Mr. J. Frank Callaghan reports

BARKERVILLE GOLD MINES LTD. ANNOUNCES UPDATED RESOURCE ESTIMATE AT COW MOUNTAIN AND ADDRESSES CANADIAN TECHNICAL INFORMATION DISCLOSURE WITH THE BC SECURITIES COMMISSION

Barkerville Gold Mines Ltd. has released an updated mineral resources for Cow Mountain at its Cariboo gold project and has clarified technical disclosure on its Cariboo gold project.

On Aug. 14, 2012, the B.C. Securities Commission, the securities regulatory authority in British Columbia, delivered a letter to Barkerville stating that it had completed a review of the technical report entitled "Technical report, mineral resources and potential, Cariboo gold project, Barkerville Gold Mines Ltd., Cariboo gold district, British Columbia," filed by the company on Aug. 12, 2012, in support of a resource estimate on the Cow Mountain sector of the Cariboo gold project. The original technical report was filed in support of a resource estimate announced by the company in a news release dated June 29, 2012, and included a revised resource estimate on the Cow Mountain sector. The review by the BCSC identified a number of disclosure and filing issues with the original technical report. Based on this, the BCSC issued a cease trade order in respect of the company's shares. To revoke the cease trade order, the company was required to address the disclosure issues of the BCSC and file a new Canadian National Instrument 43-101 (standards of disclosure for mineral projects) report on the Cariboo gold project.

Updated technical report on the Cariboo gold project

Barkerville has now filed an updated technical report entitled "Technical report, effective date Dec. 31, 2012, Cariboo gold project, Barkerville Gold Mines Ltd., Cariboo mining district, British Columbia," co-authored by Peter T. George, PGeo, of Geoex Ltd., Ivor W.O. Jones, FAusIMM (CP), and Robert McCarthy, PEng, of Snowden Mining Industry Consultants Inc., and Michael B. Dufresne, PGeo, of Apex Geoscience Ltd., which addresses the disclosure issues raised by the BCSC. As part of its response to the BCSC review, the company retained Snowden and Apex, both independent mining and geological consulting firms that had not previously reported on the property, to co-author a new technical report, together with previous independent author Mr. George, PGeo, of Geoex. Snowden assisted Geoex and the company in the review and audit of the data validation and verification aspects of the Cow Mountain data and the review of the most appropriate estimation method currently applicable at Cow Mountain, and Snowden completed an independent mineral resource estimate for the Cow Mountain sector of the Cariboo gold project. Snowden also assisted in making recommendations for the Cariboo gold project, including the exploration targets for the property. Apex assisted Snowden, Geoex and the company in a review of all exploration data for the property and in the identification and recommendations for the exploration targets for the property.

Revised resource estimate for Cow Mountain

The mineral resource estimated is based upon an open-pit scenario for the mining of gold mineralization to a depth of 1,000 feet beneath the surface of Cow Mountain in an area immediately surrounding the underground workings of the Cariboo gold quartz mine. The resource estimate involved the application of multiple indicator kriging for gold grade estimation of a block model using Datamine mining software. The attached mineral resources table sets out the results of the mineral estimation for Cow Mountain.

    COW MOUNTAIN MINERAL RESOURCE REPORTED 
 AT A CUT-OFF GRADE OF 0.012 OUNCE PER TON GOLD,
            EFFECTIVE DEC. 31, 2012

Category             Tonnage Gold grade   Contained  
                      (Mtons)      (ppm)  gold (Moz) 

Measured                  --         --          --          
Indicated               17.7       2.00        1.04       
Measured plus indicated 17.7       2.00        1.04       
Inferred                49.2       2.74        3.94       

Tons and contained ounces have been rounded, and this may have resulted in minor apparent discrepancies.

Mineral resources are not mineral reserves. Mineral resources do not have demonstrated economic viability and may never be converted into mineral reserves.

The underlying premise in the exploration model is that there are widespread, small-scale veins and pyrite replacement zones that, if encountered during historical underground mapping, would have been too small to be economically recovered during the historical underground operations.

The mineral resource reported herein was derived from the original data with default values added to unsampled intervals. The resultant resource estimates were prepared using MIK in 25 feet by 25 feet by 25 feet blocks, and the prospect of economic extraction was tested using open-pit optimization. This demonstrated that the project is worthy of a more rigorous engineering study to evaluate the economic potential of the mineral resource identified at Cow Mountain.

