Committee Bay Resources Ltd.
TSX VENTURE : CBR

Committee Bay Resources Ltd.

December 20, 2007 08:00 ET

Committee Bay Resources Ltd.: Perseverance Feasibility Study Yields Positive Result, Base Case Scenario Gives 52% ROFE

EDMONTON, ALBERTA--(Marketwire - Dec. 20, 2007) - Committee Bay Resources Ltd. (TSX VENTURE:CBR) ("Committee Bay" or the "Company") and Australian Redemption Joint Venture ("RJV") partner Focus Minerals Ltd. (ASX:FML) today announced the results of a Feasibility Study and proposed initial development of the high grade Perseverance Project, located in the prolific Coolgardie Gold Belt in Western Australia. The RJV has commenced the process of tendering mining contracts and obtaining the final mining permits required to develop the Perseverance Project, with development activities scheduled to commence early 2008.

Key Highlight Points

- Completion of Bankable Feasibility Study (BFS) confirms economic viability of Perseverance Gold Project, Coolgardie.

- Base case cash flow analysis (based on average grade of 6.9 g/t Au) shows net cash flow of AUD $19.3M with a Return on Funds Employed of Employed (ROFE) of 52%.

- Upside case (utilizing uncapped grade in main quartz sulphide lode of 8.5 g/t Au) increases net cash flow to AUD $32.4M with a ROFE of 88%.

- Base case production of 64,187 ounces over 21 months at average cash operating cost of AUD $533/ounce.

- Based on results of the BFS the RJV has commenced permitting and tendering of mining contracts.

- Development of the Perseverance ore body scheduled to commence first quarter of 2008.

- Continued development and exploration drilling in the Tindals area has excellent potential to discover additional Perseverance type ore bodies.

"We are extremely pleased with the outcome of the Perseverance Feasibility Study," stated Committee Bay President and CEO, John Williamson. "The base case scenario of the project's economics are quite robust and, given our ongoing exploration and recently released grade control drilling results, I believe the project will outperform the base case, particularly with respect to grade. Utilizing a combination of cut and fill and long-hole stope mining methods the project will develop early cash flow which will be used for continued development of the project," Mr. Williamson added.



Summary of Feasibility Study on Perseverance Deposit

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Assumptions Base Case Upside Case
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Gold Price (AUD) 900 900
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Gold Royalty 2.5% 2.5%
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Production
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Ore Milled (tonnes) 315,000t 315,000t
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Average Monthly Production Rate (tonnes/month) 15,000t 15,000t
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Operating Life (months) 21 21
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Grade (g/t Au) 6.9 8.5
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Mining Recovery % 90 90
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Mining Dilution % 20 20
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Metallurgical Recovery % 92 92
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Gold Recovered (life of mine) (k oz) 64.2 79.2
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Cash Operating Costs (AUD/oz) 533 432
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Total Cost (AUD/oz) 577 468
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Capital Costs (AUD millions) 2.8 2.8
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Net Cash Flow (AUD millions) 19.3 32.4
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Return on Funds Employed % 52 88
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Development Months 11 11
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Payback Period (months) 14 10
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Feasibility Study

Objectives

The Redemption Joint Ventures objective in completing a feasibility study on the Perseverance Deposit is to facilitate the development of high return gold production on the Coolgardie Project that would generate significant cash flow to fund continued development and exploration of the Tindals Mining Centre, and general exploration over the Coolgardie tenements.

Continued development and exploration drilling in the Tindals area indicates that the potential to discover additional Perseverance type ore bodies is high. Ongoing exploration at the Tindals and Empress deposits, along with delineation at the Countess deposit, all within existing underground infrastructure, provide potential for additional near term ore sources.

