Pencari Mining Corporation

Pencari Mining Corporation

May 24, 2006 14:57 ET

Pencari Mining Corporation: Itea Gold Property Optioned

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 24, 2006) - Pencari Mining Corporation ("Pencari") (TSX VENTURE:PMC) is pleased to announce that it has optioned the Itea Property located in Madagascar from Itea Minerals Inc ("Itea"). The property consists of two blocks comprised of 6 exploration permits covering a total surface area of 37.5 sq. km. The property is located in the central highlands of Madagascar in a region of mixed agricultural, logging and mining use.

The Itea Prospect is hosted in early Proterozoic-aged schists that have been folded into an anticlinal dome, and intruded by sodic granite (the "Itea Granite"). Gold mineralization at Itea is hosted by a number of parallel structures in pelitic rocks that have undergone hydrothermal alteration.

BRGM (Bureau de Recherches Geologiques et Minieres) reported that gold occurs as fine free gold, 90% plus gold recoveries can be attained by fine grinding and physical concentration. The current limits of mineralization are indicated by pre-1938 surface workings and can be recognized over a length of 500 m and a width of 100 m. The most recent work was conducted by BRGM, who reported that the mineralization appears to extend for 1 km, however this will need to be substantiated by the upcoming Pencari exploration programmes.

In 1908, approximately 60 kg of gold is reported to have been extracted from the historic Itea area in the northern portion of the property. The workings only extended to a vertical depth of approximately 22 m. Twelve (12) km to the south, on the southern block of the Itea Property, gold was reportedly extracted at the historic Tsinjava area along the same mica schist/quartzite formation. No significant exploration has been done on the property since 1940.

The goal at the Itea property is to explore for and develop a large tonnage open pit gold deposit.

Upon acceptance from the TSX Venture Exchange Pencari must pay $15,000 and issue 100,000 shares to Itea. Pencari has a 4-year option to acquire a 100% interest in the property under the following terms:

(a) Minimum Property Expenditures:

Year 1 $250,000
Year 2 $500,000
Year 3 $500,000
Year 4 $500,000

(b) Cash Payments and share issuances:

On the first anniversary of the
date of the agreement: $35,000 and issue 125,000 shares
on the second anniversary: $35,000 and issue 125,000 shares
on the third anniversary: $50,000 and issue 150,000 shares
on the fourth anniversary: $250,000

"The Itea property provides an excellent opportunity for the discovery of a large tonnage open pit deposit and fits in well with our goal of acquiring properties of exceptional merit," stated Adrian Rollke. Pencari plans to conduct an extensive exploration program.

Information supplied in this press release has been taken from reports of BRGM and is historical information. No recent work has been conducted on the property under National Instrument 43-101. The technical information contained in this release has been reviewed by Jerry Blackwell (PGeo), a qualified person as defined in National Instrument 43-101.

Pencari is a gold exploration and development company publicly traded on the TSX Venture Exchange.


This news release may contain forward looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.

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

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