TSX.V: VOL
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2009 News

AUGUST 11, 2009

Volcanic Capital Corp. Announces Signing of Share Exchange Agreement and Private Placement

Volcanic Metals Corp. ("Volcanic") is pleased to announce that, further to its News Release of September 15, 2008, it has signed a share exchange agreement (the "Agreement") dated July 30, 2009 with Cougar Mining SH. P.K., a private Albanian corporation ("Cougar"), and the two shareholders of Cougar. Under the terms of the Agreement, Volcanic has agreed to purchase all of the issued and outstanding shares in the capital of Cougar from the shareholders of Cougar in consideration for the issuance of 2,600,000 common shares in the capital of Volcanic, the aggregate payment of $175,000 and the grant of a 2.5% net smelter returns royalty as described below, half of which may be repurchased by Volcanic. The transaction is intended to represent Volcanic's Qualifying Transaction that is to be conducted in accordance with TSX Venture Exchange Policy 2.4 concerning Capital Pool Companies.

The acquisition has been negotiated and carried out by the parties dealing at arm's length to one another and therefore is not a Non-Arm's Length Qualifying Transaction, as such term is defined under the rules and policies of the TSX Venture Exchange. As a result, the acquisition will not require shareholder approval from the shareholders of Volcanic.

Cougar
As set out in the press release of September 15, 2008, Volcanic initially entered into a memorandum of understanding dated September 8, 2008, with Blackeagle Ventures Inc., a private arm's length British Columbia corporation. The agreement was later assigned pursuant to an assignment agreement dated December 15, 2008 among Volcanic, Blackeagle, Cougar, and the shareholders of Cougar, whereby Blackeagle assigned its rights and obligations under the agreement to the Cougar shareholders.

Cougar is a private Albanian company. Its shareholders consist of two individuals, each resident of British Columbia. Cougar holds the exploration rights to the Gjegjan Project which is located approximately 100 kilometres northeast of the capital city of Tirana and 120 kilometres northeast of the port city of Durres on the Adriatic Sea. The property is located in the Kukes Administrative District of Albania and covers an area of approximately 173.8 kilometres. The Gjegjan Project consists of prospecting Permit No 1267, issued by the Ministry of Economy, Trade and Energy of Albania to Cougar on October 24, 2008. Upon production, the property is subject to a royalty payable to the Albanian government in accordance with Albanian mineral law. A technical report has been prepared on the Gjegjan Property in accordance with National Instrument 43-101.

Upon the closing of the Qualifying Transaction, Volcanic intends to use the proceeds from the financing described below and cash on hand to carry out the phase one recommended work program on the Gjegjan Project.

Conditions of Closing
The parties have agreed to close the transaction on or before October 8, 2009, or such other date as the parties may agree to in writing. Completion of the proposed acquisition will be subject to certain conditions including: (a) completion of each party's satisfactory due diligence review of the other party; (b) Cougar providing financial information from which to prepare financial statements as required by applicable securities laws and a technical report on the Gjegjan Property in accordance with National Instrument 43-101; (c) the appointment of a sponsor and the TSX Venture Exchange accepting the sponsor's report in respect of the Qualifying Transaction; (d) Cougar providing a title opinion with respect to the Gjegjan Property; and (e) receipt of conditional approval from the TSX Venture Exchange of the proposed transaction.

Financing
Prior to completing the Qualifying Transaction, Volcanic intends to close a non-brokered equity financing of at least $350,000 at $0.23 per common share. Although Volcanic has entered into the Agreement, the closing of which is intended to constitute Volcanic's Qualifying Transaction, Volcanic can offer no assurance that Volcanic will close the Agreement. The closing of the private placement is not conditional upon the closing of the Qualifying Transaction. As a result, in the event the Agreement does not close for any reason, Volcanic may use the proceeds from the private placement to identify and close an alternate Qualifying Transaction. The common shares issuable on the closing of the private placement will be subject to a hold period in accordance with applicable securities laws.

Sponsorship
Volcanic has appointed Canaccord Capital Corporation to act as sponsor with respect to the Qualifying Transaction in accordance with TSX Venture Exchange Policy 2.2.

Net Smelter Returns Royalty
Pursuant to the terms of the Agreement, Volcanic has agreed to grant a 2.5% net smelter returns royalty to the two shareholders of Cougar on the closing date of the Agreement. The royalty will be payable following commencement of commercial production of proceeds from the sale of mineral products less allowable deductions. Volcanic may, at any time up to the date that is one year from the commencement of commercial production, purchase one-half of the royalty (1.25%) for $750,000.

Board of Directors
Upon completion of the Agreement, Volcanic anticipates that its current board of directors and management team will remain the same.

ON BEHALF OF THE BOARD OF VOLCANIC CAPITAL CORP.

/s/ Michael Iverson
Michael Iverson,
President, CEO and Director

For further information contact:
Michael Iverson, President
Phone: 604.687.7160

Statements in this press release regarding the Company's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the proposed transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to this transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Canaccord Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.