EMC Metals Corp. (the "Company" or "EMC") previously announced that it received notice of a lawsuit filed against the Company on Friday June 22, 2012 in the Supreme Court of Victoria, Australia, by our Nyngan Scandium Project partner, Jervois Mining Limited ("Jervois").

While these legal proceedings continue, Jervois contends that, among other things, the Joint Venture Agreement (including EMC's earn-in right) was automatically terminated on 29 February 2012.

On 20 August 2012, EMC filed its formal defense and a counterclaim with the Supreme Court in Victoria, Australia. In its counterclaim, EMC has sought relief that includes:

    * a declaration that it satisfied the earn-in conditions set out in clause 6.2 of the Joint Venture Agreement,

    * a declaration that upon payment to Jervois of the sum of AUD1.3 million (plus GST), EMC is entitled to a 50% interest in the Joint Venture, and

    * damages to compensate EMC for the loss that it has suffered as a result of Jervois wrongfully treating the Joint Venture as terminated.

The Court has directed that the proceeding first be referred to a court-approved mediation, assisted by an independent facilitator, and that such mediation take place by 1 October 2012. If the parties mutually agree a settlement at this mediation, that settlement will be binding upon them. This process is distinct from an arbitration, and in the absence of an agreed settlement at mediation, the matter will return to the Court for determination.

About EMC Metals

EMC owns a 100% interest in the Springer tungsten mine in Nevada, USA. Strong tungsten prices and tight supply conditions, combined with the refurbished mill and existing tungsten resource on the property, support a strategy to seek a near term restart of the Springer facility. EMC also owns a 100% interest in the Carlin Vanadium property near Carlin, Nevada. Both properties have current NI 43-101 compliant resource estimates, available on the Company website and on SEDAR.