Canadian Arrow Mines and URSA Major Minerals announce letter of intent for a business combination to create a larger nickel focussed exploration and development company

    SUDBURY, ON, May 25 /CNW/ - Canadian Arrow Mines Limited ("Canadian
Arrow") (TSX-V:CRO) and URSA Major Minerals Incorporated ("URSA") (TSX:UMJ)
announce today that they have entered into a letter agreement whereby Canadian
Arrow has granted to URSA an exclusivity period in which to complete due
diligence and a definitive agreement in respect of a proposed business
combination ("the Proposed Transaction") of the two companies. The Proposed
Transaction, if completed, will create a larger exploration and development
company with experienced management and two advanced nickel sulphide projects
in Ontario. The combined company will have NI 43-101 Reserves and Resources in
excess of 200,000,000 lbs of contained nickel with significant copper and
precious metal by-product credits.
    The Proposed Transaction will proceed on the basis of an exchange of
Canadian Arrow common shares (an "Arrow Share") for common shares of URSA (an
"URSA Share"). URSA shall issue 1 URSA Share for each 1.5 Arrow Share
submitted for exchange subject to a price adjustment clause exercisable by
URSA should certain conditions not be met. All options and warrants of
Canadian Arrow will be exchanged for options and warrants in the combined
company at the same exchange ratio as described above. URSA warrants and
options will remain outstanding in accordance with their terms. It is intended
that URSA will continue to be listed on the TSX.
    On completion of the Proposed Transaction the board of directors shall
initially be composed of five members consisting of three nominees from URSA
and two nominees from Arrow. Richard Sutcliffe will serve as Chairman and CEO.
Canadian Arrow's current President Kim Tyler will continue to serve as
President and will also assume the new role of Chief Operating Officer of the
combined Company.
    It is intended that the Proposed Transaction will be in the form of an
amalgamation with a wholly-owned subsidiary of URSA, unless an alternative
form of transaction is deemed advisable.
    The Proposed Transaction is subject to a number of conditions, including
but not limited to satisfactory due diligence and the negotiation of
definitive transaction documents. The proposal is also conditional upon both
parties entering into support agreements to include, among other things, the
unanimous favourable recommendation of the transaction, a reciprocal break fee
provision in the amount of C$400,000; and notification by each party of the
receipt of alternative proposals from third parties. Each party has agreed not
to solicit other proposals, subject to the exercise of each board's fiduciary
duties. The Proposed Transaction is subject to customary closing conditions,
including required shareholder and regulatory approvals and the absence of
material adverse changes. No definitive agreements have been reached, other
than the letter of intent. There can be no assurances that any transaction
will result, or as to the terms thereof.
    Dean MacEachern, Canadian Arrow's CEO, stated, "The Proposed Transaction
is a strategic one for both companies and brings together two of North
America's more advanced, low cost and robust nickel, copper and PGM projects.
URSA's Shakespeare and regional projects provide Arrow with improved exposure
to platinum group metals as well as the operational flexibility to take rapid
advantage of improved market conditions. Canadian Arrow also welcomes the
opportunity to build up its management bench strength with the addition of the
URSA executive."
    Richard Sutcliffe, URSA's CEO, stated, "This merger is a key step in our
goal of becoming a mid-tier nickel producer. As well as providing the
significant Kenbridge project and the outlying potential of the emerging
Kenora nickel camp Canadian Arrow also brings a strong operational management
team to URSA. The combined company will have a larger market presence,
substantial resources and will enhance our ability to rapidly develop our
nickel sulphide mining projects when nickel prices strengthen."

    About Canadian Arrow Mines Limited

    Canadian Arrow is an experienced exploration and mine operating team that
is focussed on acquiring and developing economically viable nickel sulphide
deposits near existing infrastructure. Canadian Arrow operates in
north-western Ontario, near the towns of Kenora and Dryden. The company's main
asset is the Kenbridge Nickel Project, a nickel-copper sulphide deposit
containing over 98 million lbs of nickel in Measured & Indicated Resources.
The deposit is equipped with a 620m shaft and has never been mined. Canadian
Arrow has 79,197,522 shares outstanding.

    About URSA Major Minerals

    URSA Major is an emerging mining company that is focussed on growth
through nickel, copper, and precious metal exploration and development,
primarily in the Sudbury area, Ontario. URSA's main asset is the Shakespeare
Nickel Project, a fully permitted open-pit nickel-copper sulphide deposit
containing over 86 million lbs of nickel with significant by-products in
Probable Reserves and an additional 15 million lbs of nickel in Indicated
Resources. URSA's Shining Tree Project has a further 16 million lbs of nickel
in Indicated Resources. To date, URSA has mined approximately 150,000 tonnes
of ore at Shakespeare and this has been processed at Xstrata Nickel's
Strathcona mill. Mining has been suspended since October 2008. URSA has
44,088,799 shares outstanding.
    Additional information relating to URSA Major and Canadian Arrow is
available on SEDAR at

    (*)National Instrument 43-101 - Mr. T. Hennessey, P.Geo, of Micon and Mr.
    E. Puritch P.Eng. of P&E Mining Consultants Inc. are the qualified
    persons for the Shakespeare resource and reserve estimates. Mr. E.
    Puritch, P. Eng., Ms. Tracy Armstrong, P.Geo., and Antoine Yassa, P.Geo.
    of P&E Mining Consultants Inc. are the independent qualified persons for
    the Kenbridge resource estimates.

    This press release may contain "forward-looking statements" within the
meaning of the Canadian securities legislation and the United States Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
made as of the date of this press release and the Company does not intend, and
does not assume, any obligation to update these forward-looking statements.

    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

    %SEDAR: 00008534E

For further information:

For further information: visit the website at,
or call toll free, 1-877-262-6354, or contact: Canadian Arrow Mines, Ltd., R.
Kim Tyler, P. Geo, President, Tel: (705) 673-8259, E-mail:; CHF Investor Relations, Julia Clark, Director of
Communications, Tel: (416) 868-1079 ext. 236, E-mail:

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