Initial Drill-Hole Results Released for Copper Canyon Project

Cranbrook BC, 18 August 2004: Management of Eagle Plains Resources Ltd. (TSX-V:EPL) has been notified by partner NovaGold Resources Inc. (AMEX, TSX: NG), that assay results have been received for the first two holes of a large program currently underway by NovaGold on Eagle Plains’ Copper Canyon gold-silver-copper project located in northwestern British Columbia. Exploration at Copper Canyon is primarily designed to confirm existing mineralization present on the property, and is being conducted concurrently with work on the contiguous Galore Creek project. Results confirm the presence of a large mineralized system present on the property and highlight the importance of the project with respect to the development of Galore Creek/Copper Canyon as a whole.

Mr. Greg Johnson, V.P., Corporate Development of NovaGold, has issued the following:

Highlights

Initial two holes drilled on the Copper Canyon target have returned exceptional results

  • Drill hole CC04-022 intersected 74 meters of 1.7% Copper Equivalent (CuEq) or 2.7 g/t Gold Equivalent (AuEq) and ended in mineralization.
  • Drill hole CC04-023 intersected a total of 274 meters of 1.3% CuEq (2.2 g/t AuEq) in two composite intervals including a high grade interval totaling 33.5 meters of 3.4% CuEq (5.7 g/t AuEq).

First Two Holes from Copper Canyon Confirm Potential for Additional Near Surface Higher Grade Resource

Initial results from the first two drill holes of an 8 hole program to test the potential for a new near surface higher grade resource on the Copper Canyon property have returned very strong gold, silver and copper mineralization over significant widths. The Copper Canyon property is under option from Eagle Plains Resources (TSX-V: EPL) and directly adjoins the main Galore Creek property. NovaGold is exploring the property as part of its overall Galore Creek program.

Previous work on the Copper Canyon prospect included 13 drill holes by Consolidated Rhodes in 1990 indicating the potential for high grade gold, silver and copper mineralization. One of the major objectives of the Galore Creek exploration program is to delineate additional higher grade mineralized zones that would allow for higher production levels beyond the first 5 years of the mine life as currently contemplated in the recently completed Preliminary Assessment Study. That study showed that increasing the number of years of higher grade throughput at Galore Creek would significantly increase the internal rate of return and overall net present value of the project.

Initial results confirm the presence of significant higher grade mineralization at Copper Canyon. Drill hole CC04-022, which did not reach its intended target depth due to broken ground conditions intersected 73.6 meters of 1.67% CuEq (2.74 g/t AuEq) grading 1.01 g/t Au, 20.1 g/t Ag and 0.87% Cu and ended in mineralization. Drill hole CC04-023, a 100 meter offset to the north, intersected a total of 274.4 meters of 1.3% CuEq (2.16 g/t AuEq) grading an average of 0.76 g/t Au, 12.9 g/t Ag and 0.74% Cu in two composite intervals. Included in this hole was an intersection averaging 3.44%CuEq (5.66 g/t AuEq) over 33.5 meters and grading 1.78/t Au, 23.4 g/t Ag and 2.16% Cu (see Table 1 below).

With the drilling completed to date there are a total of 27 mineralized composite intervals in 13 drill holes at Copper Canyon averaging 71.2 meters grading 1.32% CuEq (2.17 g/t AuEq) (see Table 2). As currently defined the mineralization extends over a 600 meter x 400 meter area and the deposit remains open to expansion in all directions. Mineralization at Copper Canyon begins at surface and occurs as a relatively flat lying, roughly 50 to 270 meter thick tabular zone of disseminated chalcopyrite hosted by an extensive orthomagmatic breccia unit. Results from the remaining six holes are pending and will be reported as they become available.

