Dynamite Resources Ltd.

Dynamite Resources Ltd.

August 29, 2007 17:29 ET

Dynamite Resources Ltd.: Lake Torrens IOCGU Project & Drilling Update

TORONTO, ONTARIO--(Marketwire - Aug. 29, 2007) -


- The Lake Torrens project drilling program adjacent to BHP Billiton's world class Olympic Dam is progressing faster than expected.

- Dynamite and WCP Resources have signed definitive Option Agreement.

- Six initial drillholes completed at Titan Prospect for 5,962 meters.

- Two drillholes in progress at Marathon South Prospect.

- First assay results expected in Mid-September 2007.

- All final assay results expected by the end of October 2007.

- Next phase of drilling to commence early in 2008.

- Assignment Fee payable under Option Agreement completed.

DYNAMITE RESOURCES LTD. ("Dynamite") (TSX VENTURE:DNR) is pleased to announce that the drilling on its Lake Torrens iron-oxide copper gold uranium ("IOCGU") project in South Australia is progressing faster than management had expected. The Lake Torrens project is located immediately to the east, north and west of BHP Billiton's world class Olympic Dam Mine. The drillholes in this program are sited within 25km from the center of the Olympic Dam Mine.

Pursuant to the definitive option agreement that the Company has entered into with WCP Resources Ltd. ("WCP") (ASX Code: WCP), the Company can earn a 32.5% interest in the Lake Torrens Project from WCP by spending Australian Dollars ("AUD")6.5 million over 5 years. Dynamite will then be entitled to increase its interest in the Lake Torrens project to 51% by exercising a call option.

"Dynamite is very pleased with the progress of drilling on the Lake Torrens project, we are pressing for the sampling & assaying to be completed as soon as possible so we can finalize our plans for the next drilling program." states Dynamite Executive Chairman, Stan Bharti.

Current Drilling Program

Two drill rigs have been drilling since early July 2007 and to date have completed six holes at Titan for 5,962 meters, with the deepest vertical hole at 1,182 meters. The drillholes have been designed to test anomalies within basement rocks from approximately 600 meters depth and that are prospective for IOCGU mineralization similar to that of the Olympic Dam Mine and the nearby Oxiana Limited's Prominent Hill Project.

Drilling of two holes at Marathon South (MS005 & MS006) is in progress with both holes close to the basement-cover interface at approximately 550-600 meters. These two holes are targeting the gravity feature proximal to sedimentary breccias intersected in MS001 completed by Tasman Resources Limited ("Tasman") (ASX Code: TAS), which contain zones of iron-oxide altered matrix. Holes are planned to 1,000 meters each and should be completed by the end of September, concluding the current drilling program.

Sampling & Assaying

Sampling & assaying of Titan drill core is in progress with the first batch of samples from TI009 submitted to the laboratory. First assays from this hole are expected in mid-September. Cutting & sampling of the remaining altered core from TI012, TI013 and TI014 is in progress with all samples including Marathon South expected to be submitted to the laboratory by late-September. Results from the laboratory for all drilling completed on the Lake Torrens project should be received by the end of October 2007.

It is the Company's policy to release the results of this drilling campaign after the relevant core has been geologically logged, sampled & assayed. This process will be implemented in a manner so as to comply with the Company's continuous disclosure obligations.

Next Drilling Campaign

The Company has commenced planning the next drilling campaign at Lake Torrens which is expected to begin in early 2008. This drilling campaign will target both (1) valid targets that arise from the results of the current drilling program; and (2) additional gravity targets within the Lake Torrens project. Follow-up drilling will be aided by geochemical and alteration vectors interpreted from this drilling program. Target generation and prioritization will be based on an integrated reinterpretation of the project areas geology, structure and geophysics utilizing 3-D modeling packages. Modeling will be further added by an infill gravity survey scheduled for November.

Terms of Option Agreement

Under the terms of the Option Agreement, Dynamite has the right to earn up to 50% of WCP's interest in the Lake Torrens project. WCP has a joint venture with Tasman on the Lake Torrens project. WCP has the right to earn 65% of the Lake Torrens project, as governed by the Lake Torrens Farmin and Joint Venture Agreement ("Lake Torrens JV Agreement"), by incurring expenditures of AUD6.5 million on the Lake Torrens project. Dynamite has agreed to fund the AUD6.5 million expenditure, in exchange for 50% of WCP's interest in the Lake Torrens project. Dynamite has a call option to increase its overall equity in the Lake Torrens project to 51% at a predetermined payment amount.

Dynamite's expenditure on the Lake Torrens project will be a minimum of AUD6.5 million over the next 5 years as it proceeds on a year on year basis. No interest will be earned by Dynamite unless and until it spends at least AUD3.25 million on the Lake Torrens project. At that stage Dynamite will have earned a 25% interest in WCP's Project Interest, and thereafter will earn a further 7.7% of WCP's Project Interest for each additional AUD1,000,000 of expenditures or part thereof. WCP's rights are limited to the IOCGU targets and it will have no rights to sediment hosted mineralisation in the tenements.

Once Dynamite has fully funded the AUD6.5 million expenditure requirement, WCP will grant to Dynamite a call option to increase its interest in the Lake Torrens project to 51% overall by paying to WCP (at WCP's election) either AUD70 million in cash or AUD20 million in cash and sole funding WCP's obligations under the Lake Torrens JV Agreement with Tasman until commercial production is achieved.

Other terms of the Option Agreement include:

1. Dynamite has covenanted in favour of WCP to issue to WCP 16,875,000 share purchase warrants, each of which will entitle WCP to acquire one common share of Dynamite at a price of $0.80 per warrant exercised at any time prior to the date that is 90 days from the date of issue, subject to TSX Venture Exchange approval.

2. WCP is entitled to appoint one director to Dynamite's Board.

The Lake Torrens JV Agreement will remain in force in all respects. The provisions of the Lake Torrens JV Agreement will prevail over any inconsistent provisions in the Option Agreement or subsequent formal documentation to the extent of any inconsistency.

Dynamite Resourced Limited

Please visit the Company's web site at www.dynamiteresources.com.

Qualified Person

The technical and scientific information in this document is based on information compiled by Mr Gavin Daneel, who is a Member of The Australasian Institute of Mining and Metallurgy and qualifies as a qualified person under National Instrument 43-101. Mr Daneel, who is a full-time employee of WCP Resources, has reviewed the technical and scientific information in this press release.

Cautionary Note Regarding Forward-looking Information

Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the Company's plan of business operations; use of proceeds; availability of financing on acceptable terms; and projected costs and expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. In particular, past success or achievement does not guarantee future success. Factors that could cause actual results to differ materially include, among others, metal prices, competition, financing risks, acquisition risks, risks inherent in the mining industry, and regulatory risks. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

To view maps of the Lake Torrens project and the Proposed Drilling campaign for Titan Prospect, please visit the link below:



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