Nevada Star Resource Corp.
OTC Bulletin Board : NVSRF
TSX VENTURE : NEV

Nevada Star Resource Corp.

October 26, 2006 13:00 ET

Nevada Star Resource Corp. Receives US $3.3 Million From Sale of Gold Hill Royalty

SEATTLE, WASHINGTON--(CCNMatthews - Oct. 26, 2006) - Nevada Star Resource Corp. (TSX VENTURE:NEV)(OTCBB:NVSRF) - Robert Angrisano, President and CEO of Nevada Star Resource Corp. ("Nevada Star") is pleased to announce that it has entered into an agreement to sell its Gold Hill sliding-scale net smelter return ("NSR") royalty to Royal Gold, Inc. (NASDAQ:RGLD)(TSX:RGL) for US $3.7 million, less previously paid royalties.

The Gold Hill deposit, located just north of the Round Mountain gold mine in Nye County, Nevada, is controlled by Round Mountain Gold Corporation ("RMGC"), a joint venture between Kinross Gold, the operator, and Barrick Gold Corporation ("Barrick") as a result of an Assignment and Mining Lease with Option to Purchase agreement between RMGC and Nevada Star dated May 2, 2000. The closing of the acquisition is subject to customary conditions and is anticipated to occur in November 2006. To date, Nevada Star has been paid US $375,000 in advanced royalties making the net proceed from this transaction US $3,325,000 to Nevada Star.

The proceeds from this transaction will help fund further exploration on the new property portfolio resulting from the existing Nevada Star properties and the previously announced acquisition of Pure Nickel Inc. ("Pure Nickel") dated October 16, 2006 to acquire 100% of the shares of Pure Nickel. This transaction, which has been negotiated at arm's length, will constitute a reverse takeover ("RTO") of Nevada Star by Pure Nickel pursuant to TSX Venture Exchange policies.

The combined company will have interests in the following properties:

MAN Alaska Property, Alaska - Nevada Star's 100% owned MAN Alaska project consists of a 300,000 acre (300 square mile) nickel-copper-cobalt-PGE "drill ready" project. Exploration to-date indicates that the MAN Alaska property has the potential for the discovery of high-quality deposits of nickel, copper, gold, cobalt, and PGMs, occurring in a geologic environment similar to that which hosts the Noril'sk deposits in Russia. Grab samples from the MAN Alaska property contain up to 15.4% nickel, 16% copper, and 0.21 oz/ton gold, 2.6 oz/ton silver and high levels of PGMs.

The Axis Lake Project, Saskatchewan - Pure Nickel can acquire up to an undivided 80% working interest in the Axis Lake Nickel-Copper project ("Axis Project") from Red Dragon Resources Corp. (TSX VENTURE:DRA). The Axis Project lies directly north of the Athabascan Basin in the Fond-du-Lac region of Northern Saskatchewan, Canada. The Axis Project consists of permits totaling approximately 95,000 acres of highly prospective ground. This area is characterized by a large number of nickel-copper sulphide occurrences and confirmed by ground geochemical work and airborne geophysical survey. The phase one 2006 drilling program intersected mineralization in 7 of the 7 drill holes completed including one intersection of a half meter length grading 1.86% nickel. Further drilling is planned for 2006. Pure Nickel has commissioned a National Instrument 43-101 technical report on a previously reported 4 million tons inferred mineral resource at Axis Lake grading 0.66% nickel and 0.35% copper. Readers are cautioned that while this historical resource estimate is considered to be reliable and relevant, it does not comply with the guidelines of National Instrument 43-101, it has not been verified by Nevada Star's Qualified Person and should not be relied upon.

Fox River Project, Manitoba - Pure Nickel also has an agreement with Xstrata Plc. to earn a 50% interest in the Manitoba Fox River Project. Fox River occurs in the Circum Superior Belt and is one of the largest ultramafic complexes in Canada. The Fox River project area is over 100 kilometers in length and is flanked to the west by the Thompson Nickel Belt and to the east by the Raglan Nickel Belt. The geological attributes at Fox River are identical but on a larger scale than found at Raglan. Since acquiring the operation from Xstrata, Pure Nickel has conducted ground geochemical sampling and is awaiting surface assays to add a level of precision to a planned winter drill program at Fox River.

Nevada Star Resource Corp. is a mineral exploration company that uses advanced technology to search for metals that are in high demand world-wide. In addition to the MAN Alaska property, Nevada Star has a copper property in Milford, Utah. The Utah property, scheduled to go into production, is under a Purchase Option agreement to Western Utah Copper Company and Nevada Star holds a sliding-scale NSR from production. For more information, including maps, photos and project descriptions, visit www.nevadastar.com.

Completion of the acquisition of Pure Nickel is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the security of Nevada Star should be considered highly speculative. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

This release was prepared by management of Nevada Star Resource Corp. who take full responsibility for its contents.

Neither the TSX Venture Exchange nor the NASD OTC Bulletin Board have reviewed or accept responsibility for the adequacy of this news release.

Contact Information

  • Nevada Star Resource Corp.
    Robert Angrisano
    President and CEO
    (425) 467-1836
    (425) 222-0894 (FAX)
    Email: rangrisano@nevadastar.com