Breakwater Resources Ltd.
TSX : BWR

Breakwater Resources Ltd.

August 01, 2006 22:29 ET

Breakwater Provide Exploration Update at Mines and Properties

TORONTO, ONTARIO--(Marketwire - Aug. 1, 2006) -

Attention Business Editors:

Breakwater Resources Ltd. ("Breakwater") (TSX:BWR) is pleased to present an update on exploration at the Company's operating mines and exploration properties.

During the first quarter of 2006, the Company engaged Western Mining Services LLC ("WMS") of Denver, Colorado, to review Breakwater's current exploration programs and growth opportunities and to assist in creating a robust exploration strategy and plan for the coming three years. To date, WMS has visited the sites of all Breakwater operations and reviewed the exploration programs at those sites, in-mine, near-mine and regional, with a focus on the documentation and results produced during the past 1-2 years.

El Toqui

The Porvenir deposit, located 400 metres immediately southeast of the Aserradero deposit, is a new discovery resulting from the Company's 2005-2006 field program. Please see figure Exploration Areas, August 2006 (http://files.newswire.ca/275/BRT14001.DDH-_Aug_2006.pdf). During the fourth quarter of 2005, an in-fill geochemical stream sediment survey covering ten square kilometres was carried out on the southeast portion of the Toqui district. The results of the survey indicated that there were several geochemical anomalies. In addition, there is a strong resistivity low which could indicate the presence of sulphide mineralization.

The Porvenir project area hosts zinc skarn-type mineralization that also contains minor amounts of gold and has been traced at depth along strike for approximately 500 metres. The sediment-hosted mineralized horizon remains open along trend and suggests a potential repetition of economic ore deposits along northwest-southeast trending mineralized corridors towards the southern part of the El Toqui district.

During the second quarter of 2006, 9,920 metres of diamond drilling was carried out on Porvenir which was successful in identifying zinc mineralization hosted in the favourable fossiliferous limestone bed along what is being interpreted as a new mineralized conductor. Please see figure Aserradero/Porvenir Area, August 2006 (http://files.newswire.ca/275/BRT14001.Aserradero-Porvenir_020806.pdf). Mineralization is contained in a gently-dipping manto averaging approximately 6 metres in thickness. Drilling in this new area is returning significant results, including:



- PDT-12: 6.1 m @ 10.68% Zn
- PDT-13: 6.5 m @ 9.70% Zn
- PDT-17: 7.7 m @ 11.05% Zn
- PDT-21: 4.4 m @ 8.04% Zn
- PDT-22: 6.6 m @ 9.74% Zn
- PDT-25: 6.0 m @ 17.12% Zn
- PDT-31: 6.2 m @ 19.32% Zn


The Company is very encouraged by the results to date at Porvenir. A resource calculation will be carried out during the third quarter of 2006 once all results are in. Additional drilling during the second half of 2006 will continue to test the extent of this zone.



