X-Tal Announces Definitive Merger Agreement With American Eagle Resources, Inc.

Vancouver, B.C. November 2, 2010, X-Tal Minerals Corp. (NEX:XMT.H) (the “Company” or “X-Tal”) andAmerican Eagle Resources Inc. (“AME”) are pleased to announce that they have entered into a definitive MergerAgreement (the “Agreement”) dated November 1, 2010 to complete a business combination (the “Transaction”)in which the Company will acquire all of the outstanding shares of AME. The combined entity will focus ongenerating shareholder value through the exploration and development of its mineral projects in Fiji.Pursuant to the terms of the Agreement, all of the common shares of AME shall become exchangeable forcommon shares of the Company on a basis of one (1) common share of AME for one (1) common share of X-Tal.AME and X-Tal currently have 21,108,543 and 6,300,001 common shares outstanding, respectively. TheCompany will also complete a name change to Lion One Metals Limited and plans to graduate from the NEX to the TSX Venture Exchange (“TSXV”). 

About American Eagle

AME is a private British Columbia corporation that holds, through its subsidiary Lion One Limited Fiji, fiveSpecial Prospecting Licenses covering 38,034 hectares in the Fijian Islands, including the assets collectivelyknown as the Tuvatu project (“Tuvatu”). A technical report for Tuvatu dated October 1, 2010 has been completed according to NI 43-101 guidelines by P&E Mining Consultants of Brampton, Ontario. 

The Tuvatu High-Grade Gold Project

Tuvatu hosts the second largest gold deposit in Fiji after the large Emperor Gold Mines (“Emperor”) gold depositat Vatukoula (6 million oz. Au produced to date). These deposits are 50 km apart and are associated with the same NE trending lineament of alkaline rocks on the island of Viti Levu. Epithermal gold veins at Tuvatu occur alongthe margins of the eroded Navilawa volcanic center in a multi-phase environment also featuring porphyry copperstylemineralization. 

Over US$32 Million of Previous Work

Previous work on Tuvatu includes over 80,000 meters of surface and underground drilling and a total of overUS$32 million worth of expenditures in drilling, metallurgical testwork, a complete feasibility study, resource and reserve estimation, and mine construction. 

In 1997 Emperor developed 1,630 metres of underground workings after having completed 48,008 meters ofsurface drilling, and followed up with underground drilling, geophysical surveys, bulk sampling, and trial mining.In 2000 Emperor commissioned Bateman-Kinhill to complete a feasibility study in conjunction with a further23,668 meters of drilling and environmental and community studies. Metallurgical tests incorporated with thefeasibility study included trial milling of ores through the Emperor Mill at Vatukoula, reporting over 90% gold recoveries. 

Historic and Current Mineral Resource and Reserve Estimates

Historical mineral resource estimates for Tuvatu were reported in compliance with the Australian Joint Ore Reserves Committee (JORC) guidelines and included Indicated Mineral Resources of 1,065,000 tonnes at 8.45 grams Au per tonne, or 289,000 oz. Au, in addition to Inferred Mineral Resources of 757,000 tonnes at 10.31 grams Au per tonne, or 251,000 oz. Au. In connection with a pre-feasibility study commissioned by Emperor in 2000, a Probable Reserve was reported of 269,034 oz. Au grading 6.3 grams Au per tonne. 

A NI 43-101 compliant Mineral Resource Estimate prepared in conformance with generally accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” (2005) guidelines was completed in August 2010 by P&E and supersedes all historic resources. Eugene Puritch P.Eng., and F.H. Brown, CPG, Pr.Sci.Nat. of P&E are the QP’s responsible for preparation of the Mineral Resource Estimate shown below. 

The total sampling database for the Tuvatu project consists of 607 records encompassing data from surface and underground sampling and surface and underground drilling. The mineral resource was estimated using Inverse Distance Cubed weighting of capped composite samples, with a grade capping of 40g/t Au. The strike length of the deposit is on the order of 900 m. 

P&E Underground Mineral Resource estimate at a 2.0 g/t Au cut-off1,2,3 as of August 1, 2010

Indicated Inferred
Tonnes x 1000 Au g/t Au Oz x 1000 Tonnes x 1000 Au g/t Au Oz x 1000
Sulphides 760 7.05 172 2.502 5.78 465
Oxides 0 0 0 116 4.15 15
TOTAL 760 7.05 172 2,618 5.71 480
  1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
  2. The quantity and grade of reported inferred resources in this estimation are conceptual in nature. There is no guarantee that all or any part of the Mineral Resource will be converted into Mineral Reserve.
  3. Based on a gold price of US$983.00/oz. and 90% process recovery. Underground operating costs supporting the 2.0 g/t cut-off are as follows; mining $30/t, processing $15/t, G&A $13/t


Planned Financing of $10 Million

In conjunction with the Transaction, the Company has engaged MGI Securities Inc., to act as agent and advisor and carry out a concurrent private placement (the “Financing”) of up to $10,000,000. The Company has agreed to pay cash commissions of up to 6% of the gross proceeds raised, and issue agent’s warrants of up to 6% of the number of shares sold. In addition, the Agent has the option (the “Agents’ Option”) to sell up to that number of additional Units which is equal to 15% of the number of Units sold pursuant to the Offering at a price equal to the Issue Price. The Agents’ Option may be exercised at any time within 30 days after the closing date of the Offering. 

New Board Composition

Upon completion of the Transaction, it is expected that the board of directors of the resulting Company will consist of four members, including Walter H. Berukoff, George S. Young, Richard Meli, and David Duval. Mr. Berukoff has been instrumental in building successful mining companies such as Miramar Mining, Northern Orion Resources and La Mancha Resources, while Mr. Young has had significant roles in building companies such as Mag Silver, International Royalty Corp., and Bond International Gold. Mr. Berukoff will act as Chairman and Director of Lion One Metals Limited. 

The Transaction is unanimously supported by the Board of Directors of both AME and X-Tal and will be fully described in the Management Information Circulars to be filed with regulatory authorities and mailed to AME and X-Tal shareholders in accordance with applicable securities laws. The Transaction will be subject to shareholder approval, and will be voted upon at the Annual Meeting of the Company, to be held at the offices of the Company on December 21, 2010. The record date for the meeting will be November 15, 2010. 

The Agreement will result in a reverse takeover of the Company subject to shareholder and regulatory approval, including approval of the TSXV. The Transaction is also subject to the approval of the AME shareholders. The shares of the Company to be issued to current shareholders of AME may be subject to escrow and/or resale restrictions in accordance with applicable securities legislation and the policies of the TSXV. 

Darcy Krohman, P.Geo, a Qualified Person for the Company under the meaning of Canadian National Instrument 43-101, has reviewed the technical information in this news release. 

ON BEHALF OF THE BOARD OF DIRECTORS

Walter H. Berukoff, Chairman 

This news release may contain forward-looking statements addressing future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. 

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release. 

For more information, please contact 
X-Tal Minerals Corp. 
Walter H. Berukoff 
Chairman 
604-998-1250 
604-998-1253 (FAX) 
www.xtalminerals.com

Facebooktwitterlinkedinmail