Gold Canyon Resources Inc.
TSX VENTURE : GCU

Gold Canyon Resources Inc.

August 12, 2005 15:18 ET

Gold Canyon Acquires Additional Ground in the Red Lake Mining Division of Ontario

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 12, 2005) - Gold Canyon Resources Inc. (TSX VENTURE:GCU) ("Gold Canyon" or "the Company") is pleased to announce that is has acquired several claims which are contiguous and non-contiguous with the Company's large Springpole Gold Project located near Red Lake, Ontario. It has also acquired and staked a significant number of new claims in the Favourable Lake area of Ontario which will form part of the Company's new Favourable Lake Gold/Silver Project.

Jilbey Gold Exploration Ltd. ("Jilbey"), has assigned its interest in and to unpatented mining claims situated wholly or partially within an area of interest surrounding to the Company's Springpole Gold Project in connection with agreements reached between the Company, Jilbey and ECI Mineral Resources Limited related to a diamond exploration option agreement entered into in May, 2002. The Company has granted Jilbey a 2% Net Smelter Returns Royalty over one of these unpatented claims which lays partially within the area of interest near Trade Winds Ventures Inc.'s High Grade Island gold project.

The Company has acquired, subject to regulatory approval, the Favourable Lake silver - gold - base metal property from local prospector Mike Desmeules for $15,000 cash, and issuance of 40,000 shares of the Company's stock, at a deemed price of $0.57 per share. All shares issued will be subject to a four month hold period from the date of the issuance in accordance with the TSX Venture Exchange policy and applicable securities laws. The Company has granted Mr. Desmeules a 2% Net Smelter Returns royalty (NSR). The Company has the right to "buy back" 1% of the NSR for $1 million prior to commercial production. The property consists of 268 individual claim units covering roughly 10,590 acres in the highly mineralized Favourable Lake Greenstone Belt and is approximately 120 miles north of Red Lake, Ontario.

These claims cover two, apparently parallel mineralized zones. One zone is dominated by silver, gold, copper, zinc, and lead mineralization and is hosted in sheared and sulfidized sediments, while the second zone, roughly one kilometre to the southwest is dominated by molybdenum hosted in garnitiferous granitic intrusives on the north side of the Bear Head Fault. Between 1964 and 1986, Noranda, Massive Energy and others conducted exploration on a small tract at the north-western end of Zone 1. This work consisted of ground and airborne geophysics and shallow diamond drilling, limited to within 300 feet of the surface.

Recent grab samples nearly 3 miles southeast of the area historically explored, and on trend are tabulated below. The silver rich zone area (Zone 1 table) have returned highly anomalous values with some surface samples yielding up to 191 ounces of silver per ton, and greater than 1% copper, zinc and lead each. Grab samples from the molybdenum zone (Zone 2 table) have yielded values up to 1% Molybdenum Disulfide (MoS2).



Zone 1 (Silver zone)

--------------------------------------------------------------------
Molyb- Ant-
Silver Silver Lead Copper denum imony Zinc
Sample (Ag) Converted (Pb) (Cu) (Mo) (Sb) (Zn)
No. g/t to opt ppm ppm ppm ppm ppm
--------------------------------------------------------------------
90755 3250 94.793 greater 5046.2 13 3780 greater
than than
10000 10000
--------------------------------------------------------------------
90756 3923 114.422 greater 5767.7 2 4290 greater
than than
10000 10000
--------------------------------------------------------------------
90757 6550 191.044 greater greater less 7390 9558.4
than than than
10000 10000 1
--------------------------------------------------------------------
90758 3750 109.376 greater 5754.3 less 4220 greater
than than than
10000 1 10000
--------------------------------------------------------------------

Note: 10,000 ppm equals 1%


Zone 2 (Molybdenum zone)

--------------------------------------------------------------------
Sample Lead Copper Molybdenum Antimony Zinc
No. (Pb) ppm (Cu) ppm (Mo) ppm (Sb) ppm (Zn) ppm
--------------------------------------------------------------------
90751 12 14.2 7170 20 10.2
--------------------------------------------------------------------
90752 6 6.6 739 less than 5 5.1
--------------------------------------------------------------------
90753 14 12.1 greater 26 6.9
than 10000
--------------------------------------------------------------------
90754 13 8.2 960 less than 5 5.1
--------------------------------------------------------------------

Note: 10,000 ppm equals 1%


Robert Carrington, the Company's Chief Executive Officer states that, "this acquisition is an excellent early stage project with numerous highly mineralized outcrops and showings which have never been drilled."

These acquisitions enhance the Company's position, and leverage its knowledge of the area. The Company will evaluate non-contiguous lands, for future exploration or it may entertain possible joint venture agreements.

Gold Canyon is engaged in the acquisition and exploration of mineral and precious metals properties and currently owns and operates the Springpole Gold Project in the Red Lake Mining District of Ontario, Canada and its Cordero Gallium Project in Humboldt County, Nevada, U.S.A. Additional information can be found on the Company's website: www.goldcanyon.ca.

Robert Carrington, Chief Executive Officer & Director

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Cautionary Note to United States Investors Concerning Forward Looking Statements - The future conduct of the Company's business and the feasibility of its mineral exploration properties are dependent upon a number of factors, and there can be no assurance that the Company will be able to conduct its operations as contemplated. Certain statements contained in this release using the terms "may", "expects to", "projects", "estimates", "plans", and other terms denoting future possibilities, are forward-looking statements in accordance with the Private Securities Litigation Reform Act of 1995. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks that are beyond our ability to predict or control and which may cause actual results to differ materially from the projections or estimates contained herein. The risks include, but are not limited to, the risks described in the above press release; those risks set out in the company's disclosure documents and its annual, quarterly and current reports; and the other risks associated with start-up mineral exploration operations with insufficient liquidity, and no historical profitability.

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

Contact Information

  • Gold Canyon Resources Inc.
    Ron Schmitz
    Director
    (604) 682-3234
    (604) 682-0537 (FAX)
    or
    Gold Canyon Resources Inc.
    Ken Faulkner
    Investor Communications, Corporate Development
    (250) 862-0724
    www.goldcanyon.ca