MacDonald Mines To Bulk Test AN3 For Possible License Of New PGM Recovery Process.

Business Editors

TORONTO--(BUSINESS WIRE)--Sept. 25, 2000

MacDonald Mines Exploration Ltd. (CDNX:MMP.A) ("MacDonald" and "the Company") has commenced exploration work at its Casson Lake platinum group minerals property near Whitefish Falls in Northern Ontario.

Mechanical stripping of overburden has been underway for four weeks, to prepare for geological mapping and surface sampling. Stripping has been completed at occurrences BP5, BP6 and BP7 where BP Resources Canada Ltd. conducted testing in 1987 and 1988.

Stripping and cleaning has also been completed at the AN3 occurrence, where a one-ton bulk sample will be taken for a metallurgical assessment. This occurrence has geological and geochemical similarities to the UG2 deposits in the Bushveld Complex, South Africa. The Company is anxious to test the feasibility of licensing a patent-protected hydrometallurgical recovery process from Nichromet Extraction Inc. ("Nichromet"), developed by Dr. Jean-Marc Lalancette, the holder of 35 such patents (see www.inotel.com).

Dr. Lalancette's laboratory, Inotel Inc. conducted tests last month on two small samples of mineralized rock recovered from the AN3 occurrence. It was reported to the Company that, based on certificates of analysis from Lakefield Research Limited ("Lakefield"), the process recovered in excess of 99% of contained platinum, palladium and gold, more than 97% of contained copper and cobalt, and more than 94% of contained nickel from the samples. The process also recovered iron and chromium in the form of precipitated oxides which may have economic value in ferrochrome production. The Lakefield analysis determined the following element contents in the mineralized samples, prior to the recovery test:

         Ni    Cu    Au    Cr   Mg    Fe    Co    S    Pt    Pd
Sample    %     %   g/t     %    %     %     %    %   g/t   g/t
AN3    0.24  0.42  0.70  0.38  4.1  23.7  0.02 1.32  1.18  1.74

AN3-13 0.30  0.39  0.83  0.77 7.06  15.9 [LESS THAN]0.02 1.13  2.49  3.34

Dr. Lalancette's written report of August 26th, 2000 estimated the value of recovered metals (Ni, Cu, Co, Pt, Pd, Au) from the samples, using then current metal prices, at US$96.02 per ton for AN3 and US$157.84 per ton for AN3-13.

The purpose of extracting and treating a one-ton bulk sample from the AN3 occurrence, is to further test the feasibility of applying this recovery process on a commercial basis, and to quantify the economic parameters of such an application. The Company has signed an option agreement with Nichromet, setting out the terms of a licence for use of the recovery process.

Under the agreement, MacDonald will pay $50,000 to Nichromet to employ Lakefield to determine the optimum reduction criteria for the bulk sample, and then to conduct an independent test of the recovery process and its potential economic efficiencies. Within seven business days after delivery of the Lakefield report, the Company may elect to acquire an exclusive license for the use of the process at the Casson Lake property. If the election is made, MacDonald will pay Nichromet a royalty of 1% of all economic minerals recovered and an advance royalty payment of $500,000 within 21 days of the election. Upon payment of the advance royalty MacDonald and Nichromet will negotiate terms for the establishment of a joint venture for the commercialization of the recovery process throughout Ontario.

The Company has also agreed to complete a part and parcel private placement to Nichromet and to Cornelian Corporation for up to 8.5 million units to raise $850,000. Each unit will comprise one treasury share and one warrant. Each warrant may be exercised to acquire an additional treasury share at $0.20 at any time within 15 months. Proceeds of the placement will be used, if the option is exercised, to pay the advance royalty and testing and development costs, and for working capital. Cornelian Corporation is a principal shareholder of MacDonald Mines, and is controlled by Frank C. Smeenk, Chairman of the Company. The Company has also agreed to complete a private placement of 1 million flow-through shares and 1 million flow-through share purchase warrants for $150,000 with an unrelated party. Proceeds of the flow-through private placement will be used to conduct further exploration and development work at the Casson Lake property. Each warrant may be exercised to acquire an additional flow-through share at $0.30 at any time prior to December 31, 2000. Completion of the transactions are subject to regulatory approvals.

No regulatory authority has approved nor disapproved the content of this news release.