Sphere Resources Inc.
TSX VENTURE : SPH.H

Sphere Resources Inc.

January 05, 2011 10:30 ET

Sphere Resources and Duncan Park Holdings Sign Letter of Intent for the McManus Property in Red Lake, Ontario

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 5, 2011) - Sphere Resources Inc. (the "Company") (TSX VENTURE:SPH.H) Signs Letter of Intent With Duncan Park Holdings Corporation ("Duncan Park") Concerning the McManus Claims

Sphere Resources Inc. NEX Board of the TSX Venture Exchange (TSX VENTURE:SPH.H) is pleased to make the following announcement:

As announced on December 6, 2010; the Company entered into an Agreement with Camp McMan Red Lake Gold Mines Limited of Red Lake, Ontario (the "Vendor") to acquire 100% interest in seventeen ( 17 ) patented mineral claims and eleven ( 11 ) licenses of occupation ("McManus Property"), covering approximately 325 hectares located in Dome Townships, in the Red Lake Mining District of Ontario.

The Claims are adjacent to the Dome property (see the Company's press release of March 2010), which comprises 13 unpatented mining claims (34 units) which cover approximately 500 hectares located about 1 km east and north of the Town of Red Lake and 3 km southwest of Balmertown, Ontario, optioned by the Company and Duncan Park Holdings Corporation ("Duncan Park") (TSX VENTURE:DPH) from Global Minerals Inc. ("Global"). The Claims add approximately 65% to the size of the Red Lake property and square up and fill in the north-eastern section of the property, which now abuts the Mega Precious Metals Inc. ("Mega") property to the north on which Mega reports it is drilling two 3,000 metre holes.

Since the Claims join the Dome property, they are subject to area of interest Clauses in both the Sphere/Duncan Park Option Agreement (the "Dome Option Agreement") and the Sphere/Global Option Agreement (the "Global Option Agreement").

The Dome Option Agreement requires Duncan Park to pay the Company 24% of the Company's acquisition costs. Duncan Park will join the Company in participating in the Camp McMan Option Agreement and will fund the Company's earn-in costs as set out below and thereby earn all of the Company's rights to the Claims, subject to the Company's right to clawback a 51% interest in the property by the payment to Duncan Park of four times the expenditures made by Duncan Park ("The Company's Clawback Right").

The result of the combination of the existing agreements and the Letter of Intent means that Duncan Park has the option to earn a 75% interest in the combined properties, subject to the Company's Clawback Right, which, if exercised, would leave Duncan Park with a 24% interest in the property and reimbursement of four times the combined required expenditures of approximately $2.41 million, with Global maintaining a 25% continuing interest.

The Company's financial obligations (which are to be funded by Duncan Park under the Letter of Intent) and share issuance obligations pursuant to its Letter Agreement with Camp McMan are:

Date Option Payment Share Issue Exploration Costs
On signing letter agreement $ 10,000 Nil $ Nil
On signing option agreement $ 25,000 300,000 $ Nil
On or before December 15, 2011 $ 50,000 400,000 $ 100,000
On or before December 15, 2012 $ 50,000 500,000 $ 200,000
On or before December 15, 2013 $ 75,000 500,000 $ 350,000
On or before December 15, 2014 $ Nil Nil $ 550,000
Total $ 210,000 1,700,000 $ 1,200,000

In addition, the Company is obligated to make the tax payments on the Claims. The Company is also committed to the option payments, tax payments, share issuances and exploration costs for the first year.

On completion of the required option, making tax payments and covering the share issuances and exploration costs; the Company will have earned a 100% interest in the Claims, including the residue of surface rights with respect thereto, subject only to a 3½% Net Smelter Royalty ("NSR") interest on all metals produced from the Claims to Camp McMan. The Company also has the right to buy down the NSR interest from 3½% to 2% for $500,000 per ½%. Upon the Company earning its interest in the Claims, the Company is obligated to make annual advance royalty payments of $10,000 until either it exercises this option or a decision is made to enter production. As noted above, under the Letter of Intent, Duncan Park will have earned the above-mentioned interest in the Claims and the above-mentioned NSR buy-down right, and will be responsible for the above-mentioned advance royalty payments, all subject to the Company Clawback Right.

The proposed transaction remains subject to, among other things, completion of satisfactory due diligence, entering into definitive agreements, as required, and receiving all requisite regulatory and other approvals, including the approval of the NEX board of the TSX Venture Exchange.

About Sphere Resources Inc.

Sphere Resources Inc. is focused on identifying and appropriating exploration targets and other high quality assets in major global mining camps with a particular emphasis on precious metals. It is currently involved in exploring for gold mineralization in the Red Lake District of Ontario and the Carlin Trend in Nevada, USA.

A finder's fee is payable in regards to this transaction.

On behalf of Sphere Resources Inc.

Malcolm L Stevens, Executive Chairman and President

Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute forward -looking statements. Forward -looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in mineral exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

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

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