Mr. Gorden Glenn reports

MINNOVA PROVIDES RAGGED TDA PERMIT STATUS AND PROJECT DEVELOPMENT UPDATE

In response to Minnova Corp.'s request for clarification on the status of the designated Ragged tailings deposition area (TDA), the company has been advised by Environment Canada, in collaboration with Fisheries and Oceans Canada (DFO), that because fish now occur within the Ragged TDA, they consider the Ragged TDA to be a body of water frequented by fish. As such, Environment Canada stated the Ragged TDA will require a listing on Schedule 2 of the Metal Mining Effluent Regulations (MMER). In order to achieve a Schedule 2 listing, the company will be required to submit an assessment of alternatives report to determine if the Ragged TDA is in fact the best option for the deposition of new tailings. The assessment will consider all possible alternatives for safe, long-term tailings storage from environmental, socio-economic and technical perspectives. This report and the subsequent listing process should not delay the planned use of Ragged TDA for tailings storage, which in any event was not planned to occur until late in the second half of 2015.

Ragged TDA status and path forward

Gorden Glenn, Minnova president and chief executive officer, said: "Environment Canada's feedback and decision on this matter provide greater clarity on the status of the Ragged TDA and the requirements to re-establish the Ragged TDA as a fully permitted tailings deposition area. It also establishes clear reporting and approval timelines that allow the company to continue to advance on various financing discussions and development plans, currently under way, while we proceed to comply with these federal requirements. I am confident we will be able to reconfirm that the Ragged TDA is in fact the best site for tailings, and stay on track to achieve our goal of restarting mining operations and achieving gold production at the Maverick gold project as soon as the second half of 2015."

Environment Canada, in association with the DFO, has advised the company that it is committed to initiating the review/screening process as soon as it receives the company's completed alternatives assessment report, and that the review/screening process would be completed within approximately three months of its receipt. Minnova intends to initiate the report immediately, and will engage consultants, as required, with the goal of submitting its alternatives assessment report to Environment Canada and the DFO before the end of October, 2014. Environment Canada and the DFO further advise that, under normal circumstances, the MMER Schedule 2 process takes six to eight months to complete after the conclusion of the federal review/screening process. Upon successful completion of the federal regulatory processes, the company would again be allowed to use the Ragged TDA as a fully licensed tailings management facility.

Minnova is already in possession of a valid Manitoba Environment Act licence No. 1207E which allows, from Manitoba's perspective, the operation of an underground mine and mill, and the deposition of tailings in the Ragged TDA. Manitoba's Director of Environmental Approvals confirmed the company's licence in a letter dated May 17, 2012.

Modified development plans

As previously disclosed (May 22, 2014), the company submitted a notice of alteration (NOA) to Manitoba Conservation and Water Stewardship to approve the addition of open pits as part of its restart plans. As part of the regulatory review process, the NOA was subject to interagency review (Canada Environmental Assessment Agency or CEAA) and a public consultation process. While no feedback was received from the public consultation process, CEAA has requested that the company submit a project description, based on its 900-tonne-per-day open-pit and underground development scenario, as outlined in the company's July 9, 2014, updated preliminary economic assessment. After reviewing the updated PEA and additional detailed mine development information provided by Minnova, CEAA has determined that the proposed restart of the PL mine "is a designated activity pursuant to Paragraph 16(c) of the regulations designating physical activities under the Canadian Environmental Assessment Act, 2012."

The agency made this determination considering the following factors:

• The mine has not been in operation since 1989. The reopening of the mine, in addition to the development of five open-surface mining pits, a potential acid-generating waste rock stockpile, four overburden and non-acid-generating rock stockpiles, on-site haulage roads, and upgrades to existing access roads, constitutes a new mine for the purposes of Paragraph 16(c) of the regulations;
• The cumulative design production capacity (resuming underground mine ore production with new surface mine production) of 900 tonnes per day exceeds the 600-tonne-per-day threshold in Paragraph 16(c) of the regulations.

This was an unexpected request as the company does not believe that this section of the CEAA 2012 regulations applies to the restart of mining at past-producing operations such as the PL mine. As a result of this request from CEAA, and factoring in other technical and project economics criteria, the company is reviewing its restart plans with Manitoba and federal regulators, and is considering its alternatives which are:

• Submit a project description, as requested by CEAA, which could result in a full environmental assessment and commensurate consultation process that could delay project development by over two years;
• Revise the company's mine development plans to an underground-only mining operation with a production rate of less than 600 tonnes per day, and therefore not trigger Paragraph 16(c) of the regulations;
• Seek a review by the federal court as to CEAA's application of Paragraph 16(c) of the regulations.

