SOURCE: Tara Gold Resources Corp.

December 01, 2006 11:29 ET

Definitive Agreement for Lluvia De Oro Gold Mine Signed

CHICAGO, IL -- (MARKET WIRE) -- December 1, 2006 -- (PINKSHEETS: TRGD) (FRANKFURT: T8N) Tara Gold Resources Corp. and Columbia Metals Corporation Limited are pleased to announce the following:

(i)   Columbia has entered into a definitive agreement (“Agreement”) with
      Tara Gold to acquire all mining, surface and water rights and all
      assets of the Lluvia de Oro gold property, more particularly set out
      below (the "Lluvia Property") from Tara Gold, the optionee and
      Atotonilco Contrucciones, S.A. de C.V. of Mexico (the “Vendor”);

(ii)  Columbia has paid Tara Gold US$150,000 upon signing of the initial
      letter of intent and made additional payments of US$837,500 and
      agrees to make further payments of US$3,500,000 by December 1, 2008;

(iii) Subject to regulatory approval, Columbia will also issue 1,000,000
      common shares of Columbia to Tara Gold;

(iv)  Columbia will acquire all interests in and to the Lluvia Property
      upon making the final payment to Tara Gold; and

(v)   Tara Gold will receive a 20% net cash flow interest (“NCF”) in the
      Lluvia Property, however Columbia will have a right to purchase all
      of Tara Gold’s NCF interest in the Lluvia Property for a period of
      24 months from the date of approval of this transaction by the
      TSX Venture Exchange, for a payment of US$250,000 for each 1% for a
      total of US$5,000,000 for all of Tara Gold’s NCF interest in the
      Lluvia Property.
The Lluvia Property is located in Sonora, Mexico, and is composed of the following four mineral claims:
No.             Lot Number       Number     File     Surface
           --------------------  ------ ----------- --------
I          Lluvia de Oro         192050 321.1/4-746 Hectares
           --------------------  ------ ----------- --------
II         Lluvia de Oro, No. 2  195124 321.1/4-581 Hectares
           --------------------  ------ ----------- --------
III        Sahuara, I "A"        201469  4/1.3/1161 Hectares
           --------------------  ------ ----------- --------
IV         Sahuara, I Dos        210805  4/1.3/1301 Hectares
           --------------------  ------ ----------- --------

              Type of
No.          Concession     Location      Sub-Agency

           -------------- -------------- --------------
                             Magdalena,    Hermosillo,
I            Exploitation         Sonora         Sonora
           -------------- -------------- --------------
                             Magdalena,    Hermosillo,
II           Exploitation         Sonora         Sonora
           -------------- -------------- --------------
                             Magdalena,    Hermosillo,
III          Exploitation         Sonora         Sonora
           -------------- -------------- --------------
                             Magdalena,    Hermosillo,
IV           Exploitation         Sonora         Sonora
           -------------- -------------- --------------
Upon completion of the acquisition of the Lluvia Property, Columbia will control the contiguous mineral rights to some 60 square kilometres in the immediate vicinity of the deposit.

Mine History

Located in the state of Sonora, in northern Mexico, Lluvia de Oro was designed as a large tonnage, low-grade gold operation. The property currently includes one open pit, two heap leach pads and a gold recovery plant. Under Great Lakes Minerals Inc. the facility entered into production in May 1996, and was later operated by Santa Cruz Gold Inc. ("Santa Cruz") and finally by Compania Minera Lluvia de Oro S.A. de C.V.

The mine had an anticipated average production rate of 25,000 ounces per year from an initial reserve of 4.6 million tonnes grading 0.82g Au/t or 121,000 ounces. Santa Cruz had projected that the life-of-mine cash costs for the Lluvia de Oro Gold Mine would be in the range of US$235 per ounce.

