Continuum Resources Ltd.

Continuum Resources Ltd.

January 12, 2006 09:15 ET

Continuum Announces Exploration Plans in Mexico and Northern Ontario for 2006

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 12, 2006) - Continuum Resources Ltd. (TSX VENTURE:CNU) is pleased to provide an update of corporate activities, and exploration plans and progress in Mexico and northern Ontario. In total, drilling is planned for 5 projects during the first and second quarters of the year. Four of these programs will be directed to Continuum's portfolio of advanced stage gold and silver projects in the state of Oaxaca, in southern Mexico, while the Company's McIntyre prospect, located in the Red Lake district in northern Ontario, will also be drilled.

Mexico Exploration Plans

Continuum holds in excess of 70,000 hectares of exploration ground in the state of Oaxaca, Mexico. Included in the property portfolio are two of the most significant past-producers of gold and silver in southern Mexico: the San Jose epithermal silver-gold deposit and the Natividad epithermal gold-silver deposit.

San Jose (Ag-Au)

Continuum completed a successful first phase drilling program at San Jose in 2005, and outlined a significant zone of silver-gold mineralization along a 500 meter interval of the 3 kilometer-long vein system. Within this one small part of the hydrothermal system, which exhibits anomalous surface gold and silver geochemistry along its 3 kilometer length, a 43-101 compliant resource calculation prepared by Independent Mining Consultants estimated an inferred resource of 233,000 ounces of gold equivalent grading 7.45 gpt gold equivalent; or 202,620 ounces of gold equivalent grading 9.02 gpt gold equivalent (press release dated May 10, 2005). High grades of gold and silver were identified in a newly-constructed underground Level 6 (150 meters depth) which returned an average grade of 10.2 gpt gold and 1,102 gpt silver over a true width of 2.26 meters. This zone is underlain by a zone of stockwork mineralization grading 6.52 gpt gold and 482 gpt silver over a true width of 14.8 meters.

In terms of silver equivalent, this one mineralized zone contains an inferred resource of 15.8 million ounces of silver equivalent (Ag eq) within 1.562 million tonnes grading 314 gpt Ag eq at a 113 gpt Ag eq cut-off. At a cut-off grade of 170 gpt Ag eq, the Inferred resource is 971,549 tonnes grading 424 gpt Ag eq, totaling 13.18 million ounces of silver equivalent (see press release dated November 16, 2005).

On November 16, 2005, the Company announced that it had entered into a joint venture agreement with Fortuna Silver Mines, Inc. to jointly explore the entire length of the San Jose structure. Fortuna's agreement with Continuum allows Fortuna to earn up to a 70% interest in Continuum's 80%, or a 56% overall interest in San Jose. To earn its interest, Fortuna will spend $2 million on drilling at San Jose on or before December 1, 2007. A minimum of $1 million will be spent on or before August 1, 2006. When Fortuna has completed drilling, it will prepare an NI 43-101 compliant resource calculation. Based on this calculation, Fortuna will pay to Continuum an amount equal to 56% of the resource at a price of US$0.50 for each ounce of silver equivalent in the Measured resource category, and US$0.35 for each ounce of silver equivalent in the Indicated resource category.

Drilling with two drill rigs is set to begin during the latter part of January with the objective of exploring the entire 3 km-long San Jose vein system.

Natividad and Lachatao (Au-Ag)

During the last two years Continuum has assembled over 40,000 hectares covering the past-producing Natividad gold-silver deposit and numerous nearby past-producing mines and prospects, together comprising the Natividad district. The Natividad mine has historically produced approximately 1 million ounces of gold from bonanza-grade vein systems. Underground tunneling and rehabilitation by Continuum lead to the discovery of the Northern Extension Zone, the fault-offset strike extension of the deposit. Here, channel samples grade up to 16.40 gpt gold across a true width of 3.9 meters (see press release dated March 14, 2005). Very high grades of gold and silver have been obtained from channel sampling near areas of historic mining underground at Natividad. For example, results of sampling from Level 6 ranged up to 206 gpt gold over a true width of 0.90 meters (see press release dated January 26, 2005). Current surface mapping has shown the vein system to continue southward for approximately 8 kilometers; the southernmost sector having been recently acquired by Continuum (the Lachatao prospect, see press release dated September 8, 2005).

Exploration of the Natividad district will take place on three fronts during the first and second quarters of the year. Firstly, bids for underground drilling have been solicited to explore for new reserves at depth along the 3 kilometers of the previously-exploited multiple vein system, and the newly-identified, on-strike extension towards the north. Secondly, underground rehabilitation and drilling are planned for the southward extension between Natividad and Lachatao where historic records indicate gold-silver mineralization of similar tenor to Natividad. For example, channel sampling at the Manchega prospect, 1.5 kilometers southwest of the mine entrance, averaged 7.25 gpt gold across 6.7 meters true width (see press release dated April 14, 2005).Thirdly, drill targets are being developed at Lachatao where epithermal vein systems have been mined on a small scale in the past and historic diamond drilling has intersected significant gold grades (see press release dated September 8, 2005). The Company is actively seeking a joint venture partner to finance the underground portion of the exploration at Natividad.


The Talea silver prospect is situated 22 kilometers east of the Natividad mine and incorporates numerous, past-producing epithermal silver veins which were mined on a small scale from 11 separate adits along a 5 kilometer strike length. Cloudbreak Resources Ltd. is earning a 60 percent interest in Talea by expending $1.25 million on exploration of the property over three years, and issuing an additional 400,000 shares. Continuum is the operator of the project. Surface and underground exploration by Continuum has identified numerous mineralized zones, none of which have ever been drilled. Recent results include values of up to 1,055 gpt silver over a true width of 1.3 meters, and zinc values up to 7.62% over a true width of 2.0 meters (see press release dated November 3, 2005). Currently, negotiations with local land owners are being finalized to allow for access road building for diamond drilling.

Other Projects

Continuum is exploring numerous additional, less advanced gold-silver projects located in Oaxaca, including the Lachiguire carbonate-hosted Ag-Pb-Zn prospect, where a program of soil sampling has been completed in advance of bulldozer trenching, planned for February.

Canadian Project

Richardson Lake-McIntyre Bay

Winter drilling is planned to begin once ice conditions permit on the McIntyre Bay zone of the Richardson Lake project, located in the Birch-Uchi greenstone belt approximately 100 kilometers east of Red Lake in northern Ontario. The project, which is jointly held with Tribute Minerals Inc. and Sunridge Gold Corp. was first drilled in January, 2004. The best intersection returned 9.60 gpt gold over a 3.43 meter interval, which includes a 2.0 meter interval grading 14.65 gpt gold at a depth of approximately 100 meters beneath surface outcropping gold mineralization. A second round of drilling during January 2005 included an intersection grading 14.9 gpt gold over an interval of 1.52 meters (see press release dated June 22, 2005). Approximately 1200 meters of drilling is planned to commence near the end of January.

The Qualified Person for these projects, and responsibility for the accuracy of this press release, under the definition established by National Instrument 43-101, is Lawrence Dick, Ph.D., P.Geo.

On behalf of Continuum Resources Ltd.

Lawrence A. Dick, Ph.D., P.Geo.

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