Mr. Glenn commented: "While we dispute CEAA's assessment that our planned restart of the PL mine is a new mine, we believe the best course of action for our shareholders and all stakeholders is to achieve the shortest possible development timetable within the existing regulatory environment. We will take the necessary steps that provide a clear development timeline that will enable us to advance our financing and development efforts under a plan that is, to some extent, entirely within our control."

Should the company opt to restart the mine as an underground-only operation, the company believes it can still achieve a short development schedule as the PL deposit is already partially developed with 7,000 metres of existing underground development accessed via an existing portal. Much of the 537,000 ounces of contained gold in the mine plan, as defined in the July, 2014, updated PEA, are located between surface and minus-100-metre vertical. As such, the company does not believe its efforts to optimize the MGP's after-tax, 5-per-cent-discounted net present value of $83.3-million by incorporating five shallow open pits on the PL deposit will be materially impacted by a revised underground-only PL deposit mine plan. For example, under the current underground mine plan, approximately 250,000 ounces or 54 per cent of the forecasted 462,000 contained ounces in the current PL deposit underground mine plan occur between surface and minus 100 metres (approximately 43 per cent occur between minus 100 metres and minus 200 metres). The company estimates that it can mine approximately 50 per cent of the current 43,000 contained ounces of gold forecasted to be produced from the open-pit mine plan on the PL deposit in years one through four via shallow underground mining methods with minimal disruption on the overall mine plan.

On this point, ACA Howe has been engaged to complete a new underground-only mining scenario that will maximize the extraction rate of the near-surface PL deposit's gold resources.

A revised, underground-only restart plan is a viable option that would avoid unnecessary regulatory delays, and conforms with the company's existing provincial licence to advance the project in this manner.

Mr. Glenn stated: "With clear guidance from Environment Canada and a reasonable (approximately 12-month) timeline to have the Ragged TDA added to Schedule 2 of the MMER, and the ability to revise our restart plans as an underground-only operation, we are in a strong position to advance our various financing, and mergers and acquisition discussions , and initiate site work toward our stated goal of initial production as early as the second half of 2015. Minnova remains committed to best practices in environmental management, and we look forward to co-operating with all federal and provincial regulatory agencies to ensure we are in full compliance with CEAA 2012, the Metal Mining Effluent Regulations and all applicable provincial laws, as we are obliged to under our existing Environment Act licence No. 1207E."

Ragged tailings deposition area history

The following is a brief summary of the history of the Ragged TDA and the process that led to Environment Canada/DFO's decision. The trigger for the decision by Environment Canada is that the Ragged TDA now represents a water frequented by fish, as fish was found by Minnova in the Ragged TDA during an August, 2014, fish population study requested by Environment Canada in June, 2014.

The company believes that fish was able to enter the Ragged TDA over the existing discharge control weir structure during a seasonal high water period at some point after the mine was placed on care and maintenance following the cessation of mining activities in April, 1989.

Despite the occurrence of fish in the Ragged TDA, AECOM concluded that the "Ragged TDA does not support a commercial, recreational or aboriginal fishery." AECOM's work and its conclusion build on the historical studies that originally supported the creation of the Ragged TDA in January, 1989 (the start of original mining operations by Pioneer Metals). Following an extensive environmental impact statement (Ilam, 1987) that concluded "no significant fisheries resource would be lost," then Manitoba Minister of Natural Resources, Jack Penner, in a letter to then Minister of Fisheries and Oceans, the honourable Tom Siddon, stated that "his department has concluded that Ragged Lake is the most suitable tailings disposal area available," and he requested that Mr. Siddon designate it for use as a tailings facility under Section 33.1 of the Fisheries Act.

In Mr. Siddon's response letter, duly authorizing the use of Ragged Lake as a tailings management facility, he confirmed that, "My regional officials are satisfied with your assessment that no significant fishery will be lost as a result of the designation [as a tailings facility]." He further commented that the use of Ragged Lake as the tailings impoundment area for the Puffy mine will "result in the permanent loss of Ragged Lake as a natural resource and the associated fisheries resource."

The Ragged TDA has remained licensed continuously by the province since 1988, and most recently in May 17, 2012, Manitoba's Director of Environmental Approvals issued a letter requiring that, in operating the Ragged TDA, the company comply with clauses 6 and 7 of the Manitoba licence by meeting all the criteria set out in the MMER.

Qualified person

The company's qualified person for the drill program at the Maverick gold project is Brian Robertson, BSc, PEng. As the qualifed person, Mr. Robertson has prepared or supervised the preparation of the scientific or technical information for the property, and has verified the data disclosed in this press release.

We seek Safe Harbor.