Copper Canyon Resources Ltd.
TSX VENTURE : CPY

March 01, 2011 19:24 ET

Copper Canyon Sues NovaGold for 100% Interest in the Copper Canyon Property and Applies to Cease Trade Novagold's Hostile Takeover Bid

CRANBROOK, BRITISH COLUMBIA--(Marketwire - March 1, 2011) - Copper Canyon Resources Ltd. ("Copper Canyon" or the "Company") (TSX VENTURE:CPY) has filed a Notice of Civil Claim in British Columbia Supreme Court against NovaGold Resources Inc. ("NovaGold") and NovaGold Canada Inc. ("NovaGold Canada") seeking specific performance of its right of first refusal to acquire the Copper Canyon property. Copper Canyon has also applied to the British Columbia Securities Commission seeking to cease trade NovaGold's hostile takeover bid for all of the outstanding Copper Canyon shares (the "NovaGold Offer").

Law Suit for 100% Interest in the Copper Canyon Property

Pursuant to an Option Agreement and a Joint Venture Agreement with NovaGold Canada, Copper Canyon has a right of first refusal to purchase NovaGold Canada's 60% interest in the Copper Canyon property prior to sale of such interest to a third party. NovaGold has disclosed in the NovaGold Offer and in its previous public disclosure documents that it holds its 60% interest in the Copper Canyon property in trust for the Galore Creek Partnership, a 50/50 partnership between NovaGold and Teck Resources Limited. Since NovaGold has transferred its beneficial interest in the Copper Canyon Property to the Galore Creek Partnership without first honouring Copper Canyon's right of first refusal, Copper Canyon has commenced a law suit against NovaGold and NovaGold Canada seeking a declaration that the transfer is null and void and an order that NovaGold Canada notify Copper Canyon of the price and terms of such transfer so that Copper Canyon can exercise its right of first refusal.

Application to Cease Trade NovaGold's Hostile Takeover Bid

The Company has also applied to the British Columbia Securities Commission seeking an order to cease trading the NovaGold Offer on the basis that it fails to disclose material information to Copper Canyon Shareholders. This material information includes the current Optimized Development Plan for the Galore Creek Project, which locates strategic infrastructure necessary for the Galore Creek Project on the Copper Canyon property. This material information also includes the fact that the Galore Creek Partnership is the beneficial owner of NovaGold Canada's 60% interest in the Copper Canyon property.

The Board Reaffirms its Recommendation that Shareholders REJECT the NovaGold Offer

The board of directors of Copper Canyon continues to reaffirm its unanimous recommendation that Copper Canyon shareholders REJECT the NovaGold Offer, and NOT TENDER their shares to the NovaGold Offer. Further details on the Board's recommendation are contained in the Directors' Circular, which has been filed on the SEDAR website at www.sedar.com.

How to WITHDRAW Copper Canyon Shares from the NovaGold Offer

Copper Canyon shareholders who have deposited Copper Canyon shares under the NovaGold Offer are urged to withdraw those Copper Canyon shares. Please see the Directors' Circular for instructions with respect to withdrawing your Copper Canyon shares or, for additional information or assistance, please contact Mike Labach at 1 866 HUNT-ORE (486-8673).

The Board intends to communicate further with Copper Canyon shareholders prior to the expiry of the NovaGold Offer as and when material matters should arise.

About Copper Canyon

Copper Canyon Resources was created by way of a Plan of Arrangement on June 9, 2006. Shareholders of Eagle Plains Resources Ltd. (TSX VENTURE:EPL) approved the plan to reorganize the company's mineral property assets in an effort to maximize shareholder value. Under the terms of the arrangement, three of Eagle Plain's projects: Copper Canyon, Severance and Abo (Harrison) Gold, were transferred into Copper Canyon.

On behalf of the Board of Directors

Tim J. Termuende, President and CEO

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such 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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