Canadian Shield Resources Inc.
TSX VENTURE : CSP

Canadian Shield Resources Inc.

August 23, 2007 13:47 ET

Canadian Shield Signs Letter of Intent to Acquire La Tola Property From Solitario Resources and Consolidates Ground Adjacent to Ccello Ccello Property

TORONTO, ONTARIO--(Marketwire - Aug. 23, 2007) - Canadian Shield Resources Inc. (TSX VENTURE:CSP) ("Canadian Shield" or the "Company") is pleased to announce the signing of a letter of intent with Solitario Resources Corporation (TSX:SLR)(AMEX:XPL) to acquire La Tola, an epithermal gold-silver prospect (the "Property") in the Caylloma Province of the Department of Arequipa, southern Peru. The Property comprises 1,000 hectares in one exploration license, Zoraida Uno.

Canadian Shield completed its due diligence on the Property and waived its conditions. Under the terms of the binding letter of intent, Canadian Shield has a 4 year earn-in option to purchase 100% of the Property by incurring exploration expenditures of US$2 million over the next 4 years, and by making a cash payment of US$2 million at the end of the 4 year option period. Solitario Resources Corporation ("Solitario') will retain a 2% Net Smelter Return that the Company may purchase at its option for US$1.5 million prior to commercial production. The exploration expenditures and cash payments schedule is as follows:



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The terms of the cumulative exploration
expenditures: $US $US
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Expenditures Cumulative
Prior to December 31, 2008; $ 200,000 $ 200,000
Prior to December 31, 2009; $ 300,000 $ 500,000
Prior to December 31, 2010; and $ 500,000 $ 1,000,000
Prior to December 31, 2011 $ 1,000,000 $ 2,000,000
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$ 2,000,000
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The terms of the cash payments: $US $US
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Payments Cumulative
Paid on signing of Letter of Intent $ 3,000 $ 3,000
Prior to December 31, 2011 $ 2,000,000 $ 2,003,000
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$ 2,003,000
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The Property is located 2.5 hours by paved and gravel road north of Arequipa, Peru's second largest city, in a prolific mining region host to a number of active, high grade, underground gold and silver mines including the Ares & Arcata Mines operated by Hochschild Mining PLC, and the Shila & Paula Mines operated by Compania Minera Buenaventura.

The Property lies in a region varying from 4,300 to 4,600 meters above sea level where gold and silver mineralization is hosted in Tacaza Formation andesitic and dacitic volcanics and subvolcanic intrusions of Miocene age. Gold bearing quartz veins, stringers and local quartz stockwork occur intermittently along a 12 x 3 km structural corridor. Solitario mapped and sampled the property discovering gold on surface along this structural trend with values up to 30 g/t gold. Solitario subsequently optioned the property to Newmont Mining Corporation in 2004. Newmont mapped geology, took over 4,000 surface rock, soil, bleg, and fine talus samples, completed geophysical surveys including Magnetometry, Gradient Array and Pole Di-Pole IP surveys, and drilled 20 widely spaced (200-500 meters apart) reverse circulation drill holes totally 2,511 meters. Although Newmont did not continue work on the Property, Canadian Shield believes the composite technical data and present geologic interpretation suggests major scale, upside exploration potential remains at La Tola.

The Company has filed for additional exploration licenses to consolidate the ground between La Tola and its Ccello Ccello Property held by Gallant Minerals Peru, a 90% owned subsidiary of Canadian Shield. The Property combined with Ccello Ccello and the additional exploration licenses consolidates a contiguous block totalling 7,000 hectares in a very prospective geologic environment where a number of surface gold occurrences are exposed along a 12 kms long, north northeast structural corridor. The style of mineralization along this structural corridor varies from discreet, well defined, banded silica, low sulfidation veins to disseminated mineralization along dome margins to stratigraphically controlled "mantos" or sub-horizontal tabular bodies. The presence of a number of oblique trending northeast, north, and northwest graben structures are suggested by geologic evidence and could play a major role in the localization of mineralization.

"We have sound geologic evidence that continued exploration could lead to the discovery of economically significant gold mineralization. The geologic environment we see along this structural zone is similar to that of the Fruta del Norte project where Aurelian Resources Inc. has had significant success in Ecuador. We will continue to compile existing data and advance our technical analysis of this land package to guide ongoing exploration" said Phil Anderson, Canadian Shield's VP Exploration.

About Canadian Shield Resources Inc.

Canadian Shield is a mineral exploration company building shareholder value through the acquisition of major scale, base and precious metal projects in prolific and established mineral provinces in South America. Efforts are primarily focused on Peru, a very prospective region ranking highly in the world's production of gold (5th), silver (1st), copper (3rd), zinc (3rd) and tin (2nd). The Company controls nine base and/or precious metals projects, eight in Peru and one gold project in Chile through recent acquisitions by its 100% owned Peruvian subsidiary Compania Minera Canadian Shield Peru S.A.C. including the 90% acquisition of Gallant Minerals Peru in 2004 and Anderson Peru Mining & Exploration in April 2007. Canadian Shield is focused on project generation and joint venture opportunities to provide shareholders with interests in a broad portfolio of South American mineral properties. The Company's shares are listed on the TSX Venture Exchange (TSX VENTURE:CSP).

Statements in this press release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

To learn more visit: www.canadianshieldresources.com.

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