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 May 31, 2012
Midlands Minerals Starts Drilling on the Sian-Praso Gold Project, Ghana

 Toronto, Ontario -- May 31, 2012: Midlands Minerals Corp. ("Midlands" or the "Company") (TSX-V: MEX) is pleased to announce that a 5,900-metre drill program has started on the Sian-Praso gold project located in the Eastern Region of Ghana.

Midlands, as operator of the Sian Mining Lease, has resumed drilling and is planning to complete a total of 5,900 meters of core drilling on the Esaase prospect located on the Sian-Praso concession. The results from this drilling will influence the location of a subsequent reverse circulation ("RC") drill campaign, the details of which will be released at a later date.

Sian-Praso Resources and Drilling Objectives

The Sian-Praso project hosts an NI 43-101 Indicated Resource of 2.6 million tonnes @ 2.33 g/t gold for 192,400 ounces, and an Inferred Resource of 2.7 million tonnes @ 2.35 g/t for 203,350 ounces of gold.

Further to Midlands's aim to upgrade the NI 43-101 resource estimate during 2012, the current drill program will address multiple objectives. These will include:

QA/QC drilling of 250 metres will validate historical Sian Goldfields core drilling and Midlands RC drilling.
Infill drilling of 1,200 metres will aim to upgrade a part of the inferred resource to indicated resource status.
3,700 metres of drilling will endeavor to expand the resource, and 750 metres of core drilling will be used to investigate a new exploration target.
Update of Status on Sian-Praso

In a press release dated 24th June 2011, prior to the end of the 2011 shareholder proxy contest, the Company included an announcement from Sian Goldfields Limited ("Sian"), a shareholder in the joint venture company Akroma Gold Company Limited ("Akroma") which holds title to the Sian Mining Lease, that Sian was unwilling to co-operate with the future management of Midlands. Midlands owns a 65% controlling interest in Akroma and is the project operator.

Their statement also warned that Midlands should not expect to benefit from the merits of the Sian Gold Project. Concomitantly, a portion of the Esaase community became hostile to the presence of Midlands on the project and operations on the project became impossible.

On 30th June 2011 Midlands received a letter from Sian's legal counsel notifying the Company that it had breached the basis of the shareholders agreement which it had terminated by way of that letter (please see press release on 4th July 2011). Midlands' legal counsel in Ghana and Canada reviewed the letter and were of the view that there was no basis for such a termination being claimed by Sian.

The evolving management team of Midlands met with Sian in July and August 2011 and in January 2012 to refine the Company's understanding of the issue and in an effort to resolve the impasse. During this time the Company was obstructed from operations.

On the 4th January 2012 Midlands signed a memorandum of understanding (the "MOU") with the Obo Traditional Council representing the Nifa Division of the Kwahu traditional area and its constituent communities (see press release on 9th January 2012). The MOU reflected that Midlands and the Community had agreed to forge a new relationship for the mutual benefit of both parties and that Midlands was allowed complete access to the Sian gold project, facilitating the continued exploration of the project. As part of the agreement, Midlands also agreed to assist the Community with its socio-economic development issues.

Following the MOU, Midlands signed a 10,000 metre drill contract with Geodrill on the 17th February 2012. An attempt at mobilizing a drill rig to site was resisted by the dissident part of the community. In the interests of maintaining peace, Midlands embarked on an education process in the communities and sought intervention from all local, district and national authorities who could positively impact the process and ensure lawful conduct. This included the Minerals Commission of Ghana ("Minerals Commission") which in due course provided a forum for mediation between Midlands and Sian.

On the 28th May 2012, the Company received a directive from the Minerals Commission to communicate a resolution in respect of the pending issues with Sian to the Commission and to recommence operations on the Esaase concession by the 27th June 2012. The directive states that failure to comply will result in the Minerals Commission recommending the termination of the mining lease held by Akroma. In addition Midlands received a letter from the Minerals Commission (dated 28 May 2012) notifying the Company that by Akroma not working the lease it is in breach of the conditions of the Minerals and Mining Act, 2006 (Act 703) and Clause 17 of the Mining Lease Agreement. Akroma was provided 120 days to remedy that breach by recommencing operations on the mining lease or face the potential for a suspension or termination of the mining lease.

As per the Minerals Commission directive, the following month provides an excellent opportunity for both the Company and Sian to find resolution for the benefit of all stakeholders. The Company will propose, without delay, a timetable for discussions during the next month with Sian to provide ample opportunity to negotiate and to explore all possible avenues for resolution.

On the 11th May 2012 a petition was presented to the Company at a demonstration by the dissidents of the Esaase community. The petition stated that Midlands has had sufficient time to explore and to return the mine to production, and should make way for another company who will start mining immediately. It also states that Midlands would not be allowed further access to the lease for its operations.

Craig Pearman, President and CEO of Midlands stated that "Midlands has actively driven this process to its current climax of negotiations and will continue constructive discussions with Sian to achieve a full resolution on this long-standing issue. Midlands is secure in it legal rights and will act to protect the interests of its shareholders during the forthcoming month of negotiations. In the meantime Midlands is attempting to resume drilling to mitigate the risk of any further breach of the Minerals and Mining Act, 2006 which could jeopardize the tenure of the mining lease. The continued unlawful obstruction of the Company to its flagship project has had a marked impact on the value of Midlands stock and the Company has made a strong appeal to the government authorities in Ghana to ensure the application of law and to facilitate in a swift resolution of the matter for the benefit of all stakeholders."

About Midlands Minerals:

Midlands Minerals is focused on developing a portfolio of high quality gold exploration projects in Ghana and Tanzania, countries with exceptional histories of gold production and home to some of the most profitable gold mines in Africa. Midland's flagship gold property is the 65% owned Sian project, site of a past producing open pit gold mine located in the Ashanti gold belt. Sian has NI 43-101 compliant Indicated gold resources of 2.6 million tonnes grading 2.33 g/t gold (192,400 ounces) and Inferred gold resources of 2.7 million tonnes grading 2.35 g/t gold (203,350 ounces). Extensions to these resources are open along strike and at depth, highlighting the potential to grow the gold resource at Sian. Midlands' Kaniago gold project is located in Ghana's Asankrangwa gold belt and is contiguous to two past open pit gold producers: Abore to the north and Obotan to the south. Recent drilling and exploration has produced encouraging results, demonstrating the gold resource potential of the project.

Midlands also holds licences for gold and diamonds in two regions in Tanzania. The first is found in the Lake Victoria Goldfields region and includes its advanced Itilima Gold Project, which lies within the Geita-Bulyanhulu-Sekenke Trend, which hosts over 40 million ounces in gold reserves. The second region lies within the Kilindi-Handeni Trend and includes the New Kilindi-Handeni prospecting licences.

Craig Pearman, a "qualified person" as defined by National Instrument 43-101, has reviewed and approved the technical information and data included in this press release. Additional information on Midlands can be viewed under the Company's profile at www.sedar.com or on Midlands' website: www.midlandsminerals.com.

FOR ADDITIONAL INFORMATION PLEASE CONTACT

Craig Pearman
President and CEO
Telephone: +233 24 4323820
Email:

Nick Tintor
Chairman
Telephone: +1 416 987 0855
Email:

This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the company's projects and other future plans, objectives or expectations of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation. Neither the TSX Venture Exchange, its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange), nor the OTCQX accepts responsibility for the adequacy or accuracy of this release.




 
 

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