Southwestern Resources Corp.
TSX : SWG

Southwestern Resources Corp.

August 09, 2006 17:00 ET

Southwestern Resources Quarterly Project Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 9, 2006) - Southwestern Resources Corp. (TSX:SWG) ("the Company") is pleased to provide a quarterly update on its exploration projects in China and Peru as of the end of June 2006.

Boka Gold Project, China

In the second quarter, three drill rigs were utilized for geotechnical investigations and seven continued resource definition drilling at Boka 1 (which has now been completed) and Boka 7. The resource estimate at Boka 1 is expected to be completed by the end of the third quarter of 2006. A total of 23 resource definition holes and seven geotechnical holes were completed. The geotechnical holes were designed to test rock quality in the proposed tailings area and potential open pit area. Other work in the quarter also included follow-up sampling in areas of gold in soil anomalies, especially within the Boka 8 area.

The pre-feasibility study at Boka 1 is focusing on geological modelling and resource estimation, mining and metallurgy, environmental and social impact studies. The pre-feasibility study is being carried out under the direction of Ausenco Limited and is anticipated to be completed by the second quarter of 2007.

Follow-up work in areas of significant gold in soil anomalies resulted in the identification of new mineralized areas at Boka 8 and in the Xinchang area. At Boka 8, gold mineralization was sampled within a shear zone extending for 800 metres and varying in width from 10 metres to 50 metres. Assay results from one metre and two metre rock chips returned values ranging from 0.12 to 5.38 grams per tonne gold. In the Xinchang area, located three kilometres south of Boka 7, copper-gold mineralization was discovered in carbonaceous slate and dolomite. A 15.4 metre channel sample across this zone averaged 5.4 grams per tonne gold and 1.4% copper. Programs are in place to conduct extensive trenching at both Boka 8 and Xinchang to determine the significance of this mineralization.

Liam Gold-Silver Project, Peru

During the second quarter, exploration focused on the Careli and Huacullo zones where first phase drilling programs have commenced. This drilling program is anticipated to be completed during the next quarter. Drilling programs are also planned at Astana (second phase) and Astana west (first phase).

As part of the regional exploration program, several new areas of mineralization were identified and evaluated. At Gran Leon, located 30 kilometres northeast of Cerro Crespo, an extensive area of gold-rich veins in granite has been identified. Over 50 veins were sampled, the largest of which is two metres wide and extends for 2,500 metres. Rock chip sampling (two metre rock chips) along this vein returned gold values ranging from 5.9 to 74.8 grams per tonne. Another new area discovered is the Numa West silver zone occurring as stockworks, breccias and replacements in limestone. The Numa West zone extends for 2,500 metres and varies in width from five to 50 metres. Rock chip sample results in the zone range from 14.5 to 1,865 grams per tonne silver, with associated lead and zinc. Both Gran Leon and Numa West will undergo major trenching and geophysical programs to advance them to the drilling stage.

Results were received from the first phase drilling program at Farallon/Astana. In general, drilling results were disappointing, with the best intersection of 14 metres assaying 1.1 grams per tonne gold and 215.27 grams per tonne silver. Several holes at Farallon contained thick intersections of anomalous gold, but values present in the surface rocks were not repeated in the drilling. The Joint Venture partners are reviewing the data from Farallon to determine whether further drilling is warranted.

Accha-Yanque Zinc Project, Peru

The Accha-Yanque Project is presently at the pre-feasibility stage. A major drilling program has been planned to infill and expand resources at the Accha and Yanque zones. Preliminary drilling is planned for the Puyani prospect later this year. An access agreement with the local community was completed for Accha and the issuance of the drill permit is expected in the near future. Negotiations have commenced with the local community at Yanque, and once an agreement is reached, an application for drilling will be submitted to the Ministry of Mines.

Antay Project, Peru

Anglo has completed surface work, including induced polarization geophysics on the Ccora Sur Porphyry zone. This has confirmed the presence of a large porphyry system extending for 2.5 kilometres by 1.2 kilometres. Approximately 500 metres of drilling have been completed at Ccora Sur, with results pending.

Sayta is the more significant target in the north of the concessions, and will be tested with sampling, geophysics and drilling once an agreement with the local communities has been reached and a drilling permit issued.

About Southwestern

Southwestern Resources is a Vancouver-based mineral exploration company engaged in the identification, acquisition, evaluation and exploration of gold, silver and base metals mineral properties in China and Peru. At the end of June 2006, the Company had working capital of $52.3 million, total assets of over $100 million, and no long-term debt. Southwestern Resources is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.

In June 2006, Southwestern announced the launch of a new zinc company to maximize the value of its zinc assets including the Accha-Yanque, Minascassa and Sayani properties in Peru. The zinc assets have been transferred to a wholly owned subsidiary, which proposes to file a preliminary prospectus for an initial public offering when appropriate.

In conjunction with this quarterly project update, the Company plans to file a quarterly Management's Discussion and Analysis and Financial Statements on the SEDAR website at www.sedar.com. Additional information is provided in the Company's audited consolidated financial statements for the year ended December 31, 2005 and the Company's Annual Information Form and Information Circular, also at www.sedar.com.

Quality Control - China

Southwestern has implemented a quality control program to ensure best practice in lithogeochemical sampling and analysis of soil, rock chips, trench, tunnel and drill core samples.

All drill core samples (approximately two metre, half-core composites) are shipped directly in security sealed bags to the SGS-China Laboratories preparation facility in Kunming. The entire composite is prepped to -10 mesh and a 500 gram split is sent to the SGS-CSTC Standards Technical Services Ltd. facility in Tianjan for conventional fire assay using a 50 gram charge. Other elements are analyzed using ICP methods at the SGS Canada Inc. facilities in Mississauga, Ontario.

Exploration samples (rock chip, soil, trench and, tunnel) are shipped directly in security sealed bags to the assay laboratory of the Northwest Non-Ferrous Geology Research Institute (ISO 9002) located in Xian, Shanxi Province, China and are digested in an aqua regia acid digestion and analyzed for gold and various other elements using atomic absorption.

The Company submits its own standards as a measure of the accuracy of the analysis. Field duplicates and pulp duplicates are routinely analyzed for precision. Routine assay checks from drill core are made at ALS Chemex in Vancouver, B.C. Sample results are received in batches and not as assays for an entire drill hole.

The exploration program is being carried out by John Zhang, Project Manager for Southwestern in China. John Paterson, President, Southwestern Resources Corp. and a member of AUSIMM is the Project's qualified person as defined under National Instrument 43-101. Paul Schmidt, P. Eng, a highly experienced metallurgical and project manager, has joined the Southwestern team and is responsible for overseeing the preparation of the Boka pre-feasibility study.

Quality Control - Peru

Southwestern has implemented a quality control program, under the supervision of L.D.S. Winter, P.Geo. (independent Qualified Person), to ensure best practice in lithogeochemical sampling and analysis of the trench samples. Samples are crushed at the ALS Chemex preparation lab in Lima, Peru to minus 80 mesh and pulverized to greater than 85% passing 200 mesh.

The pulps are sent to ALS Chemex in Vancouver, BC. ALS Chemex is an ISO 9002 registered laboratory and is preparing for ISO 17025 certification. Samples are digested in an aqua regia acid digestion and are analyzed for 34 elements by ICP-AES. Over-limit gold and silver analyses are further analyzed by fire assay-atomic absorption finish and gravimetric methods respectively.

Forward-looking Statement

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.


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