Houston Lake Mining - 2010 Letter to Shareholders and Current Exploration Objectives

Houston Lake Mining Inc.:

A YEAR OF EXPLORATION SUCCESS AND REFOCUS

With another year of successful exploration behind us I believe we made
fair progress towards achieving our corporate goals of refocus and
change for Houston Lake Mining (HLM) in 2010 while building a solid
foundation for 2011. We've added technical direction to our board of
directors with the addition of Marian (Mike) Koziol, P.Geo. We have been
decisive with exploration on our West Cedartree Gold Project, where we
have recently adjusted our exploration targeting while also realizing
the new discovery of the Robertson Gold Zone. We have also added to our
land position and are taking steps to advance exploration on our
Pakeagama Rare Metals Project.

MAKING PROGRESS ON THE WEST CEDARTREE

For our new shareholders, our West Cedartree property is situated in the
heart of the Kenora region which we believe has the potential to become
the next gold mining district in northwestern Ontario. Over the past
seven years, we accumulated a large land position and staked some of the
most prospective properties in the region. While it has taken the
company many years to assemble this land package we believe we have
pulled together a property unmatched by anyone in the area. We have done
this while keeping one overriding principal in mind-minimize shareholder
dilution.

Since 2002, Houston Lake has been a mainstay in Kenora and has been
building its land position to form its present day 100% owned and
optioned West Cedartree Gold Project. Where others saw risk, we saw
potential. West Cedartree consists of eight contiguous properties that
comprise over 1,600 hectares and over six kilometres of key geology.

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following link: http://www.usetdas.com/images/houston/houstonmap06012011.pdf

EXPLORATION STRATEGY

Looking internally to the large gabbro body that underlies a significant
portion of the West Cedartree Gold Project had been the focus for
exploration under previous management. The change in exploration
management in 2010 has fostered a shift in the focus from looking
internally at the gabbro body towards the contacts between the gabbro
and the volcanics that lay to the east and the west. With renewed focus
to the historical and limited exploration of the McLennan Gold Zone to
the west, the Dogpaw and newly discovered Robertson Gold Zones near the
eastern contact, HLM is confident in stepping out with exploration in
order to assess the larger envelope in seeking the overall ounce
potential of the West Cedartree Gold Project.

The Robertson Gold Zone was discovered first with prospecting, then with
washing and channel sampling last summer. Later our suspicion was
confirmed in the fall of 2010 with a Phase I, eight hole drill program
which identified over 100m of strike length near surface. In early 2011
we tested the extensions of this zone through a Phase II, 7 hole program
which extended the strike length to 200 meters and with hole R11-15
intersected 1.41 g/t gold over 38.7m including 8.8 g/t over 3m near
surface. The results indicate that the Robertson Gold Zone not only
extends for 200 meters along strike near surface, but is also and is
open in all directions to the east, west and depth. Furthermore, the
Robertson is intersected by a north-south shear that is also open in all
directions and is to be followed up on. It is a very positive indicator
that the multi-sheared contact area contains several siliceous zones as
well as a pyritic and fuchsitic felsic porphyry from multiple holes
where intercepts measured from 2 to 20 meters in length.

Currently, a prospecting program is being conducted on the West
Cedartree Gold Project; we are striving to provide possible indications
of further strike potential of all known gold zones and their
relationship with each other on the project.

HLM has recently revisited the historic McLennan Gold Zone in early
2011. The mineralization at the McLennan Gold Zone is hosted in an
altered shear zone near the contact between mafic to intermediate
volcanic rocks, quartz-feldspar porphyries and the large gabbro body
that underlies parts of the West Cedartree Gold Project. Historically,
this mineralized zone was followed for 260 meters but exploration was
terminated due to the low gold prices at the time leaving the zone open
to the north, south and depth. Surface work by HLM in 2010 resulted in
the discovery of a 10.79 g/t gold grab sample. The surface sample was
taken 2.5 km southwest of the McLennan Gold Zone in an unexplored area
near the same mafic-gabbro contact as the McLennan Gold Zone. This is a
very positive indicator that this sheared contact area is a favourable
target for gold and there is an impressive 6.6 km of geology to explore
on strike to the north and south of the present-day McLennan Gold Zone.
We have confirmed the historical drilling and have further encountered
several silicious zones with some being mineralized. The mineralization
occurs near surface and has been delineated by drilling for a strike
length of 450 meters that is open in all directions. We are currently
extending our grids and expanding our geophysical coverage of our new
target and plan on covering this target by further prospecting in the
very near future as a part of current operations on the project.

HLM has recently been making progress on the Dogpaw Lake Gold Zone by
compiling and reviewing the data from previous management on the known
gold-bearing veins. Of note, approximately 75% of drilling conducted by
HLM has intersected values of 3 g/t or higher including the best drilled
intercept yielded from drill hole DP07-42 with 7.5 meters of 29.9 g/t
gold. High grades, and close proximity to the underexplored contact
between the large gabbro body and volcanics provide an impressive 4.6 km
of geology to explore on to the north and south of the present-day
Dogpaw Gold Zone and makes it another key exploration target. In 2010
HLM reported up to 105 g/t gold from channel sampling in vein No. 5 on
the Dogpaw Lake Gold Zone. The Dogpaw Vein No. 5 occurs 470 meters
north-northeast of Vein No. 1, and occurs in the same gabbroic host
rocks as the Vein No. 1, No. 2, No. 4 and No. 6 gold mineralizing
system. Currently we are prospecting the Dogpaw with the intent of
quickly conducting a trenching program to reveal the surficial
relationship between the various known high grade veins on the property.
Dependent on results, we will be quick to follow up with washing and
channel sampling with the objective of a delineation program to at least
continue with the existing targets based on past drilling on veins No. 1
and No. 2 and the immediate attention of vein No. 4 and others that may
arise from our current work.