Table I - Porvenir Diamond Drill Hole Intersections

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Total Core True
Drill- Dip Azimuth Length From To Length Thick. Zn Cu Au
Hole (m) (m) (m) (m) (m) (%) (%) (g/t)
-------------------------------------------------------------------------
PDT-07 -90 - 827.5 576.9 581.3 4.4 4.0 3.24 0.18 0.04
degrees
-------------------------------------------------------------------------
PDT-07 -90 - 827.5 589.0 593.6 4.6 4.2 1.45 0.25 0.02
degrees
-------------------------------------------------------------------------
PDT-07 -90 - 827.5 649.5 655.0 5.5 5.0 0.05 1.33 0.15
degrees
-------------------------------------------------------------------------
PDT-08 -90 - 1,089.6 642.6 652.4 9.8 8.4 Fe Manto Intercept
degrees
-------------------------------------------------------------------------
PDT-09 -90 - 826.4 603.1 607.9 4.8 3.8 0.10 0.29 0.07
degrees
-------------------------------------------------------------------------
PDT-10 -80 N 43 W 653.4 515.9 521.9 6.0 5.0 2.26 0.07 0.05
degrees degrees
-------------------------------------------------------------------------
PDT-11 -73 N 63 E 449.7 414.8 421.8 7.0 6.7 4.53 0.08 0.12
degrees degrees
-------------------------------------------------------------------------
PDT-12 -78 N 62 E 392.5 356.8 363.2 6.5 6.1 10.68 0.05 0.06
degrees degrees
-------------------------------------------------------------------------
PDT-13 -71 S 40 E 424.6 379.4 387.3 8.0 6.5 9.70 0.07 0.81
degrees degrees
-------------------------------------------------------------------------
PDT-14 -78 S 47 E 394.5 346.3 350.9 4.6 4.2 6.30 0.12 0.03
degrees degrees
-------------------------------------------------------------------------
PDT-15 -90 - 317.6 220.6 226.3 5.7 5.5 6.66 0.09 0.03
degrees
-------------------------------------------------------------------------
PDT-16 -65 S 12 E 407.3 382.1 387.1 5.0 4.2 5.64 0.11 0.77
degrees degrees
-------------------------------------------------------------------------
PDT-17 -90 - 329.4 317.2 326.0 8.0 7.7 11.05 0.11 0.04
degrees
-------------------------------------------------------------------------
PDT-18 -75 S 07 W 392.8 366.3 371.2 4.9 4.6 7.61 0.17 0.43
degrees degrees
-------------------------------------------------------------------------
PDT-19 -90 - 308.2 289.5 294.1 4.6 4.4 Fe Manto Intercept
degrees
-------------------------------------------------------------------------
PDT-20 -90 - 290.7 263.8 266.4 2.5 2.5 Barren Coquina
degrees
-------------------------------------------------------------------------
PDT-21 -81 N 31 E 365.3 320.8 325.4 4.5 4.4 8.04 0.31 0.08
degrees degrees
-------------------------------------------------------------------------
PDT-22 -90 N 40 W 320.1 291.6 298.3 6.7 6.6 9.74 0.10 0.05
degrees degrees
-------------------------------------------------------------------------
PDT-23 -77 N 18 W 299.5 248.3 254.7 6.5 5.9 Barren Coquina
degrees degrees
-------------------------------------------------------------------------
PDT-24 -72 S 10 E 395.5 384.4 388.9 4.5 4.0 2.35 0.08 0.10
degrees degrees
-------------------------------------------------------------------------
PDT-25 -90 - 992.6 296.9 303.1 6.2 6.0 17.12 0.05 0.07
degrees
-------------------------------------------------------------------------
PDT-26 -80 N 43 E 389.0 376.4 381.1 4.7 4.5 5.38 0.10 0.03
degrees degrees
-------------------------------------------------------------------------
PDT-27 -90 - 421.2 386.0 392.2 6.2 6.0 0.10 0.36 0.05
degrees
-------------------------------------------------------------------------
PDT-28 -70 N 43 E 418.2 406.7 410.6 4.5 4.2 2.21 0.15 0.03
degrees degrees
-------------------------------------------------------------------------
PDT-29 -90 - 328.4 307.9 317.8 9.9 9.9 Barren Coquina
degrees
-------------------------------------------------------------------------
PDT-30 -90 - 308.4 291.3 301.4 10.1 10.2 Fe Manto
degrees Intercept
-------------------------------------------------------------------------
PDT-31 -90 - 293.3 277.9 284.1 6.2 6.2 19.32 Pending
degrees
-------------------------------------------------------------------------


The Company is in the process of exploring the extensions of the Aserradero deposit to the south and southeast. During the second quarter of 2006, a total of 2,670 metres were drilled in nine holes. It has been determined that the mineralized system does continue to the southeast, however, it is 50-60 metres lower down because of the Fortuna Fault. This southeast block is showing important differences from the main Aserradero area. The manto thickness is increasing; copper, silver and lead values are increasing; iron content is increasing; arsenopyrite content is decreasing and gold content is erratic.



