January 29, 2009

Solid grounding to help B.C. mining industry weather the world's economic storm

VANCOUVER — They say that every cloud has a silver lining. If so, then the cloud currently shrouding the world’s economy not only has a silver lining but a gold one, too. And nowhere is this truer than in B.C., where the precious-metals sector of the province’s mining industry seems well positioned to withstand the economic gales sweeping across the globe.

Indeed, boasting a value of about US$890 an ounce in late January, gold is viewed by experts such as Nick Barisheff of BMG Bullion Fund of Markham, Ont. as a safe haven for investors in these turbulent times. Moreover, analysts are pointing to the fact that the economic downturn has widened profit margins for some gold mines in the mining industry by triggering lower costs for energy and production materials.

No wonder the B.C. government announced January 15 that, even as the world’s economy teetered, mineral exploration activity in the province reached a whopping $367 million last year. “This is the second-highest total for exploration spending ever and just off 2007’s record-setting pace,” Minister of State for Mining Gordon Hogg pointed out.

“Despite a difficult economic climate in the last quarter of 2008, the mining industry performed extremely well,” Hogg continued. “We are optimistic that when commodity prices recover, the B.C. mining industry will continue its upward trajectory as a vital player in the B.C. economy.”

Exploration and development companies throughout B.C. are currently in the process of assessing results from 2008 and making plans to continue field work in 2009. Typical of the long-term commitment such companies make is Eureka Resources Inc. (TSX-V: EUK) of Vancouver which, in association with Hawthorne Gold Corp. (TSX-V: HGC), also of Vancouver, is actively working on the Frasergold site, a promising property in the Cariboo Gold District of central British Columbia.

The 2,866-hectare Frasergold property is located about 100 kilometres east of Williams Lake. The property is easily accessible by gravel road, an important asset when considering potential for development, says Eureka’s founder and CEO, John. J. O’Neill of West Vancouver.

Under a 2006 option agreement, Hawthorne can earn a 51 percent interest in the Frasergold property from Eureka by spending $3.5 million on exploration (which it already has done), completing a feasibility study by April 30, 2010, and making cash payments totalling $175,000 ($125,000 paid to date) before the end of this coming October.

“Eureka and its associates have poured millions of dollars since the early 1980s into determining the exact size and quality of the Frasergold gold deposit,” explains O’Neill, an accomplished B.C. entrepreneur who is most famous for launching Coast Hotels.

Hawthorne Gold completed a 58-hole, 10,405-metre diamond drill program on the Frasergold property last summer. Significantly, 54 percent of all holes encountered visible gold in the core, and 83 percent of the holes in the site’s northwest zone encountered visible gold.

Assay results for the first five of the 58 holes were made public in November, and earlier this week, Eureka and Hawthorne announced significant assay results for two additional holes. Hole number 08-319 averaged 47.36 grams/tonne of gold (g/t AU) in a 2.08 metre intersection, and hole 08-354 intersected a 4.38 metre section averaging 63.05 g/t AU.

Hawthorne is now compiling the remainder of the assays, and will initiate a technical report on a potential resource estimate in the area of the 2008 drilling. This report will serve as the starting point to determine the next steps in the continued exploration of the project.

B.C. currently is home to 54 working mines. “We’ve still got a long way to go,” says O’Neill. “But we remain hopeful that, one day, Frasergold will be number 55.”

The provincial government is helping ensure mining’s continued prosperity by promising to extend the vital mining Flow-Through Share Tax Credit to the end of 2009. Many mining firms raise money through flow-through shares, which allow exploration companies to pass eligible exploration expenses to investors.

Under federal tax rules, investors can deduct 100 per cent of the eligible exploration expenses. With both the federal and provincial tax-credit plans in place, an individual investor, who is at the maximum taxable income rate, is able to reduce the cost of a $1,000 investment to about $383.

In December, the provincial government also announced the creation of a new mining task force to help the industry weather the worldwide economic downturn. “The mineral exploration sector is pleased to see the B.C. government recognize the value of extending the Flow-Through Share Tax Credit,” said Gavin Dirom, president of CEO of the Association for Mineral Exploration of B.C.

“This measure, with the creation of the Economic Task Force, will help B.C. attract investment and remain globally competitive in this challenging time.”

Certain information regarding the company including management’s assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with mining exploration and development, volatility of prices, currency fluctuations, imprecision of resource estimates, environmental and permitting risks, access to labour and services, competition from other companies and ability to access sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact: John J. O’Neill, President and CEO, Eureka Resources Inc., (604)-608-6154.
Photos available at www.eurekaresourcesinc.com or through email at oneills@telus.net.
For more information on Hawthorne, contact Todd Hanas toll free at 1-866-869-8072 or the company at (604) 629-1505 or toll free at 1-888-629-1505, or you can visit Hawthorne’s website at www.hawthornegold.com.

You can view the Next News item:February 3rd, 2009, Soil Sampling Program Yields Highly Anomalous Zone 1,000 Metres Northwest of Main Zone at Frasergold Property

You can view the Previous News item:January 28th, 2009, Hawthorne Assays 4.38 metres averaging 63.05 g/t Au at Frasergold

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