Mr. Robert Butchart reports

CADAN ANNOUNCES MINING GROUP LIMITED TO ACQUIRE SIGNIFICANT INTEREST IN COMVAL PROJECT

Cadan Resources Corp. has signed a binding heads of agreement with Mining Group Ltd. whereby Mining Group may acquire an 80-per-cent interest in the Comval copper-gold project located in the Compostella Valley, Philippines. Cadan will retain a 20-per-cent interest which is free and carried until the Mining Group has incurred a minimum of $48-million (Australian) of expenditures on the Comval project.

Pursuant to the terms of the heads of agreement, Mining Group may acquire an 80-per-cent interest in Philco Mining Corp., which holds exploration permits EP1 and EP2, comprising the Comval project, as well as assume the right to receive certain intercorporate amounts owing by PMC to Cadan, by doing the following:

• It will pay $1-million (Australian) to Cadan to be advanced to Cadan as a secured loan. Upon MGL obtaining shareholder approval for the transaction and completing its due diligence reviews, the loan will be deemed repaid in full by crediting the loan amount toward the purchase price. In the event that the transaction with MGL does not proceed, the loan is repayable in 12 months plus accrued interest at the rate of LIBOR (London interbank offered rate) plus 2 per cent. Cadan has granted MGL security over the shares of PMC and EP2 as security for the loan.
• At closing, MGL will pay to Cadan a further $2-million (Australian) and issue of 2.6 million fully paid ordinary shares of MGL.
• When (and if) MGL's share price trades at or above $1 (Australian) for 30 consecutive days, MGL will issue to Cadan a further 2.6 million shares.
• Subject to certain conditions being met within 24 months of closing of the transaction (which period may be extended by up to a further 24 months), MGL will pay a further $1-million (Australian) to Cadan.

Upon closing of the transaction with MGL, Cadan will retain a 20-per-cent free carried equity interest in PMC, which cannot be diluted until MGL has expended $48-million (Australian) in exploration and development costs on the Comval project. Thereafter, Cadan and MGL will be required to contribute to further costs in proportion to their interest or be diluted.

In addition to the above, on closing MGL will be granted an option to acquire an 80-per-cent interest in the Batoto gold/silver project held by Cadan on the following terms:

• MGL must exercise the option within nine months of closing.

• If MGL exercises the option to acquire an 80-per-cent interest in the Batoto gold/silver project, it must pay to Cadan $3-million and issue a further 5.2 million shares to Cadan.

Robert Butchart, president and chief executive officer of Cadan, stated: "MGL, together with its financiers, is a group with the demonstrated capability of raising the significant funds that are required to properly explore and develop both the porphyry copper and the gold stock work assets at Compostela Valley. This represents an excellent opportunity for Cadan to retain a substantial interest in the project without having to contribute funding until the project is significantly advanced. Cadan will be able to focus its resources and efforts to the advancement of Cadan's core asset, being the T'Boli gold-silver project and mine."

Andrew Maurice, managing director of Mining Group, stated: "The proposed acquisition represents an exciting phase in the Mining Group's growth and is consistent with the company's objective of acquiring commercially significant mineral properties that can readily be brought into production. The Comval project's tenement area covers 4,310 hectares, and has had over 24,000 metres of drilling completed, which we intend to review and reinterpret with the aim of defining a resource."

The transactions are subject to various conditions precedent, including MGL obtaining shareholder approval and regulatory approval, and, in the case of Cadan, the acceptance of the TSX Venture Exchange.

We seek Safe Harbor.