The estimates were prepared using the following steps: data validation; data preparation; geological interpretation and modelling; establishment of block models; compositing of assay intervals; exploratory data analysis of gold; variogram analysis; derivation of kriging plan and boundary conditions; grade interpolation of gold; validation of gold grade estimates; classification of estimates with respect to Canadian Institute of Mining, Metallurgy and Petroleum guidelines; and then resource tabulation and resource reporting.

Classification was applied based on geological confidence, data quality and grade variability. Over all, after review of all relevant items, the most significant considerations in preparing the classification were: The area has been subjected to historical underground gold mining. The dimensions of the underground workings have given Snowden some confidence in the continuity limits considered appropriate in estimation. Subsequent to 2009, drill data have quality assurance/quality control that indicate no material bias and have grades similar to those of the historical drilling (with the exception of the drill data only selectively sampled). Unsampled intervals were given either a zero grade (in the database) or a 0.003-part-per-million value in the data used for modelling. Given these considerations, the remaining part of the classification was based on aspects of the modelling. This included an assessment as to whether or not a block was estimated using the surface drill data (which have the best confidence) or the underground drill data (with which there is lower confidence).

For the classification of the estimate to be indicated, both criteria must be met: The estimate must have been formed in the first search volume. That is, the estimate used a nominal search distance of 100 feet by 100 feet by 60 feet, with a minimum of 12 samples to inform the estimate and a maximum of 10 samples per drill hole with at least two drill holes. The estimate must have used mostly surface drill data. There is more confidence in the surface drill holes than the selectively sampled underground drill holes. For the classification inferred, the estimate was estimated using either the first or second search volume, but without achieving the criteria required for an indicated resource.

Cut-off grade determination and the evaluation of reasonable prospects for economic extraction

To demonstrate that the mineralization as estimated in the block model has a reasonable expectation of being mined at some time in the foreseeable future, Snowden completed a pit optimization exercise using the limits provided herein. The work was completed by an engineer with sufficient experience in this style of work and mineralization to ensure the robustness of the limits used. Notwithstanding the pit optimization exercise, it has not resulted in an engineered and operational open-pit mine design.

A price of $1,520 per ounce was the starting point for the optimization study, and the optimization was tested for gold prices from $1,005 per ounce to $2,295 per ounce. The results indicated that the resource potential, as defined by the optimization study, was constrained by the model limits laterally (the optimization could not expand past the model boundaries, thereby limiting the evaluation to the model extents).

 LIMITS FOR TESTING PROSPECTS OF ECONOMIC EXTRACTION

Limit                                         Value            

Gold price                                    $1,520 (U.S.)/oz      
Royalties                                     None             
Overall recovery                              94%              
Cut-off grade                                 0.012 oz/t       
Processing (including admin and ore haulage)  $20.66/t         
Mining ore recovery (before diluted)          90%              
Mining ore dilution (at 0 ppm dilutant grade) 10%              
Geotechnical slope angles                     45 degrees       
No exclusion areas except the geological                       
model limits                                                   
Exchange rate                                 $1 (U.S.) per $1 (Cdn)
Owner operator mining (but with mining fleet  
capital amortization)                         $3.50/t                           

The optimization assumes that processing and                   
infrastructure capital costs have been sunk.

Snowden found that, apart from a small portion of the mineralization that falls below the pit shells prepared, the majority of the resource block model reports from within the pit shell. The resource reporting below the pit shell is not considered a concern (and was not removed from the resource report) as the small portion is supported by high-grade intersections that would be considered for possible future underground extraction (should the confidence in the estimates be improved).

Over all, Snowden considers these assumptions are considered fair for the purpose of determining reasonable prospects for economic extraction of the Cow Mountain deposit yet do not demonstrate that the mineralization is economic, since the exercise is not at the level of a preliminary economic assessment and does not conform to the studies required for a preliminary economic assessment.

Snowden is unaware of any issues that materially affect the mineral resource estimate at Cow Mountain in a detrimental sense. These conclusions are based on the following:

• The company has represented that mineral and surface rights have secure title.
• There are no known marketing, political or taxation issues.
• There are no known infrastructure issues.
• There are no issues with respect to environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that Snowden is aware of that would materially affect the mineral resource.

The updated technical report includes a full discussion of the assumptions, limits and methods used to estimate the mineral resource and identifies known risks that could materially affect the potential development of the mineral resources.

Audit of data verification, data verification and quality assurance/quality control

Due to concerns with the documentation of data verification in the original technical report and, at the request of the company, the company drilled nine twin core holes.

Snowden concluded, "The mineralization recognized in the new drill holes was consistent in thickness and grade with the original drill holes."