Table 1. 2004 Galore Creek Project Significant Drill Hole Intercepts

Copper Canyon

Drill Hole Number From m To m Width m Width Feet Gold g/t Silver g/t Copper % Gold Equiv g/t Copper Equiv %
CC04-022 155.5 229.0 73.5 241.3 1.01 20.1 0.87 2.74 1.66
CC04-023 44.0 228.6 172.4 565.5 0.77 14.2 0.88 2.44 1.48
Including 158.5 192.0 33.5 110.0 1.77 23.8 2.16 5.66 3.44
  271.0 373.0 102.0 334.6 0.73 10.4 0.47 1.65 1.00
Total     274.4 900.2 0.76 12.9 0.74 2.16 1.31

Note: (1) Gold and Copper equivalent calculations use metal prices of US$375/oz for gold, US$5.50/oz for silver and US$0.90/lb for copper. Gold and Copper equivalent calculations reflect gross metal content and have not been adjusted for metallurgical recoveries. Two sample intervals totaling 12.23 m with no recovery account for the interval discrepancy in the first composite in CC04-023.

This drill program and sampling protocol were completed with oversight by qualified person Scott Petsel, Senior Project Geologist for NovaGold. A rigorous quality control and quality assurance protocol was utilized on the project including blank and reference samples with each batch of assays. All drill samples were analyzed by fire assay at ALS Chemex Labs in Vancouver, B.C., Canada.

Table 2. Copper Canyon Historic Drill Hole Intercepts

Drill Hole Number From m To m Width m Width Feet Gold g/t Silver g/t Copper % Gold Equiv g/t Copper Equiv %
CC90-001 2.70 64.0 61.3 201.1 0.62 24.8 1.122 2.827 1.718
Including 18.0 31.0 13.0 42.7 1.03 47.3 2.194 5.330 3.239
  87.0 115.0 28.0 91.9 3.54 11.5 0.611 4.717 2.866
Including 89.0 105.0 16.0 52.5 5.02 13.1 0.676 6.329 3.846
  120.0 149.0 29.0 95.1 0.64 4.5 0.218 1.068 0.649
Total     118.3 388.1 1.32 16.7 0.779 2.843 1.728
CC90-002 5.6 276.3 270.7 888.1 1.89 22.3 1.057 3.960 2.406
Including 21.0 87.0 66.0 216.5 2.19 42.0 2.297 6.591 4.005
Including 118.0 138.0 20.0 65.6 4.07 46.1 1.674 7.499 4.557
CC90-004 146.0 193.0 47.0 154.2 1.43 16.4 0.821 3.018 1.834
  207.0 315.0 108.0 354.3 1.03 18.0 0.769 2.554 1.552
Including 259.0 271.0 12.0 39.4 4.20 34.5 1.593 7.323 4.450
  320.0 396.0 76.0 249.3 0.26 20.0 0.343 1.117 0.679
Total     231.0 757.9 0.85 18.3 0.639 2.176 1.322
CC90-005 93.0 113.0 20.0 65.6 0.32 11.7 0.617 1.503 0.913
  128.0 144.0 16.0 52.5 4.24 25.6 1.030 6.313 3.836
Including 134.0 144.0 10.0 32.8 6.25 28.6 1.238 8.707 5.291
  151.0 190.0 39.0 128.0 0.17 14.0 0.419 1.066 0.648
  200.0 239.0 39.0 128.0 0.12 11.9 0.427 0.999 0.607
  293.0 308.8 15.8 51.8 0.22 15.3 0.468 1.211 0.736
Total     129.8 425.8 0.69 14.5 0.53 1.78 1.08
CC90-006 53.0 179.0 126.0 413.4 0.52 4.8 0.42 1.28 0.78
CC90-007 3.6 55.0 51.4 168.6 1.19 34.9 1.07 3.46 2.10
CC90-009 51.0 101.0 50.0 164.0 1.41 0.9 0.02 1.45 0.88
CC90-010 51.0 73.0 22.0 72.2 0.96 2.4 0.01 1.01 0.61
  111.0 159.0 48.0 157.5 0.76 4.5 0.26 1.25 0.76
  178.0 282.0 104.0 341.2 1.94 8.2 0.38 2.69 1.63
Including 189.0 205.0 16.0 52.5 6.27 24.5 1.24 8.67 5.27
  294.0 359.0 65.0 213.3 1.01 2.5 0.04 1.11 0.67
  387.0 411.0 24.0 78.7 1.02 1.8 0.01 1.06 0.64
Total     263.0 862.9 1.50 5.9 0.26 2.01 1.22
CC90-011 136.0 182.0 46.0 150.9 0.24 21.2 0.69 1.68 1.02
CC90-012 132.0 269.0 137.0 449.5 0.17 13.5 0.41 1.03 0.63
  368.0 466.0 98.0 321.5 0.38 7.8 0.29 0.97 0.59
Total     235.0 771.0 0.26 11.1 0.36 1.01 0.61
CC90-013 75.0 128.0 53.0 173.9 0.51 1.6 0.23 0.91 0.55