Mineral Resources

Derwent Geoscience Pty Ltd issued the current mineral resource estimate for the Perseverance deposit. The resource is based on surface drilling comprising 52 reverse circulation (RC) and 25 diamond drill holes. The resource has been estimated utilizing Ordinary Kriging within the main Quartz Sulphide zone and Inverse Distance Squared interpolation in the peripheral diorite zone. The disclosed mineral resources for the Perseverance deposit are summarized in Table 1 below (See CBR news release dated October 9th, 2007).



Table 1. Perseverance Deposit Resource
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Au Au g/t Uncut Cut(i)
Zone Category Volume Tonnes g/t Cut(i) Ozs Ozs
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Quartz - Sulphide Inferred 54,988 157,036 2.79 2.77 14,086 13,985
Indicated 109,984 324,598 9.35 7.79 97,576 81,296
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Diorite Inferred 86,285 249,422 3.06 2.63 24,538 21,090
Indicated 42,469 123,159 3.94 2.72 15,601 10,770
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Total Indicated 152,453 447,757 7.86 6.4 113,176 92,066
Total Inferred 141,273 406,458 2.96 2.68 38,624 35,075
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Resource reported at 1.0 g/t Au lower cutoff grade
(i) Upper cut of 35 g/t Au used for quartz sulphide zone, Upper cut of 15
g/t Au used for Diorite zone


The current Perseverance Resource does not incorporate underground grade control drilling completed by the RJV from the recently completed Perseverance decline (see CBR press release dated December 12th, 2007); the results of which indicate the deposit may demonstrate higher grades than indicated by the surface drill holes.

Mineral Reserves

Utilizing the base case scenario, a fully diluted Minable Ore Reserve of 315,073 tonnes grading 6.89 g/t Au has been calculated for the Perseverance Lode, based upon the following parameters:

- Application of a break-even (operating) cut-off grade of 3.2 g/t to determine the stope outline.

- Cut-offs have been applied on a lode and level basis consistent with the geological resource block breakdown.

- Application of identified ore loss and dilution factors for each of the lodes and mining methods.

- Only JORC compliant Indicated resources have been considered in determining an underground reserve.

Mining

The Perseverance deposit will be mined entirely by underground methods and the ore body will be accessed on 25 metre vertical level intervals via a spiral incline/decline developed from the existing exploration decline.

The mining method selected for the feasibility study is a combination of cut and fill and shorter long-hole stoping within each mining panel. This combined method gives good exposure to early ore production from the cut and fill, but limits the higher cost of cut and fill by long-holing a substantial portion of each panel. Cut and fill stoping assumes a minimum mining width of 3.5 metres with 0.5 metre dilution applied to both the footwall and hanging wall. Long-hole stopes will be limited to 10 metres vertical, and have a minimum mining width of 3.0 metres with 0.75 metres of dilution applied to both the footwall and hanging wall.

Mineral Processing

Negotiations are at an advanced stage for the treatment of the Perseverance ore at a local toll-treatment facility located 8 kilometres from the project site at a rate of AUD 22/tonne. This reduces the exposure to operational issues as the project will use an established operation that has previously treated similar ores. The agreement with the treatment facility fixes the price paid for milling the ore. When concluded, this agreement will leave very little exposure to changes in the milling costs for the project. Cartage costs from the mine to the treatment facility are estimated at AUD 5/tonne.

Infrastructure

One of the highlights of the proposed Perseverance project is that good quality infrastructure is already established in the area. This is particularly relevant for the underground infrastructure, as this includes decline access to within 60 metres of the ore body.

It is expected that there will be very low risk associated with the infrastructure as there is a long operational history for the area.

Exploration

The RJV is continuing to aggressively explore the Tindals Mining Centre and the Redemption Fault Corridor proximal to the Perseverance deposit and is currently conducting an extensive ground electro-magentic (EM) survey over the area targeting additional high sulphide Perseverance style mineralization. Exploration drilling is continuing at Perseverance, targeting down-hole EM conductors immediately on strike of and down-dip of existing mineralization.

