MacDonald Mines Announces Vanadium Assays from Butler Lake Project in the 'Ring of Fire'

TORONTO, ONTARIO--(Marketwire - May 11, 2011) - MacDonald Mines Exploration Ltd. (TSX VENTURE:BMK) ("MacDonald" or the "Company") is pleased to announce that assays have been received from drill holes targeting vanadium mineralization in titano-magnetites on its Butler Lake Property in the 'Ring of Fire' area of the James Bay Lowlands of Northern Ontario. All drilling targeting vanadium intersected mineralization, with composited intervals ranging up to 1.17% V2O5. The weighted average of all vanadium mineralization intersected on the property is 0.644% V2O5. This value is comparable to currently producing international vanadium-bearing titano-magnetite mines. Like nickel and chromium, vanadium is a strategic element in the steel industry.

Drilling consisted of 8 diamond drill holes (BP11-V01 through BP11-V08) over 1060.4 metres. An additional 5 diamond drill holes from previous drill programs (MN08-61, MN08-70, MN08-78, MN10-110, and MN10-187) were also re-sampled for vanadium. Composited drill hole assays are provided in the table below:

Vanadium Mineralization

During the latter part of the fall 2010 Butler Lake VMS and Nickel exploration programs, geologists noted elevated vanadium mineralization associated with titano-magnetites in drill core from holes MN07-53, MN08-61, MN08-70, MN08-78, MN10-110, and MN10-187. The high magnetic signature of the titano-magnetites enabled the identification of extensive magnetic trends from airborne geophysical survey data, which were postulated by the Company's geoscientists to be vanadium-bearing.

During the 2011 exploration program, a total of 8 diamond drill holes (BP11-V01 through BP11-V08) were selected to target the linear magnetic geophysical anomalies thought to be vanadium-bearing. An additional 5 diamond drill holes from previous drill programs (MN08-61, MN08-70, MN08-78, MN10-110, and MN10-187) that intersected these trends, but were not previously sampled specifically for vanadium mineralization, were also re-sampled during the course of the 2011 exploration program. Vanadium mineralization was found to extend from surface, and to be open at depth and along strike. All drill holes were found to be mineralized, with assay values to 1.58% V2O5, and composited intervals ranging from 0.42% to 1.17% V2O5. Widths of the composited down-hole data ranged from 1.1 to 36 metres.

Please visit MacDonald Mines website at www.macdonaldmines.com for visual images and a full description of this press release.

Extensive Vanadium Trend Postulated

Based upon the association of vanadium mineralization with easily identifiable magnetic trends, the Company believes there are in excess of 20 linear kilometres of potentially vanadium-bearing titano-magnetite on the Butler Lake Property, 8 kilometres of which is on joint venture (JV) property held with Ring of Fire Resources. MacDonald Mines owns 63.25% of the JV property, and is the operator.

The vanadium grades intersected in drill core are high relative to other national and international vanadium-bearing titano-magnetite projects, with mineralization extending to surface. Based upon the grades, widths, and postulated linear extent of mineralization, the Company therefore believes that the Property has the potential to host a volumetrically significant amount of vanadium mineralization.

Ring of Fire Emerging as 'Area of Interest' for Steel Companies

Vanadium-bearing titano-magnetites are the primary ore for producing ferro-vanadium which is used to strengthen and harden steel. There is currently no operating North American mine extracting vanadium-bearing titano-magnetites for the steel industry. The primary sources for this material are South Africa and China.

The steel industry requires chromite, and the Butler Lake Property is only 40 km from Cliffs Natural Resources' Black Thor and Big Daddy chromite projects (the largest known North American chromite deposits), and 35 km from Noront Resources' Blackbird chromite project. The recent acquisition of a 9.9% interest in Noront Resources by China's Baosteel Resources signals that manufacturers are interested in the vertical integration of the constituent minerals required for steel. MacDonald Mines believes that vanadium mineralization at Butler Lake is therefore strategically located within the Ring of Fire, as it is in an area targeted for development.

About Vanadium

Vanadium is a strategic metal that is essential for engineering as well as for the automotive, shipping, and construction industries. It is irreplaceable for its role in aerospace as vanadium-titanium alloys have the best strength-to-weight ratio of any engineered material.

With increased global demand for infrastructure development, steel consumption is driving the market for vanadium. The steel industry currently uses 90 to 97% of the 60,000 tonnes of vanadium produced annually. Emerging large-scale energy (battery) storage markets, which require vanadium in their vanadium redox flow batteries (VRFBs), are expected to accelerate demand for vanadium.

Qualified Person

Quentin Yarie, P.Geo., is the qualified person in regard to the technical data contained within this news release and will be responsible for overseeing all aspects of the Company's exploration programs.

More detailed information about the Company is available on the website at www.macdonaldmines.com.