CanAustra Resources Inc.

June 30, 2005 09:00 ET

CanAustra Resources Inc.: Commencement of Field Work

CALGARY, ALBERTA--(CCNMatthews - June 30, 2005) - CANAUSTRA RESOURCES INC. (TSX VENTURE:CTA) ("CanAustra" or the "Company") announces that it commenced fieldwork on its Geodo project (option to acquire 100%), South Korea during May 2005.

CanAustra President, Mr. Errol Smart, visited the site with Mr. Mark Dugmore M.Sc., B.AppSc, MAusIMM, MAIG, of GeoDiscovery consultant group (previously VP Exploration for CanAustra and before that Manager, Global Base Metals and Exploration Manager for Australia/Asia/Africa regions for BHP Minerals Exploration). Mr. Dugmore has been appointed in a consulting role to supervise this first phase of field work at the site. He is a Qualified Person under National Instrument 43-101. This phase of work will comprise geochemical soil sampling, mapping and channel sampling of mineralized outcrop geology which is well exposed in numerous road cuttings and a limestone quarry located on the site. The work program is designed with the objective of locating optimum sites for follow up drilling on Au, Ag, Cu (gold, silver, copper) mineralization and is being supervised on site by geochemist, Dr. Kyu-Yuol Sung.

In addition, the drill cores and collar positions of several diamond drill holes which were commissioned in 2004 by the owner of the property in search of iron ore, have been located. These holes, eight of which were inspected by Mr. Smart and Mr. Dugmore (reported to total 2000m of drilling) have not previously been entirely or properly sampled or logged due to a lack of technical expertise. The holes were not necessarily drilled in optimum positions to test the precious and base metal potential but have inadvertently traversed some horizons of interest. While some of this core is in disarray, the cores of several holes are in satisfactory state and will be logged and sampled by CanAustra. The CanAustra team was pleased to note the extensive occurrence of visible Cu mineralization in the form of Malachite in the oxide zone, and Chalcopyrite, Bornite + Pyrite in the Sulphide zone of these cores.

Examination of this drill core and several surface exposures has yielded important, encouraging geological observations. Apparently mineralized lithologies include both porphyry intrusive and skarn. Both prograde and retrograde textures are observed in exo and endoskarn. This multiphase mineralization bodes well for the economic concentration of the polymetallic deposits. Grab samples from the site have yielded a range of values suggesting the presence of massive to disseminated mineralization over a combined strike of over 5000m and widths of several tens of meters. In addition high grade (in excess of 50g/t Au, 500g/t Ag together with over 5% Cu) zones and veins occur on the property and were possibly enriched in the retrograde phase of mineralization.

Professor Park of the Pukyong National University, Busan, who first documented the occurrence of gold, silver and copper mineralization at Geodo and has published peer reviewed scientific papers, has noted important similarities between the Geodo mineralization and other massive Au, Cu skarn deposits mined worldwide. In particular the McCoys gold camp, Nevada is considered to be very similar in its geological style, although Geodo appears to have much higher Cu tenor and has the added element of exposed adjacent porphyry intrusive.

The project site is well serviced with access by paved and good quality dirt roads. Several heavy current electrical transmission lines are observed to pass over and nearby the property. Geodo is located approximately 10km from Taebaek City, an important regional administrative and commercial center, which in turn lies some 180km east of Seoul.

The site is considered not to be of particular environmental sensitivity. Both the site and surrounding region have seen extensive mining operations for base and industrial minerals as well as coal (in the hinterland). The site is forested with secondary regrowth. Few dwellings are observed within sight of the slopes of the valley where the mineralization is found.

CanAustra President, Errol Smart commented today, "Having visited the site and been exposed to the setting and clearly prospective geology of Geodo, I believe that the project has the hallmarks of a large polymetallic deposit that can be mined by means of modern, massive mining. The South Korean culture, being technologically advanced and offering an educated labour force with strong work ethic suggests an attractive operating environment. CanAustra is looking forward to consolidating our position in South Korea and will be investigating other projects that have been brought to our attention."


Errol Smart, President & CEO

Malcolm L. Stevens, Executive Chairman

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

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

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