Southern Arc Minerals Inc has provided the following update regarding Canada Nickel Corporation.

Canada Nickel has settled a legal action against Diamondex Resources Limited on the following terms:

1. Diamondex has paid to Canada Nickel the sum of USD 250,000

2. Canada Nickel has transferred to Diamondex its 10% interest in the James Bay Lowlands Property

3. Diamondex has granted to Canada Nickel a royalty equal to 1.5% of Net Smelter Returns if the Property is put into commercial production

4. Canada Nickel has granted to Diamondex an exclusive option to purchase two thirds of this 1.5% NSR as follows: 0.33% for USD 833,333 before November 26th 2014, an additional 0.33% for USD 833,333 before November 26th 2014 and a further 0.34% for USD 833,334 before the second anniversary of commercial production. In the event that Diamondex fully exercises the three parts of this option by paying USD 2,500,000 to Canada Nickel, Canada Nickel's NSR will be reduced to 0.5%.

The settlement of this matter enables Canada Nickel to pursue a new strategic direction while retaining the significant upside potential of the James Bay Lowlands project without any remaining funding obligations.

The company is pleased to announce that Canada Nickel has entered into a JV agreement with a Canadian intermediate oil and gas producer. The JV makes available to Canada Nickel a liquids rich gas prospect within established gas producing fairways in the Brewster Area of Alberta. Canada Nickel's JV partner reported total production of approximately 13,000 barrels of oil equivalent per day in Q3 of 2009 and has a market capitalization of approximately USD 900 million.

The estimated cost of USD 1.6 million for the exploration program on Brewster property will be funded by Canada Nickel from existing working capital.