Lithic Resources Ltd.
TSX VENTURE : LTH

Lithic Resources Ltd.

June 01, 2005 09:01 ET

Lithic Purchases Crypto Zinc Project in Utah

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 1, 2005) - Lithic Resources Ltd. (TSX VENTURE:LTH) (the "Company") is pleased to announce that it has reached an agreement with EuroZinc Mining Corporation (TSX:EZM) whereby it will acquire from EuroZinc a 100% interest in the Crypto zinc project located in Utah about 100 miles southwest of Salt Lake City. The property is easily accessible by road.

The Crypto deposit is a carbonate hosted skarn/manto deposit located in the Fish Springs Mining District. From the late 19th century through the mid-1970's, the district recorded small scale production of high grade silver-lead ore from veins and oxidized replacement deposits. The Crypto zinc deposit was discovered and explored by Utah International from 1961-1985 and then further drilled by Cyprus Minerals in 1990-1991. In all, 66 holes totalling about 86,200 feet have been drilled on the property.

In 1993, Cyprus used the cross-sectional method to estimate a "geological in-situ reserve" of approximately 6 million tons of sulphide mineralization grading 8.68% zinc and approximately 3.1 million tons of oxide mineralization grading 7% zinc. This historical estimate was made prior to the implementation of NI43-101 standards, does not conform to those standards and should not be relied on as being indicative of a resource or a reserve with demonstrated economic viability. However, Cyprus' estimate was independently reviewed in 1993 by Roscoe Postle Associates Inc. ("RP") who found their methodology to be consistent with industry practice at the time. Based both on RP's independent review and Cyprus' status as a senior mining company, the Cyprus estimate is believed by the Company to be relevant and a reliable indication of the mineral potential of the property.

RP also stated that since a number of the zones were open along strike and/or down dip, there is good potential to expand mineralization by in-fill and step-out diamond drilling. They found that Cyprus' estimate did not include several deep intercepts in three of the last four holes drilled on the property, including 7.54% zinc over 100 feet, 4.48% zinc over 54 feet, 14.32% zinc over 10 feet and 3.53% zinc over 23 feet. There has been no additional drilling or other substantive physical work on the property since the Cyprus estimate which would be relevant to the historical resource estimate.

The Company believes the property has excellent potential for economic, near surface oxide zinc mineralization amenable to open pit mining as well as for deeper sulphide zinc mineralization more suited to underground mining. Various drill intercepts of higher grade copper, molybdenum, silver and lead mineralization as well as the old high grade silver mines suggest interesting potential for significant zones enriched in these other metals. The Company plans detailed 3D modelling of the geology and mineralization of the Crypto deposit along with detailed magnetic and IP surveys of the property. This will lead to drilling to both confirm and expand known mineralization as well as to search for new zones.

Utah has a long history of mining. In 2003, it ranked ninth in the USA for non-fuel mineral production, of which base and precious metals accounted for almost US$1.3 billion in value. Several mining projects are in development, including Constellation Copper's Lisbon Valley oxide copper deposit and an expansion of Kennecott's world class Bingham Canyon copper mine. The improved metals market in the last couple of years has also led to a substantial increase in mineral exploration in the state, with uranium, base metals, gold and iron being the main commodities of interest.

Crypto's US location is particularly advantageous in that it will give the project full exposure to US dollar denominated commodity prices. With the decline of the US dollar and strengthening foreign currencies, metal production in many other countries has seen little or no benefit from rising metals prices.

The Crypto deposit is held by EuroZinc's wholly owned subsidiary, N.P.R. (US), Inc. The agreement with EuroZinc provides that Lithic purchase NPR in return for the issuance of 1.5 million shares to EuroZinc along with a cash payment of $25,000. A 1.5% NSR is payable to Vaaldiam Resources Ltd., which is also entitled to a $1 million cash payment upon completion of the financing necessary to bring the deposit into production. The agreement is subject to approval by the TSX Venture Exchange.

LITHIC RESOURCES LTD.

C.F. Staargaard, President and CEO

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

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