Pencari Mining Corporation

Pencari Mining Corporation

December 06, 2006 15:53 ET

Pencari Mining Corporation: Options Significant Land Position in Madagascar

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 6, 2006) - Pencari Mining Corporation ("Pencari") (TSX VENTURE:PMC) is pleased to announce it has expanded its option with Itea Minerals Inc. ("Itea") to include multiple exploration properties totalling 9,200 square km in central, western, and southern Madagascar. Pencari and Itea have reached an agreement whereby Pencari has exclusive rights to all exploration properties acquired by Itea in Madagascar. The minimum property expenditure of $250,000 disclosed in Pencari's May 24, 2006 press release has been extended to June 30 2008, with additional expenditures of $500,000 required in each of the subsequent 3 years. In addition, the last cash payment of $250,000 has been extended by one year to June 30, 2011. All other terms remain the same.

Pencari now holds mineral permits that are prospective for gold, uranium and diamonds covering a total of 9,200 square kilometres in central, western, and southern Madagascar. Pencari continues to look for additional opportunities. See below list for the properties currently held.

P49 Gold Property

The P49 property covers a contiguous surface area of 462.5 square kilometres or approximately 43,000 hectares and is situated in the southeastern Antananarivo Province.

The P49 Property is well-located within an historic gold mining region of Madagascar. Numerous gold prospects and old deposits are known in the immediate vicinity as well as within the property. Notable amongst these is Soavinarivo situated in the southwestern portion of the P49 Property. Soavinarivo was mined by the French in the early 1900's and again during the 1930's. Also during the early 1900's and 1930's the French mined other gold occurrences in the region, including the Antananarivokely, Ambondra, and Sarobaratra deposits. All were mined at surface only, and it is highly unlikely that any of these gold occurrences have been drill-tested or subjected to modern geochemical and geophysical techniques.

Tsididdy Gold Property

The Tsididdy Gold Property is located 180 kilometres west of the capital Antananarivo. Covering 2,190 square kilometres Tsididdy encompasses several small orpailleur-type gold mining operations currently in operation, as well as older, inactive surficial gold workings. A compilation of these historic and current operations is being undertaken.

The exploration targets at Tsididdy are bedrock-hosted, high-grade, structurally-controlled gold deposits. The southern portion of the Tsididdy Property is some 20 kilometres north of Pan African Mining's Mountain of Gold Property. Pan African recently (Nov. 6, 2006) announced core-drilling results from Mountain of Gold, including 17.2 metres grading 4.04 g/t Au, which included a 5.5 metre interval grading 50.81 g/t Au.

Uranium Property: A prospective uranium property covering 637.5 square kilometres. It covers part of a Jurassic-Cretaceous aged sedimentary basin in western Madagascar in the province of Toliary. This sedimentary basin is over 600 kilometres long and is considered to be prospective for economic uranium deposits. Much of the length of this basin has been blanketed by exploration permits. The road-accessible town of Miandrivazo is located just east of the property.

Diamond Property: 3 large contiguous permits for diamond exploration, totalling 5,869 square kilometres. These are situated in southern Madagascar in the provinces of Toliary and Fianarantsoa. The diamond potential of southern Madagascar was brought to light in 2003 with the discovery of diamonds in old gravel deposits, then by the discovery of diamond indicator minerals by the BRGM in an area southeast of Fianarantsoa, southeastern Madagascar. Subsequently diamond exploration intensified with large land positions being taken by two international diamond exploration companies.

Madagascar is emerging as a region with good diamond exploration potential. The island has a favourable thick crust and is thought to be a fragment of the Gondwanaland super-continent. Paleo-reconstructions of Gondwanaland suggest Madagascar was once attached to, and between Tanzania (East Africa) and southern India. Both of the latter regions host kimberlites and produce diamonds. In 2005 the first two kimberlite dykes to be discovered in Madagascar were announced by Majescor Inc.

Pencari now controls 5 extensive properties totalling some 9,200 square kilometres in Madagascar. This includes the Itea Property site of the historic Itea gold deposit. Pencari plans to begin exploring Itea in early 2007. Information for this new release was provided by John D. Charlton, P. Geo., a qualified person under NI 43-101.

"Madagascar is an emerging country for gold, uranium and diamond exploration. Our current land position in Madagascar now makes us a significant player in a very geologically prospective area of the world. In addition we are continuing to evaluate other prospects."

Pencari is a gold exploration and development company publicly traded on the TSX Venture Exchange.


Adrian Rollke, President, CEO & Director

This news release may contain forward looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.

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

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