SOURCE: Tara Gold Resources Corp.

October 25, 2006 09:39 ET

Progress Report From Lluvia de Oro Heap Leach Gold Mine

CHICAGO, IL -- (MARKET WIRE) -- October 25, 2006 -- Tara Gold Resources Corp. (PINKSHEETS: TRGD) (FRANKFURT: T8N) is pleased to announce the results of a comprehensive program of sampling of the leach pad materials completed by Columbia Metals Corporation at the Lluvia de Oro mine located in Sonora, Mexico. Tara Gold Resources signed an agreement with Columbia Metals Corporation, whereby Columbia can acquire 100% interest, subject to a 20% Net Cash Flow interest, by making payments totaling of $4,337,500, and issuing 1,000,000 shares to Tara Gold.

According to the production records of Santa Cruz Gold Inc., 2,921,025 tonnes of material were placed on the heap leach pad at Lluvia de Oro during the period of mining from 1996-98. An independent calculation of the volume and tonnage of material placed on the leach pad, conducted by R. Blakestad, QP for the Company, correlates well with the reported tonnage. This calculation uses a specific gravity ("s.g.") of 2.486 g/cm3 (determined by 25 s.g. measurements) and an average interstitial space between fragments of 18%. Further, more than two million tonnes of these materials were run-of-mine ("ROM"). The ROM material bypassed the crusher circuit and resulted in low gold recoveries being realized by the operator. Of 72,539 troy ounces reported to have been placed on the leach pad, 40,909 ounces were recovered during mining operations and approximately 1,368 ounces were recovered from post-mining operations, leaving 30,262 ounces contained in the pad materials. A resource analysis, prepared in conjunction with the technical report on the property, confirms these and will be reported as inferred resources. The Company is preparing a plan to recover the gold on the leach pads under a "crush and re-leach" operating scenario, as a transition into full-scale production at the Lluvia de Oro mine site.

A comprehensive sampling of the pad materials consisting of chip-channel sampling of the surface boulders and backhoe pit sampling of the upper lifts, to a depth of seven metres, has been completed. Boulders were sampled over three metre intervals along the edges of the leach pad and along the edges of the various lifts. In addition, forty-nine pits were excavated at 50 metre intervals over the surface of the pad. From these pits, composite samples of cobbles and boulders and composite samples of material less than 2.5 cm. (fines) were obtained.

Materials from the pits and boulder chip-channel samples were sent to ALS-Chemex laboratory for analysis. The following table lists the materials sent for analysis and the average grade of gold contained in the sample medium:

           Leach Pad Sample Materials
                        Samples   Gold g/t       Gold g/t
                                  Un-cut        Cut(1) @ 4g/t Au
Boulder Samples           168      0.472                  0.375
Pit rocks 0-2 metres       26      0.495
Pit rocks 2-4 metres       26      0.372
Pit rocks 4-7 metres       26      0.400
Composite 0-7 metres       23      0.374
Composite fines            26      0.329
Weighted Ave. Grade:               0.438        Un-cut    0.383 Cut
        Total:            295 samples
(1) Gold values greater than 4 g/t Au were cut to 4.0 g/T Au
Assays on the pad materials were performed by ALS Chemex of Vancouver, BC. Fire assays were conducted on a 50 g sample of pulverized material taken from a split of the original samples. The ALS Chemex laboratories in North America are registered to ISO 9001:2000 for the "provision of assay and geochemical analytical services" by QMI Quality Registrars. In addition to ISO registration, the Vancouver laboratory of ALS Chemex has received ISO 17025 accreditation from the Standards Council of Canada. All samples submitted to ALS Chemex are subjected to QA/QC analyses using duplicate, blank, and standard analyses which were reviewed by the Company and found to be acceptable.

The weighted average, un-cut grade of gold in the material sampled from 295 samples of the leach pad indicates a gold budget of 0.438 g/t Au in the ROM materials.

Metallurgical analysis of 13 column tests run in 1995 by Kappes Cassiday and Associates of Reno Nevada indicate that up to 81% gold recovery can be realized from in-place materials crushed to 2.5 cm (nominal 1-inch). The Company has submitted a series of bulk samples of the pad material for independent recovery tests and verification. An analysis of the cost for crushing and re-leaching the ROM pad material is underway and estimated recoveries from the metallurgical tests in progress will form the basis for a near-term production scenario for the Lluvia de Oro mine.

In addition to gold, copper occurs in concentrations of approximately 640 ppm. Recovery parameters for copper are under investigation pursuant to a joint gold-copper recovery plan previously announced by the Company (Sept. 6, 2006). To verify the Company's recovery expectations for both gold and copper contained in the leach pad, bulk samples from the 49 pits have been sent to MetCon Research Inc. of Tucson, Arizona. Data from the MetCon test work will be released in a future news release.

