Eloro Resources and Megastar Development Announce Closing of $4 Million Joint Venture Agreement on Megastar's Simkar

TORONTO, ONTARIO, Aug 17 (MARKET WIRE) --
Eloro Resources Ltd. (TSX VENTURE: ELO)(FRANKFURT: P2Q) ("Eloro") and
Megastar Development Corp. (TSX VENTURE: MDV)(FRANKFURT: M5Q)
("Megastar") are pleased to announce that they have executed a definitive
agreement (the "Agreement") for a $4 million joint venture on Megastar's
wholly-owned Simkar Gold Project (the "Project"), located approximately
20 km east of Val-d'Or (Quebec). The Project, a former gold producer,
consists of two contiguous mining concessions in Louvicourt Township,
covering 225.63 hectare. The Project is not encumbered with any royalties.

The Agreement provides Eloro with the option to earn a 50% undivided
interest in the Project by completing $4 million in exploration work on
the Project over a 3 year period, subject to a one-time six month
extension at Eloro's option after the first year, whereby $750,000 would
be incurred in the first year, $1.25 million in the second year and $2
million in the third year; paying Megastar $350,000 cash over a three
year period, and issuing 4.5 million common shares of Eloro to Megastar
as follows: (1) 750,000 common shares upon execution of a definitive
option agreement (the "Option Agreement") and TSX Venture Exchange
approval, (2) 750,000 common shares on the first year anniversary of the
Option Agreement, (3) 1.5 million common shares on each the second and
third anniversary of the Option Agreement. Should Eloro elect to utilize
the six month extension on either the second or third year's exploration
commitments, Eloro would issue an additional 100,000 common shares to
Megastar. Eloro would be the project manager and operator. After Eloro
completes its earn-in, Eloro and Megastar will form a joint venture
reflective of their proportionate ownership interest in the Project with
Eloro acting as operator. Should either Eloro or Megastar's participating
interest in the Project be diluted to less than ten percent, the diluted
party's interest will be converted to a 2% net smelter returns royalty.
The non-diluted party can acquire one-half percent of the royalty from
the diluted party for $1 million, thereby reducing the royalty from 2% to
1.5%. This transaction is subject to the receipt of all required
regulatory and board approvals.

The Simkar Gold Project

The Project has been the subject of two National Instrument ("NI") 43-101
compliant technical reports, one in 2004 and a second in 2008. The first
was titled "Technical Report (NI 43-101 F1) on the 2004 drilling Program,
Simkar Property (Val-d'Or, Quebec), Louvicourt Township, Province of
Quebec, Canada (NTS: 32C04)", by C. Pelletier, B. Sc., P. Geo. (of
InnovExplo Inc.), dated December 6, 2004. The 2008 report was titled
"Technical Report (NI 43-101) Simkar Property , Val d'Or, Quebec" (the
"Report") was prepared by M. Bourgoin, P. Geo., of MRB & Associates, and
R. Sandefur, P. Eng., of Chlumsky, Armbrust and Meyer LLC. Both reports
are available on SEDAR at www.sedar.com (under Megastar Development Corp).

From 1987 to 1993, over $12 million of surface exploration and
underground development work was completed on the Project. The
exploration work successfully defined significant gold mineralization in
the extensions of the previously mined A,B and C Zones, as well as
defining new gold resources in three new gold bearing structures, the
East, F, and Pillar Zones. Subsequently, the existing underground
workings were dewatered and new underground development was completed to
access the East Zone on two levels. This underground development work led
to the extraction of 71,068 tonnes grading 8.42 g/t gold for
approximately 20,000 ounces of gold.

Megastar acquired all rights, titles and interests of the Project in
1996. Since then, Megastar completed ground geophysics; surface diamond
drilling totaling 8,000 m in 26 holes; and integrated the former Simkar
Gold Mine underground workings into a GEMCOMTM GEMS 3-D mine model. This
work led to the Report and mineral resource estimates in 2008 which are
outlined in the following table to a vertical depth of -200 m:

-----------------------------------------------------
SIMKAR GOLD DEPOSIT
-----------------------------------------------------
TOTAL INFERRED RESOURCES(i)
-----------------------------------------------------
TOTAL
CUT-OFF GRADE CONTAINED GOLD
(g/t gold) TONNES (g/t gold) OUNCES
-----------------------------------------------------
1.0 1,482,000 3.01 143,160
-----------------------------------------------------
2.0 641,050 5.10 105,100
-----------------------------------------------------
3.0 347,400 7.32 81,800
-----------------------------------------------------
5.0 188,750 10.23 62,100
-----------------------------------------------------
(i) Numbers may be rounded for simplicity.

Eloro's plan going forward is to enhance the 3-D mine model with
detailed interpretation work in preparation of a drill program to test
the down plunge extension of all of the gold structures below the 200 m
vertical depth, particularly on the East Zone Shear, where the gold
grades are higher than those defined elsewhere on the Project. Eloro is
of the opinion that the presence of higher grade tension veins
intersected by Megastar in the 2007 surface diamond drilling work (140.0
g/t gold over 0.5 m, 99.8 g/t gold over 0.3 m, 33.9 g/t gold over 1.0 m,
and 31.0 g/t gold over 0.5 m) represents strong evidence of the
similarities of the Simkar Gold Deposit with the 9 million ounce
Sigma-Lamaque Gold Deposit located 20 km to the west.

The information contained in this news release was prepared and revised
by Martin Bourgoin, P. Geo., Eloro's Executive VP, and a Qualified Person
as defined by National Instrument 43-101.

About Eloro Resources Ltd.

Eloro is a junior exploration company focused on discovering and
developing precious and base metal quality resources in the James Bay
region of northern Quebec, and base and precious metals in the Timmins
Camp of northern Ontario. Eloro currently has eleven gold-copper-silver
properties (1,062 claims) covering 548 km2 in the La Grande and Eastmain
Greenstone Belts, proximal to Goldcorp's Eleonore Gold Project. Eloro
also has an option to earn a 50% interest in 31 claims held by Virginia
Mines Inc. also located in James Bay, Quebec. The Timmins area holdings
include both the prospective Hurdman Property, and the 30 km2 McArthur
Lake Nickel Property under option to Fletcher Nickel Inc.

About Megastar Development Corp.

Megastar Development Corp. is an emerging resource company engaged in the
acquisition, exploration and development of mineral properties in Canada.
Megastar owns gold and base metal properties in Quebec and British
Columbia, including the Simkar Gold Project in Val d'Or, Quebec for which
a NI 43-101 compliant independent Technical Report concludes that the
Project is estimated to have a remaining (post-historic mining) Inferred
Resources of about 140,000 ounces, based on parameters appropriate for a
reasonable underground mining scenario. For further information,
investors and shareholders are invited to visit the Company's website at
www.megastardevelopment.com or call the office at 604-683-6648.

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.

Contacts:
Eloro Resources Ltd.
Thomas G. Larsen
President and CEO
(416) 868-9168
(416) 361-1333 (FAX)
www.elororesources.com

Megastar Development Corp.
Dusan Berka, P. Eng
President and CEO
(604) 683-6648
(604) 683-1350 (FAX)
www.megastardevelopment.com

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