Telkwa Gold Corporation
TSX VENTURE : TKW

Telkwa Gold Corporation

September 07, 2005 16:05 ET

Telkwa Acquires High Grade Gold Property

CALGARY, ALBERTA--(CCNMatthews - Sept. 7, 2005) - Telkwa Gold Corporation (TSX VENTURE:TKW) is pleased to announce that it has signed a letter of intent to enter into a formal agreement with Nevada Eagle Resources of Reno, Nevada to acquire a 100% interest in 10 unpatented lode-mining claims in the central Buckskin Range of Douglas County, Nevada. The "Buckskin North" project is located approximately 10 miles Northwest of Yerington, Nevada and 85 miles Southeast of Reno, Nevada.

The Letter of Intent provides for a due diligence period until Nov 1, 2005 whereby the company will conduct a field visit and confirm available data on the property. Terms of the final agreement will provide for lease/option payments totaling US$84,000 over the next 3 years with an annual payment of US$30,000/year thereafter until purchase of the land for US$500,000. There will be a stock payment of 200,000 shares due when the definitive agreement is completed. The property is subject to a Net Smelter Royalty of 4% of which Telkwa can purchase 2% for US$2,000.000. An immediate non-refundable advance payment of $5000 has been made to secure the due diligence period.

The gold in the central Buckskin Range was discovered by Anaconda Minerals Company in 1974 during an exploration drilling program for copper skarn mineralization. Anaconda first recognized the gold occurrence visually during logging of the hole (D-314) and the interval assayed 540 ppm gold (15.75 oz/t)(i). Subsequent relogging and assaying for gold in earlier holes confirmed the presence of a gold bearing zone over a wide area to the west of the discovery hole.

Anaconda subsequently encountered the gold zone in 2 holes and three deflections in the area with grades ranging up to 56.61 ppm gold (1.65 oz/t) which revealed a complexly faulted geologic picture. A total of five widely spaced holes and three deflections confirm gold mineralization over 2500 feet along the apparent strike of the trend. All holes are reported as being vertical, which does not allow adequate identification of the structural orientation of the gold mineralization.

As Anaconda was a major "copper company" at the time of the discovery, strategically the company did not want to pursue a gold discovery in 1977 (gold price of $175/oz). If gold had not been seen during logging of the hole, the discovery would not have been made since at that time gold was not routinely assayed in the Yerington District, which was a significant copper mining area. Until Anaconda 's discovery, the only gold known in the area had been produced from near surface structures in a similar geological environment at the historic Buckskin Mine (1907), approximately 3 miles south of the property.



Significant Historical Drilling Results From Buckskin North Project

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Drill Hole Interval (ft) Length (ft) Gold (ppm) Gold (oz/t)
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D-314 (ii) 1021-1037 16 94.76 2.76
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Including (i) 1021-1024 3 486.66 14.20
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D-314B 1019-1025 6 31.405 0.92
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Including (ii) 1019-1022.3 3.3 56.61 1.65
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D-331 1024-1028 4 4.51 0.13
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Including (ii) 1024-1025 1 16.74 0.49
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D-331A (ii) 1032-1033 1 0.94 0.027
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D-331B (ii) 1025-1033 8 2.62 0.076
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Including (ii) 1030-1031 1 15.1 0.44
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D-302 803-812.5 9.5 1.1 .032
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D-309 1098-1103 5 2.9 .085
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and 1792-1802 10 11 0.32
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D-332 999-1001 2 3.2 0.09
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(i) Hole D314 had several replicate assays; the 'discovery' was based
on an original value of 540ppm with the other assays being
554.1 ppm and 365.9 ppm which were averaged for the table above.
(ii)These intervals include replicate assays to produce the averages
reported.


Analytical data was taken from a summary report provided by the vendor and that report indicated most assays were carried out by the Anaconda Company Laboratory with some check assays by several other labs. Sufficient check assays were done to assure that the gold numbers are valid. No original assay sheets have been provided and exact procedures are not known at this time but these represent historical results that are considered reliable for the time. Many of the original documents may not be available as there are no filing requirements for data in the State of Nevada. Telkwa required the due diligence period to address these issues of data availability and quality and anticipates they will be adequately addressed in the due diligence period. At the present time, the data and information available do not meet NI 43-101 standards. Michael Marchand, Ph.D. P. Geol., President of Telkwa Gold was the qualified person who reviewed the data provided by the property vendor.

Telkwa Gold Corporation's current exploration focus is Nevada where it now has three properties and also has two legacy exploration properties located in British Columbia. Telkwa maintains its website www.telkwagold.com with corporate information, reports and images of our exploration projects. Telkwa uses this website to maintain communication with shareholders, investors and the financial community.

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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