Cusac Gold Mines Ltd.
OTC Bulletin Board : CUSIF

Cusac Gold Mines Ltd.

June 01, 2006 09:01 ET

Cusac Gold Mines Ltd.: $5.75 Million Production/Exploration Financing Closed

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 1, 2006) - David H. Brett, President, Cusac Gold Mines Ltd. (TSX:CQC)(OTCBB:CUSIF) (the "Company"), reports that the Company has closed the previously announced financing with $5.75 million in gross proceeds being raised to fund the recommencement of gold production at the Table Mountain Gold Mine in northern BC, further exploration of the nearby Taurus II bulk-tonnage gold target, and ongoing working capital needs. Issued under the financing, brokered by M Partners Inc., are 3,749,225 common share units at $0.24 per unit for proceeds of $899,814, 6,657,500 Flow Through units at $0.27 per unit for proceeds of $1,797,525, and 813 Convertible Debentures at $3,750 per unit for proceeds of $3,048,750. Total proceeds were $5,746,089. M Partners Inc and Oberon Securities LLC were paid a cash commission of 7% and received brokers warrants to purchase such number of common shares as is equal 7% of all the units sold, at a price of $0.24 exercisable for a period of 18 months from closing.

The common share units consist of one common share and one warrant to purchase an additional common share for one year at $0.35 per unit. The flow through units consist of one common share and one half of one warrant to purchase an additional common share for one year at $0.35 per share. The Convertible Debentures bear interest at a rate of 11% per annum calculated and payable semi-annually, mature in 18 months, and are convertible into common shares at $0.305 per share. The purchasers of the Convertible Debenture also received 6,147 warrants with each Debenture purchased. The warrants accompanying the Debenture are not exercisable until the Company obtains the approval of its shareholders for the Debenture warrants. Thereafter, each Debenture warrant entitles the holder to purchase a common share at $0.35 per share expiring May 31, 2007. If the shareholders do not approve the warrants accompanying the Debentures by the close of business on July 30, 2006, the Debentures will bear interest at 15% per annum. The debentures are secured against the assets of the Company.

The Company is immediately commencing exploration and production operations at the Table Mountain Property in Northern BC. Cash flow from gold production is expected to commence in the fourth quarter of 2006.

"This financing is a major milestone for Cusac, as we are now on a path to realizing the full potential of the Cassiar Gold Camp," said Cusac CEO David Brett. "With gold production recommencing from the historic high grade vein systems on Table Mountain, Cusac will be in an excellent position to explore and advance the emerging bulk-tonnage gold potential at Taurus II. I am looking forward to working with the Cusac team to realize our goals for 2006."


David H. Brett, President & CEO

Forward Looking Statements

There are forward-looking statements contained herein that are not based on historical fact, including without limitation statements containing the words "believes", "may", "plans", will", "estimate", "continue", "anticipates", "intends", "expects" and similar uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, Cusac's exploration results, lack of revenues, additional capital requirements, risks associated with the exploration activity. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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