Trelawney Enters Into Option Agreement to Acquire Interest in Chester Property

TORONTO, ONTARIO--(Marketwire - Aug. 18, 2009) - Trelawney Mining and Exploration Inc. ("Trelawney") (TSX VENTURE:TRR) is pleased to announce that further to its press release dated June 26, 2009 the Company has entered into a definitive option agreement (the "Option Agreement") with Treelawn Investment Corp. ("Treelawn") wherein Trelawney has been granted the exclusive right to earn up to a 70% interest in certain mining claims located in Chester Township, Ontario (the "Property").

Pursuant to the terms of the Option Agreement the Company can acquire an initial 50% interest in the Property (the "First Option"), in exchange for:

- $35,000 in cash which has been paid ($10,000 with respect to legal fees of Treelawn and the balance with respect to the acquisition of the Property);

- 2,000,000 common shares ("Common Shares") of Trelawney and 1,000,000 common share purchase warrants ("Warrants"), each Warrant exercisable at a price of $0.17 per share for a period of five years from the date of issuance;

- on or before August 31, 2009, Trelawney shall issue an additional 2,000,000 Common Shares to Treelawn;

- within 12 months following the signing of the Option Agreement, the Company shall obtain the necessary work permits and commence a work program on the Property;

- on or before the 18th month anniversary of obtaining the work permits, the Company shall have brought the Property into commercial production; and

- on or before the sixth month anniversary of achieving commercial production, the Company shall issue an additional 1,000,000 Common Shares to Treelawn.

After exercising the First Option, the Company can acquire an additional 10% interest in the Property (the "Second Option") by issuing an additional 1,000,000 Common Shares to Treelawn on the date which is the later of: Treelawn receiving $2.5 million from its share of the net profits from commercial production from the Property and the Property achieving 12 months of continuous commercial production.

The Company can acquire an additional 10% interest in the Property on the date that is 12 months from the exercise of the Second Option by issuing an additional 1,000,000 Common Shares to Treelawn.

Trelawney has agreed to pay a finder's fee to Mr. Sandy Ayre consisting of: (i) $10,000, of which $5,000 has been paid and $5,000 payable in six months; and (ii) 100,000 Common Shares.

The securities issued pursuant to the Option Agreement are subject to a four month hold period from the date of issuance. Completion of the transaction is subject to approval of the TSX Venture Exchange.

For further information with respect to the Property please refer to the Company's press release of June 26, 2009.

Increase to Private Placement

Trelawney also reports that, due to market interest, it is increasing the amount of the proposed private placement announced on July 29, 2009. The previously announced proposed non-brokered private placement of 2,950,000 units ("Units") at a price of $0.17 per Unit and 7,500,000 flow-through units ("FT Units") at a price of $0.20 per FT Unit has been increased by up to $950,000 resulting in up to an additional 588,235 Units and up to 4,250,000 FT Units being issued by the Company. Each Unit is comprised of one common share and one-half of one warrant, each whole warrant entitling the holder thereof to purchase one common share at a price of $0.30 for a period of 12 months from the date issuance. Each FT Unit is comprised of one flow-through common share and one-half of one warrant, each whole warrant entitling the holder thereof to acquire one common share at a price of $0.30 for a period of 12 months from the date of issuance.

The securities issued pursuant to the private placement are subject to a four month hold period from the date of issuance. Completion of the private placement is subject to approval of the TSX Venture Exchange.

This press release contains forward looking statements within the meaning of applicable Canadian and U.S. securities regulation, including statements regarding the future activities of the Company. Forward looking statements reflect the current beliefs and expectations of management and are identified by the use of words including "will", "anticipates", "expected to", "plans", "planned" and other similar words. Actual results may differ significantly. The achievement of the results expressed in forward looking statements is subject to a number of risks, including those described in the Company's annual information form as filed with the Canadian securities regulators which are available at www.sedar.com. Investors are cautioned not to place undue reliance upon forward looking statements.

Shares Issued: 20,259,357