Mining & Exploration

During 1997, 1.65 million tonnes of ore, with an average grade of 0.75g Au/t were mined and placed on the pad at an average cash cost of US$3.76 per tonne. As a result of El Niño, the project area received twice the average annual rainfall. Production for 1997 was 20,688 ounces versus the projected 25,000 ounces. Cash costs averaged US$299 per ounce, which was US$79 higher than the projected US$220 per ounce. The cash cost overrun was not only due to the shortfall in production but also due to increased mining (an extra 320,000 tonnes of ore were placed on the heap in an attempt to offset the negative impact of the excess rains). Operating costs per tonne were effectively reduced since start-up, when the crushing circuit was eliminated and the mine transformed into a run-of-mine operation.

Santa Cruz completed a drilling program in the 2nd quarter 1997 successfully expanding the existing proven reserves* by more than 60%. This 6,100-metre drill program was successful in adding 2.1 million tonnes grading 0.81g Au/t or 54,400 oz. Additional lower grading material, which may be mined and leached later in the mine life, added another 9,500 oz for a total of 64,000 oz. These reserves were defined along 300 metres of strike from the limit of the current open-pit.

The new reserves* increased the proven reserves* to 4.7 million tonnes grading 0.81g Au/t, representing an increase of 64%. In addition to adding mine life to the operation, the reserves discovered in 1997 allowed for an increase in production scheduled for 1998 to approximately 28,000 ounces.

Drilling delineated an additional higher-grade resource* of approximately 4.5 million tonnes grading 0.95g Au/t along the same structure. Highlights from the drill program include three holes, all of which ended in "ore" and appear to have intersected a deeper, higher grading zone. These holes include:

--  hole L188, located approximately 60 metres on strike from the pit
    limits, which
--  intersected 15.2 metres grading 2.3g Au/t;
--  hole L194, on the next section, intersected 19.8 metres grading 1.8g
    Au/t; and
--  hole L202, approximately 200 metres from the current pit along strike,
--  7.6 metres grading 3.8g Au/t.
A deeper drilling program composed of six holes was completed in the 3rd quarter 1997. Four of the six holes intersected good values including hole L239 which intersected 30metres grading 1.5g Au/t, hole L240 which intersected 14metres grading 1.62g Au/t, hole L241 which intersected 39 metres grading 2.29g Au/t and hole L242 which intersected 18 metres grading 1.33g Au/t.

Cautionary Note: The tonnages, grades, assays, drill intercepts, production figures and other technical data are taken from historical records prior to the implementation of NI 43-101. While the data is believed to have been acquired, processed and disclosed by persons believed to be technically competent it is unverifiable at present. The data source for the Lluvia de Oro is largely the 1997 Annual Report of Santa Cruz Gold Inc.

*The terms "reserve" and "resource" are as reported by Santa Cruz and do not necessarily conform to NI 43-101 standards.

A qualified person as defined under NI 43-101 has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. Columbia is not treating the historical estimates as current mineral resources or mineral reserves as defined in NI 43-101 and the historical estimate should not be relied upon.

Update on National Policy 43-101 Compliant Geological Report on the Lluvia Property

Columbia is currently in the process of conducting due diligence on the Lluvia de Oro gold mine and their engineering team is reviewing options for re-initiating mining, production, rinsing the leach pad and heap leach processing. Columbia has completed a National Instrument 43-101 qualifying report on the Lluvia Property by Rodney Blakestad, J.D., C.P.G, Qualified Person and has submitted the report for acceptance by regulatory authorities before filing the report on SEDAR.

Rodney Blakestad, J.D., C.P.G, Qualified Person reports the resources at Lluvia:

Exploration and Resource Status

Exploration of the Lluvia de Oro mine area is in an advanced stage with 264 exploration and resource definition drill holes comprising more than 26,000 meters of drilling. Work to date has identified two envelopes of gold-silver-copper mineralization comprising the Upper and Lower Zones. Mineral resources for the two zones are defined in a series of grade-tonnage tables for a variety of gold cutoff grades. The Measured and Indicated resources for the Upper Zone are shown in Table 1.1, while the Inferred Resources for the Upper Zone are shown in Table 1.2. The resources are reported for a cutoff grade of 0.4 g/t Au. The Measured and Indicated resources at the 0.4 g Au/t for the Lower Zone are shown in Table 1.3, while the Inferred Resources for the Lower Zone are shown in Table 1.4.

