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, 2009 (Canada NewsWire via COMTEX) -- UMJ | Quote | Chart | News | PowerRating -- 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 www.sedar.com.

    <<
    *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

SOURCE: Canadian Arrow Mines Ltd.

visit the website at www.canadianarrowmines.ca, 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: kim@canadianarrowmines.ca; CHF Investor Relations, Julia Clark,
Director of Communications, Tel: (416) 868-1079 ext. 236, E-mail: julia@chfir.com.

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