of extrusion, and therefore the potential for multiple VMS deposits (i.e. a VMS camp)
• Geophysics indicates there is ample room for deposits in excess of 20 MT
• Company geoscientists believe the constraining geologic markers bounding VMS mineralization have been identified on the Property, and that future exploration should be able to vector into more copper-rich mineralization

A more detailed technical explanation follows.

Geologic Setting

BMK's Butler property is potentially a new VMS district, with at least four zinc-copper volcanogenic massive sulphide (VMS) 'centres' of mineralization (Butler 1 through 4). These centres are spaced about 2-4 km apart, a typical distribution for deposits in most productive camps such as Matagami Lake, Sturgeon Lake and Noranda. With VMS deposits typically occurring in clusters the Company is confident that additional massive sulphide intersections of interest will be found around Butler 3. Click here to see a map of the Butler VMS Zones.

Each occurrence consists of an underlying copper-rich stringer zone that is separated by a ~20m massive black felsic "marker" flow from several overlying horizons of zinc-silver-copper massive sulphide. The footwall rocks are all intensely altered, characterized by widespread sodium (Na) depletion and more localized manganese (Mn) enrichment (typical of VMS camps like Sturgeon Lake).

Butler 3 VMS

Butler 3, our most recent exploration target, is located in about the middle of the 15km - long principal stratigraphic horizon that controls all of the VMS centers thus far identified. Having now defined this stratigraphic control, we are able to much better target the potential resources. BMK's team has delineated a new zone of Zn-Cu-Au-Ag-Co-Cd stratiform sulfides that extends for at least 200m N-S and consists of several stacked lenses, including an intersection >40m in width (does not represent true width). The last drill program discovered this area and highlights of the assay results are summarized as follows:

BH ID	From: To (m)		Intersection(m)		Ag (g/t)		Cd (g/t)		Co (g/t)		Cu (%)		Zn (%)
BP12-Cu14	83-92		9		3		6		24		0.13		0.875
BP12-Cu14	138.5-180		41.5		6		52		172		0.41		3.26
including	147.5-168		19.50		9		106		239		0.57		6.51
BP12-Cu12	140.8-163.3		23.5		3		13		106		0.35		0.57
BP12-Cu16	54-79		25		8		27		136		0.43		1.47
BP12-Cu18	213-245		32		3		5		168		0.39		0.20
including	219-233		14		3		7		142		0.49		0.32

BH ID	From: To (m)	Intersection(m)	Cu Equivalent (%)*
BP12-Cu14	138.5-180	41.5	1.46
including	147.5-168	19.50	2.57
BP12-Cu16	54-79	25	1.01
*Based on current metal values 8/12/2012

A completed list of assays will be available on the company website once final results are received from the lab.

All intersections occur in an intensely sericitized, locally siderite-bearing and silicified assemblage of felsic strata. As yet, we have not penetrated the eastern side of the alteration package; indicative of excellent potential of continued mineralized zones to the east. These bodies are also open along strike. The Zn-rich sequence of lenses is underlain by the black felsic flow, and under that an extensive Cu-stringer zone in anthophyllite-cordierite-chlorite altered strata. Copper also occurs in the core parts of the overlying zinc zone, and its abundance indicates good potential for additional copper resources along strike and possibly and deeper.

In VMS systems, copper is found in close proximity to the exhalative volcanogenic centre. The low Cu:Zn ratios encountered at Butler 3 indicate that drilling has not intersected mineralization proximal to its exhalative source. As such, Company geoscientists believe that higher tenor copper mineralization can be intersected through future drill targeting. To see a cross-section of mineralized zones, click here.

Butler 1, 2 & 4

This newly emerging camp has compositional and alteration characteristics that are quite similar to the Sturgeon Lake (and Hackett River) camps. It is felsic-dominant, has well defined stratigraphic control and is characterized by Mn-enriched carbonate-sericite-biotite-garnet-anthophyllite-quartz alteration and extensive Na depletion in the footwall. The well-zoned Butler 3 horizon is open in four directions. Butler 4 (to the south) has similar characteristics as identified by Dr. James Franklin, but drilling there is at a very early stage. Butler1 and 2 may be two parts of another separate mineralization centre, and their depth and stratigraphic extents remain undefined. The Butler 1, 2 and 4 occurrences all share the same stratigraphic assemblage as Butler 3, another characteristic of most of the productive camps in the Canadian Shield.

Geophysical Model

The current geophysical data set includes:

• Airborne, Surface and Borehole Time Domain EM
• Airborne and Ground Magnetics
• Surface and Airborne Gravity
• IP and Complex Resistivity

A model of this data constrained by the current mineralized intersections, geochemistry and geology indicates the potential of the Butler Property to host not only VMS occurrences of size but also multiple centres. Plan maps of this compilation for Butler 2 and 3 can be viewed on the company website.

Continuing Exploration

Before the current drill program, exploration was focussed on the footwall sections (west of the results presented here), but with the new stratigraphic definition the potential for additional resource along strike, east and at depth are good. Dr. James Franklin states that "The combination of:

• tight stratigraphic control,
• definitive alteration vectors that help identify the core zones of hydrothermal discharge,
• and good geophysical response by the sulfide zones

will enable the BMK team to define additional resources in future drill programs."

The Company is currently compiling and analyzing data to vector towards optimum VMS mineralization to define future drilling. Additionally, the Company is analyzing nickel and vanadium data collected on the Butler Property, and expects to have an update regarding these commodities in the very near future.

Qualified Person

Quentin Yarie, P.Geo., is the qualified person in regard to the technical data contained within this news release and will be responsible for overseeing all aspects of the Company's exploration programs.

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, zinc, vanadium and titanium in the "Ring of Fire" area of the James Bay Lowlands of Northern Ontario.

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

Cautionary Statement

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

¹Galley, A.G, Hannington, M.D. and Jonasson, I.R., 2007, Volcanogenic Massive Sulphide Deposits.