Dauntless Capital Corp. announces Qualifying Transaction and entry into definitive Agreement

SYMBOL - DTL.P

VANCOUVER, May 27 /PRNewswire-FirstCall/ - Dauntless Capital Corp. (TSX-V:DTL.P) ("Dauntless") is pleased to announce that it has entered into a definitive Option Agreement (the "Agreement") dated February 20, 2010 with NZ Uranium, LLC ("NZU") pursuant to which NZU has agreed to grant Dauntless an exclusive option (the "Option") to earn an undivided 100% interest in and to three properties located in McKinley County, New Mexico, USA (collectively, the "Properties"), being the Crownpoint, the Hosta Butte and McKinley Properties (the "Transaction") subject to a sliding scale gross proceeds royalty as described below. The Transaction is intended to be Dauntless's "Qualifying Transaction" as that term is defined in TSX Venture Exchange (the "Exchange") Policy 2.4 concerning capital pool companies. To date, Dauntless has been a capital pool company in the business of identifying a Qualifying Transaction.

The Transaction will be carried out by parties dealing at arm's length to one another and therefore will not be a Non-Arm's Length Qualifying Transaction, as such term is defined in Exchange Policy 2.4. However, Dauntless will need to obtain the written consent of a majority of its shareholders to NZU becoming a control person of Dauntless through the issuance of common shares of Dauntless (each a "Share") to NZU as partial consideration for the grant of the Option, as described below.

Upon completion of the Transaction, Dauntless expects that it will be classified as a mining issuer under the policies of the Exchange and will be engaged in the exploration and development of prospective uranium properties, including the Properties. In accordance with the terms of the Agreement, Dauntless is required to be listed on the Exchange as a Tier 1 Issuer (as defined in Exchange Policy 1.1) upon completion of the Transaction. Unless otherwise noted, all dollar amounts set out in this release refer to United States dollars.

Terms of the Transaction

NZU has agreed to grant Dauntless an exclusive Option to earn an undivided 100% interest in and to the Properties, as further described below, at any time within 48 months of the receipt of a title report on the Properties acceptable to Dauntless (the "Subject Removal Date"), subject only to the royalty described below. As consideration for the Transaction, Dauntless is required, on the Subject Removal Date, to:

    (a) pay to NZU the sum of $1,000,000, less the Deposit described below;
        and
    (b) issue to NZU 10,000,000 Shares, at an agreed value of CDN $0.15 per
        Share.

In order to exercise the Option, Dauntless is required to make the following cash payments and Share issuances to NZU:

    (a) on or before each of the first and second anniversaries of the
        Subject Removal Date: (i) the sum of $500,000, in cash, and
        (ii) either (at the election of Dauntless) (A) an additional sum of
        $500,000, in cash, (B) that number of Shares as is calculated by
        dividing $500,000 by the product of (1) the VWAP (as defined in the
        Agreement) multiplied by (2) the difference between 100% and the
        Applicable Discount (as defined in the Agreement), or (C) some
        combination of (A) and (B); and

    (b) on or before each of the third and fourth anniversaries of the
        Subject Removal Date, either (at the election of Dauntless): (A) an
        additional sum of $500,000, in cash, (B) that number of Shares as is
        calculated by dividing $500,000 by the product of (1) the VWAP
        multiplied by (2) the difference between 100% and the Applicable
        Discount, or (C) some combination of (A) and (B).

In addition, within 30 days of the fourth anniversary of the Subject Removal Date, Dauntless shall issue such number of Shares to NZU as is calculated by (i) subtracting the total amount of the cash payments described above from $6,000,000, with the resulting amount being the "Target Share Value", (ii) deducting from the Target Share Value the total number of Shares issued to NZU under the Agreement multiplied by the VWAP on the fourth anniversary of the Subject Removal Date (such product being the "Market Share Value"), and, provided that the Target Share Value less the Market Share Value is a positive number, (iii) dividing the Target Share Value, less the Market Share Value, by the VWAP on the fourth anniversary of the Subject Removal Date (the "Additional Shares"). However, no Additional Shares will be due to NZU if NZU disposes of any Shares into the market during the period used for the calculation of the VWAP or during the 15 days immediately preceding such period.

All Shares issued to NZU under this Agreement will be subject to acceptance by the Exchange and such escrow provisions as may be required by the Exchange.

Until the Option is exercised or terminated, Dauntless shall be the operator of the Properties.

