Cadillac Mining Corporation

August 22, 2006 12:35 ET

Progress Report: Discovery of VMS Potential on Cadillac West Project

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 22, 2006) - Cadillac Mining Corporation (TSX VENTURE:CQX) wishes to announce the discovery of a stratiform and stratabound zone of mineralization on its Cadillac West project located near the city of Rouyn-Noranda in northwestern Quebec.

The discovery was made in DDH CM06-10, one of a series of holes designed to test a 24 km section of the Cadillac Break for gold and base metals. Mineralization consists of strongly pyritic sericite schists, interbedded graphitic sediments and zones of semi-massive pyrite associated with narrow cherty beds. (Photos are displayed on the Company's website). The zone was intersected over a core length of 300m, extending from 970m to 1270m, at which depth the hole was abandoned in bad ground. Preliminary samples, taken at random in lengths of 1.0 to 1.5m between 1228m and 1267m depth, yielded elevated values in copper, nickel and zinc, as tabulated below. Complete analytical results will be available by mid-September.

The zone was intersected at a shallow angle to strata and was not completely transected. Consequently, no reliable estimate of true thickness can be made. However, this horizon signals a substantial potential for volcanogenic massive sulphide (VMS) mineralization on strike from this intersection.

Sample # Au (ppb) Cu (ppm) Ni (ppm) Zn (ppm)
58216 5 119 853 342
58219 104 342 500 1537
58220 132 345 220 2918
58221 17 142 1086 325
58223 49 831 1096 1310
58235 61 886 1991 1246
58236 123 522 879 4486
58237 85 713 1608 1545
58246 65 527 1598 2507

As this discovery is covered by about 700m of Cobalt sediments and the horizon does not outcrop, geophysical methods will be employed to determine the strength and orientation of the structure on strike and generate targets for subsequent drilling.

The Company has completed three additional holes to test coincident magnetic-geochemical targets on the 'Break', and three other priority targets are currently being drilled. Two of the completed holes did not intersect significant gold values, but did provide geological information essential to the program. The third, DDH CM06-01, was drilled to test a corridor of strong gold mineralization related to the Francoeur and Lac Fortune deposits (as reported on August 2, 2006). This hole was lost in bad ground where it intersected the principal trace of the Break at a depth of 1652m. However, the final 80cm returned 3.15g/t gold. A follow-up drill hole, CM06-17, was collared August 14th to test this zone up-dip.

Five additional exploration holes were completed to test varied targets on unexplored and under-explored sectors of the Company's holdings. Preliminary results do not indicate significant gold mineralization, but much of the analytical data has not yet been received.

To date, about 6700m of drilling has been completed in 14 drill holes, the first 7 of which were completed on the Richmont Option as previously reported.

Management is encouraged by results received to date. The geologic environment is more complex than previously thought, but shows potential for both VMS base metal and gold deposits within and associated with the Break. The Company is moving ahead with two diamond drills to test priority targets in an orderly program that maximizes available resources. It should be noted that the bulk of drilling along the Cadillac corridor is focused on blind anomalies concealed by up to 700m of cover. None of these anomalous zones have been tested in the past.

The Cadillac West drilling program is under the direct supervision of Andre J. Audet, P.Eng., Vice-President, Exploration, and a Qualified Person under NI 43-101. The BQ core is sawn, and half-core samples are analyzed by standard fire assay with atomic absorption or gravimetric finish at Laboratoire Expert Inc. of Rouyn-Noranda. Standard quality control procedures are being followed and duplicate check assays are performed on all samples reporting greater than 1 g Au/t. As a further check, and to glean the maximum information from the program, full-scan ICP is being completed on all samples by Activation Laboratories of Toronto.

Statements contained in this release that are not historical facts may be "forward-looking statements". Such statements are subject to risks and uncertainties and other factors which may cause actual developments or results or level of activity or performance to vary materially from those projected by Management.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release, which has been prepared by Management.

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