As part of its engagement, Snowden conducted an audit of the Cow Mountain database and a review of the Cow Mountain drilling quality assurance and quality control data.

Snowden concluded that: "There are parts of the Cow Mountain database, where a high level of confidence in the data cannot be demonstrated (some of the older data where there is selective sampling and no QA/QC), and parts where the confidence in the data is relatively high (such as the new surface drilling data). Snowden's analysis in the comparison of some of the earlier drill data with the more recent data indicates the fully sampled drill data have grades consistent with the higher confidence data.

"In Snowden's opinion, the database at Cow Mountain is suitable for use in the estimation of a mineral resource if the following considerations are followed:

• "Intervals in the drilling which were not sampled should be included in the database, with a very low grade. Snowden has entered a grade of 0.003 part per million, but these intervals should be sampled where possible and assayed.
• "Estimates based on the data collected prior to 2009 should be limited to an inferred mineral resource mainly due to the lack of QA/QC results (and selective sampling issues) in some of the underground data.
• "Only estimates based largely on the 2009 data (and later) are suitable to create higher confidence estimates.

"Issues with respect to coarse gold in the samples have recently raised concerns about the appropriateness of the older assaying and therefore precision. For this reason, the confidence in the estimates is restricted to the indicated category."

The development of the Snowden estimate

The updated technical report includes a discussion on the reasons for the changes to the Geoex estimation method as adopted by Snowden. In 2012, Geoex completed two estimates of the tonnes and grade of Cow Mountain. During June, and prior to completion of the original technical report, Geoex had completed preliminary grade tonnage estimation work. The company decided that the estimate was material to the shareholders and put out a news release disclosing the estimate on June 29, 2012. Following the August, 2012, grade tonnage estimates, the BCSC raised a number of concerns, and Snowden was contracted to assist the company and Geoex to address those items. Between August, 2012, and the timing of the updated technical report (as noted herein), Snowden completed a significant amount of data validation and verification, including twin drilling, QA/QC and a database audit.

Further work by Snowden in a review of the geology and appropriateness of the style of modelling concluded that:

• Attempts at building a constrained geological model were found not to constrain the mineralization appropriately and were discarded in favour of a model based on an estimate of the proportion of mineralized material in each block.
• Sampling of drill intervals that had previously not been sampled indicated gold mineralization in areas that would have previously been considered barren (although these were still dealt with by adding a default grade of 0.003 part per million gold prior to grade estimation).
• Compositing needed to be at a longer interval. Five feet were chosen for the composite length as they represents the median of the sample intervals in the mineralized zone.
• Statistics of the mineralization showed a strongly skewed distribution. In this instance, the use of capping to control high grades using linear methods in grade estimation (such as inverse distance weighting or ordinary kriging) can either overestimate or underestimate the grade significantly, with the choice of capping being a relatively arbitrary decision. The Snowden estimate was based on a similar block model and the application of MIK to interpolate the gold grades. MIK, unlike linear methods, is an estimation method that recognizes that high grades have less grade continuity than lower grades and helps to minimize the smearing of high grades that can arise in linear estimation methods such as inverse distance and ordinary kriging.

An additional constraint in the classification of the resource model over previous models was that Snowden downgraded the classification of some areas in the model to inferred where they had been estimated using the before-2009 data. This consideration in the classification was to reflect the lower confidence in the data collected prior to 2009.

The company has adopted the Snowden estimate as the only current resource estimate on the Cow Mountain deposit. Previous estimates disclosed by the company on the Cow Mountain deposit should not be relied upon.

Bonanza ledge

The updated technical report notes that the only prior mining study conducted in the Cariboo gold project area, including costing and economic analysis, was completed for the Bonanza ledge deposit and formed part of the prefeasibility study prepared by EBA Consultants (Fier et al., 2009); however, the economics of the same are now considered to be outdated due to:

• Changes to capital and operating costs over time;
• Changes to metal prices;
• Purchase of the QR mill such that toll milling is no longer applicable;
• Purchase of property interests such that royalty payments are no longer applicable. Consequently, Snowden completed an update to the economic analysis for Bonanza ledge to assess the relevance of the mineral reserve under the revised modifying factors.

At a discount rate of 10 per cent, the Bonanza ledge project yields a positive after-tax net present value of $12.8-million, with an internal rate of return of 40.4 per cent under the base-case scenario of long-term $1,520 per ounce gold at 220 tons per day. The long-term gold price equates to the three-year trailing average; however, for the first year, a price of $1,400 per ounce has been assumed.

