Mr. Henry Kloepper of Houston Lake reports

HLM ENTERS LETTER OF INTENT WITH NORTH AMERICAN PALLADIUM FOR THE OPTION TO PURCHASE ITS TIB LAKE PGE PROPERTY

Houston Lake Mining Inc. has entered into a letter of intent with North American Palladium Ltd. whereby North American Palladium would have the option to purchase the Tib Lake platinum group elements (PGE) property after completion of certain cash payments and exploration expenditures. The property is the second largest intrusion in the Lac des Iles mining camp, located just north of Thunder Bay, Ont.

The LOI provides that North American Palladium may acquire a 100-per-cent interest in the 2,464-hecatre Tib Lake PGE property from HLM after making staged payments totalling $450,000 to HLM and incurring exploration expenditures of $1.6-million, in aggregate, over five years. HLM would retain the exclusivity to exercise its buyback option to purchase 1 per cent of a 2.5-per-cent net smelter royalty for $1-million, and to purchase the remaining royalty (1.5 per cent) on such terms and conditions as it is able to negotiate with the holder of the royalty.

The terms of the LOI remain subject to entering into a definitive agreement and the LOI also requires regulatory approval.

"HLM is very pleased to have taken a significant step with such a well-respected, mining company as North American Palladium," said Henry J. Kloepper, chief executive officer of HLM. "North American Palladium's PGE mining expertise and exploration track record in discovering high-grade mineralization, coupled with available capacity at their LDI mill only 15 km away, provide a unique opportunity for the Tib Lake PGE property."

We seek Safe Harbor.