Canoe Mining to Purchase 100 % of Hamlin-Deaty Creek Property from Glencore

Canoe Mining announced it had signed binding letters of intent with Glencore Canada Corporation, Rainy Mountain Royalty Corp. and Mega Uranium Ltd. to purchase a 100% interest in the Hamlin-Deaty Creek property located in the Shebandowan Belt 110km west of Thunder Bay, Ontario.

"The Hamlin property compliments our current holdings and furthers our strategic objective to consolidate the Shebandowan copper gold belt into a single major mining camp,” said Duane Parnham, a director of Canoe Mining.

Two factors that enabled Canoe Mining to acquire the Hamlin-Deaty Creek property are the low acquisition costs for metal deposits in Canada and the fact that many mining companies are divesting their exploration and development projects.   

“We envision that Canoe will benefit from being well positioned with an excellent copper- gold mining project in the future, when markets will potentially recognize a significant increase in this property's valuation and reward Canoe for its efforts to enhance this asset," Parnham added.

Glencore currently has a 51 % interest in Hamlin-Deaty Creek, while Mega Uranium and Rainy Mountain each hold a 24.5 % interest. The Property was initially acquired by East West Resource Corporation (now Rainy Mountain) in 2003 and a partnership was formed with Mega Uranium to explore and develop the property.

A total of 58 diamond drill holes were completed by 2006 which traced a 900m long and 100m wide breccia zone containing copper, gold, silver and molybdenum mineralization.  In 2011, Xstrata Copper (now Glencore) earned a 51% interest by spending $3.0 million in addition to the $1.5 million spent by previous operators. During 2009 to 2011, Xstrata Copper completed 23 drill holes, for a total of 7763m, which extended the deposit down to 200m below surface.

R.S. Middleton, P.Eng, Canoe Mining's Exploration Manager led the team that made the original discovery of the Hamlin deposit and has since sponsored students to complete their thesis work on details of the geology and mineralogy of the property.

"I am deeply familiar with the Hamlin property and deposit and know first-hand the potential of this property. Our objective is to build a 60-100 million tonne copper-gold-silver deposit similar to the producing Mount Polley Mine in BC (Imperial Metals), or the Troilus Mine near Chibougamau (Inmet now First Quantum),"  Middleton said.

The agreement is subject to the receipt of all required regulatory and exchange approval. Canoe Mining has agreed to make a cash payment of $50,000 to Glencore and grant Glencore a 1% net smelter royalty ("NSR") together with a right of first refusal for an off-take agreement. Additionally, Rainy Mountain and Mega Uranium will each be issued one million common shares of Canoe Mining.

The underlying 2% NSR held by the original vending prospectors may be purchased by Canoe Mining under the following terms: a 1% NSR may be purchased at any time for $1.0 million, and Canoe Mining has the first rights of refusal to purchase the remaining 1% NSR.

This project will be supervised by R.S. Middleton, P.Eng who is a qualified person as such term is defined in NI 43-101 and who has reviewed and approved the technical information and data included in this press release.

 Additional information and corporate documents may be found on www.sedar.com and on the Canoe Mining website: www.canoemining.com