Eagle Plains and Northern Continental Execute Option Agreement on Abo Gold Project

Cranbrook, B.C.: The Board of Directors of Eagle Plains Resources Ltd. (EPL:TSX-V) announce that a formal agreement has been executed between Eagle Plains and Northern Continental Resources Inc. (NCR:TSX-V) whereby Northern Continental has acquired the option to earn a 60% interest in Eagle Plains’ wholly owned Abo Gold Property (the Property), located in the Harrison Lake area of south-western British Columbia, approximately 130km east of Vancouver. Northern Continental intends to firstly earn a 50% interest in the Property by completing $1.5 million dollars in exploration expenditures, paying Eagle Plains $10,000 and issuing 1.2 million common shares of Northern Continental over a 5 year period. Northern Continental Resources Inc., will pay as finders fee 100,000 shares to Bernard Kreft, an arms-length individual, on receipt of TSX Venture Exchange (TSX) acceptance of the formal agreement, and will pay a further 200,000 shares upon earning a 50% interest in the property.

In order to earn an additional 10% in the Property (for a total of 60%), Northern Continental shall complete a further $1.5 million in exploration and development expenditures and issue an additional 500,000 shares to Eagle Plains over a 3-year period. For each additional 10% interest in and to the Property (from 70% to 100% and upon election by Eagle Plains), Northern Continental will agree to spend an additional $1.5 million in exploration and development expenditures and issue an additional 500,000 common shares to Eagle Plains over each three-year period. Under terms of the Agreement, a retained 2% Net Smelter Return (NSR) will be eligible for sale to Northern Continental for a total of $2,500,000. The Agreement is subject to receipt of TSX acceptance of the formal agreement.

Since October 2000, Eagle Plains has assembled a land package consisting of 76 units (4600 acres) overlying a number of gold occurrences associated with a series of intrusive stocks. Accessory minerals include copper, silver, lead, zinc, molybdenum, tungsten and bismuth. The Property is road-accessible year-round. Hydroelectric power, natural gas and rail-service are located within 3 kilometers of property boundaries.

The Property area has been held or optioned by various operators since the early 1970’s including Abo Resources, Kerr Addison Mines Ltd. (Kerr Addison) and Bema International Resources Ltd. Exploration work has included mapping, soil sampling, ground-based geophysics and a total of 13,856m (45,448’) of diamond drilling. Some small-scale underground development has also been completed. Most of the work was focused on the northern part of the Property in the area of the Jenner and Portal Stocks. Drill results reported from the Portal Zone include 30 meters averaging 3.17 grams per tonne gold (EMPR ASS RPT 19584). Drill results reported from the Jenner Stock include 64m averaging 3.77 gm/t (EMPR ASS RPT 20144). In 1987, Kerr Addison collected a 1053 tonne bulk sample from the Jenner Stock underground workings. Using the metallurgical results from this sample combined with extensive underground sampling and results from diamond drilling, Kerr Addison reported an indicated a grade of 3.2 – 4.1 g/t Au with an inferred tonnage of 1.3 million tonnes from surface to 100m elevation, and an additional 2.2 million tonnes from surface to sea level (EMPR ASS RPT 20144, MINFILE #92HSW092). Other gold-bearing stocks identified on the Property include the Hill and Lake Stocks. These areas have seen limited exploration in comparison to the Jenner-Portal Stocks areas. Diamond drill intersections reported from the Hill Stock area include DDH BX88-130 which averaged 3.54 g/t Au and 6.3 g/t Ag over 27 meters, and contained 8m averaging 8.7 g/t Au and 14.2 g/t Ag (EMPR ASS RPT 20144). Eagle Plains Management has not confirmed the reliability of the above estimates or reported drill results, but considers the estimates to be reliable and relevant. This will form the basis for advanced exploration activity, including work to confirm historical results.

Eagle Plains has acquired all pertinent data from past exploration work, and has completed a preliminary compilation and revision of available historic data. In October 2001, Eagle Plains completed a 215 line-km airborne geophysical survey over the entire Property area, resulting in a number of untested anomalies being delineated. Northern Continental expects to commence diamond-drilling activity in order to confirm existing resources, and to further delineate under-explored areas of the Property.

The Board of Directors also announces that it has agreed to re-price 1,988,418 incentive stock options (the “Stock Options”), originally issued between May 1999 and November 2001 at a price of $0.25 per common share to $0.10 per common share. In addition, Eagle Plains will extend the expiration date of the Stock Options to October 18, 2007.

Since the date Stock Options were granted, market conditions have been unfavourable and the market price of the Company’s shares has decreased. Eagle Plains intends to reduce the exercise price of the options set out above to $0.10 per share and extending the expiration date of these option to October 18, 2007 to provide the appropriate incentive to these directors. The policies of the TSX Venture Exchange provide that in the event the Company wishes to reduce the exercise price of options and if the optionee is an insider, then shareholder approval (excluding insiders and their associates) must be obtained.

The re-pricing and extension of the Stock Options by the Company is subject to regulatory approval.

On behalf of the Board of Directors

Signed

“Tim J. Termuende”
President and CEO

For further information on EPL, please contact Mike Labach at 1 866 HUNT ORE (486 8673)
Email: mgl@eagleplains.com or visit our website at http://www.eagleplains.com

 

Cautionary Note Regarding Forward-Looking Statements

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 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.