We currently have two NI 43-101 compliant resources on two of our gold
zones (Angel Hill and Dubenski) and a historical resource on a third
(Dogpaw Lake). In 2010 we focused a good portion of our drilling on the
Dubenski Gold Zone. We initiated and completed phases IV and V of
drilling which was aimed at expanding the resource along strike and at
depth. Our drilling confirmed the extension of the Dubenski Mineralized
Zone and proving that the Shaft, Central and East Zones form a
continuous gold mineralizing system. The drilling also extended the gold
mineralization to 465 meters of strike length. We have encountered some
mineralization at a depth of 450m vertical, this is encouraging, despite
encountering some cross faulting on the western extension of the zone.
We have accomplished approximately 6000m of drilling since our last
resource calculation, and are working on 3D modelling to aid in the next
exploration holes to test the strike potential towards the Peninsula
Zone to the east, rather than expensive, deep drilling before we look at
updating the resource there.

To view an image in reference to this news release, please click on the
following link: http://www.usetdas.com/images/houston/houston06012011.pdf

B.J. McKay Ltd., P&E Mining Consultants Inc., Technical Report and
Updated Resource Estimate on the Dubenski Gold Property Kenora, Ontario;
2009: 37

STEPPING OUT WITH EXPLORATION HOLES

All three gold zones (Angel Hill, Dogpaw Lake and Dubenski) are open
along strike and to depth. Of notes, HLM has not predominately drilled
below a depth of 100 metres on the West Cedartree Gold Project. The
geology of gold mineralization in Northern Ontario is typically
high-grade deep veins. Deposits that have gone on to become prolific
producing gold mines tend to be deep deposits. We have confirmed this
predominately on the Dogpaw Gold Zone however deeper drilling increases
both risk level and cost. To date, we have concentrated on building
resources at shallow depths, which has also been tightly spaced on each
known gold zone. This strategy has shifted and 2011 drilling efforts
will be done with exploration holes set out to define the larger
envelope of mineralization in order to attain the ounce potential on the
project. This strategy will display the project's production potential
in a quicker fashion and define the relationships between known gold
zones that will effectively minimize financial risk and share dilution
to the company. HLM will be conducting drilling in the late summer/fall
of 2011 and meterage and holes will be based on current
modelling/analyzing of known zones, as well as surface work currently
being conducted on the project.

RARE-METALS

Recent consolidation has enabled a 100 percent interest in 1,024
hectares (2,530 acres) of mining claims at its Pakeagama Rare Metals
Project. This land position covers all known exposures of the Pakeagama
rare metal pegmatite. Strong market interest in rare metals has made our
Pakeagama Rare Metals Project the chief focus of a staking rush north of
Red Lake. We believe that we hold the key ground identified by the
Ontario Geological Survey (OGS) in their 1998-1999 rare metals
evaluation of the region and are happy to have optioned grounds that
strongly suggest the extension of the known mineralized pegmatite. High
grade cesium, tantalum, rubidium and lithium oxide values have been
reported in the Core Zone of the exposed pegmatite which is open in all
directions on our project.

Exploration Plans for 2011 include a summer Mobile Metal Ion (MMI)
geochemical survey. The objective of this program is to aid in the
targeting and planning of a Phase I winter diamond drill program. Upon
completion of the MMI survey and the Phase I diamond drill program, the
knowledge gained should allow us to have a rare and exclusive
geochemical survey tool we can use in the exploration for rare-metal
pegmatites in northern Ontario. In order to significantly reduce the
costs associated with a helicopter supported summer drill program, HLM
is planning on drilling Phase I in the winter months of 2012 and
accessing the project utilizing the winter road network that runs within
6 kilometres of the project.

MAKING STRATEGIC LEADERSHIP CHANGES AND STRENGTHENING OUR BALANCE SHEET

With the addition of Mike Koziol (P.Geo) as director, HLM's board has
the expertise to see projects from grassroots exploration to production.
Mike has been instrumental with current changes and approaches to
exploration on HLM's gold and rare-metal assets. Our approach to
stepping out from our known gold zones on the West Cedartree in
particular should advance exploration on the project while keeping in
mind our goal of preserving a tight share structure. During 2010, we
issued 4,791,666 common shares for gross proceeds of $750,000 to finance
our activities during our year of transition. In addition, in September
of 2010 we announced a $10 million equity line facility that will
provide HLM with a flexible and inexpensive access to capital to support
our exploration initiatives. Currently, we are in the application
process with the Ontario Securities Commission (OSC) regarding the
facility and remain optimistic. We have taken a prudent approach to
financing the company to date and we will continue to do so in the
future. We will likely require additional exploration dollars later in
the year as well. As gold trades around $1500 an ounce mark, the market
fundamentals look strong for gold and rare-metals to remain at elevated
prices in the future. This bodes well for exploration companies that are
more leveraged to commodity prices.

With another season of exploration just underway, a refined exploration
strategy for both the West Cedartree Gold Project and Pakeagama Rare
Metals Project, and a newly energized and refocused board and management
team which will continue to evolve, I am confident that HLM will be
playing a more critical role in both Kenora's rise as the next gold
mining district in Canada and addressing the supply constraints of Rare
Metals in the world.

On a personal note, I would like to thank our highly valued shareholders
for your support and patience over this past year of refocus and change.

To view this news release as a web page, please click on the following
link: http://www.usetdas.com/pr/houston06012011.htm

Houston Lake Mining

Trevor R. Walker, MBA

President

Tel:
705-897-7622

Fax: 705-897-7618