Mr. John Black of Regulus reports

REGULUS AND SOUTHERN LEGACY ANNOUNCE SIGNING OF ARRANGEMENT AGREEMENT

Further to the press release dated May 20, 2014, Regulus Resources Inc. and Southern Legacy Minerals Inc. executed a definitive arrangement agreement on July 29, 2014, pursuant to which the two companies will amalgamate.

The amalgamated company will take the name of Regulus Resources Inc. and will maintain the public listings of Southern Legacy on each of the TSX Venture Exchange and the Lima Stock Exchange. Amalco will assume all of the liabilities and assets of each of Regulus and Southern Legacy in accordance with the Business Corporations Act (Alberta).

Regulus and Southern Legacy have agreed to amalgamate pursuant to a plan of arrangement under the Business Corporations Act (Alberta), based on an exchange ratio of 0.565 share of Amalco for each share of Southern Legacy and one share of Amalco for each share of Regulus. Amalco will also effect a one-for-three share consolidation concurrent with the amalgamation. As a result, shareholders of Southern Legacy will in effect receive 0.1883 share of Amalco for each Southern Legacy share, and shareholders of Regulus will receive 0.333 share of Amalco for each Regulus share. Upon completion of the arrangement, Amalco will have approximately 45.3 million shares outstanding, approximately 74 per cent of which will be held by former Regulus shareholders and 26 per cent of which will be held by former Southern Legacy shareholders. It is expected that all of the outstanding common share purchase options of Regulus and Southern Legacy will be cancelled as part of the arrangement for no consideration.

The companies intend to call special meetings of their respective securityholders on or before Sept. 30, 2014.

In connection with the signing of this agreement, Regulus has agreed to increase the unsecured line of credit it has extended to Southern Legacy to a maximum of $2.5-million, with the other terms of the loan remaining unchanged from the terms disclosed in the press release dated May 20, 2014. Advances under the loan will be made at the discretion of Regulus on expenses approved by Regulus. The loan will allow Southern Legacy to continue with key activities and obligations until the amalgamation is completed, including making required option payments on its properties.

Transaction description

For further information on Amalco, please refer to the joint press release dated May 20, 2014, which is also available on SEDAR.

Break fee

Each company has agreed to pay the other company a break fee of $750,000 if the arrangement is not completed because the parties fail to recommend to their respective shareholders to vote in favour of the arrangement at a duly called meeting of shareholders, or a party accepts a proposal to complete an alternative transaction.

Lock-ups

Certain of the directors and officers and other shareholders of each of Regulus and Southern Legacy have executed lock-up agreements in connection with the execution of the agreement. In total, shareholders holding in excess of 19.3 per cent of the Southern Legacy shares and 9.4 per cent of the Regulus shares have agreed to vote in favour of the arrangement.

Advisers and counsel

Regulus's legal counsel is Burnet, Duckworth and Palmer LLP. Southern Legacy's legal counsel is Davis LLP. Roman Friedrich and Associates is providing financial and advisory services to Southern Legacy.

Southern Legacy has received a fairness opinion from Evans & Evans Inc. that the consideration to be received by the shareholders of Southern Legacy pursuant to the arrangement is fair, from a financial point of view, to the shareholders of Southern Legacy.

We seek Safe Harbor.