FAS.V · 2012-08-02

Yuntone Capital Corp. Enters into Letter of Intent with Megastar Development Corp.

Mergers & Acquisitions Property Options & Staking

YUNTONE CAPITAL CORP. NEWS RELEASE 750-625 Howe Street TSX Venture Exchange Vancouver, BC V6C 2T6 Trading Symbol: YTC.H

YUNTONE CAPITAL CORP. ENTERS INTO LETTER OF INTENT WITH MEGASTAR DEVELOPMENT CORP.

VANCOUVER, BC – Yuntone Capital Corp. (the “Company”) (TSXV: YTC.H) is pleased to announce that on August 2, 2012, it entered into a letter of intent (the “LOI”) with Megastar Development Corp. (“Megastar”) (TSXV: MDV) pursuant to which Megastar has agreed to grant the Company an option to acquire 60% of its 100% interest in and to 25 mineral claims known as the Sedex Claims (the “Sedex Property”) located in the Omineca Mining Division, British Columbia (the “Transaction”).

The Transaction is intended to be the Company’s “Qualifying Transaction” as that term is defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”). To date, the Company has been a capital pool company with the business of identifying a qualifying transaction.

The Transaction will be carried out by parties dealing at arm’s length to one another and no nonarm’s length parties of the Company have any direct or indirect interest in the Sedex Property, therefore the Transaction will not be a Non-Arm’s Length Qualifying Transaction as such term is defined in Exchange Policy 2.4. The Company does not expect that approval of its shareholders will be required for the Transaction.

Upon completion of the Transaction, the Company expects that it will be classified as a Tier 2 mining issuer under the policies of the Exchange and will be engaged in the exploration and development of prospective mineral properties, including the Sedex Property.

Terms of the Transaction

Under the terms of the LOI, Megastar has agreed to grant the Company an option (the “Option”) to acquire 60% of its right, title and interest in and to the Sedex Property. In order to acquire the 60% interest in the Sedex Property, the Company will be required to:

(a) pay to Megastar an aggregate of $50,000 as follows:

(i) $25,000 within 10 days of execution the LOI (Paid); and

(ii) $25,000 on or before the earlier of:

A. 7 days after receipt of final approval (the “Final Approval”) of the Exchange for the Transaction and the common shares of the Company (each, a “Share”) being listed for trading on the Exchange as a Tier 2 mining issuer (the “Listing Date”), or

B. September 30, 2012, subject to Final Approval;

(b) incur exploration expenditures of at least $500,000 on the Sedex Property as follows:

(i) $200,000 on or before the earlier of:

A. the first anniversay of Listing Date, or

B. September 30, 2013; and

(ii) $300,000 on or before the earlier of:

A. 18 months from the Listing Date, or

B. March 31, 2014;

(i) 200,000 Shares on or before the earlier of:

A. 7 days after the Listing Date, or

B. September 30, 2012, subject to Final Approval; and

(ii) 50,000 Shares on or before the earlier of:

A. 18 months from the Listing Date, or

B. March 31, 2014;

The Company intends to use its working capital and proceeds from the Offering (as defined below) to make the cash payments required under the LOI.

During the term of the Option, the Company will be responsible for maintaining the Sedex Property in good standing. Megastar will have the right to access the Sedex Property and technical data and proof of exploration expenditures incurred with respect to the Sedex Property during the period that the Option is outstanding.

Pursuant to the LOI, in the event that the Company exercises the Option in accordance with the terms of the LOI, the Company and Megastar agree to associate on a joint venture basis for further exploration and development of the Sedex Property and agree to to enter into a formal Joint Venture Agreement.

Completion of the Transaction will be subject to Final Approval.

