Mr. Larry Johnson reports

VOLCANIC SAMPLES UP TO 3.41 G/T GOLD AT WALHALLA; ANNOUNCES FINANCING

Volcanic Metals Corp. has received the assay results from its phase I soil sampling and prospecting program on the Walhalla property in the White gold district of the Yukon Territory.

Highlights:

• 1,019 ridge and spur soil samples collected from the property.

• Many grouped gold-in-soil anomalies suggest a gold-bearing system and warrant a comprehensive phase II grid/trench/pit program to identify drill targets.

• 3.41 grams per tonne gold soil anomaly -- top 10 in entire White gold district.

Property location and description

The Walhalla property consists of 1,988 quartz claims covering approximately 41,800 hectares located 120 kilometres southeast of Dawson City in the Yukon. The property is located in the White gold district immediately east of and contiguous to Pacific Ridge's Mariposa project. The company holds a 25-per-cent interest in the property and has entered into an option agreement to acquire the remaining 75-per-cent interest (see news release dated Oct. 18, 2011). The option remains subject to exchange approval.

Phase I sampling and prospecting

The phase I program, which covered less than a third of the property, identified strong anomalous gold zones as well as anomalous pathfinder elements such as arsenic and barium. Ridge and spur samples were taken in the western, northeastern and southeastern parts of the property. Significant gold-in-soil anomalies were identified in all areas, warranting a comprehensive phase II grid/trenching/pit program to identify potential drill targets, as well as continued ridge and spur sampling on the rest of the property. Of particular interest was a gold-in-soil anomaly that returned a value of 3.41 g/t Au -- one of the top 10 historically in the entire White gold district. For detailed maps of the property and the locations, please visit the website.

Geology and mineralization

Prospecting on the property identified a large breccia system in float rock extending approximately two kilometres long and 200 metres wide. A breccia is a rock consisting of broken fragments of minerals or rock cemented together by a fine-grained matrix. Breccia zones may be generated by faulting or by forceful explosions of volatile-rich fluids with the rapid expansion of the fluids shattering large volumes of country rock. This part of the property is located along the Teslin fault, a major regional fault system which splays out on the property, and is mid-Cretaceous in age which is the age of most Yukon gold mineralization. Other parts of this large property are underlain by intrusive and metamorphic rocks similar to those found in the White gold district to the west, and also those which host the Minto copper-gold mine to the south. Outcrop is very sparse on the property, and the area is considered to be under-explored.

Airborne geophysical

The company contracted Precision GeoSurveys Inc. and is currently flying an east-west-oriented helicopter-borne high-resolution aeromagnetic survey over the property. Results from this airborne survey will be used in conjunction with assay results to identify targets for follow-up work such as further ridge and spur soil sampling, prospecting, grid soil sampling, trenching, and drilling.

Financing

Volcanic will undertake a non-brokered private placement to raise gross proceeds of up to $600,000, consisting of up to four million non-flow-through units at a price of 10 cents per unit (for gross proceeds of up to $400,000) and up to 1,666,667 flow-through shares at a price of 12 cents per share (for gross proceeds of up to $200,000). Each unit will consist of one common share and one-half of a non-transferable warrant, with a whole warrant entitling the holder to purchase one common share at a price of 20 cents for a period of 12 months following the closing.

The securities issued pursuant to the private placement will be subject to a four-month hold period from the closing date. Completion of the private placement and the payment of any finders' fees remain subject to the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

The proceeds of the private placement will be used to finance the acquisition of the Walhalla project, the phase II work program on Walhalla and general administrative costs.

The technical information contained within this news release has been reviewed and approved by William Mann, PGeo, a qualified person as defined by National Instrument 43-101.