Telkwa Gold Corporation

Telkwa Gold Corporation

January 29, 2007 09:00 ET

Telkwa Reviews Progress on It's Iron Cap Property, Nevada

CALGARY, ALBERTA--(CCNMatthews - Jan. 29, 2007) - Telkwa Gold Corporation (TSX VENTURE:TKW) announces that it has completed the final agreement on the "Iron Cap" property where it has the right to earn 100%. Terms of the final agreement are the same as in the existing letter of intent and provide for lease/option payments totaling US$87,500 over the next 5 years, thereafter continuing with annual payments of US$27,500/year until purchase of the land for US$500,000. The property is subject to a Net Smelter Royalty of 3% of which Telkwa can buy out 2% for US$2,000.000.

The "Iron Cap" property is located approximately 8 miles west of Yerington and 45 miles southeast of Reno, Nevada. It lies within the historic Yerington porphyry copper district and 5 miles west of the site of the Yerington copper mine which produced approximately 2 billion pounds of copper at a grade of 0.55% between 1953 and 1978. Other active exploration projects in the region are Quaterra Resources Inc.'s MacArthur copper oxide deposit 4 miles NE of the Iron Cap property and Nevada Copper Inc's Pumpkin Hollow property, which currently has 3 drills working and lies 13 miles SE of Iron Cap.

Of particular interest is the Ann Mason deposit located only 2 miles to the SE that is owned by an Australian public company, PacMag Metals Limited. PacMag reported recently on the ore reserves on the Ann Mason deposit, announcing to the Australian Stock Exchange on 5 October 2006, an Inferred Resource (JORC compliant) of 810 million tonnes @ 0.40% copper and 0.004% molybdenum (0.30% copper cut off) with higher grade zones including 221 million tonnes @ 0.51% copper and 0.004% molybdenum (at a 0.43% copper cut off). Recently PacMag expanded their land position by staking claims up to our southern and eastern boundaries from their existing Ann Mason claims. They have named this new area their Blue Hills target where they report a historical drill hole within 500m of our property containing 6m of 0.61% copper. They announced that they have obtained a drill for January drilling on both the Blue Hills target and Ann Mason extensions.

PacMag published a map showing that our Iron Cap claims are underlain by a large Induced Polarization (IP) anomaly, which is an expression of conductivity and usually is interpreted as due to the presence of sulphides. Telkwa is considering both a modern IP survey that could better characterize the nature of the anomaly and provide depth estimates and a closely spaced ground magnetic survey.

Both gold and copper mineralization are found at Iron Cap. Previously reported results from earlier episodes of prospecting included numerous multi-gram gold values in grab samples up to as high as 37 gpt (1.08 opt) along with Copper values to 36,000 ppm ( 3.6 %). Recent results have been compiled from the previously announced short program of prospecting, mapping and extending the soil grid further to the southeast. From the new prospecting, there is a wide distribution of anomalous copper samples with a cluster of very high grade samples in the SE corner, including numerous grab samples that had copper values between 5000 to 50,000 ppm, with the highest sample being 154,000 ppm (15.4%) copper. There were also three grab samples that returned 216, 356 and 840 ppb gold. A significant multi-line gold in soil geochemical anomaly with a peak of 240 ppb has been identified. The copper results from the same soil survey identified several zones of anomalous copper with peaks of 2890 and 5600 ppm copper.

Telkwa is pleased with the progress on our Iron Cap property along with the activity on neighbouring properties and we are looking forward to an active exploration season. The copper and gold soil and rock geochemistry maps along with a more detailed overview of the property will be posted on the Telkwa website.

Michael Marchand, Ph.D. P. Geol., President of Telkwa Gold was the qualified person who reviewed the information in this press release.

Telkwa Gold Corporation's current exploration focus is Nevada where it has four properties and it also has two exploration properties located in British Columbia. Telkwa maintains its website with corporate information, reports and images of our exploration projects.

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

This news release is not for dissemination in the United States or to any United States new service, and does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction. The common shares of Telkwa Gold Corp will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption therefrom.

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

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