Mr. John Budreski reports

MORIEN SIGNS DEFINITIVE SALE AGREEMENT FOR DONKIN COAL PROJECT

Morien Resources Corp. has entered into a definitive purchase and sale agreement with Kameron Collieries ULC, an affiliate of the Cline Group LLC, for the sale of Morien's 25-per-cent interest in the Donkin coal project in Cape Breton, N.S. Kameron currently holds a 75-per-cent interest in Donkin, having acquired it from Glencore PLC on Dec. 3, 2014.

A special meeting of shareholders will be held on Feb. 10, 2015, when the company's shareholders will be asked to approve a special resolution authorizing the transaction. The material terms of the transaction will be set forth in a management information circular to be mailed out to shareholders and filed on SEDAR on or about Jan. 14, 2015. Pursuant to the terms of the agreement, Kameron has agreed to pay Morien aggregate cash consideration of $5.5-million: $2-million on closing, $2-million on or before the second anniversary of closing and $1.5-million on or before the third anniversary of closing. Morien is also entitled to a gross production royalty of 2 per cent on the first 500,000 tonnes of coal sales per calendar quarter, and 4 per cent on any coal sales from quarterly tonnage above 500,000 tonnes.

After careful consideration, including a thorough review of the agreement, Morien's board of directors unanimously determined that the transaction is in the best interest of the company and recommends that shareholders vote in favour of the transaction.

In the course of coming to this conclusion, the board reviewed information and considered a number of factors, including, among other things:

1. Prospective royalty payments:
   • Morien management and its board analyzed the potential annual royalties to be received from Donkin, and believe the transaction will bring significant value to shareholders. Based on the current permitted production rate of 2.75 million sales tonnes per year for Donkin, and on current and forecasted coal prices for coal, the board considered royalty payments that could range from $4.6-million to $6.7-million annually. These values are only estimates based on judgements made by the board and Morien management, and would be achieved only when the project commences and reaches maximum permitted production levels. Actual results and royalties received, if any, may vary from those considered by the board and Morien management;
2. Minimizing shareholder dilution:
   • The transaction is believed to be more favourable, with less financial risk, than the value in retaining Morien's working interest. If Morien were to retain its working interest, the company would need to raise funds through the issuance of additional equity, likely resulting in significant shareholder dilution, in order to finance its 25-per-cent share of the costs required to bring Donkin into production. Although Kameron has not provided estimates of future capital costs for the development of the project, previous studies prepared by Glencore suggested total capital development costs in excess of $300-million, excluding sustaining capital. At that level, Morien's 25 per cent of these costs would be in excess of $75-million;
3. Upside exposure without direct operating risk:
   • Shareholders are able to benefit in the event of higher production and coal prices, but will not be exposed to the direct capital and operating risks associated with operating a coal mine;
4. Strong financial position and growth opportunities:
   • The cash payment from Kameron on the closing of the transaction, combined with Morien's existing funds, will result in the corporation having a total cash position of approximately $4.5-million. Funds from the two anticipated future milestone payments from Kameron, totalling $3.5-million, in addition to existing royalties from Banks Island Gold Ltd., and an anticipated milestone payment from Vulcan Materials Company of $800,000 in early 2016 related to the Black Point aggregate project, will further strengthen the company's financial position. These funds will allow Morien to pursue growth opportunities at an opportune time in a period of low valuations in the resource sector;
5. Reputation and expertise of Cline:
   • Cline has a strong reputation as a high-quality mine developer, and is currently operating three of the four most productive underground coal mines in the United States. Cline's development experience in both continuous miner and long-wall coal mining, coupled with its marketing expertise for similar quality coal to Donkin, provides great synergy. The board believes Kameron has the potential to establish a safe, efficient and economically viable long-term operation at Donkin;
6. Diversified royalty portfolio:
   • The Donkin royalty will further diversify Morien's portfolio. Morien has two existing royalty arrangements: a 1.5-per-cent net smelter return royalty from the Yellow Giant gold mine owned by Banks Island Gold, which currently provides payments to Morien in the order of $200,000 per year, and a production royalty from the Black Point aggregate project to be provided by Vulcan Materials, which is anticipated to commence some time after 2018, and to be in the range of $250,000 to $750,000 per year over the project's expected 50-year life.

Special meeting of shareholders

The meeting will be held at the offices of McInnes Cooper, suite 1300, 1969 Upper Water St., Halifax, N.S., on Tuesday, Feb. 10, 2015, at 10:30 a.m. Atlantic Time. Specific details of the matters proposed to be put before the meeting will be set forth in detail in the circular, expected to be mailed to shareholders and posted to SEDAR, as well the company's website, on or about Jan. 14, 2015. The record date for determining the shareholders entitled to vote at the meeting has been fixed as the close of business on Tuesday, Jan. 6, 2015.

We seek Safe Harbor.