Channel Resources Ltd.
TSX VENTURE : CHU

Channel Resources Ltd.

August 05, 2005 14:47 ET

Channel Receives TSX Venture Exchange Approval to Option for Joint Venture on Gold Resource Development Property

KELOWNA, BRITISH COLUMBIA--(CCNMatthews - Aug. 5, 2005) - Channel Resources Ltd. (TSX VENTURE:CHU) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Channel Resources Ltd. ("Channel") announces that it has received the approval of the TSX Venture Exchange to the option with Minera Cachabi C. Ltda. ("Mineca") to acquire a gold resource property for development in South Central Ecuador, known as the El Mozo Gold property. Under the option Channel has entered into a Heads of Agreement with Mineca to acquire a 60% interest in the property by delivering a bankable feasibility study and a further 10% interest in the property for a total of 70% by providing production financing as set forth in to the Company's News Release of June 7, 2005. Channel has made an option payment of US$100,000 and issued 1,000,000 Common Shares to Mineca as consideration for the option Channel must incur a minimum of US$1,000,000 per year on exploration and development expenditures up to and including the preparation of a bankable feasibility study to earn the 60% interest in the property. Channel will earn an additional 10% interest by providing project financing within 30 months of delivery of the feasibility study. In the event that Channel elects not to proceed to production and provide project financing the property will revert to Mineca.

Channel also advises that it has received conditional approval from the TSX Venture Exchange to its proposed Private Placement announced in the Company's News Release of June 23, 2005 of up to 7,000,000 common shares at a price of $0.30 per share with up to 7,000,000 warrants attached to purchase up to 7,000,000 common shares at a price of $0.40 per share in the first year and at $0.60 per share in the second year.

Completion of the private placement, which is expected to be fully subscribed and to close on or before August 12, 2005 is subject to the filing of the documentation required pursuant to Policy 4.1, section 1.14 and execution and delivery of standard documentation including an agency agreement and subscription agreements, and receipt of all required final regulatory approvals and consents.

The proceeds of the private placement will be used to fund a comprehensive exploration program on the El Mozo property and for general corporate purposes.


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

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