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Mountain Capital Inc.: Mountain Capital Acquires the Inco Lithium Property

^{Published on 2009-02-20 01:43:11, Last Modified on 2009-02-20 01:44:25 - Market Wire}
 

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 20, 2009) - Mountain Capital Inc. (TSX VENTURE:MCI) ("the Company") is pleased to announce that it has entered into an option agreement with Peter C. Dunlop and James C. Campbell to acquire a 100% interest in the Inco Lithium Property located near Thompson, Manitoba.

The property is located in the community of Gods Lake, 155 miles southeast of Thompson, Manitoba. Between 1958 and 1961, Inco Ltd. completed 9421 feet of diamond drilling in 25 holes exploring the lithium potential of the spodumene rich pegmatite dike. In 1986, on the basis of this work, William C. Hood, P.Eng., calculated resource to be 4.8 million tons grading 1.27% Li2O over an average width of 36.2 feet. In addition, Mr. Hood estimated that probable resource to be 4.6 tons grading 1.14% Li2O.

In his technical report on the property, Mr. William Hood, P.Eng., recommended that the pegmatite from the property should be assayed to test for gallium and rubidium mineralization. In addition, Mr. Hood states that the deposit is open to depth and that a 10,000 foot drill program would likely double the drill indicated resource on this deposit.

The resource calculation is historical and not National Instrument 43-101 compliant as it was completed prior to the implementation of these requirements. However, given the quality of the work completed, the company believes the resource estimate to be relevant and reliable. In addition, a qualified person has not done sufficient work to classify the historical estimate as a current mineral resource and the issuer is not treating the historical estimate as current. Hence, the historical estimate should not be relied upon.

The terms of the Option agreement require that Mountain Capital:

1) Make a payment of $10,000 upon execution of this agreement (paid).

2) Payment of $40,000 and 500,000 shares in the capital of the Company upon Exchange Acceptance of this agreement.

3) Payment of $40,000 and 500,000 shares in the capital of the Company six months after Exchange Acceptance of this agreement.

4) Payment of 500,000 shares in the capital of the Company within two years of Exchange Acceptance.

5) Payment of $250,000 to the vendors upon receipt of a feasibility study or at the four year anniversary of this agreement.

The vendors will retain a 2% Royalty which can be reduced to 1% by the Company paying $1 Million dollars. A 7% finder's fee comprising both cash and shares will be paid on the transaction to an arm's length third party within seven business days after Exchange Acceptance of the lithium option agreement.

Blair Naughty, President of Mountain Capital states: "We consider the acquisition of the Inco Lithium Property to be an exciting opportunity to potentially position Mountain Capital to supply the lithium carbonate market. The Lithium carbonate market has improved dramatically, and we are not alone in anticipating significant increases in the demand for lithium ion batteries for use in hybrid motor vehicles, and a whole myriad of portable electronic devices."

It should be noted to the investor that lithium it is not traded on the public market and is sold directly to end use markets for a negotiated price per ton or pound of (Li2, K) Cl or carbonate compounds. This makes price data difficult to confirm but some recent deals have reached USD $5,500/ton driven by high demand from end use buyers and relatively low global production. The property is seen as a potential source of lithium minerals for use in the glass and ceramics industry and specialty composite materials and is also a potential source of lithium chemicals for the growing rechargeable battery market.

The information contained in this release was taken from a report titled Geology of and Ore Reserves of the Sherman Lithium Property at God's Lake, Manitoba written by William C. Hood, P. Eng in 1986.

The contents of this release have been reviewed and approved by Marvin A. Mitchell, P.Eng, a qualified person as defined by National Instrument 43-101.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.