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08.03.2010
Queenston, Vault Minerals plan to merge
Queenston, Vault Minerals plan to merge

2010-03-05 14:48 ET - News Release

Also News Release (C-VMI) Vault Minerals Inc

Mr. Charles Page of Queenston reports

QUEENSTON MINING AND VAULT MINERALS AGREE TO MERGER TO CONSOLIDATE HOLDINGS IN THE KIRKLAND LAKE GOLD CAMP

Queenston Mining Inc. and Vault Minerals Inc. have entered into an agreement to amalgamate Vault and Queenston in a transaction unanimously approved by the boards of directors of both companies. The business combination will create the largest property holdings in the historical Kirkland Lake gold camp where approximately 40 million ounces of gold have been produced over the last century. As a result of this transaction the consolidated landholdings would represent 27 individual properties containing approximately 19,000 hectares.

Summary of transaction

Under terms of the amalgamation announced today, Vault shareholders will receive one Queenston common share for every 10 Vault common shares. In addition, all convertible securities of Vault will be exercisable in accordance with their terms for common shares of Queenston on the same basis. Based on approximately 40 million common shares of Vault issued and outstanding, Queenston will issue approximately four million Queenston common shares pursuant to the amalgamation. The arm's-length transaction is expected to close on or before April 30, 2010, and upon closing, assuming no exercise of any existing convertible securities of Vault or Queenston, Queenston will have approximately 68 million common shares outstanding, of which approximately 6 per cent will be held by the former shareholders of Vault. The amalgamation values the Vault shares at 50 cents and represents a premium of approximately 50 per cent to Vault shareholders based on the volume-weighted average price over the last 20 days that each company's shares actually traded. Based on the volume-weighted average price of the Vault and Queenston shares over the last 20 market days that included days of no trading activity the premium is 59 per cent.

The transaction is subject to customary conditions, including regulatory and Vault shareholder approval. Vault intends to hold a special meeting of its shareholders on or before April 30, 2010, to consider the amalgamation. Full details of the agreement will be described in a management information circular to be filed with regulatory authorities and mailed to Vault shareholders in accordance with applicable securities laws. Vault's board of directors has unanimously approved the proposed transaction, following the recommendation of its special committee comprising solely independent directors. The special committee has received a verbal opinion from CI Capital Markets Inc. that, subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received under the terms of the amalgamation is fair, from a financial point of view, to Vault shareholders as of the date of the verbal opinion. Each of the directors and officers of Vault has signed support agreements indicating intent to support the transaction, comprising approximately 23 per cent of Vault's outstanding common shares.

Charles Page, president and chief executive officer of Queenston, commented: "This is an exciting time for both Queenston and Vault shareholders as this transaction delivers significant value. The Vault properties are contiguous and complement Queenston's assets in the camp that when combined form the largest landholdings in the district. The business combination expands our exploration exposure in Kirkland Lake and supports our strategy of returning to producer status."

Joseph Horne, president and CEO of Vault, stated: "This merger boasts obvious synergies. Those that know the Kirkland gold camp will especially appreciate the complementary nature of our respective property portfolios. A consolidated land package will drive much more efficient exploration and access to greater capital will accelerate future development of our properties. Additional significant benefits to accrue to Vault shareholders will be enhanced share liquidity and exposure to Queenston's more advanced-stage gold projects. We have tremendous respect for the Queenston group, share their enthusiasm for the camp's potential, and look forward to integrating our technical team and shareholders."

Benefits to Queenston shareholders:

• Creates a dominant land position covering approximately 190 square kilometres along major gold trends in the Kirkland Lake area;
• Expands potential along trend of existing exploration success with emphasis on the Upper Beaver project;
• Provides exposure to both high-grade and bulk-tonnage opportunities in the King Kirkland area of the camp;
• Strong balance sheet with over $45-million in cash.

Benefits to Vault shareholders:

• Provides Vault shareholders with greater exposure to the Kirkland Lake camp that includes significant gold resources in five deposits;
• All-share transaction allows Vault shareholders to continue to participate in the exploration upside in this evolving gold camp;
• The transaction provides greater liquidity to Vault shareholders;
• The contiguous nature of the consolidated land position facilitates much more efficient exploration.

We seek Safe Harbor.

Contact:
Queenston Mining Inc.
Charles E. Page, P. Geo.
President and CEO
(416) 364-0001 (ext. 224)

Queenston Mining Inc.
Hugh D. Harbinson
Chairman
(416) 364-0001 (ext. 225)

Queenston Mining Inc.
Andreas Curkovic
Investor Relations
(416) 577-9927
info@queenston.ca
www.queenston.ca

Vault Minerals Inc.
Joe Horne
President and CEO
(902) 402-8266
contact@vaultminerals.com
www.vaultminerals.com


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