                    UPPER ZONE MEASURED           UPPER ZONE INDICATED
                ----------------------------- -----------------------------
Cutoff g Au/t      Tonnes    g Au/t    Oz. Au    Tonnes    g Au/t    Oz. Au
--------------  --------- --------- --------- --------- --------- ---------
0.40              263,000     0.693     5,860 2,130,000     0.632    43,280
                --------- --------- --------- --------- --------- ---------

                      UPPER ZONE  M + I
Cutoff g Au/t      Tonnes    g Au/t    Oz. Au
-------------   --------- --------- ---------
0.40            2,390,000     0.639    49,101
                --------- --------- ---------
Table 1.1: Measured and Indicated Resources - Upper Zone.
               UPPER ZONE INFERRED
Cutoff g
 Au/t         Tonnes    g Au/t    Oz. Au
--------   --------- --------- ---------
0.40         3410000     0.588    64,465
           --------- --------- ---------
Table 1.2: Inferred Resources - Upper Zone.

                     LOWER ZONE MEASURED           LOWER ZONE INDICATED
                ----------------------------- -----------------------------
Cutoff g Au/t      Tonnes    g Au/t    Oz. Au    Tonnes    g Au/t    Oz. Au
-------------   --------- --------- --------- --------- --------- ---------
0.40               25,000     1.328     1,067   480,000      1.17    18,056
                --------- --------- --------- --------- --------- ---------

                    LOWER ZONE  M + I
Cutoff g Au/t      Tonnes    g Au/t  Oz. Au
-------------   --------- --------- -------
0.40              636,000     1.025  20,959
Table 1.3: Measured and Indicated Resources - Lower Zone.
Cutoff g
 Au/t         Tonnes    g Au/t    Oz. Au
--------   --------- --------- ---------
0.40         5760000     0.716   132,595
           --------- --------- ---------
Table 1.4: Inferred Resources - Lower Zone.

A resource analysis of the existing leach pad indicates that 30,100 ounces of gold remain in 2,921,000 tonnes of rock materials placed on the pad between 1996 and 1998. Mineral Resource calculations show that an Indicated Resource of 10,926 ounces of gold are contained in 640,000 tonnes within 7.0 meters of the surface of the northeast end of the leach pad, as set forth in Table 1.5.

------------------- ------- ----------------------- -----------------------
Tonnes       g Au/t  Oz. Au  Tonnes  g Au/t  Oz. Au  Tonnes  g Au/t  Oz. Au
-------     ------- ------- ------- ------- ------- ------- ------- -------
0                 0       0 640,000   0.531  10,926 640,000   0.531  10,926
-------     ------- ------- ------- ------- ------- ------- ------- -------

------------------- -------
Tonnes       g Au/t  Oz. Au
-------     ------- -------
725,600       0.378   8,818
-------     ------- -------
Table 1.5: Summary table of Mineral Resources for the Lluvia de Oro leach pad.

The body of this press release was prepared by J. E. Steers, Q.P.P. Eng. VP Exploration, Columbia Metals Corporation Limited.

Forward-Looking Statements: Except for statements of historical fact, all statements in this new release -- including without limiting, statements regarding future plans, objectives and payments are forward-looking statements that involve various risks and uncertainties.

About Tara Gold Resources Corp.

Tara Gold Resources Corp. is a growth-oriented precious metals exploration and development company with existing production plants. It is management's objective to become a significant gold and precious metals producer by re-initiating and increasing production levels at La Currita, Lluvia de Oro and Picacho, and developing the San Miguel, La Millionaria, and Las Minitas projects in Mexico. We continue to acquire other advanced-stage projects and/or producing mines in one of the most prolific precious metal districts in the world. For more information, please visit the Company's web site at:

Contact Information