X-Cal Resources Ltd.
TSX : XCL

X-Cal Resources Ltd.

August 28, 2006 09:10 ET

X-Cal Resources Ltd.: Drilling Begins at Sleeper

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 28, 2006) - X-Cal Resources Ltd. (TSX:XCL) -

SLEEPER GOLD PROJECT

Humboldt County, Nevada

Drilling begins this week on the Range Front Target at Sleeper. The Range Front is one of five priority target areas described in the March 2006, NI-43-101 type Technical Report on The Sleeper Gold Project by Thomason, Kornze and Rowe and also in a summary paper entitled Exploration Potential of the Sleeper Property by Dr Richard Sillitoe. The documents are available @ www.x-cal.com. The Range Front Target is a +5km long favorable area parallel and to the east of the Sleeper Mine site.

A major drill program designed to test each of the priority, mine scale targets at Sleeper is being planned by X-Cal's geologic team. The team consists of a group of professionals with Nevada track records. All available data from the massive Sleeper database (see Technical Report) is being utilized. The range front drilling is one aspect of a comprehensive program for Sleeper, described in general terms in the recently released 2006 X-Cal Annual Report.

REESE RIVER (Horse Mountain Window) Property

Cortez Area, Lander County, Nevada

Geologic mapping and sampling of the Reese River/Horse Mountain Window property is ongoing. Additionally, a gravity geophysical survey has been completed and integrated with previous geophysics. Drill permit applications are nearing completion. X-Cal intends to meet the year 1 requirement of its agreement with Barrick (previously Placer Dome) for this property. Barrick has a one time back in right, which can be triggered by tripling X-Cal's year one expenditure on this early stage project. A NI-43-101 type of report on the Reese River/Horse Mountain Window Property will be filed prior to drilling.

Summary

Management is pleased to announce drilling at Sleeper. The Sleeper Gold project is the top priority for X-Cal. This project is advanced exploration with multiple targets requiring a major drill program. The acquisition of 100% of Sleeper earlier this year was an important building block for X-Cal.

X-Cal's early stage projects in the Cortez Area: "Mill Creek/Goat Window" and "Reese River/Horse Mountain Window" are being advanced.

The company has also recently staked claims in Pershing County, Nevada, covering favorable geology proximal to the Spring Valley Area.

The contents of this release have been reviewed by Robert Thomason, M.Sc., and Larry Kornze, P.Eng, who are "Qualified Persons" as defined by NI-43-101.

Shawn Kennedy, President

Caution Concerning Forward-Looking Statements

This release and related documents may contain certain "forward-looking statements" including, but not limited to, statements relating to interpretation of drilling results and potential mineralization, future exploration work at the Sleeper Gold Project, the Mill Creek Gold Project and the Reese River Project and the expected results of this work. Forward-looking statements are statements that are not historical facts and are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: risks related to fluctuations in gold prices; uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Sleeper Gold Project, the Mill Creek Gold Project and the Reese River Project; uncertainties involved in the interpretation of drilling results and other tests; the possibility that required permits may not be obtained in a timely manner or at all; risk of accidents, equipment breakdowns or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; the risk of environmental contamination or damage resulting from the exploration operations at the Sleeper Gold Project, the Mill Creek Gold Project and the Reese River Project.

Forward-looking statements contained in this release and related documents are based on the beliefs, estimates and opinions of management on the date the statements are made. There can be no assurance that such statements will prove accurate. Actual results may differ materially from those anticipated or projected. X-Cal Resources Ltd. and X-Cal USA, Inc. undertake no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change.

Note: X-Cal Resources Ltd. can be referenced through the Standard & Poor's Directory.


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