TORONTO, ONTARIO--(Marketwire - Feb. 16, 2011) - MacDonald Mines Exploration Ltd. (News - Market indication) ("MacDonald" or the "Company") is very pleased to announce the signing of an Exploration Agreement with the Kasabonika Lake First Nation ("KLFN"). In accordance with the Government mandate to advise and consult, MacDonald Mines continues its history of reaching accords with First Nation Communities. The company firmly believes that strong and fair working relationships between the mining exploration sector and First Nation's traditional beliefs and objectives is the cornerstone of a harmonious interface between both parties.

Kirk McKinnon, President & CEO, commenting "I would like to take this opportunity to thank Chief Eno H. Anderson and the Kasabonika Council for their time and desire to reach a fair and responsible agreement with MacDonald Mines. During this negotiating process, we at MacDonald Mines saw and understood the important relationship that the Kasabonika Lake First Nation has and enjoys with their traditional lands. It is this appreciation of the relationship to their traditional lands that gave MacDonald Mines the necessary understanding to work to find a fair resolution to our negotiations. I am especially gratified at the role the elders, Mr. Geordie Semple and Mr. Harry Semple, played in reaching this agreement in cooperation with Chief & Council. Their comments and passion relating to their traditional lands provided great insight and understanding for MacDonald through this process."

MacDonald Mines would also like to acknowledge the efforts of Mr. Mitchell Diabo and Mr. Doug Parker who act as advisors to the community.

Terms of the Agreement

The exploration agreement signed on February 4, 2011 covers a 3-year period, which allows MacDonald Mines unrestricted access to explore any of its registered mineral properties located within the traditional territory of KLFN.

In consideration of the above, MacDonald Mines has agreed to the following community benefits:

• issue securities in the form of shares and warrants to KLFN which is subject to regulatory approval
• one time lump sum payment
• ongoing payments equal to a percentage of exploration expenditures
• potential business relationship on mineral properties of Kasabonika Minerals Corporation.

The agreement will be filed on Sedar and our website once all regulatory approvals have been obtained.

Kasabonika Lake First Nation ("KLFN")

Kasabonika Lake First Nation (www.kasabonikafirstnation.com) is an Oji-Cree community of 1,000 people located 575 kilometers north of Thunder Bay in the Far North of Ontario (Treaty #9) and situated westward along the greenstone belts extending from the Ring of Fire. Total reserve lands are 11,000 hectares with the community being located on an island on Kasabonika Lake with connection by causeway to the mainland.

The community can be accessed via air year round and by means of a winter road depending on weather conditions. 

Kasabonika faces the many challenges of a young, rapidly growing population and the need for jobs, training, housing, infrastructure, economic & business opportunities for residents while maintaining their culture, traditional activities, improving the quality of life, as well as the overall community health. 

Opportunities are forecasted to occur chiefly in mineral exploration and mining; complemented by tourism; small business; arts and crafts; import substitution; bulk fuels; aviation; hotels; and development of major infrastructure, such as all-weather/winter roads and electrification generation/transmission. To that end, KLFN has established the Kasabonika Minerals Corporation and Kasabonika Community Development Corporation, while partnering in the Wasaya Group (www.wasayagroup.com). The community has good infrastructure and is well equipped to provide support and services to the exploration sector.

MacDonald Mines wishes to recognize the important role played by the Ontario Government and in particular the MNDMF. Premier McGuinty through his recognition of the importance of the Ring of Fire in the future economic development of the province, brings important focus on the exploration success and the emerging importance of mining in the James Bay Lowland area of Ontario. The appointment of the Ring of Fire Coordinator and ongoing support for developing relationships and community capacity building through the Ministry's Aboriginal Relations Unit, played an important role in the success of this initiative.

The success of this agreement is another important milestone for MacDonald as it demonstrates the company's ability to reach fair and responsible agreements with the First Nation Communities. The company also has a current agreement in place with the Community of Webequie and had a previous arrangement with the Community of Summer Beaver. It was a team effort at MacDonald, but special appreciation goes to, John Sanderson, Chairman of MacDonald Mines, and Richard Schler, COO & CFO whose extra efforts and dedication led the company to this agreement.

The Semple-Hulbert Property Within the Territorial Territory of KLFN

The data compiled to-date for the Semple-Hulbert property has been reviewed by leading experts in the nickel field, and has been described as a Voisey's Bay look-alike. The property contains very conductive and discrete targets within a layered magnetic structure, which is typical of magmatic massive sulphides containing nickel. Target prioritization will be completed in March with diamond drilling following shortly thereafter.

About MacDonald Mines Exploration Ltd

MacDonald Mines is a mineral exploration company with an established exploration history in the Canadian Northlands. MacDonald Mines has set upon a strategic direction of exploration with particular focus on nickel, chrome, copper, zinc, vanadium and titanium in the "Ring of Fire" area of the James Bay Lowlands of Northern Ontario. Hadyn Butler, P.Geo. played the key role in providing the necessary insight into the land acquisition of MacDonald's properties in the Ring of Fire. His experience and skills in interpreting geologic areas of economic interest also led to the acquisition of the Semple-Hulbert property.

As detailed in the Company's recent press releases, MacDonald Mines has several significant mineral opportunities across multiple properties in the James Bay Lowlands. On its Butler Property, new volcanogenic massive sulphide (VMS) mineralization of substance has been discovered. Four VMS mineralized greenstone fold limbs, all of which have now yielded VMS mineralization over a potential cumulative strike length of approximately 20 kilometres, have been identified and the Butler Property has the potential to host a new VMS camp with characteristics similar to those seen at Matagami or Noranda in Quebec.

The Company's Sanderson Property (formerly the Big Mac Property) exhibits high-priority nickel and copper targets with geological and geophysical signatures similar to the Eagles Nest discovery of Noront Resources.

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.

Administration

The Company will be applying to the TSX Venture Exchange (the "Exchange") for approval of the following transactions.

A total of 7,678,947 common share purchase warrants with an exercise price of $0.25 per share expiring on August 18, 2012 to be extended for three years.

A total of 10,935,000 stock options with an exercise price of $0.15 per share expiring between September 2011 and November 2011 have been amended for a term of five years at an exercise price of $0.15, in accordance with the Company's stock option plan.

The above noted items are subject to approval of the Exchange.

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

Cautionary Statement:

The foregoing information may contain forward-looking statements relating to the future performance of MacDonald Mines Exploration Inc. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from MacDonald Mines plans and expectations. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by MacDonald Mines with the TSX Venture Exchange and securities regulators. MacDonald Mines does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.