Spirit Exploration, Inc.
PINK SHEETS : SPXP

Spirit Exploration, Inc.

August 16, 2007 09:00 ET

Spirit Exploration, Inc. Begins Production at Muluncay

MACHALA, ECUADOR--(Marketwire - Aug. 16, 2007) - Spirit Exploration, Inc. (PINK SHEETS:SPXP) -

Spirit Exploration, Inc. through its wholly owned subsidiary, ECUADORGOLDCORP S.A., is pleased to announce it has commenced production of gold/silver/copper concentrate at its Muluncay mine site in Portovelo, Ecuador. The company has been working over the last three months with its operator, Minera Del Pacifica SA, to upgrade their mining and milling operation to enhance recovery rates. The initial flotation milling production has begun at 80 tons per day, and should increase over the next four to six months.

Peter Laipnieks, President of Spirit, stated, "This is a huge milestone for the company; we are now a gold producer, which means the company will be generating cash flow that will be used to accelerate our growth at Muluncay."

Spirit will be running a combination of mine feed and tailings. There are 5000 tons of tailings on the property which have been assayed at 7 grams gold equivalent value. These tailings are from past production when mill recovery was low.

The company is completing the slashing out of its main Muluncay production tunnel, the Nueva Esperanza Mine, to 8ft x 8ft for underground equipment clearance. This tunnel is approximately one kilometer long and has four primary vein faces plus several secondary veins. We are placing a new steel rail for volume removal of ore, replacing the antiquated rubber tired system. Spirit is also introducing modern production equipment to increase this mine's production to 150 TPD, to match our planned processing capacity.

The company's 43-101 report states there are 4 known major veins and several secondary vein systems in the Muluncay Mining district. The 43-101 report states that a head grade of 12 grams gold equivalent could be expected as feed for our floatation mill. The report gives a preliminary estimated resource of 600,000 oz gold in the Jen and Christina veins which are the two major veins currently worked.

Further information is available on the company website: www.spirit-exploration.com.

Forward-Looking Statements: Certain information and statements included in this release are intended to constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the company to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements.

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