IGC Resources Inc.

IGC Resources Inc.

January 10, 2005 09:30 ET

IGC Resources Inc. Signs Agreement to Rent the Tenements Known as the Blackburn Gold Project and the Fraser Range Project in Western Australia


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: IGC RESOURCES INC.

TSX VENTURE SYMBOL: IGC

JANUARY 10, 2005 - 09:30 ET

IGC Resources Inc. Signs Agreement to Rent the
Tenements Known as the Blackburn Gold Project and the
Fraser Range Project in Western Australia

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 10, 2005) - IGC
RESOURCES INC. ("IGC") (TSX VENTURE:IGC) announces that on January 7,
2005, IGC signed the Sub-Lease and Sub-Licence Agreement ("Sub-Lease")
with Great Southern Resources Pty Ltd ("GSR") to rent the tenements
known as the Blackburn Gold Project and the Fraser Range Project (the
"Properties") located in Western Australia, as announced in previous
press releases.

For consideration of A$5,000 (approximately CDN$4,600), Goldport Pty
Ltd, IGC's recently acquired, wholly-owned Australian subsidiary, was
granted and exercised an exclusive option to sub-lease and sub-licence
the Properties from GSR., Goldport now has the exclusive right to
explore and develop the Properties for a term of 21 years. GSR is a
private Australian corporation also controlled by one common
director/officer and having another common officer of IGC.

As per the terms of the Sub-Lease, Goldport paid A$750,000 rent to GSR
upon signing the Sub-Lease, and is to pay A$500,000 cash on the first
anniversary of the Sub-Lease, A$750,000 cash on the second anniversary,
and A$500,000 cash on the third anniversary of the Sub-Lease.

The Blackburn Gold Project comprises mineral tenements of various types,
including Mining Leases, Exploration Licenses, Licenses, Prospecting
Licenses and applications for Exploration Licenses covering an area of
approximately 340 square kilometres. The Fraser Range Project comprises
applications for Exploration Licenses covering an area of approximately
884 square kilometres. Over ten percent of the world's gold production
is from Australia, with a substantial amount of that production coming
from Western Australia.

The Blackburn Gold Project is in good company, with Newmont's Boddington
gold-copper mine to the northwest (120 kilometres south-east of Perth)
and the gold mines of the prolific Southern Cross/Kalgoorlie Belt to the
east. Similarities in the geological setting and the presence of a
quartz monzonite intrusive similar to the Boddington Mine provide the
possibility for the discovery of another gold-copper porphyry ore body
at the Blackburn Gold Project.

Drilling is underway at the Blackburn Gold Project to begin the
first-year exploration program consisting of 5,000 metres of reverse
circulation and diamond drilling at the Jinka's Hill target to develop
additional gold resources. In conjunction with the drilling program, IGC
will also perform regional exploration to determine and evaluate further
targets along strike; prepare metallurgical test work as a precursor to
mining; and undertake a scoping study aimed at beginning production from
currently known high-grade underground deposits within two years from
acquisition.

In consideration of A$100 (approximately CDN$92), GSR has granted to
Goldport an option exercisable for two years, to purchase the plant,
equipment and related infrastructure at the Blackburn Gold Project. Upon
exercise of the option, Goldport would pay GSR A$2,000,000 as the
purchase price for the plant and equipment.

Within 30 days of the achievement by Goldport of commercial production
on any of the Properties, IGC has agreed to issue to GSR 1,500,000 units
consisting of 1,500,000 bonus shares at a deemed price of $0.30 per
share and non-transferable share purchase warrants to purchase an
additional 1,500,000 common shares of IGC at $0.36 per share for two
years after the date of issuance of the bonus shares.

Application has been made for Exploration Licences covering the Fraser
Range Project, an exploration project with potential for
iron-oxide/copper/gold/uranium targets. The areas are extensive with
tenure of over 800 square kilometres. The tenements cover a major
structural feature inferred to be subtle transfer fault system and
contain identified late stage granites similar to granites associated
with Olympic Dam and Earnest Henry mines (approximately greater than 100
million tonnes grading 0.5gpt gold, 2% copper and uranium). Indications
of copper and gold anomalism in historical soil sampling are evident.
Exploration will commence upon receipt of approval of the licences.

IGC's principal business activities are the exploration, development
and, if warranted, mining of the Blackburn Gold Project and, provided
that the tenements are granted, exploration of the Fraser Range Project.

For more information contact Linda Holmes, Director and Secretary, at
250-404-0310 or visit our website at www.igcresources.com.

On Behalf of the Board of Directors of

IGC RESOURCES INC.

"Clive Hartz"

Clive R. Hartz, President and CEO

12.5 million shares outstanding

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    IGC Resources Inc.
    Linda Holmes
    250-404-0310
    250-404-0311 (FAX)
    Email: igcresources@shaw.ca
    www.igcresources.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.