Canadian Shield Resources Inc.

Canadian Shield Resources Inc.

November 09, 2005 09:00 ET

Canadian Shield Further Expands 'CSP Discovery Gold Zone' at Humajala

TORONTO, CANADA--(CCNMatthews - Nov. 9, 2005) -

- New trench 60 m east of the CSP Discovery Gold Zone returns 0.7 g/t gold across 20.5 metres

- Additional gold assays for drill hole HUM-05-020 doubles length of the mineralized interval

- Geophysical survey identifies large target area overlapping known mineralization

Canadian Shield Resources Inc. (TSX VENTURE:CSP) ("Canadian Shield" or the "Company") is pleased to announce that additional surface sampling has expanded the known extent of the CSP Discovery Gold Zone at the Humajala Gold Property in Peru. In addition, new assays for drill core from hole HUM-05-020 have doubled the length of the mineralized interval.

"The results from our second trench averaged 0.7 g/t gold over 20.5 metres, including a zone of 1.8 g/t gold over 7 metres. The second trench is 60 metres east of the holes drilled at the CSP Discovery Gold Zone. These results extend the area of known mineralization and we can now visualize a volume of mineralized rock, whereas previously the mineralized intersections were from drill holes on one line", states Lynda Bloom, President & CEO.

Previously announced drill results identified thick mineralized intervals in four drill holes with average gold grades greater than 0.7 g/t gold. The mineralized interval is approximately 120 metres long and 50 metres thick within a zone that dips approximately 20 degrees into the hillside. The zone was exposed at surface in the first trench over a length of 63 metres, which returned an average grade of 1.2 g/t gold.

Additional assays have been received for drill hole HUM-05-020. The mineralized interval was previously reported as having an average grade of 0.53 g/t gold over 7.5 metres. The average grade of the mineralized zone in hole HUM-05-020 has been recalculated as 0.68 g/t gold over 14.7 metres (from a depth of 1.0 metre to 15.7 metres down the hole), enhancing both the grade and length of the intersection.

Previous assays of 0.76 g/t gold over 46 metres, in the vicinity of the CSP Discovery Gold Zone, also reported 15 g/t silver, including a zone of 6 metres that assayed 3.2 g/t gold and 56 g/t silver, indicating that silver may be of economic significance. The samples from the gold-mineralized intervals from the 2005 drilling are being submitted for silver assays on a priority basis.

The mineralized interval with average gold grades greater than 0.7 g/t gold is coincident with the western edge of a specific geophysical feature from the recently completed multi-separation pole-dipole array induced polarization-resistivity survey. The centre of the geophysical feature, approximately 200 metres east of CSP Discovery Gold Zone, has not been tested. Similar geophysical features have been located elsewhere along the 2.8 kilometre strike length that was surveyed.

"The close correspondence between the mineralized intervals and the geophysical responses is very encouraging. The geophysical responses on lines 200 metres from where drilling has intersected mineralization are stronger and may indicate a larger zone of mineralization. This provides us with an indication of the overall potential size of the mineralized zone and additional obvious targets", says Terence Bottrill, Exploration Manager.

Technical Highlights

The second trench (Trench B) is located 60 metres east of the previously described trench (Trench A) in the press release dated October 12, 2005. Thirteen samples were systematically collected, weighing 4 to 6 kilograms each, at 1.5 metre intervals in Trench B. Both trenches are located within an area of scattered outcrops that is approximately 165 metres by 75 metres and all of the exposures are strongly silicified, brecciated and contain quartz veins. Quartz veins, fractures and cavities are frequently coated by a combination of both limonite and jarosite. The presence of jarosite has so far been restricted to areas of significant gold assays. The relatively short mineralized interval of 7 metres in Trench B is not an indication of the true extent of the mineralized zone as the trench could not be excavated any further due to the extreme thickness of the overlying glacial and landslide debris. A further 15 metres uphill from the end of Trench B, an additional rock chip sample assayed 1.3 g/t gold from an exposure that contained an 8 cm-wide stibnite vein.

Hole 0.2 g/t Au cut-off 0.5 g/t Au cut-off
From To Au g/t Metres(i) From To Au g/t Metres(i)
(m) (m) (m) (m)
Trench A 0 63.0 1.20 63.0 7.0 63.0 1.34 56.0
(including) 7.0 31.5 2.20 24.5 - - - -
Trench B(ii) 0 20.5 0.70 20.5 13.5 20.5 1.81 7.0
HUM-05-020 1.0 29.15 0.48 28.2 1.0 15.7 0.68 14.7
HUM-05-021 7.0 79.0 0.45 72.0 26.5 61.0 0.70 34.5
HUM-05-022 27.4 85.9 0.37 58.5 27.4 57.4 0.53 30.0

(i) Not true width
(ii) Trench length limited by surface exposure

Hole HUM-05-020 was collared further down the hillside than the lowest part of Trench A and towards the centre of the mineralized zone. Together, hole HUM-05-020 and Trench A sampled a combined true width of mineralization comparable to those in holes HUM-05-021 and HUM-05-022.

The average grades and true widths of the mineralized zones are consistent with grades and widths typical of the larger, open-pit, heap-leach, oxide-gold mines in Peru and Chile. The continuous presence of substantial jarosite throughout the full length of the drill core intersections, and as far as 150 metres down dip from the surface exposure, indicates that the mineralization is oxidized and will be amenable to recovery in an industry-standard heap-leach operation.

A total of 12 holes were completed in the 2005 summer drill program at the Humajala Gold Property, producing 1,740 metres of diamond drill core. The initial 10 drill holes were targeted to test different areas in which geology, geochemistry and alteration had indicated the possible presence of mineralization at depth. Starting with hole HUM-05-016 and HUM-05-017, and later in drill holes HUM-05-026 and -027, a large mega-breccia with a clay-rich matrix containing abundant pyrite and stibnite was intersected, from which representative samples returned high arsenic and antimony assays. The mineralization, first intersected in hole HUM-05-020, and immediately followed up from an existing set-up by holes HUM-05-021 and -022, appears to be related to later intense silicification around the margins of this large mega-breccia body. A secondary cap of chalcedonic silica covers the entire mega-breccia body.

Drill holes HUM-05-018, HUM-05-019 and HUM-05-024 tested similar areas overlain either by chalcedonic silica or its weathered equivalent, about 800 metres west of the CSP Discovery Gold Zone. These drill holes all intersected various types of alteration indicative of mineralization in the near vicinity, beneath the silica-cap

Prior to the receipt of any assays, drill holes HUM-05-023 and -025 were drilled as originally planned to depths of 94 and 105 metres respectively. Subsequently it was recognized that these holes were not deep enough to have intersected the CSP Discovery Gold Zone.

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 its ore deposits.

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 about $2 billion dollars worth of metal in the ground. These deposits have very large tonnages, in the order of 200 million tonnes, as well as ore reserve grades that are within a relatively small range from 0.7 g/t gold (Barrick's Lagunas Norte mine) to 0.86 g/t gold (Newmont's Yanacocha mine). The Company considers that the Humajala Gold Property has the potential to host similar mineralization.

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 Humajala Gold Property.


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