The Lluvia de Oro project is a bulk-tonnage gold deposit amenable to open-pit mining techniques. Gold mineralization has been identified by drilling of 295 drill holes along a northeast trending zone that can be traced for more than two kilometres along strike. Two zones of structurally controlled mineralization have been identified along the Lluvia shear zone.

One mineralized zone is near to the surface and constitutes a pre-NI 43-101 resource(2) of 140,472 ounces. This resource was compiled on a 6-metre bench and grade block basis by Santa Cruz Gold in 1998. Mr. Blakestad has reviewed the resource estimate and has determined that it is a reasonably reliable estimate, which is relevant to the project by establishing an approximate magnitude of the gold resource at Lluvia de Oro. Mr. Blakestad cannot verify the estimate because the parameters for the calculation cannot be independently reproduced, and the categories used by Santa Cruz to quantify the resource ("reserves" and "geologic reserves" and "mineable reserves") are not compliant with the CIM Definition Standards as required under NI 43-101. A resource determination for the property is currently under calculation by an independent QP and the results will be incorporated in a formal technical report on the property. The Company is not treating the historical estimate as current mineral resources, and the historical estimate should not be relied upon. Notwithstanding these caveats, if the resource analysis under investigation supports the historical resource estimate, the Company expects that the resource will be sufficient for a mine life of 4 to 5 years at the designed capacity of 25,000 to 30,000 ounces per year, in addition to the leach pad crush and re-leach program. The Company has not completed a positive feasibility study and there is no certainty that the planned operations will be viable. The preliminary assessment is preliminary in nature and should not be relied upon.


A second zone of mineralization has been identified by a number of drill holes that define the top of a deeper zone that lies approximately 20 metres below the near-surface mineralization. Only five drill holes have penetrated entirely through the deeper mineralized envelope, but nine other drill holes terminated in the top portion of the zone. Drilling to date indicates that the deeper zone of mineralization is higher grade than the near-surface zone and that the distribution of mineralization is possibly greater than the near-surface zone. Drill hole intercepts indicate that the deeper zone is more than 544 metres long, 116 metres wide, with an average thickness of 44 metres. The zone is open in lateral dimensions and will be the focus of future exploration for the Company. Santa Cruz defined a geologic resource(2) of 276,813 ounces gold (grading 1.23 g/t gold) for the deep zone. As above, the historical estimate is not to be relied upon, but is believed by Mr. Blakestad to be relevant to the property by establishing a reasonable estimate of mineral resources in the lower zone. A NI 43-101 compliant analysis of the resource is in progress and a current mineral resource estimate is expected by early November.

The Company is proceeding under a plan to crush and re-leach the coarse material placed on the leach pads during 1996-98. At the conclusion of that program, it is expected that most of the near-surface resources(2) previously defined by Santa Cruz will be systematically mined and placed on the pad. The Company believes that no additional exploration will be required to adequately define the resources in the near-surface mineralized zone. Exploration of the lower zone will commence with cash flow from operations, after production from the near-surface mineralization gets underway.

This Press Release has been prepared in part by Rodney Blakestad, J.D., C.P.G., an internal qualified person (QP) as defined by NI 43-101. Mr. Blakestad acts as consulting geologist for the Company's exploration and development efforts in the Lluvia de Oro and adjoining La Jojoba property.

(2) Note -- the use of the terms "reserves" and resources are historical estimates of Santa Cruz Gold Inc. and are pre-NI 43-101. Columbia has not completed the work necessary to verify the classification of "reserves" or resources, therefore, Columbia is not treating them as a NI 43-101 compliant "reserves" or resource verified by a QP and these historical estimates should not be relied upon.

About Tara Gold Resources Corp.

Tara Gold Resources Corp. is a growth-oriented precious metals exploration and development company with existing production plants. It is management's objective to become a significant gold and precious metals producer by re-initiating and increasing production levels at La Currita, Lluvia de Oro and Picacho, and developing the San Miguel, La Millionaria, and Las Minitas projects in Mexico. We continue to acquire other advanced-stage projects and/or producing mines in one of the most prolific precious metal districts in the world. For more information, please visit the Company's web site at:

Cautionary Note: A qualified person as defined under NI 43-101 has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. Columbia and Tara Gold are not treating the historical estimates as current mineral resources or mineral reserves as defined in NI 43-101 and the historical estimate should not be relied upon. Except for the statements of historical fact contained herein, the information presented constitutes forward-looking statements within the meaning of the Securities Act (Ontario). Such forward-looking statements including but are not limited to those with respect to the price of gold, silver, copper or other metals, potential mineralization, reserve and resource determination, exploration results, and future plans and objectives of Columbia/Tara Gold involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Columbia/Tara Gold to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

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