Sultan Minerals Inc.

Sultan Minerals Inc.

August 29, 2005 16:50 ET

Sultan Minerals Exploration Update & Second Quarter Review

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 29, 2005) - Sultan Minerals Inc. (TSX VENTURE: SUL) -

Exploration Update

In August Sultan announced the discovery of a new molybdenum deposit on its 100% owned Jersey-Emerald property in British Columbia, Canada. The mineralization was intersected in two underground diamond drill holes drilled beneath historic mineralization in the Emerald Mine. The Emerald Mine was Canada's second largest tungsten producer and was operated by Placer Dome from 1947 until its closure in 1973 due to low metal prices at the time. Hole two was the highlight of the recent two-hole diamond drill program. This remarkable hole assayed 0.22% MoS2 over its entire 192 foot length averaging 3.5 times the average grade of the Endako Mine, Canada's largest molybdenum producer. Hole two also carried 5.19% MoS2 over a 3.7-foot long section near the bottom of the hole.

Sultan is presently completing 1,000 metres of follow-up diamond drilling in the discovery area. The 10-hole drill program is designed to obtain a better understanding of the structures that host the molybdenum mineralization on the 9,500-hectare property. The program will also provide information on the shape, size and grade of the deposit within the discovery area. Drilling will be completed by mid September with initial assays available by late September.

Molybdenum, usually occurring as the mineral molybdenite, is an exotic silvery-gray metal commonly referred to as moly. Molybdenum is primarily used as an alloy in the steel industry where it is an important additive to strengthen steel and inhibit corrosion. Molybdenum is also used for high-tech metal alloys, electronics, industrial chemicals and as a lubricant. Analysts estimate that the iron and steel industries consume about 80 percent of the world's molybdenum to increase their product's durability, ductility and hardness. Recent projections suggest that the steel industry will soar by 23% over the next 5 years. The demand for molybdenum is therefore expected to expand proportionately. Molybdenum use last year was about 300 million pounds, or 136,000 tons, according to the International Molybdenum Association in London - September 7, 2004. The spot price for molybdenum oxide is presently US$29.50 per pound.

Mr. Ed Lawrence, P.Eng., former Manager of the Jersey and Emerald Mines, is managing the underground exploration drill program. Perry Grunenberg, P.Geo. of P&L Geological Services of Lac Le Jeune, BC, is the Company's project supervisor and "Qualified Person" for the purpose of National Instrument 43-101, "Standards of Disclosure for Mineral Projects".

Operating Results

In the six months ended June 30, 2005 ("fiscal 2005") Sultan incurred a loss of $304,903 ($0.01 per common share), compared to $273,178 ($0.01 per common share) in the six months ended June 30, 2004 ("fiscal 2004"). Sultan had working capital of $171,369 as at June 30, 2005. Two private placements completed subsequent to June 30, 2005, provided net proceeds of $349,380 to the treasury, of which $234,500 in share subscriptions had been received at June 30, 2005.

The loss for the three months ended June 30, 2005 ("Q2 2005") was $234,974 compared to $176,002 in the three months ended June 30, 2004 ("Q2 2004"). Stock-based compensation of $118,814 was the main contributor to the increase in expenses in Q2 2005, as there was no comparative compensation in Q2 2004. This increase was offset by decreases in Q2 2005 compared to Q2 2004 in legal and accounting - $13,736 to $800; office and administration - $41,575 to $23,451 and shareholder communications - $50,699 to $19,860.

In fiscal 2005 operations utilized $159,302 compared to $158,276 in fiscal 2004. Cash expenditures on mineral property interests totalled $180,648 in fiscal 2005 compared to $104,396 in fiscal 2004. The cash expenditures were incurred on the following mineral properties in fiscal 2005: Kena - $56,089 (2004 - $69,687), Coripampa Properties - $56,037 (2004 - $12,743), Stephens Lake - $1,298 (2004 - $18,151), Willi claims - $Nil (2004 - $2,025) and the Jersey and Emerald properties - $76,946 (2004 - $1,790).

Arthur G. Troup, P. Eng., Geological, President and CEO

SEC 12g3-2(b): 82-4741

No regulatory authority has approved or disapproved the information contained in this news release.

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