Metallum Resources Inc.

Metallum Resources Inc.

February 28, 2009 12:42 ET

Metallum Resources Inc. Announces Proposed Business Combination with Solfotara Mining Corporation

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2009) - Metallum Resources Inc. (TSX VENTURE:MRV) (the "Company" or "Metallum") announces that it has signed a Letter of Intent ("LOI") dated February 27, 2009 with Solfotara Mining Corporation ("Solfotara"), a private corporation incorporated under the laws of British Columbia, Canada with offices in Manila, Philippines and Vancouver, Canada for a reverse takeover ("RTO") of Metallum (herein the "Proposed Transaction"). The parties to the Proposed Transaction act at arm's length.

If the Proposed Transaction is completed, the shareholders of Solfotara will own approximately 80% of the fully-diluted shares (pre-new money) of the Resulting Issuer (the entity formed out of the three-way amalgamation of Metallum, Solfotara and a wholly-owned subsidiary of Metallum formed to complete the Proposed Transaction) while the existing shareholders of Metallum will own approximately 20% of the fully-diluted shares (pre-new money) of the Resulting Issuer. It is a condition precedent to the closing of the Proposed Transaction, that a minimum $3,500,000 private placement of units ("Units") of the Resulting Issuer at $0.50 per Unit be completed. It is anticipated that each Unit will consist of one common share and common share purchase warrant of the Resulting Issuer exercisable for twelve months at $0.75 per share. It is also a condition of the Proposed Transaction that Metallum obtains shareholder approval, and implements, a consolidation of its shares on an approximate basis of one new share for every 6.4 old shares. Furthermore, the Proposed Transaction is subject to the parties entering into a definitive agreement and obtaining all regulatory approvals (including that of the TSX Venture Exchange ("Exchange").

To facilitate certain aspects of the Proposed Transaction, Metallum has agreed to advance to Solfotara, pending receipt of Exchange approval, Cdn. $250,000 to fund a property option payment due by Solfotara in respect to its Basay Property (discussed below). Pending Exchange approval, the Cdn. $250,000 will be advanced by Metallum to Solfotara in the form of a debenture ("Debenture"). If the Proposed Transaction is completed, the principal amount of the Debenture plus accured interest will be convertible into common shares of Solfotara at an agreed price and if the Proposed Transaction is not completed, Solfotara will be required, unless the reason for the default lies with Metallum, to repay the Debenture advances with interest. The LOI contemplates that Metallum may make additional Debenture advances, again subject to Exchange approval, of up to a maximum of Cdn. $500,000 (for a total of Cdn. $750,000) prior to completion of the Proposed Transaction.

If the Proposed Transaction is completed, Metallum will acquire an interest in five mineral properties in the Philippines, four of which are copper-gold porphyry targets lying within the prolific Philippine porphyry belt, and one of which is a gold fumarole.

A comprehensive press release with further particulars relating to the Proposed Transaction will follow in accordance with the policies of the Exchange.

About Solfotara Mining Corp.

Solfotara is a privately owned British Columbia company that has, through a number of foreign subsidiary companies, an interest in five exploration properties, being Basay, Biliran, Tawi-Tawi, Kilong-Olao and St. Anthony, all as described in more detail below. Solfotara currently has 30,901,651 common shares issued and outstanding.

One of Solfotara's copper-gold porphyry properties, the Basay Property, is the former producing open-pit Basay Mine, (production 1979-1982 by CDCP Mining Inc.) located on the island of Negros. A National Instrument 43-101 report (February 25, 2009 authored by Neil T. Motton, MAusIMM, MAIG) identifies historic post mining resource figures1 of 230,340,000 tonnes grading 0.44% copper, using a 0.25% copper cut-off (equivalent to current NI 43-101 measured, indicated, and inferred resources) and historic reserve figures1 of 129,000,000 tonnes grading 0.48% copper, using a 0.25% copper cut-off (equivalent to current NI 43-101 proven and probable) based on published data from CDCP. Motton calculated inferred resources (NI 43-101 compliant) of 102,503,000 tonnes grading 0.45% copper, using a 0.25% copper cut-off and 50m drill radius, with credits of molybdenum, gold, silver, and rhenium; however, grades and tonnages have not been established for these credit metals. The deposit is open at depth and all directions. The difference between the two resource figures lies in the fact that some of the historic drill exploration data is missing; however, it is anticipated that future drilling will result in an increase in the calculated resource figure.

Solfotara's remaining four properties, described below, have not had any historical geological information yet confirmed by an independent arms-length qualified person. Due diligence with respect to this information will be completed prior to closing of the Proposed Transaction.

A second property, the Tawi-Tawi Property, located on the island of Luzon, is a porphyry copper-gold deposit in respect to which drilling of 150 holes from the late 1970's to early 1980's by an exploration company identified a mineral inventory of 225,000,000 tonnes grading 0.4% copper and 0.3 gm/t gold (these tonnage and grade numbers are not NI 43-101 compliant and therefore should not be relied upon2), with molybdenum credits. The deposit is open in three directions and at depth. The property is further enhanced by the occurrence of a diorite porphyry, located approximately 3 km. distant, with associated copper mineralization identified in 9 drill holes from the 1970's. As well there are epithermal gold-bearing veins associated with the system. A recent Induced Polarization (IP) geophysical survey indicated that there is probable continuity between the two copper porphyries.

