Consolidated Thompson Iron Mines Ltd. (TSX:CLM) and Quinto Mining Corp. (TSX.V:QU) have signed a letter of agreement whereby Consolidated Thompson will acquire all of the outstanding common shares of Quinto in exchange for common shares of Consolidated Thompson. As a result of the business combination, Consolidated Thompson will acquire neighbouring iron ore deposits, and significantly increase its mineral resources and exploration growth potential. This acquisition will further establish Consolidated Thompson as a significant player in the Labrador Trough iron ore camp, while positioning itself well to participate in further consolidation in the iron ore industry. Pursuant to the transaction, Quinto shareholders will receive one Consolidated Thompson common share for every five Quinto common shares held.

James West's Resourcex Investor newsletter recommended Quinto Mining to its subscribers in January 2003 when the stock was trading at $0.45.

Upon completion of the transaction, Quinto shareholders will hold approximately 13.6 per cent of the issued and outstanding Consolidated Thompson common shares.

The boards of directors of both Consolidated Thompson and Quinto support the proposed business combination.

Upon completion of the transaction, the combined company will have:

• An estimated measured and indicated mineral resource totalling 940 million tonnes grading 29.33 per cent Fe, of which the measured resource totals 488.5 million tonnes grading 29.91 per cent total Fe and the indicated resource totals 451.5 million tonnes grading 28.71 per cent total Fe (National Instrument 43-101 review carried out by Watts, Griffis and McOuat Ltd.);
• Potential production growth through the integration of Peppler Lake and Lamelee deposits, located within 40 kilometres of Consolidated Thompson's Bloom Lake deposit, which is currently being developed by Consolidated Thompson and is expected to be in production in the second quarter of 2009 at seven million tonnes of iron ore concentrate per year with a 34-year mine life;
• Significant exploration potential at both Bloom Lake and the Lamelee and Peppler Lake deposits (exploration programs are in progress at Bloom Lake and Lamelee projects);
• Approximately $365-million in cash and cash equivalents;
• Proven management and board of directors with experience in financing, developing and operating mines;
• Significant strategic advantages in the largest iron ore camp in Canada, located in Quebec and Labrador, which includes major industry participants such as Rio Tinto PLC and ArcelorMittal.

Upon completion of the transaction, Consolidated Thompson will have approximately 131.8 million common shares outstanding on a fully diluted basis, with former Quinto shareholders holding approximately 13.6 per cent of the fully diluted combined company's common shares.

Richard Quesnel, president and chief executive officer of Consolidated Thompson, said: "Combining the Peppler Lake and Lamelee iron ore deposits with the neighbouring Bloom Lake deposit dramatically increases Consolidated Thompson's potential iron ore resources on an absolute and per-share basis. A 'tip of the iceberg' acquisition of these deposits could propel Consolidated Thompson into the heart of continued consolidation in the Labrador Trough. Some of the many opportunities expected to be realized from this transaction include: purchasing the resources at an attractive cost, significant scope for eventually increasing production, and significant synergies to be expected through rail, port and G&A."

Tyrone Docherty, president and chief executive officer of Quinto, commented, "From the perspective of a Quinto shareholder, the transaction provides an attractive immediate premium while still maintaining significant upside exposure from our share ownership in Consolidated Thompson."