War Eagle Proposed Investment in Chihuahua Project

War Eagle Mining Company announced on June 30, 2010 that it had cdifferent between vertical and horizontal milling mac pptlosed the first tranche of a private placement; the second tranche is expected to close on or about July 15, 2010. This news release provides more information concerning the primary use of proceeds of the private placement.

As previously disclosed in the Company's June 17 and 30, 2010 news releases, War Eagle intends to acquire a minority interest in a private company that has negotiated the acquisition of a Chihuahua, Mexico-based mineral property. The private company, Andromeda Resources, which is at arm's length from War Eagle, has negotiated an agreement to purchase the Terrazas zinc-copper property for cash consideration of US$5,000,000 payable in installments over two years and a 2.0% NSR, sliding up to 3.0% at $2.00/lb zinc. The Terrazas zinc-copper property is located near Chihuahua city in Mexico. The Terrazas property was previously optioned to Constellation Copper Corporation, but ownership reverted to the underlying owner in 2008. The following summary about Terrazas is based on information obtained from Constellation's public filings, which