A third property, the St. Anthony Property, also located on the island of Luzon, is a gold-rich porphyry copper deposit defined by extensive historic drilling as well as multiple adits. In 1984, a feasibility study calculated a reserve of 53,000,000 tonnes grading 0.33% copper and 0.48 g/t gold (these tonnage and grade numbers are not NI 43-101 compliant and therefore should not be relied upon2). The deposit remains open in two directions and at depth.

A fourth property, the Kilong-Olao Property, also on Luzon island, comprises 24,587 hectares and covers two known copper porphyry deposits, as well as several small scale gold mining camps. The first copper porphyry received 5,951 meteres of drilling by Marcopper Mining Corporation during the early 1970's whereby an initial resource of 50,000,000 tonnes grading about 0.4% copper (these tonnage and grade numbers are not NI 43-101 compliant and therefore should not be relied upon2) was calculated. Mineralization is open in all directions and at depth. The drilled area sits within a 3 km. X 1.5 km. soil anomaly grading greater than 500 parts per million (ppm) copper. The second copper porphyry on this property, lying approximately 8 km. to the south, was explored by Carpentaria Resources, also in the early 1970's. The area was grid soil sampled which defined a 3 km. X 1.5 km. anomalous copper zone grading greater than 500 ppm copper, with several large areas grading in excess of 2,000 ppm copper. This impressive anomaly remains untested by drilling. Neither of these porphyries was assayed for gold or molybdenum. Exploration was suspended in this region over 30 years ago due to local insurgency and no exploration has been completed since then. It is significant to note that the area between these two porphyries has never been explored.

Small scale gold mining by local residents has been carried out for decades in the area east of the northern porphyry and gold mineralization is associated with a large east-west striking fault system. Stockwork quartz veining hosts the gold mineralization and recent samples from the local gold miner's dumps graded between 35 and 120 g/t gold. These targets remain virtually unexplored and they have never been drill tested.

The fifth property, the Biliran Property, located on the island of Biliran, was acquired for its gold potential because of its geologic similarities to the Lihir gold deposit, just northeast of Papua New Guinea, one of the world's largest gold deposits. The property contains an active fumarole field and has been previously explored as a native sulphur deposit with an outlined sulphur resource. An area of greater than 2 sq. km. is covered by pervasive advanced argillic alteration. Previous geothermal drilling intersected extensive zones of quartz-calcite-adularia-pyrite-anhydrite veining, but drill core was never assayed. However, historic and recent surface sampling has been known to prove grades of several grams gold/t, although precise assay values cannot be substantiated at this time.

The Company believes that the Proposed Transaction, if completed, will represent an opportunity to participate in five excellent exploration projects in the Philippines. The Philippines contains large, untapped resources of copper, gold and additional base and precious metals. As well, it offers a stable pro-mining government, and is strategically located in close proximity to Asian markets.

About Metallum Resources Inc.

Metallum Resources Inc. is a precious metals exploration company which holds a group of 11 patented and 18 unpatented claims within Chester Township, known as its Chester Gold Property, located west of Highway 144 midway between Sudbury and Timmins, Ontario. It also has an option to earn a 70% interest in the M-18 gold property in Argentina.

Metallum has 53,803,828 common shares outstanding and is listed on the Exchange under the symbol MRV.

Greg Lipton, P. Geo. is the qualified person for the Company as required under National Instrument 43-101. He is a member of the Association of Professional Geoscientists of Ontario (APGO).

Reader Advisory

A general policy of the Exchange requires that a sponsor be retained to prepare a sponsor report in compliance with Exchange Policy 2.2. Metallum has not yet appointed a sponsor to prepare a sponsor report in respect to the Proposed Transaction, but expects to do so shortly.

This press release contains forward-looking statements with respect to the Proposed Transaction and matters concerning the business, operations, strategy, and financial performance of the Resulting Issuer, Solfotara and Metallum. These statements generally can be identified by use of forward looking word such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The completion of the Proposed Transaction and the future business, operations and performance of the Resulting Issuer discussed herein could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the Proposed Transaction contemplated herein is completed. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of Metallum and Solfotara to obtain necessary shareholder approval to complete the Proposed Transaction or to satisfy the requirements of the Exchange with respect to the Proposed Transaction. The cautionary statements qualify all forward-looking statements attributable to Metallum and Solfotara and persons acting on their behalves. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and Metallum and Solfotara have no obligation to update such statements except as required by law.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested Shareholder approval. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Metallum Resources Inc. should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange Inc. 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.

1 Historical reserves are considered to be historical resources as any economic information would be out of date.

2 A qualified person has not done sufficient work to classify the historical estimate as current mineral resources. The issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.

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