Table II - Aserradero Diamond Drill Hole Intersections

-------------------------------------------------------------------------
Total Core True
Drill- Dip Azimuth Length From To Length Thick. Zn Cu Au
Hole (m) (m) (m) (m) (m) (%) (%) (g/t)
-------------------------------------------------------------------------
DAS-78B -77 S 07 E 329.5 323.8 326.2 2.4 2.2 1.20 0.17 2.26
degrees degrees
-------------------------------------------------------------------------
DAS-79 -65 S 46 E 380.1 366.7 372.9 6.2 5.1 4.74 0.03 7.56
degrees degrees
-------------------------------------------------------------------------
DAS-80 -59 S 65 E 512.7 396.4 403.4 7.0 5.4 7.67 0.32 2.24
degrees degrees
-------------------------------------------------------------------------
DAS-80 -59 S 65 E 512.7 489.9 501.9 12.0 9.0 1.07 1.35 0.62
degrees degrees
-------------------------------------------------------------------------
DAS-81 -53 N 70 E 619.0 Hole lost
degrees degrees
-------------------------------------------------------------------------
DAS-82 -63 N 78 E 504.7 484.5 496.3 11.9 8.5 0.11 0.24 0.01
degrees degrees
-------------------------------------------------------------------------
DAS-83 -64 N 51 E 720.0 701.7 709.7 8.0 5.5 0.91 0.06 0.07
degrees degrees
-------------------------------------------------------------------------
DAS-84 -90 - 131.2 Hole lost
degrees
-------------------------------------------------------------------------
DAS-84A -90 - 839.6 798.4 806.4 8.0 7.2 0.44 0.04 0.46
degrees
-------------------------------------------------------------------------
DAS-85 -69 N 51 E 722.4 678.5 683.0 4.4 3.2 1.39 0.89 6.57
degrees degrees
-------------------------------------------------------------------------
DAS-86 -68 N 24 E 656.4 590.4 599.2 8.8 7.3 0.08 0.11 0.06
degrees degrees
-------------------------------------------------------------------------
DAS-87 -64 S 60 E 392.6 378.4 383.4 5.0 4.6 5.03 0.03 5.50
degrees degrees
-------------------------------------------------------------------------
DAS-88 -68 S 72 E 376.4 352.3 357.8 5.5 4.7 9.71 0.11 11.18
degrees degrees
-------------------------------------------------------------------------
DAS-89 -58 S 65 E 531.4 521.2 529.9 8.7 5.5 1.06 0.93 0.22
degrees degrees
-------------------------------------------------------------------------
DAS-90 -54 S 65 E 637.9 623.0 636.8 13.8 6.6 8.00 0.13 0.04
degrees degrees
-------------------------------------------------------------------------
DAS-91 -63 S 50 E 396.0 387.3 394.8 7.5 6.0 9.38 0.03 6.37
degrees degrees
-------------------------------------------------------------------------
DAS-92 -90 - 725.6 688.7 695.4 6.7 6.1 1.60 0.06 0.52
degrees
-------------------------------------------------------------------------
DAS-93 -90 - 767.2 Intercepted Aserradero Fault System
degrees
-------------------------------------------------------------------------


The Concordia deposit is located close to the existing mill infrastructure, is relatively shallow allowing for inexpensive ramp access and hosts zinc grades that are 40% higher than the current reserves with significant lead and silver content. Based on the drilling carried out to September 2005 an indicated and inferred mineral resource of 1.87 million tonnes grading 10.0% zinc, 5.1% lead, 0.29% copper and 68 grams per tonne silver was estimated.

An in-fill diamond drill program at Concordia was initiated during February 2006 with the objective of upgrading the current resources to reserves and to continue metallurgical testing to determine the best way to process Concordia material in the existing mill. During the second quarter, a total of 1,716 metres were drilled in nine holes. Please see figure Concordia Area, August 2006

(http://files.newswire.ca/275/BRT14001.Concordia-020806.pdf).

Surface rights for the portal area have been acquired and construction of an access road and preparation of the portal area have now been completed. During the second quarter of 2006, ramp development to access the Concordia deposit commenced, with production expected by mid-2007.



