Mr. Charles Fipke reports

CANTEX ANNOUNCES AL HARIQAH OPTION AGREEMENT WITH WCP RESOURCES LTD

Cantex Mine Development Corp. has signed an agreement with WCP Resources Ltd. wherein WCP can earn up to a 70-per-cent interest in the Al Hariqah gold project by financing advanced exploration and mine development to commercial production. Cantex also announces the end of the Vale option agreement.

Vale option agreement

Pursuant to the terms of the November, 2008, letter agreement entered into with Vale, the company has received notification that Vale has decided not to pursue the Suwar option and accordingly has elected to terminate the letter agreement effective immediately.

WCP commercial terms

WCP and Cantex have entered into an earn-in agreement regarding the Al Hariqah gold project which provides the following:

• WCP will have up to two years to exercise an option to commence the earn-in to the project.
• During the earn-in option period, Cantex will continue to manage the project, and WCP will be responsible for all agreed or budgeted costs of the project.
• Upon the exercise of the earn-in option, WCP may earn an interest in the project by expending:
• • $5-million (U.S.) within two years of the commencement date to acquire a 40-per-cent interest in the project;
  • $10-million (U.S.) within the following two years to increase its interest in the project to 50 per cent;
  • $15-million (U.S.) within the following three years to increase its interest in the project to 70 per cent.
• Expenditure by WCP during the earn-in option period will be included in calculation of the first earn-in expenditure.
• WCP will manage the project during the earn-in period and will be able to utilize Cantex's existing in-country exploration team.
• Force majeure provisions (which include sovereign risk and conflict issues) may apply to the above time frames.
• Prior to earning a 40-per-cent interest in the project, WCP may withdraw from the agreement at any time.
• An incorporated joint venture will be formed upon WCP earning an interest in the project.
• Upon formation of the JV, WCP's representation on the board of directors of the new company will be proportional to its shareholding in that entity (most matters of the JV will require a simple board majority (including decision to mine); however, some matters will require a unanimous decision of the board (including sale of the project and surrender of the licence).
• In circumstances where WCP earns a 70-per-cent interest in the project and a decision to mine the project is reached, WCP will carry Cantex's portion of mine construction costs to initial production via a loan at an agreed/market interest rate. The loan would be repaid from the first 80 per cent of profits earned by Cantex.
• Once the JV is formed, each party has pre-emptive rights over the other party's interest in the JV.
• If WCP only earns a 40-per-cent or 50-per-cent interest in the project (if it does not earn a 70-per-cent interest in the project), then each party must finance its own proportion to reach initial production. If a party does not do so, then its interest in the JV will be diluted.
• Upon initial production by the JV (whether solely financed by WCP or not), dilution will apply to a parties' interest in the JV if it does not continue to contribute in accordance with its interest at that.
• Should the government of the Republic of Yemen acquire an interest in the project, then the parties will dilute their interest in the project on a pro rata basis.
• The agreement is subject to the following conditions precedent:
  • Each party obtaining all necessary regulatory approvals necessary to effect to the transactions contemplated by the agreement;
  • WCP completing due diligence to its sole satisfaction on the project within 60 days of execution of the agreement.

Summary

Cantex looks forward to WCP's involvement in the Al Hariqah project. The addition of its technical expertise and financial backing has the potential to not only define a substantial gold reserve, but also to take the project through to commercial production.

This press release has been prepared by Chad Ulansky, PGeol, a qualified person.