LEXAM EXPLORATIONS INC.
TSX VENTURE : LEX.H
NEX BOARD : LEX.H

LEXAM EXPLORATIONS INC.

May 29, 2006 09:00 ET

Lexam Reports First Quarter 2006 Results and Update of Baca Project

TORONTO, ONTARIO--(CCNMatthews - May 29, 2006) -

(All amounts in this news release are expressed in Canadian dollars.)

LEXAM EXPLORATIONS INC. (TSX VENTURE:LEX.H) (NEX BOARD:LEX.H) is pleased to announce financial results for the first quarter 2006 and an update of the oil and gas Baca Project. The first quarter report including management's discussion and analysis, financial statements and notes can be found on our Company's website at www.lexamexplorations.com and on SEDAR at www.sedar.com. During the quarter, the Company reported a loss of $135,830 or nil per share as the Company has continued to advance the 100,000 acre oil and gas Baca Project, situated in the San Luis Valley of south-central Colorado.

BACA OIL & GAS PROJECT - COLORADO

With increased working capital available, Lexam was able to fully integrate and interpret the 2-D seismic data that was supplied by its former joint venture partner Petro-Hunt LLC of Dallas, Texas. Lexam had undertaken a preliminary analysis of the seismic data during the fourth quarter of 2005 as part of the technical report prepared by Watts, Griffis and McOuat. The interpretation of the integrated data has shown that the gas targets on the property appear to be closer to surface than previously believed. The analysis also outlined what may be a thicker section of Cretaceous age rock, which is the host for prolific producers of oil and gas in the Rocky Mountain region, where Lexam proposes to drill two exploratory wells.

Lexam recently hired an engineering firm to complete a well design study and accompanying AFE which will outline the detailed costs associated with exploratory drilling on the Baca Project. The results of the study have been received by Lexam and have in turn been submitted to Lexam's 25% partner on the Baca Project, ConocoPhillips, for their review.

In addition, Lexam has begun to prepare the required Plan of Operations and permitting applications for two possible exploratory wells on the Baca property.

FINANCIAL HIGHLIGHTS

Lexam recorded a loss of $135,830 during the three months ended March 31, 2006, compared to a loss of $20,693 during the corresponding period in 2005. The loss in the first quarter of 2006 can largely be attributed to expenditures for administrative costs of $102,476, compared to $19,726 during the same period in 2005 and exploration costs of $33,512 compared to $1,009 for the same period in 2005.



Three months ended
March 31,
2006 2005
----------- ----------
Loss $ (135,830) $ (20,693)
Loss per share $ - $ -


Administrative expenses have increased as Goldcorp is no longer providing administrative services to the Company and as a result of legal and other expenditures on properties unrelated to the Baca Project. As described in the notes to the financial statements, Lexam also entered into a new management services agreement during the quarter.

Exploration expenses incurred relate primarily the preparation of a NI 51-101 report by Watts, Griffis and McOuat Limited ("WGM") on the Baca property, as well as maintaining certain mining claims unrelated to the Baca Project.

Lexam has cash on hand of $20,057 compared to $35,054 at December 31, 2005. For further information, refer to the full first quarter report as described above.

SUBSEQUENT EVENTS

Subsequent to the end of the quarter, 760,000 stock options at an exercise price of $0.15 per share were exercised providing proceeds of $114,000 to the Company. 750,000 of these options were exercised, but not sold, by Robert R. McEwen, Chairman and CEO of the Company. Rob McEwen now owns 19,851,752 common shares of Lexam, which represents 50.4% of the outstanding shares on an undiluted basis.

ABOUT LEXAM EXPLORATIONS

Lexam Explorations is a public company whose common shares trade on the TSX Venture Exchange NEX Board under the symbol LEX.H. There are currently 39.4 million common shares outstanding. Lexam has various exploration interests in North America with the principal focus of the company being the Baca Oil & Gas Project situated in the San Luis Valley of south-central Colorado

Some of the statements contained in this release are "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: ability to raise financing for further exploration and development activities; risks relating to estimates of reserves, deposits and production costs; extraction and development risks; the risk of commodity price fluctuations; political, regulatory and environmental risks; and other risks and uncertainties in the reports and disclosure documents filed by Lexam from time-to-time with Canadian securities regulatory authorities. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise



Corporate Office: Transfer Agent and Registrar:

99 George St. Computershare Investor Services
3rd Floor 100 University Avenue, 9 th Floor
Toronto, Ontario Toronto, Ontario
Canada M5A 2N4 Canada M5J 2Y1
Telephone: (647) 258-0395 Telephone: (800) 564-6253
Facsimile: (647) 258-0408 Facsimile: (416) 981-9800


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Email:caregistryinfo@computershare.com

LEXAM EXPLORATIONS INC.
CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets
(in Canadian dollars)
As at
-----------------------------
March 31, December 31,
2006 2005
------------- --------------
Assets (unaudited)

Current assets
Cash and short-term investments $ 20,057 $ 35,084
Accounts receivable 5,525 2,409
Reclamation deposit 29,075 29,075
Prepaid expenses 15,806 1,250
------------- --------------
$ 70,463 $ 67,818
------------- --------------
------------- --------------

Liabilities and Shareholders'
Equity (Deficit)

Current liabilities
Accounts payable and accrued
liabilities $ 166,161 $ 148,384
Due to related party 501,279 458,581
------------- --------------
667,440 606,965

Shareholders' equity (deficit)
Capital stock 16,480,075 16,402,075
Deficit (17,077,052) (16,941,222)
------------- --------------
(596,977) (539,147)
------------- --------------

$ 70,463 $ 67,818
------------- --------------
------------- --------------

See financial statements as filed on SEDAR.


Consolidated Statements of Operations and
Deficit (unaudited)
(in Canadian dollars)

Three months ended
March 31,
---------------------------
2006 2005
------------- ------------

Revenues
Interest income $ 158 $ 42

Expenses
Administrative 102,476 19,726
Exploration 33,512 1,009
------------- ------------
135,988 20,735
------------- ------------

Loss for the period (135,830) (20,693)
------------- ------------

Deficit at beginning of period (16,941,222) (16,845,677)
------------- ------------

Deficit at end of period $(17,077,052) $(16,866,370)
------------- ------------
------------- ------------

Loss per share (basic and diluted) $ - $ -
------------- ------------
------------- ------------

Weighted average number of shares
outstanding (000's) 38,537 38,107
------------- ------------
------------- ------------

See financial statements as filed on SEDAR.


Consolidated Statements of Cash Flows (unaudited)
(in Canadian dollars)

Three months ended
March 31,
2006 2005
----------- ----------

Cash provided by (used in)

Operating activities
Loss for the period $ (135,830) $ (20,693)
Items not affecting cash
Change in non-cash operating working
capital 42,803 20,654
----------- ----------
(93,027) (39)
----------- ----------

Financing activities
Common shares issued on exercise of stock
options 78,000 -
----------- ----------
78,000 -
----------- ----------

Decrease in cash (15,027) (39)

Cash and short-term investments at
beginning of period 35,084 11,932
----------- ----------

Cash and short-term investments at end of
period $ 20,057 $ 11,893
----------- ----------
----------- ----------

See financial statements as filed on SEDAR.


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