Elysee Development Corp (ASXSF)

[Montanore]

TERMS OF ACQUISITION OF STERLING AND CHAPTER 11 PLAN

As previously announced by the Company (refer to the Company's press release of June 10, 2009), the Company filed a "Notice of Appearance and Request for Special Notice" with the United States Bankruptcy Court for the District of Idaho, U.S.A. (the "Court") regarding Sterling and subsequently executed a Binding Term Sheet which is superseded by the acquisition agreement (the "Agreement") dated November 17, 2009 between the Company and Sterling. Pursuant to the Agreement, the Company has agreed to acquire up to 100% interest in Sterling and its assets and provide for financing of Sterling's ongoing operations. The Agreement contains a number of conditions precedent to the obligations of the parties. Unless all of such conditions are satisfied or waived by the party for whose benefit such conditions exist, to the extent that they may be capable of waiver, the proposed transaction will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all. Such conditions include: an order ("Order") of the Court approving a Plan of Reorganization of Sterling (the "Plan of Reorganization"); all claims of all the creditors of Sterling are paid, satisfied, settled or compromised under the Plan of Reorganization and that all other consents and approvals, including regulatory approvals, are obtained. The proposed transaction has not been approved by the TSX Venture Exchange (the "Exchange") and remains subject to Exchange approval.

There can be no assurance that the proposed transaction will be completed as proposed or at all. The proposed transaction is an "arms length transaction" as defined in Exchange Policy 1.1.

Sterling has filed its Second Amended Disclosure Statement ("Disclosure Statement") in the bankruptcy proceedings. The Disclosure Statement has been approved by the Court and contains a Plan of Reorganization for Sterling. The Sterling Plan of Reorganization proposes a bidding process for 100% of the issued and outstanding common stock of Sterling entitling the purchaser to all assets of Sterling. The key dates for the sale process are as follows:

February 15, 2010 Due date for deposits and qualification of bidders
March 31, 2010, 5:00pm Due date for bids
April 5, 2010, 8:00am Auction
April 6, 2010, 9:30am Plan confirmation hearing and sale approval hearing
April 15, 2010 Sale closing date

The Sterling Plan of Reorganzation sets forth specific bidding procedures and processes which must be followed. The Sterling Plan of Reorganization and the Disclosure Statement are available at (a) the Clerk's Office of the U.S. Bankruptcy Court for the District of Idaho, located at 6450 N. Mineral Dr., Couer d'Alene, ID 83815; or (b) online at https://ecf.idb.uscourts.gov/cgi-bin/login.pl (a fee-based registration is required to access the information on this website).

The Company is a "qualified bidder" under the Sterling Plan of Reorganization and the Company intends, subject to Court and Exchange approval, and being the highest bidder to acquire not less than 100% of the outstanding Sterling shares, and for Sterling to exit the Chapter 11 process with the following assets in place: its interest in the Sunshine Silver Mine, facilities, Sunshine Silver Mine lease, and exploration interest in the Sterling exploration projects in Idaho. In addition, the Company upon meeting of the above referenced conditions, including the confirmation of a Plan of Reorganization, will reconstitute the Sterling Board of Directors and make additions to senior management of Sterling.
The Company believes that the proposed acquisition of Sterling represents a significant opportunity for the Company to become a near-term, mid-tier silver producer.

The Company maintains a strong balance sheet and has no long term debt. The Company continues to maintain seasoned and qualified management and seeks to fulfill its stated mandate of acquiring a world class advanced stage exploration and production projects.