Table III - Concordia Diamond Drill Hole Intersections

-------------------------------------------------------------------------
Total Core True
Drill- Dip Azimuth Length From To Length Thick. Zn Pb Ag Cu Au
Hole (in degrees) (m) (m) (m) (m) (m) (%) (%) (g/t) (%) (g/t)
-------------------------------------------------------------------------
DCA-80 -70 S 72 E 148.3 139.6 145.6 6.0 4.8 Barren Coquina
-------------------------------------------------------------------------
DCA-81 -48 S 64 E 164.6 151.4 159.6 8.2 4.1 5.50 2.02 29 0.22 0.06
-------------------------------------------------------------------------
DCA-82 -53 N 66 W 250.0 232.9 239.2 6.3 3.5 3.19 0.39 13 0.28 0.09
-------------------------------------------------------------------------
DCA-83 -62 N 69 W 208.7 185.0 200.4 15.4 10.7 6.31 1.17 22 0.30 0.07
-------------------------------------------------------------------------
DCA-84 -72 N 71 W 200.0 157.0 171.9 14.9 12.1 Barren Coquina
-------------------------------------------------------------------------
DCA-85 -67 S 61 W 211.2 190.2 195.0 4.8 3.9 Barren Coquina
-------------------------------------------------------------------------
DCA-86 -72 S 22 E 145.9 128.3 140.7 12.4 10.2 10.69 1.31 72 0.22 0.07
-------------------------------------------------------------------------
DCA-87 -55 S 19 E 219.1 - - - - No Manto or Coquina
Intercept
-------------------------------------------------------------------------
DCA-88 -50 S 51 E 154.9 146.8 154.7 7.9 4.1 3.56 0.67 30 0.16 0.04
-------------------------------------------------------------------------
DCA-89 -83 S 11 E 188.8 182.5 184.1 1.6 1.5 7.03 4.41 4.40 44 0.18
-------------------------------------------------------------------------
DCA-90 -55 S 58 E 196.9 179.9 193.0 13.1 7.9 Barren Coquina
-------------------------------------------------------------------------
DCA-91 -73 S 29 W 225.3 202.0 204.0 2.0 1.8 5.11 0.13 34 0.54 0.15
-------------------------------------------------------------------------
DCA-92 -74 S 68 W 245.2 207.9 221.6 13.7 11.8 Barren Coquina
-------------------------------------------------------------------------
DCA-93 -83 S 66 W 218.8 - - - - No Manto or Coquina
Intercept
-------------------------------------------------------------------------
DCA-94 -69 S 50 E 218.4 200.2 202.3 2.1 1.6 3.67 0.05 8 0.13 1.76
-------------------------------------------------------------------------
DCA-95 -87 S 12 E 164.4 154.2 162.3 8.1 7.5 18.73 3.83 103 0.51 0.32
-------------------------------------------------------------------------
DCA-96 -67 S 64 E 158.4 145.7 149.4 3.7 2.8 Barren Coquina
-------------------------------------------------------------------------
DCA-97 -78 S 40 E 140.4 126.2 140.4 14.2 12.2 Barren Coquina
-------------------------------------------------------------------------
DCA-98 -46 S 39 E 175.6 141.2 153.7 12.5 5.9 10.17 0.14 85 0.75 0.17
-------------------------------------------------------------------------
DCA-99 -74 S 61 E 160.2 139.7 143.9 4.2 3.5 10.40 1.55 116 0.26 0.27
-------------------------------------------------------------------------


The Porvenir discovery was a result of focussing on one of several high quality targets that still remain to be tested in the El Toqui district. A review of exploration targets conducted by WMS earlier in the year indicated that exploration in the district has the potential to add significantly to the current resources, thus extending the life of the Toqui operation. Exploration of the remaining targets in the district will resume in the third quarter of 2006.

Work is currently underway on a regional exploration program on our extensive land holdings in the El Toqui area. Our primary goal is to discover a gold skarn deposit similar to the Aserradero deposit. A detailed stream sediment survey was carried out in February of 2006 in the Manihuales-Sur area. Geological mapping of the area was completed prior to winter weather setting in, and will be followed up in the third quarter of 2006 once access is re-established.

The exploration programs at El Toqui are under the supervision of Robert McGuire, P.Eng. who is a qualified person as defined by National Instrument 43-101. All core samples are split in half at the drill site, with one-half of the core sample sent to Acme Analytical Laboratories Chile S.A. in Santiago for sample preparation and analysis by atomic absorption and fire assay for the gold values and high silver values. The other half of the core sample is retained on site. The pulp samples are sent to Acme Analytical Ltd. in Vancouver, British Columbia for further analysis by ICP methods.