Independent Preliminary Economic Assessment Summary Results

Hatch Limited, an independent engineering services company in Vancouver, B.C., Canada, recently completed a Preliminary Economic Assessment Study of the Galore Creek project. This study showed that the Galore Creek project as defined at that time has the potential in the first 5 years of the project to annually produce an average of 270,000 ounces gold, 1.8 million ounces silver and 200 million lbs copper at an average total cash costs of $0.15 per pound of copper with precious metals as credits or negative -$180/oz of gold with copper and silver as a by-product credit using the gold institute guidelines (based on long-term transportation and refining cost projections and metal prices of US$0.90/lb Copper; US$375/oz Gold and US$5.50/oz Silver). Using these long term average metal prices the project would payback the initial $500 million in mine capital in just 3.4 years of its 23 year mine life and generate a Pre-Tax Rate of Return of 12.6% and have an undiscounted after-tax Net Present Value (NPV) of US$329 million. At recent market prices the pre-tax rate of return doubles to 24.3% and the undiscounted after-tax Net Present Value increases to US$1.065 billion.

Mineralization at Copper Canyon was not included in the Preliminary Economic Assessment Study, but is anticipated to be including in future studies. Management of both NovaGold and Eagle Plains feel that the economic synergies provided by the co-development of both projects is significant.

About the Galore Creek Project

The Galore Creek Project is located approximately 75 kilometers northwest of Barrick Gold’s Eskay Creek gold-silver mine that produces 350,000 ounces of gold annually. The project lies west of the Cassiar Highway and 150 kilometers northeast of the tidewater port of Stewart, British Columbia.

NovaGold holds its interests in the Galore Creek area through several agreements. The Company is acquiring a 100% interest in the main Galore Creek property, which contains all currently reported resources, through an option agreement with subsidiaries of Rio Tinto plc and Anglo American plc. Under that option agreement NovaGold can acquire its 100% interest by completing a pre-feasibility study and making payments to the parties totaling US$20.3 million within a period of 8 years. NovaGold has an option agreement with Eagle Plains on the adjoining Copper Canyon property under which NovaGold may acquire up to an 80% interest by paying Eagle Plains C$1 million cash, issuing 300,000 shares of NovaGold over the next 3 years, making underlying property payments totaling C$250,000 and completing a feasibility study by September 2011. Eagle Plains currently holds a 100% option (subject to a 2% NSR) in the Copper Canyon property through an arms-length agreement with B. Kreft. NovaGold also has an option on the Grace property with Pioneer Metals Inc. under which NovaGold may acquire a 60% interest in the Grace claims. NovaGold has also staked claims in the surrounding area which it controls 100%.

Eagle Plains Resources continues to conduct research, acquisition and exploration projects in western Canada. The Company controls over 30 gold and base-metal projects, many of which are currently optioned to or joint-ventured with third parties including NovaGold Inc., Kobex Resources Ltd., Northern Continental Resources Inc., Shoshone Silver Mining Co., and Golden Cariboo Resources Inc. These agreements expose Eagle Plains to over $18 million in exploration expenditures over the next five years. In recent years, Eagle Plains has completed option agreements with Billiton Metals, Rio Algom Exploration, Kennecott Exploration, NovaGold Resources Inc., Viceroy Resource Corp. and numerous other junior exploration companies, resulting in nearly 13,000 m (43,000 ft) of drilling and over $5,000,000 in exploration spending on its projects since 1998.

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

 

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