Mr. Arni Johannson reports

Galena Capital Corp.'s management has met with several asset groups and has carried out due diligence on a number of potential transactions but nothing material has developed past the due-diligence stage. The sector of interest continues to be oil and gas; however, a substantial number of potential transactions have come from the precious-metal and base-metal sectors as well. Last month, the company signed an letter of intent with Parlane Resources under which Parlane Resource Corp. may acquire the company's Mercedes project in Mexico. The consideration for the proposed acquisition will be as follows:

• $10,000 upon signing of the LOI ($3,000 of which is non-refundable; the balance to be refunded if Parlane Resource does not proceed with the proposed acquisition);
• $15,000 upon the notice to proceed (on or before 120 days after the review period);
• $15,000 upon execution of a formal agreement;
• $75,000 12 months after expiry of the review period.

Parlane Resource is currently conducting its due diligence and has until Jan. 6, 2011, to provide a notice to proceed to the company.

Management has started negotiations with two different groups for the sale of the company's Maureen project, which is owned by the company's wholly owned subsidiary, Minas Vallarta. "We are working diligently on cutting our costs in Mexico while maximizing the value of our current assets through potential sales and joint ventures. We are working very hard to ensure that the company and its subsidiaries remain is good standing with Mexican authorities and the TSX Venture Exchange. We remain focused on maximizing the value of the company to shareholders through potential acquisitions. As a team, we recognize the strength of the current climate for commodities, which has the effect of creating a seller's market and, as a result, we must ensure that any acquisition makes sense for our shareholders," states chairman Arni Johannson.