Myra Falls

The Company continues to review its near-term and long-term plans for the Myra Falls operation. The near-term goal is to stabilize the operation by maintaining a steady flow of ore to the mill and to ensure that recoveries of all economic metals are maximized. The long-term goal is to define orebodies lying adjacent to and west of the current mining areas. The Company will aggressively explore the Myra Falls area to fully test its potential, which is believed to be excellent. Work towards this long-term goal continues with the Lynx Ramp and the drive towards the Marshall zone to the west of the Battle-Gap area.

Underground exploration, consisting of drift development and diamond drilling is now concentrated on three prospective areas: the Marshall zone to the northwest; the Extension zone to the east of Battle-Gap; and the 43 Block to the east of HW. Drilling was curtailed during the first quarter of 2006 due to a lack of diamond drillers but is expected to pick up through the third quarter of 2006.

In a recent review of Myra Falls exploration potential, WMS has identified several targets with the potential of adding significant resources within the mine infrastructure. As part of their review, WMS is assisting Breakwater in better defining the tasks and resources required to test these targets selected as discovery opportunities.

During the second quarter of 2006, the Myra Falls mine-site exploration department was reformed after being disbanded in 2001. This newly formed department will review, sort and capture historical data, produce comprehensive geological compilations and update district geologic models. As well, the new department will carry out additional geologic mapping and core logging.

El Mochito

The exploration plan at El Mochito for 2006 includes approximately 40,000 metres of underground in-fill and extensional drilling and 6,700 metres of surface drilling aimed at detecting new systems and/or deposits. In addition, 400 metres of underground development is scheduled to facilitate the extensional drilling. During the second quarter of 2006, the Company continued to explore, develop and delineate new mineral resources and reserves along extensions of the productive Salva Vida and Santo Nino trends. The work to date is on track with our plan.

Exploration drilling during the first half of 2006 has identified a possible connection between the Salva Vida and Santo Nino trends. Mineralized skarn has been intersected between the two deposits. Increasing resources in this area is a distinct possibility. Mineralized skarn, encountered east of the Barbasco/Imperial fault, appears to be the continuation of the Barbasco chimney to the north. If this interpretation is correct, this may imply a connection with the Imperial zone.

The NSAMT survey carried out in 2005 identified a possible extension of the San Juan orebody into the Upper Atima limestone as well as a possible zone of mineralization located in the Barbasco/Imperial target area. A surface diamond drill program was initiated during the first quarter of 2006 to investigate the San Juan target. Low grade skarn mineralization was encountered in hole DDH 06-USJ-01. Subsequent holes have missed mineralization. A second NSAMT survey target, Caliche, was explored during the quarter with no mineralization encountered.

During the first quarter of 2006, a broad element spectrum geochemical survey was carried out over the Santa Barbara Mountain area immediately northwest of the Barbasco/Imperial target area. An airborne magnetic survey flown in the 1996 and 1997 identified a large magnetic anomaly at this location. The entire anomaly area is currently being tested by a soil sampling survey for geochemistry. Results are pending.

Tunisia

The Company is presently investigating other uses for the Bougrine infrastructure following the closure of the Bougrine mine in September 2005 due to the depletion of reserves. To that end, the Company has commenced an exploration program on a lead/zinc prospect called Aguiba, southeast of the town of Tabarka and 170 kilometres northwest of the Bougrine mine site.

Exploration of this prospect is budgeted at $0.5 million and consists of a micro-gravimetric survey, electrical tomography and a 1,500 metre drilling program which is currently underway. The exploration program should be completed during the third quarter of 2006.

The micro-gravimetric survey was completed during April 2006. Preliminary results indicate a positive gravity anomaly 700 metres long by 150 metres wide. The mineralization is principally barite, however, galena is locally abundant. To date, seven diamond drill holes have tested the gravity anomaly. The holes encountered barite and galena mineralization. Assays are pending.

Langlois

Langlois is currently being developed to reach production in mid-2007. Development drifts are currently being driven to 97 Zone on Levels 4, 9 and 13.

