Cavan Enters LOI for Acquisition of Quebec Rare Earth Project, Proposed $1.5 Million and $1.0 Million Flow-Through Financing

Cavan Ventures Inc. (TSX VENTURE:CVN), (http://www.cavanventures.com) (the
"Company") is pleased to announce it has entered into a non-binding Letter Of
Intent ("LOI") with Investissements Horizon Inc. ("IHI") of Quebec, to acquire
from IHI up to one hundred percent (100%) interest in the Pythonga Lake Rare
Earth project ("Pythonga") in the Maniwaki region in the province of Quebec. The
8.3km2 Pythonga lake project is comprised of 14 mining claims and is situated
180km northwest of Montreal in the Maniwaki region. The Maniwaki region has
recently seen a great deal of exploration activity associated with rare earth
elements discoveries.


Cavan will immediately commence a due diligence review of the project. Upon
successful completion of the due diligence review the parties will proceed to
enter into and execute a definitive agreement with respect to the acquisition by
Cavan of up to 100% interest in the Pythonga project. Cavan will issue a news
release to provide an update to its shareholders in connection with the
execution of the definitive agreement. The proposed terms to purchase a seventy
percent (70%) interest of the property is cash payment of $50,000 and 2,000,000
common shares of Company stock to IHI. Cavan also agrees to spend $500,000 for
an exploration program on the property over 2 years. Cavan can issue an
additional 3,000,000 shares of Company stock to purchase the remaining thirty
percent (30%) of the Pythonga project for a total one hundred percent (100%)
interest.


Completion of the transaction is subject to a number of conditions, including
TSX Venture Exchange acceptance and, if required, shareholder approval. There
can be no assurance that the transaction will be completed as proposed or at
all.


Cavan intends to complete a non-brokered private placement of up to 7.5 million
units to subscribers to residents in Canada and certain offshore jurisdictions
at a price of 20 cents ($0.20) per unit for gross proceeds of up to $1,500,000.
Each unit will comprise one common share of the company and one-half of one
non-transferable warrant of the company. Each whole warrant will entitle the
holder thereof to acquire one common share of the company at an exercise price
of 25 cents ($0.25) per common share for a period of 18 months after the closing
date of the private placement.


Cavan also intends to complete a non-brokered private placement of up to 4
million flow-through units at a price of 25 cents ($0.25) per unit for gross
proceeds of up to $1,000,000. Each unit will comprise one flow-through common
share of the company and one-half of one non-transferable warrant of the
company. Each whole warrant will entitle the holder thereof to acquire one non
flow-though common share of the company at an exercise price of 30 cents ($0.30)
per common share for a period of 18 months after the closing date of the private
placement.


In connection with the private placement, The Company may pay a finder's fee,
payable in cash or shares, to certain arm's-length parties in an amount equal to
8 per cent of the total gross proceeds raised under the private placement from
subscribers introduced to the company by such parties.


The securities issued under the private placement will be subject to a statutory
hold period which will expire four months and one day from the date of the
closing of the private placement. The private placement is subject to acceptance
by the TSX Venture Exchange and other customary conditions for a transaction of
this nature. The proceeds of the private placement will be used for mineral
exploration activities of the company and for general working capital purposes.


On behalf of the Board of Directors:

Andrew Mah, President & Director

Patrick Brandreth, Director, Corporate communication

This news release contains certain forward-looking statements that reflect the
current views and/or expectations of Cavan with respect to its performance,
business and future events. Such statements are subject to a number of risks,
uncertainties and assumptions. Actual results and events may vary significantly.