The Royalty

On exercise of the Option, Dauntless will grant to NZU a Royalty entitling NZU to receive a perpetual production royalty equal to the percentage of gross proceeds received by Dauntless for uranium mined, removed or sold from the Properties, based on the following sliding scale:

    -------------------------------------------------------------------------
                Spot U(3)O(8) Price                                  Royalty
    -------------------------------------------------------------------------
    Less than $60                                                       4%
    -------------------------------------------------------------------------
    At least $60 but not over $78                                       5%
    -------------------------------------------------------------------------
    Over $78 but not over $96                                           6%
    -------------------------------------------------------------------------
    Over $96 but not over $114                                          7%
    -------------------------------------------------------------------------
    Over $114 but not over $132                                         8%
    -------------------------------------------------------------------------
    Over $132 but not over $150                                         9%
    -------------------------------------------------------------------------
    Over $150                                                          10%
    -------------------------------------------------------------------------

The spot U(3)O(8) price will be based on the average weekly spot price per pound of U(3)O(8) for domestic delivery during the month when uranium is sold by Dauntless, as quoted in the UX Weekly, or equivalent source if that source is no longer available.

Deposit of Funds

Dauntless has paid to NZU the CDN$25,000 (the "Deposit"), being the maximum non-refundable deposit allowable pursuant to Exchange Policy 2.4.

Conditions of Closing

Completion of the Transaction will be subject to certain conditions, including:

    (a) Dauntless, at its own expense, as quickly as possible and, in any
        event, by August 18, 2010, obtaining a title report (and, if
        required, title insurance) in form and substance acceptable to
        Dauntless, confirming that the Properties are free and clear of all
        liens, charges, encumbrances or other defects in title (other than
        specified encumbrances);

    (b) Dauntless completing a satisfactory due diligence review of the
        Properties on or before the Subject Removal Date;

    (c) NZU obtaining, on or before the Subject Removal Date, a written
        consent or other document from Comerica Bank, in form and substance
        acceptable to Dauntless, acting reasonably, releasing the Properties
        from any and all security interests which Comerica Bank may have in
        or to the Properties;

    (d) Dauntless obtaining the written consent of a majority of Dauntless'
        shareholders to NZU becoming a control person of Dauntless through
        the issuance of Shares to NZU;

    (e) receipt of the approval of the Exchange to the Transaction being
        Dauntless's Qualifying Transaction; and

    (f) Dauntless being listed on the Exchange as a Tier 1 Issuer upon
        completion of the Transaction.

Sponsorship

Dauntless will be relying on an exemption from the sponsorship requirements set out in Exchange Policy 2.2.

The Properties

The Properties are located in McKinley County in north-western New Mexico, USA, approximately 125 miles northwest of Albuquerque, on land totalling, in aggregate, approximately 130,317 acres. Extensive exploration and evaluation programs were conducted on the Properties by Continental Oil (Conoco) in the 1970s, investigating the uranium mineralization with the goal of putting the projects on the Properties into production. Certain of the Properties were subsequently optioned by Quincy Energy Corp. (subsequently acquired by Energy Metals Corp.) pursuant to an option agreement with NZU, who conducted additional exploration on the Properties. In connection with the entry into the Agreement, Dauntless has commissioned the preparation of updated technical reports with respect to the Properties, which will be compliant with the terms and provisions of National Instrument 43-101 Standards of Disclosure for Mineral Projects.

Appointment of Director Nominee of NZU to Dauntless Board of Directors

Dauntless has also granted NZU the right to appoint a nominee to the Dauntless' board of directors (the "Board") for as long as the Option is outstanding or NZU holds a 10% or greater equity interest in Dauntless. Unless otherwise agreed by Dauntless, the nominee will be Robert M. Worsley, the owner and sole manager of NZU. Mr. Worsley is also the principal of New Mexico and Arizona Land Company, LLC. Mr. Worsley was previously a principal of SkyMall, Inc., the largest in-flight catalogue company in the United States, which he founded in 1989. From 1985 to 1989, Mr. Worsley was a principal of ExecuShare, Inc., an executive services firm that provided timeshared financial executives for small companies and from 1980 to 1985 he was an Audit Manager with Price Waterhouse. Mr. Worsley received a bachelor's degree in accounting from Brigham Young University in 1980.

Insiders of Dauntless upon Completion of the Transaction

It is expected that the officers and the Board of Dauntless will remain unchanged upon completion of the Transaction, subject to NZU exercising its right to appoint a nominee to the Board as described above.

For a description of the backgrounds of the current officers and directors of Dauntless, see its final prospectus as filed on SEDAR on April 23, 2010, which is available at www.sedar.com.

As a result of the issuances of the Shares to NZU described above, NZU will become an insider of Dauntless by virtue of holding more than 10% of the Shares of Dauntless.

About NZU

NZU is a limited liability company organized under the laws of the State of Arizona. It is engaged in the acquisition, exploration and development of prospective uranium properties. Robert M. Worsley is the owner and sole manager of NZU.

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 the 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.

The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding Dauntless's proposed qualifying transaction. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Dauntless will obtain from them.

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.

SOURCE Dauntless Capital Corp.