During the first quarter of 2006, a surface infill diamond drill program was carried out on the Grevet B deposit, located seven kilometres southeast of the Langlois mine. This deposit, first discovered in the 1990's, is at a relatively shallow depth, with the top of the deposit located 50 metres below surface. The Company has received all permission and environmental approvals to take a bulk sample of 15,000 tonnes of material. It is our intention to mine and mill the 15,000 tonnes in the fourth quarter of 2006. Surface preparation work consisting of access road construction, power line installation, and portal construction have commenced.

During the first quarter of 2006, a Megatem Electromagnetic and Magnetic survey was carried out over the Langlois property. A recognized expert in the field of airborne electromagnetics, has been retained to perform a detailed interpretation of the results and final conclusions regarding the significance of the survey will depend on his findings.

The Company currently has two diamond drills on the Langlois property investigating several targets.

Bouchard-Hebert

The Company continues to explore for mineral deposits on the 7,982 hectares of exploration claims surrounding the mining leases. The concentrator building and equipment will be left intact pending any success in discovering economic mineralization in the near term.

During the first quarter of 2006, induced polarization and magnetic geophysical surveys were carried out over Lac Dufresnoy. Known electrical conductors were followed under the lake. A Titan 24 geophysical survey was initiated during the second quarter of 2006 in the Clericy village area, southwest of the mine and within the immediate mine area. Final results are pending, but preliminary data showed interesting anomalies.

During the first quarter of 2006, a Megatem Electromagnetic and Magnetic survey was also carried out over the Bouchard-Hebert property. The expert retained to perform the detailed interpretation of the results at Langlois has also been retained interpret the results of this survey as well. Conclusions regarding the significance of this survey will depend on the findings.

The Company currently has three diamond drills operating on the Bouchard-Hebert property. The focus of the exploration program is to investigate geophysical, geological and geochemical anomalies, as well as to perform deep exploration on certain areas with good potential to host mineralization. Follow-up on the Megatem and Titan 24 surveys will be performed as the data becomes available. A complete compilation of the exploration data on this property is being generated as part of a GOCAD modeling.

Virginia Mines Inc. - Coulon Project

On May 8, 2006, the Company announced the signing of an agreement with Virginia Mines Inc. ("Virginia") on the Coulon project, located in the James Bay region of the Province of Quebec.

In accordance with the agreement, Breakwater has the option to acquire a 50% interest in the Coulon property in return for C$6.5 million in exploration expenditures and cash payments totalling C$180,000 over an 8-year period. Virginia will be the operator until the completion of a positive pre-feasibility study.

The Coulon project is the host to polymetallic, massive-sulphide lenses, which returned values of up to 15.39% Zn, 3.12% Pb, 117 g/t Ag and 0.46% Cu over 10.5 m on the Dom zone and of up to 1.31% Cu, 12.63 g/t Ag, 0.59% Zn over 38.13 m on the Nord Dom zone. The Coulon project located 15 km from the Fontanges airport, lies in an unexplored volcanic belt and is characterized by a geological assemblage typical of belts hosting volcanogenic, massive-sulphide deposits that have made north western Quebec and north eastern Ontario one of the world's richest regions of polymetallic deposits. A budget of nearly C$500,000 is foreseen for the second half of 2006 on the property.

Breakwater is a mineral resource company engaged in the acquisition, exploration, development and mining of base metal and precious metal deposits in the Americas and North Africa. Breakwater has three producing zinc mines: the Myra Falls mine in British Columbia, Canada; the El Mochito mine in Honduras; and the El Toqui mine in Chile. The Company is currently developing the underground Langlois mine in Canada, which is expected to achieve commercial production in mid-2007.

This news release contains forward-looking statements within the meaning of the United States Private Securities Legislation Reform Act of 1995. When used in this news release the words "indicated", "will be", "could", "suggests", "expected" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those currently anticipated are described above and in the Company's most recent Annual Information Form or Form 40-F under "Risk Factors" on file with the Canadian provincial securities regulatory authorities and U.S. Securities and Exchange Commission respectively. The Company disclaims any obligation to update or revise any forward looking statements whether as a result of new information, events or otherwise.

Contact Information

  • Breakwater Resources Ltd. Torben Jensen Vice President, Engineering (416) 363-4798 Ext. 232
    or
    Breakwater Resources Ltd. Ann Wilkinson Vice President, Investor Relations (416) 357-5511