Revised exploration target potential estimates for further exploration

The company's June news release, as well as the original technical report, included disclosure on potential of exploration targets at the Cariboo gold project. The disclosure of the potential exploration targets did not include the assumptions regarding the exploration targets, or the local data for the exploration targets.

The company advises exploration targets disclosed in the June news release and the original technical report should not be relied upon.

Island Mountain exploration target potential

The geological setting for Island Mountain is an extension of that of Cow Mountain. The mineralized trend at Cow Mountain, based upon soils, drilling and trenching, extends to the northwest into the Island Mountain sector.

Based upon the drill hole and soil geochemical data in conjunction with the geology, the Island Mountain trend as an exploration target is comparable with Cow Mountain with twice the strike length at about 1.5 miles in length.

The past-producing Island Mountain/Aurum and Mosquito mines (all in Island Mountain) have underground workings extending to depths greater than 2,000 feet below the surface. In addition to this, the mine workings from the Cariboo gold quartz mine at Cow Mountain extend to the northwest beneath Jack of Club Lake to Island Mountain. The historical workings in conjunction with the drill hole data indicate that the Island Mountain exploration target extends to a depth of at least 2,000 feet below surface.

A strike length of 1.5 miles (7,920 feet), a width of 1,300 feet, a depth of 2,000 feet and a density of 168 pounds per cubic foot give a tonnage range of 100 million tons to 350 million tons. The grade, according to summary statistics of the available drill data at Island Mountain, however, appears to be higher than that at Cow Mountain. Based on these grades, a grade range for the target of between 0.06 ounce per ton and 0.18 ounce per ton (two to six ppm) was chosen resulting in an exploration target with a range of 6 to 21 million ounces gold. The grades were based on the lower grade from the contiguous Cow Mountain resource and the higher grade based on the average grade of the historical drill data from the Rainbow unit. The higher tonnage was used with the lower-grade value to define the upper value of contained ounces as it is considered less likely the higher tonnage would be associated with the higher-grade values.

These results, in combination with historical underground mining and the existing gold in soil geochemical anomalies, make the Island Mountain area a high-priority target for further evaluation.

The foregoing assessments of potential quantity and grade are conceptual in nature, and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in any of the exploration targets being delineated as a mineral resource.

Barkerville Mountain target potential

The geological setting beneath Barkerville Mountain is an extension of that of Cow Mountain. The mineralized trend at Cow Mountain, based upon soils, drilling and trenching, extends to the southeast across the narrow Lowhee Creek valley into the Barkerville Mountain sector.

The Barkerville Mountain area, based upon the extent of the soil geochemical anomaly and gold mineralization identified in trench sampling and limited drilling, appears to have a potential strike of 1.1 miles.

Given a strike length of 1.1 miles (5,800 feet), a width of 1,300 feet and a depth of 1,000 feet, the authors suggest a target with a tonnage range of between 50 million tons and 100 million tons. Summary statistics of the available drill data at Barkerville Mountain have been used to estimate a grade range for the target of between 0.06 ounce per ton and 0.15 ounce per ton (two to five parts per million) Au, and the exploration target a range of three million to six million ounces gold. The grades were based on the lower grade from the contiguous Cow Mountain resource and the higher grade based on the average grade of the historical drill data (above 0.012 ounce per ton) from the Rainbow unit. The higher tonnage was used with the lower-grade value to define the upper value of contained ounces as the authors considered it less likely the higher tonnage would be associated with the highe-grade values. The foregoing assessments of potential quantity and grade are conceptual in nature, and there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in any of the exploration targets being delineated as a mineral resource.

Total exploration target potential of Island and Barkerville Mountains

The total exploration target potential of the four-mile-long mineralized trend including the Barkerville Mountain target and the Island Mountain target is 150 million to 450 million tons (rounded to the nearest 50 million) between 0.06 ounce per ton and 0.15 ounce per ton (two to five ppm) Au and the target with a range of between nine million and 27 million ounces gold.

The estimate of exploration target potential does not include the Cow Mountain resource.

In addition, there are a number of other targets including mineralization associated with the Bonanza ledge setting and the Rainbow-Baker replacement style for which there is strong evidence for but not enough work to define properly. The foregoing assessments of potential quantity and grade are conceptual in nature, and there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in any of the exploration targets being delineated as a mineral resource.

Recommendations for the Cariboo gold project

Bonanza ledge

The updated technical report recommends that the Bonanza Ledge project be reassessed into the much larger Island Mountain/Cow Mountain/Barkerville Mountain resource evaluation.

