Canadian Orebodies Signs Purchase Agreement to Buy Haig Inlet Iron Ore Project in Nunavut

Canadian Orebodies Inc. (TSX VENTURE:CO) has announced that it is has entered into a non-arm's length Purchase Agreement to acquire up to a 100% legal and beneficial interest in the Inuit Owned Lands Mineral Exploration Agreement with Nunavut Tunngavik Incorporated which covers the Haig Inlet Iron Ore Project, located on the Belcher Islands, Nunavut, Canada.

The Haig Inlet Iron Project covers over 2,680 hectares on Flaherty Island. A significant amount of exploration work, including numerous widely-spaced diamond drill holes, was carried out on the property during the 1950's by Belcher Mining Corporation Ltd ("BMC"). BMC's exploration programs targeted the Kipalu Formation of iron-bearing rocks containing laterally extensive magnetite (with subordinate hematite) iron formations of the Superior type. The Property is host to a significant unclassified historically estimated mineral resource of 907 million tonnes grading 27% iron as defined in the government publication, "Northern Mineral Policy Series; NM1: Mines and Important Mineral Deposits of the Yukon and Northwest Territories, 1982".

Gordon McKinnon, Orebodies President & CEO stated "This project represents a major step for the company to take advantage of the booming iron ore sector and opens the door to the significant amount of capital that has been pouring into junior iron ore companies. We have seen that other iron ore projects within Nunavut such as Baffinland Iron Mines Corp. ("Baffinland") and Advanced Explorations Inc. ("Advanced") are being sought after by large international companies. Both Baffinland and Advanced having their deposits in Nunavut in harsher climates and much more remote locations shows projects like the Haig Inlet Iron Property are in demand and garnering the attention of large international steel and iron ore companies."

Terms of Agreement:

The Agreement is a non-arm's length transaction between Donald McKinnon (Orebodies Chairman and Director), Gordon McKinnon (Orebodies President & CEO), Randall Salo (the "Vendors") and Orebodies, the closing of which is subject to TSX Venture Exchange, NTI and disinterested shareholder approvals.

In order to purchase a 100% interest in the NTI Agreement, Orebodies is required to:

1. Issue to the Vendors an aggregate amount of 3,000,000 common shares on closing to earn a 10% interest in the NTI Agreement.

2. Issue to the Vendors an aggregate amount of 4,000,000 common shares on the first year anniversary of closing to earn an additional 15% interest in the NTI Agreement.

3. Issue to the Vendors an aggregate amount of 7,000,000 common shares on the second year anniversary of closing to earn the remaining 75% interest in the Agreement.

After the issuance of 3,000,000 common shares on closing to earn a 10% interest in the NTI Agreement, Orebodies may elect not to proceed with the share issuances outlined in items 2 and 3 above.

1. Grant a 3% Gross Overriding Royalty ("GOR") of which 1/3^rd may be purchased at anytime by Orebodies for $3,000,000, in the event that Orebodies has acquired the 100% interest in the NTI Agreement. If Orebodies has elected not to purchase a 100% interest in the NTI Agreement, the consideration for a purchase of such 1/3^rd of the GOR shall be pro-rated to Orebodies' interest in the NTI Agreement at such time.

2. Grant a $250,000 advance royalty, in the event that Orebodies has acquired the 100% interest in the NTI Agreement, commencing on the earlier of (i) the date on which a production lease is entered into pursuant to the NTI Agreement, or (ii) on the 6^th year anniversary from closing. If Orebodies does not hold the 100% interest in the NTI Agreement at such time as the advance royalty becomes payable, the advance royalty shall be pro-rated to Orebodies' interest in the NTI Agreement at such time.

3. Enter into a joint venture agreement on closing which governs the activities of Orebodies and the Vendors in respect of the Property and the NTI Agreement, until such time, as Orebodies acquires a 100% interest in the NTI Agreement.

In addition, if Orebodies has acquired a 100% interest in the NTI Agreement, Orebodies covenants to issue and deliver to the Vendors an additional 14,000,000 common shares on the following basis:

1. Issue an aggregate 7,000,000 common shares (each such common share a "First Milestone Share") in the event that a technical report compliant with NI 43-101, which demonstrates at least 80,000,000 tonnes of Mineral Resources (defined in the Agreement as 'indicated mineral resources' or 'measured mineral resources' as those terms are defined in NI 43-101) grading at least an average of 23% iron.

2. Issue a further 7,000,000 common shares (each such common share a "Second Milestone Share") in the event that a technical report compliant with NI 43-101, which demonstrates at least 200,000,000 tonnes which includes the 80,000,000 tonnes comprising the threshold for the First Milestone Shares, of Mineral Resources grading at least an average of 23% iron.

In the event that Orebodies has not acquired a 100% interest in the NTI Agreement at the relevant time that First Milestone Shares or Second Milestone Shares are to be issued, Orebodies covenants to issue to the Sellers in aggregate a percentage of First Milestone Shares or Second Milestone Shares, as the case may be, that is equal to Orebodies' interest in the NTI Agreement at the relevant time.

The number of common shares to be issued to the Vendors on closing, the first year anniversary of the date of closing, the second year anniversary of the date of closing, and the issuance of any First Milestone Shares or Second Milestone Shares to the Vendors shall be on the following pro-rata basis: 45% to Gordon McKinnon, 45% to Donald McKinnon, and 10% to Randall Salo.

The Agreement as provides an extended area concept whereby the 3% GOR and the requirement to issue First Milestone Shares and/or Second Milestone Shares applies beyond the Property to include (i) specified additional areas in proximity to the Property where Orebodies' has staked mineral dispositions, and (ii) any areas or part thereof, lying within a distance of 10 kilometres from the external perimeters of the Property in which Orebodies has or will stake any mineral dispositions.

If all common shares are issued pursuant to the Agreement, the potential shareholding of Donald McKinnon in Orebodies on an undiluted basis shall be 16.4% of the issued and outstanding common shares as at the date hereof, and the potential shareholding of Gordon McKinnon in Orebodies on an undiluted basis shall be 14.86% of the issued and outstanding commons shares as at the date hereof.

In order to properly evaluate and negotiate the Agreement, Orebodies' board of directors formed a special committee comprised of all independent directors to act on behalf of Orebodies. The committee engaged Broad Oak Associates, an independent third party firm to review and deliver a fairness opinion ("Fairness Opinion") regarding whether the transaction would be fair to all the shareholders of Orebodies. Based on a thorough review and the findings of the Fairness Opinion, the independent special committee unanimously approved Orebodies enter into the Agreement.

This press release has been prepared under the supervision of Mr. Randall Salo (P.Geo.), who is an independent consultant to the Company and a "qualified person" (as such term is defined in National Instrument 43-101). Mr. Salo has verified the technical data disclosed in this press release.