Mr. Stephane Leblanc reports

QNB METALS EXPANDS PORTFOLIO WITH SALT PROPERTY ACQUISITION

QNB Metals Inc. has entered into an arm's-length purchase agreement to acquire a 100-per-cent interest in the Kingsville Salt property located in Nova Scotia, Canada.

Highlights:

• Reported 1.15 billion tonnes of probable estimated historical salt mineral reserves, based on drilling work carried out between 1968 and 1971.
• Solution mining test successful at confirming brining as an appropriate mining method.
• 20 kilometres north of deep-sea, ice-free industrial port of Point Tupper on the Strait of Canso.
• Salt analytical database on approximately 10,000 salt samples.

Kingsville Salt property overview

The Kingsville Salt deposit is located at Kingsville, on Nova Scotia's Cape Breton Island, approximately 20 km north of the Port Hawkesbury/Point Tupper industrial area on the Strait of Canso. Deep exploration drilling for salt was initiated in the Kingsville area between 1968 and 1971 by Domtar Ltd., based on a significant high amplitude Bouguer gravity low anomaly that extends over a length more than 4,000 metres.

Kingsville salt project's claims outline

Domtar drilled 10 exploration diamond drill holes (DK3 to DK12) at depths of approximately 1,200 metres. Domtar reported in 1978 an estimated historical probable salt mineral reserve of 1.15 billion tonnes in the drilled area of 2,400 m by 900 m to a depth of 1,200 m. Depth to the top of the first salt ranges from 400 m to 500 m (not National Instrument 43-101-compliant, Domtar, 1968 to 1971).

Domtar indicated that blocks of salt appropriate for potential brine production cavities were outlined in 10 of its 11 holes.

Domtar (1978) reported four main categories of salt grade: (1) very high grade, greater than 95 per cent NaCl (sodium chloride); (2) high grade, 90 per cent to 95 per cent NaCl; (3) medium grade, 75 per cent to 90 per cent NaCl; and (4) low grade, 60 per cent to 75 per cent NaCl. Potash salts are not reported in significant amounts in any of the drill hole logs or analyses. Domtar (1978) described notable intersections of very-high and high-grade salt in drill holes DK-DK-6 and DK-7.

The salt analytical database on approximately 10,000 salt samples provided by Domtar is the largest available for any salt deposit in the province (1978). The success of the brining test (KBW No. 1), and the deposit description by Domtar, indicates that the salt grades and tonnages would be sufficient for economic extraction.

Location and access

The Kingsville salt deposit is accessed by travelling the Trans-Canada Highway for 20 kilometres north from Port Hawkesbury/Point Tupper (Strait of Canso Port). The Trans-Canada Highway crosses the property lengthwise from south to north.

The Strait of Canso, which is home to the Point Tupper Heavy Industrial Park, has the finest deep water, ice-free and dredge-free harbour on the East Coast of North America, with superior wharf facilities. It is strategically located on established international and coastal shipping lanes. In fact, its location on the Great Circle Atlantic Shipping Route is well situated to eastern North America and the Great Lakes, as well as Trans-Atlantic.

Strait of Canso facts:

• Closet North American port on the Great Circle Route to Europe and Asia via the Suez Canal;
• A naturally deep and ice-free harbour;
• An abundant of industrial zoned, undeveloped land and property available for purchase;
• Capable of accommodating the world's largest fully laden ultralarge carriers of 500,000 DWT (deadweight tonnage);
• Gateway to the Great Lakes through the St. Lawrence Seaway;
• National rail connections;
• Limiting depth: 92 feet (27 metres) -- average mid-channel: 210 feet (64 metres).

Point Tupper facts:

• 4,000-acre/166-hectare industrial zone on deep-water port;
• Low industrial property tax;
• Land available;
• Available wharf space;
• Rail;
• Collaborative industry partners;
• Available work force;
• Airport: Celtic Air Services.

Businesses in Point Tupper:

• Port Hawkesbury Paper;
• Strait Supplies;
• NuStar Terminals Canada;
• Bear Head LNG Corp.;
• Tupper Industrial Developers;
• Cabot Gypsum;
• NSPI Point Tupper Generating Station;
• Point Tupper Marine Services;
• Plus a growing number of services.

Terms of the agreement

Pursuant to the agreement, as consideration for the acquisition of the interest in the property, the company will issue to the vendor an aggregate of nine million common shares of the company following the acceptance of the Canadian Securities Exchange of the agreement.

If the property is brought into commercial production, then the company shall pay a royalty (mining royalty) over the property equal to: (i) if, during a given fiscal year, the production from the property is between nil and one million tonnes, $5 per tonne; or (ii) if, during a given fiscal year, the production from the property is above one million tonnes: (a) $5 per tonne for the first one million tonnes, plus (b) $2 per tonne from the 1,000,001th tonne. In addition, on activities other than mining (for example, energy storage), the company will pay a royalty equal to 2 per cent of the net profits from the activities.

All shares issued under the agreement will be subject to a four-month-and-one-day statutory hold period and voluntary escrow hold period commencing on the date of issuance, with 100 per cent of the shares being released from such voluntary restrictions on the date that QNB has secured satisfactory surface rights to the property in its sole discretion. The company agreed to issue 900,000 common shares to an arm's-length finder in connection with the acquisition.

The agreement contains a resolutory condition in favour of the company in the event it fails to have/obtain the surface right within 24 months from the closing date.

Qualified person

The technical content of this news release has been reviewed and approved by Patrick Laforest, BSc, MBA, PGeo, who is an independent qualified person (QP) as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. The QP and the company have not completed sufficient work to verify the historic information on the properties, particularly regarding historical exploration, neighbouring companies and government geological work.

About QNB Metals Inc.

QNB Metals is an exploration and development company focused on creating shareholder value through the strategic acquisition of nickel, copper and salt projects while closing and maintaining key partnerships.