Channel Resources Ltd.
TSX VENTURE : CHU

Channel Resources Ltd.

September 04, 2007 15:00 ET

Channel and Azimut Sign Letter of Intent on West Bienville Uranium Property in Northern Quebec

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2007) - Channel Resources Ltd. ("Channel" or the "Company") (TSX VENTURE:CHU) is pleased to announce the signing of a Letter of Intent with Azimut Exploration Inc. ("Azimut") to earn a majority interest in the West Bienville Uranium Property in Northern Quebec.

The West Bienville property covers a clearly defined 10-km long uranium anomaly in lake-bottom sediments (with a peak value of 230 ppm U) positioned at the intersection of two major regional scale structures. The uranium footprint, as well as other geochemical parameters, and magnetic data suggest that the property has the potential to host intrusion-related and/or structurally-related uranium mineralization. The property is located adjacent to the 350 kilometre long Central Quebec Uranium Lineament which is associated with crustal-scale structural features. A helicopter-borne radiometric and magnetic geophysical survey will be carried out over most of the area in the Fall and the results of these surveys will help to direct field follow-up programs.

The property comprises 220 claims with a surface area of 108 km2. The project is located in the central part of Quebec, about 230 km east of the Hudson Bay coast and 160 km north of the La Grande-4 airport and access road.

Channel has the option to acquire a 50% interest in the project from Azimut over a 5-year period together with an additional 15% interest upon delivery of a bankable feasibility study. The initial 50% can be earned by making cash payments to Azimut of $30,000 within thirty days of signing and the following two anniversaries, and $40,000 on the two subsequent anniversaries. Channel also undertakes to issue 300,000 common shares within 30 days of signing and on the two subsequent anniversaries of the agreement. This first phase of the earn-in option will also include exploration expenditures of $150,000 in the first year, $200,000 in year two, $350,000 in year three, $400,000 in year four and $600,000 in year 5. Azimut will retain a 2% Yellow Cake Royalty and a 1% Net Smelter Return Royalty on any precious and base metal deposits developed.

Following its acquisition of the 50% interest, Channel will have the option to earn an additional 15% interest by producing a bankable feasibility study within 5 years under the following conditions: issuing common shares to Azimut equivalent to a total value of $100,000, cash payments of $50,000 per year for five years; and expending a minimum of $500,000 per year. If Channel decides not to exercise the additional option, the Company will provide Azimut with $100,000 in cash as a final payment to maintain its 50% interest.

"The Company has an aggressive growth strategy based on building a portfolio of high quality exploration assets in different metal commodities and geographic locations," said Colin McAleenan, Channel's President and CEO. "Capitalizing on uranium's strong market outlook and Azimut's demonstrated success in defining high-potential prospects, West Bienville offers Channel an excellent opportunity for discovery."

Two non-executive directors of Channel are also directors of Azimut; all non-arms-length directors approved the terms of the Letter of Intent. This agreement remains subject to the approval of regulatory authorities.

Channel is an exploration stage company that is earning a majority interest in the Mozo gold project in Ecuador as well as holding interests in two exploration-stage projects in Burkina Faso, West Africa. The Company has formed a strategic alliance with Azimut Exploration Inc. ("Azimut") for mineral exploration in Ecuador based on a country-wide mineral potential assessment carried out for the Company by Azimut.

Colin McAleenan, P.Geo., is Channel Resources' Qualified Person as defined by NI 43-101 and has reviewed the contents of this news release.

Forward Looking Statements:

Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this Release.

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