War Eagle Provides Update on Tres Marias Mine Development

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug 25, 2014) - War Eagle Mining Company Inc. (TSX VENTURE:WAR) ("War Eagle" or the "Company") is pleased to announce that it has received the second payment (US$35,000) from the sale of the Tres Marias zinc-lead-germanium project in Chihuahua, Mexico to Contratista y Operaciones Mineras SA de CV ("COMSA"), a Mexican mining company, previously announced on January 16, 2014. Total cash consideration for the sale was US$5,000,000 of which the next payment to War Eagle is to be US$300,000 in January 2015.

In addition to making this payment, COMSA has reported that it is making excellent progress on advancing the Tres Marias project towards production. Activities over the past six months in this regard include:

• COMSA continues to occupy and maintain the various office, accommodation and warehouse facilities previously maintained by War Eagle when it was advancing its work on Tres Marias and continues to maintain all mineral concessions and permits (including the explosive permit) in good standing with the Mexican authorities and has located two sites for the processing of the extracted Tres Marias mineralized material (crushing, loading, concentration) prior to transportation to a smelter;
• Repairs and remediation work on equipment and facilities at the mine site, including service to the head frame, repair and installation of the ore hopper and winch, all of which facilitates access and extraction of Tres Marias zinc-lead-germanium mineralized material;
• In mid-July two crews arrived on site to begin underground rehabilitation work, including underground access and underground installations such as warehouse, machine shop and office/comfort stations;
• Three smelters have expressed interest in purchasing material from Tres Marias with negotiations expected to be completed once greater confidence in the amounts of material to be shipped from the mine is confirmed;
• COMSA is in the final stages of preparation for submission of its permit to mine at Tres Marias and has been in close liaison with government officials in the preparation of this document. The timing of receipt of this permit cannot be determined at this time; however COMSA remains confident that, with the underground work advancing as it presently is, production can be achieved as quickly as 6 to 8 weeks from receipt of the mining permit; and
• As of June 30, 2014, COMSA had spent approximately US$65,000 in mine site related activities, in addition COMSA has paid US$100,000 to WAR Eagle since the signing of the sale agreement t.

President and CEO of War Eagle, Thomas R. Atkins, commented on the progress at the Tres Marias project, stating: "COMSA is doing everything I believe any mine contractor would do to advance the Tres Marias project in as timely a manner as possible to enable the extraction of mineralized material. Management of War Eagle is pleased with the progress COMSA is making which gives us confidence in their ability to continue to fulfill the financial obligations to War Eagle for the sale of the Tres Marias project. The Company looks forward to keeping shareholders apprised of future progress."

About War Eagle:

War Eagle is a mineral exploration and development company focused on acquiring, defining and developing base metals mineral resources in Mexico and other attractive mining friendly jurisdictions in the Americas. The Company has a 100% interest in the Tres Marias zinc-lead-germanium project under purchase agreement to COMSA, a Mexican mining company and the Company holds an option to purchase the surface rights covering the large scale Terrazas oxide zinc-copper deposit, both of which are located in Chihuahua State, Mexico. The Company continues to seek other opportunities in the Americas that it deems to host above-average potential for economic concentrations of base metals mineralization.

To find out more about War Eagle and to sign up to receive future press releases, please visit the Company's website at www.wareaglemining.com.

This news release was prepared by management of War Eagle, which takes full responsibility for its contents. 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.

Legal Notice Regarding Forward Looking Statements

This disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control including: the impact of general economic conditions in the areas in which the Company operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with mining operations, therefore the Company's future results, performance or achievements could differ materially from those expressed in these forward-looking statements will transpire. All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include references to a future drill program and related plans. These statements are based on assumptions made by the company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.