Vangold Resources Ltd.

Vangold Resources Ltd.

January 17, 2006 13:41 ET

Killam North Production Reaches 228 bopd to Vangold's Interest-Drilling Continues

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 17, 2006) - Vangold Resources Ltd. ("Vangold") (TSX VENTURE:VAN) reports that Culane Energy Corp. ("Culane"), the operator of the Killam North Project, has announced production rates of the first three wells of a sixteen well program. Culane commenced horizontal drilling operations at the Killam North property on Oct. 27, 2005. Drilling of four new multi-leg horizontal wells is now complete and the drilling of a fifth multi-leg well is presently underway. Vangold holds a 26.25% working interest in this field.

The first well, a double-leg horizontal, was placed on production Nov. 20, 2005, and is currently producing 270 barrels of oil per day with a 2-per-cent water cut. The second well, a triple-leg horizontal, was placed on production Dec. 15, 2005, and is currently producing 275 barrels of oil per day with a 2-per-cent water cut. The third well, a triple-leg horizontal, was placed on production Jan. 11, 2006, and is currently producing 315 barrels of oil per day with a 15-per-cent water cut. This well has yet to stabilize and it is still recovering load water from the drilling operation. The fourth well, a triple-leg horizontal, has been drilled and is currently being completed for production. The fifth well, a double-leg horizontal, is currently drilling and is expected to be on production by early February.

On Nov. 15, 2005, Culane drilled and cased one vertical test well at Killam North and plans to drill another vertical test well in late January to further delineate the pool. Pipeline-grade crude oil is currently being trucked from Killam North to market. In August of 2005, the Alberta Energy Utilities Board granted the Killam well a new oil pool status - Mannville F2F pool. The development of the Killam North field is based upon a discovery well which was drilled in December 2004. Since then, the discovery well has been producing 100 barrels per day.

Vangold Resources Ltd. is a unique natural resource company with a portfolio of 22 diverse advanced stage projects including revenue generating oil and gas projects. In the gold sector, drilling will commence early 2006 at Mt. Penck (Papua New Guinea) which has been compared to Nevada's Round Mountain Mine (9 million ounces). Vangold also has licenses covering approximately in prospective copper/cobalt, gold and nickel belts in Uganda. Vangold will be announcing new developments in Uganda shortly.

Vangold's Alberta projects also include the Sarcee Gas Discovery, (the Sarcee 12-13-23-4W5M well is estimated to be 20 to 30 BCF (Sproule Associates Ltd.). Another of Vangold's Alberta gas projects, scheduled to be drilled mid-2006, is located in the Rocky Mountain House Deep Gas Basin which is close to Shell's trillion cubic feet pool.

On Behalf of the Board of


Dal Brynelsen, President and CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.

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