Canadian Shield Resources Inc.

Canadian Shield Resources Inc.

October 12, 2005 09:50 ET

Canadian Shield Follows Up 'Discovery Gold Zone'

TORONTO, ONTARIO--(CCNMatthews - Oct. 12, 2005) -

- Discovery Gold Zone of 2.18 g/t gold across 24.5 metre at surface

- Discovery Gold Zone intersected in three drill holes

- Grades up to 0.76 g/t gold reported over 25 metre-thickness in drill holes

- Additional untested gold targets at the Humajala Gold Property

Canadian Shield Resources Inc. (TSX VENTURE:CSP) ("Canadian Shield" or the "Company") is pleased to announce that additional surface sampling has commenced at the Humajala Gold Property to expand the Discovery Gold Zone.

Lynda Bloom, President & CEO says, "We have reported significant gold grades that persist over tens of metres both at surface and in several drill holes at the Discovery Gold Zone. The producing low cost, open pit and heap leach mining operations in Peru have average grades in the same range as those intersected in the current drill campaign. Our plans are to expand the tonnage at the Discovery Gold Zone and test the additional gold targets elsewhere on the 4 kilometre prospective trend."

The reported reserves for gold mines in Peru, such as those operated by international mining companies, Barrick Gold and Newmont Mining, are generally more than 5 million ounces of gold, which equates to some $20 billion dollars worth of metal in the ground. These deposits have very large tonnages, in the order of 200 million tonnes and ore reserve grades that range from 0.7 g/t gold (Barrick's Lagunas Norte mine) to 0.86 g/t gold (Newmont's Yanacocha mine). The Company believes that the Humajala Gold Property has the potential to host similar mineralization.

Drilling Highlights

Surface and drill results in the vicinity of the Discovery Gold Zone are reported in the table below.

Drill Hole No. Depth Depth Gold Intersection
or Trench From (m) To (m) (g/t) (m)
HUM-03-008 0.76 46
HUM-05-020 8.2 15.7 0.53 7.5
HUM-05-021 31.0 56.5 0.76 25
HUM-05-022 27.4 46.9 0.7 20

Surface Trench - - 2.2 25

Although individual 1.5 metre-long samples assayed up to 6.57 g/t gold, it is far more important that the average grades of 0.7 to 2.2 g/t gold persist over long intervals. Epithermal gold deposits, such as at the Humajala Gold Property, are ranked by their tonnage potential as much as the gold grades. Intersections of up to 35 metres at potentially economic gold grades (i.e. HUM-05-021) are significant as the persistence of gold mineralization over significant widths may translate into large tonnages.

Most of the drilling to-date has been completed along a northeast trending line. The Discovery Gold Zone has been identified at surface and in drill holes to depths of 60 m from surface. Two of the drill holes (HUM-05-021 and HUM-05-22) were drilled in opposite directions at 60 degree angles. The distance between the bottom of the mineralized intervals in these two drill holes is approximately 75 metres. The known configuration of the mineralization is encouraging and additional sampling and drilling will test the continuity of the Discovery Gold Zone.

Next Step - Further Trench Sampling

The surface trench sampling reported the highest-grade gold interval from the current program of drilling and mapping. The trench was systematically sampled along a northeast trending line overlying the gold mineralization encountered in drill holes HUM-03-008, HUM-05-020, HUM-05-021 and HUM-05-022. The mineralized trench is representative of an outcrop extending over an area of 165 metres by 75 metres consisting of hydrothermal breccia, a common host of epithermal gold mineralization, and with the characteristics associated with known gold deposits (iron oxides, quartz veins, vuggy silica and alunite alteration). The outcrop has not been sampled systematically but samples greater than 1 g/t gold have been reported other than from the area defined by the surface trench. A series of parallel trenches across the Discovery Gold Zone outcrop are planned. Gold mineralization at surface is far less costly to mine than deeper ore deposits and expansion of the Discovery Gold Zone at surface is an important step forward for Canadian Shield.

At least four similar zones have been identified at the Humajala Gold Property, over a distance of 4 kilometres, each with anomalous gold in surface samples. An induced polarisation and resistivity survey with an estimated depth of penetration of 300 metres is in progress, and the results of the geophysical surveys will be used to select priority drill targets.

Further technical details, such as the orientation of drill holes, depths of the mineralized intervals and assaying, have been reported previously in the press releases of September 28, 2005 and October 3, 2005.

About Peru

Peru is the 5th largest gold producer and 3rd largest copper producer in the world and mining contributes about half of the country's export revenue. It has just been 20 years since international mining companies brought modern exploration and mining techniques to Peru. Peru's Ministry of Energy and Mines estimates that almost $4 billion will have been invested in new mine development in Peru in the five years leading up to 2007. Most of the world's largest mining companies have significant assets in Peru including Southern Peru Copper Corporation (PCU: NYSE), Barrick Gold Corporation (ABX:TSX), Newmont (NMC:TSX), Phelps Dodge Mining Company (PD:NYSE), and BHP Billiton (BLT:LSE), demonstrating the economic stability of Peru and the high quality of Peru's ore deposits.

Canadian Shield Resources Inc. is currently focused on the acquisition, exploration and development of precious metal and base metal properties in Peru. The Company is focused on large scale, open pit opportunities with economic values in excess of $200 million. The Company's shares are listed on the TSX Venture Exchange (Trading Symbol CSP:TSX V). Terence Bottrill, P.Eng., is the Exploration Manager for the Company and the Qualified Person for the project.

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