Mr. Michael Smith reports

$5 MILLION EQUITY DRAWDOWN FACILITY

Hercules Resources Corp. has signed a letter of intent with Crescita Capital LLC, a private company, for a financing commitment of up to $5-million. The financing commitment is based on an equity drawdown facility and is valid for three years after a definitive agreement is signed. Both companies are working diligently to complete the definitive agreements.

Under the equity drawdown facility, Hercules will allot and issue units to Crescita Capital at the minimum issue price permitted by the Canadian Securities Exchange. The drawdown will be determined by the company and approved by Crescita based on the prior 10-day average trading volume. Each unit issued under the equity drawdown facility will comprise one common share and one-half of one common share purchase warrant. Each full warrant will be exercisable for three years from the date of issue at an exercise price equal to the minimum exercise price permitted by the CSE.

Upon the execution of a definitive agreement for the equity drawdown facility, Hercules will be required to pay a commitment fee to Crescita Capital equal to 6 per cent of the total commitment (a commitment of $300,000), payable in cash or common shares at the minimum price permitted by the CSE.

The company has also started a detailed use of proceeds and budget, including, but not limited to, the continuation of its exploration of the P3 Los Tres mining concession as well as strategically adding to its portfolio of mineral exploration properties.

Michael Smith, chief executive officer of Hercules, commented: "The timing of this funding commitment couldn't be better as we look to increase our shareholder value by adding to our exciting portfolio of concessions. We are in the process of finalizing definitive documents for the acquisition of P3. Once we have completed the P3 acquisition, we plan to begin work on a NI [National Instrument] 43-101 compliant report for the property's placer and hard-rock mineralization. The commitment of these funds will allow us to continue to strategically move forward."

The company looks forward to sharing further details as the final agreement is completed.

Debt settlement

Pursuant to a debt settlement agreement, the company settled certain debt in the aggregate amount of $12,000 that were owing and payable to a consultant of the company through the issuance of 57,142 common shares in the capital of the company at a deemed issue price of 21 cents per common share.

All securities issued in connection with the debt settlement are subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation.

We seek Safe Harbor.