Private Placement

In conjunction with the Transaction, the Company would like to announce a non-brokered private placement (the “Offering”) for gross proceeds of $700,000 through the sale of 10,000,000 units (each, a “Unit”) at a price of $0.05 per Unit and the sale of 2,000,000 flowthrough units (each, a “FT Unit”) at a price of $0.10 per FT Unit. Each Unit consists of one common share in the capital of the Company (each, a “Share”), and one-half of one Share purchase warrant (each, a “Unit Warrant”). Each Unit Warrant entitles the holder thereof to purchase one additional Share at a price of $0.10 per Share for a period of 24 months from the date of the issuance of such Unit Warrant. Each FT Unit consists of one Share issued on a flowthrough basis under the Income Tax Act (Canada) and one-half of one Share purchase warrant (each, a “FT Unit Warrant”). Each FT Unit Warrant entitles the holder thereof to purchase one additional Share at a price of $0.15 per Share for a period of 24 months from the date of the issuance of such FT Unit Warrant. The Company intends to use the proceeds of the Offering to meet its obligations under the LOI. The Company may pay finder’s fees in connection with the Offering up to the maximum fees allowable in accordance with the policies of the Exchange.

Sponsorship

The Company intends to rely on an exemption from the sponsorship requirements set out in Exchange Policy 2.2.

The Sedex Property

The 10,705 hectare Sedex Property is a zinc-lead-silver property that located in the Omineca Mining Division, approximately 280 kilometers north-northwest of Mackenzie, BC, Canada. The Sedex Property is situated within the Gunsteel shale formation in the Kechika trough sedex zinc basin.

Officers and Directors upon Completion of Transaction

Upon completion of the Transaction, Mr. Charles Desjardins, Mr. Stuart Wooldridge and Mr. Zhigang Wang are the three current directors and officer of the Company that are expected to remain in their current positions. In addition, the Company intends to appoint Mr. Ming Chiang and Mr. Patrick Fernet to its board of directors. The Company also intends to appoint Mr. Fernet as the Company’s Chief Financial Officer.

Mr. Chiang has over 15 years of management experience in the financial industry and capital markets; Mergers and Acquisitions, debt financings, Initial Public Offerings and Capital Pool Companies. Currently, Mr. Chiang is a director of Crimson Bioenergy Ltd., a bioenergy company listed on the Exchange that went public through a reverse takeover of Crimson Falcon Capital Corp., a Capital Pool Company where Mr. Chiang has been a founder, President and Chief Executive Officer.

Mr. Fernet is a lawyer and a graduate of the University of Montreal. He has also successfully completed the Canadian Securities Course and he is a graduate in business administration of the Cegep Jean-de-Brébeuf. Over the past 12 years, he has been working as a legal consultant on business and financial matters for small cap emerging companies. Through these years, he has been involved and has acquired a wide experience in the legal, the accounting and the financial sector. He is also a director, an officer and a member of the audit committee of two other public corporations.

For a description of the backgrounds of each of the current insiders, see the Company’s management information circular as filed on SEDAR on November 23, 2011.

The Company does not expect that any new insiders will be created upon completion of the Transaction, other than the addition of Mr. Chiang and Mr. Fernet.

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.

ON BEHALF OF THE BOARDS OF

YUNTONE CAPITAL CORP.

Per: “Charles Desjardins”

Charles Desjardins President, CEO and Director

For further information, please contact:

Charles Desjardins, President, CEO and Director Telephone: 604 729-8898 Facsimile: 604 687-9631

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’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 information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations and includes statements that the Company will complete its qualifying transaction, acquire the Sedex Property free and clear of all encumbrances, satisfy its payment obligations with respect to the Sedex Property, use its working capital to make cash payments to Megastar, pay finder’s fees in connection with the Transaction, appoint the new directors and officers, and that the insiders of the Company following completion of the Transaction will be as set forth in this news release and that there will be no additional insiders, other than the new directors and officers. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties such as the risk that the closing of the Transaction may not occur for any reason. Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) the refusal of the Exchange to accept the proposed Transaction for any reason whatsoever; (ii) the inability of the parties to obtain approval of any third parties or shareholders, as required; (iii) the inability of the Sedex Property to satisfy Exchange Initial Listing Requirements; and (iv) the inability to complete the Offering in whole or in part for any reason whatsoever. Except as required by law, the Company does not intend to update any changes to such statements.

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