Mr. Charles Fipke reports

WCP EXERCISES OPTION ON THE AL HARIQAH GOLD PROJECT

Cantex Mine Development Corp. optionee WCP Resources Ltd. has exercised its option to farm in on the Al Hariqah gold project, a prospective and potentially large-scale gold project located in the Republic of Yemen.

Introduction

The Al Hariqah gold project is a near-surface gold deposit located 130 kilometres northwest of Sana'a, Yemen. The project is currently 100-per-cent-owned by Cantex, and comprises a granted exploration licence covering an area of approximately 957 square kilometres and is valid until Jan. 16, 2016, with the option for two further four-year extensions (providing 50-per-cent area relinquishments are carried out at the first extension).

On Feb. 6, 2014, WCP exercised its option to earn in on the project. By meeting a series of expenditure commitments, WCP will be able to progressively earn up to a 70-per-cent interest in the project.

Commercial terms

In December, 2011, WCP and Cantex entered into an option and earn-in agreement regarding the Al Hariqah gold project, which provides the following:

• 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; and $15-million (U.S.) within the following three years to increase its interest in the project to 70 per cent;
• Expenditure by WCP since the execution of the agreement in December, 2011, will be included in the 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 company, WCP's board representation will reflect 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 an unanimous decision of the board (including sale of the project and surrender of the licence);
• Upon earning a 70-per-cent interest in the project, WCP will loan carry Cantex to initial production (at an agreed/market interest rate). In these circumstances, the first 80 per cent of earning from the JV will be applied to repay WCP's loan to the JV. 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 (in essence, 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 funded by WCP or not), dilution will apply to a party's interest in the JV if it does not continue to contribute in accordance with its interest at that time.

Cantex is pleased to have WCP's continued involvement in the Al Hariqah project. The recent drill results released on Jan. 23, 2014, indicate that the gold mineralization which has been defined by significant drilling in the northern kilometre of the deposit may extend for up to a further three kilometres to the south.

The technical information and results reported here have been reviewed by Chad Ulansky, PGeo, a qualified person under National Instrument 43-101, who is responsible for the technical content of this release.