Under the agreement in principle, an LP, providing it expends a minimum of $600,000 will earn under a farm-out, a 1% working interest for each $133,000 expended on the Potter property in a $4,000,000 Phase 1 program (maximum 30%). HDG has the right to involve LPs in two additional programs with the earn-in cost escalating for a $10,000,000 second phase program to a 1% working interest for each $400,000 expended (maximum 25%) and in a $5,000,000 third phase program to a 1% working interest for each $1,000,000 expended (maximum 5%). It is not contemplated that the LPs will cumulatively earn an aggregate of more than a 30% working interest at any one time. In the event an LP ceases funding exploration work, Millstream retains a call privilege in certain events to reacquire the working interest earned by paying 130% of the exploration expenditures incurred by the LP. The acquisition of the working interest would be completed by issuing Millstream shares valued at market prices prevailing at the time of exercise of the call. Millstream will also issue shares dependent on certain performance events as well as based upon the reduction of the share dilution which Millstream will enjoy under the LP financing structure when compared with conventional equity financing. The exact number of shares issuable in these circumstances cannot be currently determined but is not expected to affect control. The agreement in principle also provides for restrictions on Millstream’s issuance of common shares for other corporate purposes as long as the LP arrangements are outstanding. The agreement is subject to completion of definitive agreements, regulatory approval and financing of an LP.

Robert Dickinson of Hunter Dickinson said, "Millstream’s drilling program at its Potter property represents one of the most promising mineral exploration projects in Canada. Recent drilling up to 660 metres (2000 feet) below the former Potter mine workings has returned excellent results indicting a major copper-zinc-cobalt deposit is in the making. Furthermore, geophysical targets located nearby on the property require immediate testing."

Millstream has recently focused its activities on its 100% owned Potter Mine property, which is situated in northeastern Ontario, near Highway 101 approximately 80 km east of Timmins. The Potter Mine was a former base metal producer (1967-72) and occurs within an east-southeast trending Archean succession of mafic to ultramafic volcanic and intrusive rocks referred to as the Kidd-Munro Assemblage. This Assemblage hosts world-class copper-zinc volcanogenic massive sulphide deposits (ie. Kidd Creek, 138 million tonnes).

During 1996, Millstream carried out geophysics and mapping in the shaft area of the property. This work identified favourable targets below and beyond the historical Potter Mine workings. Old mining records indicated that the ore zones were becoming thicker and higher grade with depth. Therefore, in 1997 and 1998, the Company completed its first phase of drilling below the historical mine workings. Eleven diamond drill holes were completed. Five of these holes intersected significant widths of copper-zinc-cobalt massive sulphides up to 330 metres (1000 feet) below the historical mine workings proving that mineralization continues to depth. (See Table 1)

For more information visit the Company’s website: www.millstreammines.com

The principle objective of Millstream Mines Ltd. is to enhance and develop known mineral properties to production potential. Millstream holds mineral claims or interests, directly or through wholly owned subsidiaries in Canada, USA, and the Czech Republic.