Cow Mountain and exploration

To expand upon the mineral resource and the potential of the Cow Mountain property, the following is recommended in the updated technical report:

• Review core sampling records for all drill holes within the Cow Mountain resource model and execute a core sampling and assaying program to provide 100-per-cent assay data for all drill core with previously unsampled intervals;
• Create and maintain a robust database including management of QA/QC;
• Initiate groundwork for a preliminary economic assessment at Cow Mountain;
• Establish and maintain an industry standard secure database for all drill log information;
• Begin bulk sampling program of surface mineralization;
• Construct a comprehensive 3-D computer geologic model to develop regional targets for exploration drilling;
• Conduct Island Mountain drill data validation and evaluation;
• Evaluate the potential of the exploration targets at Island Mountain and Barkerville Mountain through further trenching and drilling;
• Prepare a grade tonnage estimate of the results of the data validation and new exploration data;
• Where appropriate, replace original fire assays with metallic screen fire assays (a technique that employs a larger sample size for analysis of drill core) as work to date indicates the original assaying did not account for all of the gold in the samples (there is an apparent bias low);
• Perform continual monitoring of QA/QC results;
• Establish a library of standard operating procedures for all drill core processing to be established by the company. The following phased program is recommended. Drilling related costs are based upon actual costs of the 2010 drill program (Yin, 2010) escalated by 10 per cent. The all-inclusive drilling costs include footage costs, wages and benefits, road and pad construction, driller bonus, mob demobilization, and miscellaneous. Assay costs have been increased to reflect the higher cost of screened metallic assaying. Other costs are order of magnitude estimates.

                    PHASE 1 (FOR COMPLETION DURING 2013)

Infill sampling of approximately 100,000 feet of 
unampled core from the period from 2007 to 2011

Assume average five-foot length of 20,000 samples at $41 per sample  $820,000
Cow Mountain PEA                                                      $80,000
Bonanza ledge prefeasibility study                                   $250,000

                  PHASE 2 (FOR COMPLETION BY THE END OF 2014)

Complete 50,000 feet of drilling in the Barkerville Mountain area

50,000 feet of drilling, $85 per feet (all-inclusive)           $4.25-million
Sampling and assays (assume average five-foot length 
10,000 samples) at $41/sample                                        $410,000

Complete 100,000 feet of infill drilling in Island Mountain 
study area

100,000 feet of drilling, $85 per feet (all-inclusive)           $8.5-million
Sampling and assays (assume average five-foot length 
20,000 samples) at $41/sample                                        $820,000
Miscellaneous and overhead costs                                 $1.4-million

Phase 2 is not contingent upon the results of phase 1.

Staff at the BCSC reviewed the company's updated technical report in the context of issues and deficiencies identified by its previous review of the company's original technical report filed on or about Aug. 13, 2012. Staff have not approved the updated technical report. Staff have relied on the company and the opinions and certificates of the qualified persons that the updated technical report contains a summary of all material scientific and technical about the Cariboo gold project and has been prepared in compliance with NI 43-101 and Form 43-101 F1. In addition, staff have not approved, endorsed or otherwise passed on the merits of the scientific and technical information contained in the updated technical report or in this news release and including, but not limited to, estimates of exploration targets, mineral resources and mineral reserves. Any representation to the contrary may constitute a breach of Section 55 of the B.C. Securities Act.

Technical information and qualified person/quality control notes

The mineral resource estimate for the Cow Mountain sector, data verification and QA/QC were prepared by Mr. Jones, FAusIMM (CP), of Snowden, a qualified person for the purposes of NI 43-101. Mr. Jones also co-authored the recommendations section contained in the updated technical report. Mr. Jones is independent of the company and has not previously reported on the Cariboo gold project. The other scientific and technical information regarding Cariboo gold project contained herein is based on information prepared by or under the supervision of each of Mr. George, PGeo, of Geoex, Mr. McCarthy, PEng, of Snowden, and Mr. Dufresne, PGeo, of Apex, who are also QPs for the purposes of NI 43-101. Each of the remaining QPs herein is independent of the company, and Mr. McCarthy and Mr. Dufresne have not previously reported on the Cariboo gold project. An updated technical report under NI 43-101 on the Cariboo gold project, as co-authored by the QPs, and which includes the updated resource and estimate for Cow Mountain, has now been filed by the company on SEDAR. All of the QPs have reviewed and approved the contents of this news release.

We seek Safe Harbor.