Mining reserves at Perseverance are based only on the Indicated portion of the mineral Resource. Results from underground grade control drilling conducted by the RJV from the exploration decline are not included in the current mineral resource. An updated resource is expected to be completed by the end of Q1 2008 which will incorporate the underground drilling, and is reasonably expected to result in the upgrading of additional ounces to the measured and indicated categories.

Operating Costs

A mining contractor will be engaged to carry out all work associated with the operation of the underground mine. As was done recently with the development of the Perseverance exploration access decline, a schedule of rates contract will be utilized for the project. This has the advantage of being able to fix key operating cost parameters and thus limit the project to fluctuations associated with other contract styles. Operating costs (Table 2) have been based upon formal tender estimates for underground contract mining as at October 2007. Other cost estimates have been supplied by the RJV or sourced, where specified, from budget quotations, industry benchmarking, in-house databases and evaluations.



Table 2. Operating Costs
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Estimated Operating Cost Estimated Operating Cost
Cost Centre (AUD millions) (AUD per tonne milled)
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Mining 23.43 74.36
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Milling/Cartage 8.51 27.00
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Administration 2.29 7.27
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Total 34.23 108.63
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Capital Costs

Due to the existence of a significant portion of the infrastructure for the project, there is only a relatively small requirement for new capital works. This is estimated at AUD 2.8M and primarily covers additional dewatering and ventilation requirements not currently available at the Perseverance deposit. As infrastructure requirements are minimal, the project does not have a significant exposure to construction issues experienced at other resource development projects.

Acknowledgements

This technical information in this news release has been prepared in accordance with JORC and National Instrument 43-101. The following Qualified Persons Have Contributed to the Study:

Darren Gibcus - B.Eng-Mining, M.AusIMM

Brett Ustick - B.Eng-Mining, M.AusIMM

Dr. Garry Adams - PhD, B.Sc(Hons)-Geology, M.AusIMM, M.AIG, F.SEG

Mark Rigby - B.Sc-Geology. M.AusIMM

Brian Eaton- B.Eng-Mining, Assoc Min Eng, FAusIMM, CP-Eng

Stewart Capp - B.Sc(Hons)-Geology, M.AusIMM

Coffey Consulting - hydrogeological, geotechnical and environmental

Ammtec Ltd - metallurgical

Coolgardie Project, Western Australia

Committee Bay Resources Ltd., through the Redemption Joint Venture (Committee Bay in a 50% partnership with Focus Minerals Ltd. ASX:FML), has the mineral rights to more than 210 km2 of under-explored greenstone tenements, located in one of the world's most significant gold and nickel mining regions. These tenements contain Measured Resources of 31,014 ounces gold(ii) (0.55 million tonnes at 1.77 g/t gold), Indicated Resources of 564,631 ounces gold(ii) (8.53 million tonnes at 2.06 g/t gold), and Inferred Resources of 1,038,292 ounces gold(ii) (11.52 million tonnes at 2.80 g/t gold). The RJV also has a 100% interest in the fully permitted, 1.2mtpa, Three Mile Hill Mill processing plant(ii).

(ii) For more information on the stated gold resources and historic drill results of Committee Bay Resources Ltd., Coolgardie Project please refer to the detailed NI 43-101 compliant technical report filed on SEDAR by Committee Bay on February 26, 2007.

Committee Bay Resources Ltd. maintains an extensive quality control program in the preparation, shipping and checking of all samples from the property as detailed in Committee Bay Resources Ltd. 'Technical Report for the Coolgardie Gold Project, Coolgardie, Western Australia' by Dean Besserer - May 27, 2005 pp. 76-80. The program is supervised by Peter Kleespies, M.Sc. P.Geol., and Vice President of Exploration, who is the Qualified Person as defined by NI 43-101. Mr. Kleespies has reviewed and approved the information contained in this release.

On behalf of the Board

Committee Bay Resources Ltd.

John Williamson, P.Geol., President

Certain disclosures in this release, including management's assessment of Committee Bay's plans and projects, constitute forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Committee Bay's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Committee Bay expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

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

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