Mr. Paul Joyce reports

RUGBY OPTIONS GOLD PROJECT IN PILBARA REGION, WESTERN AUSTRALIA

Rugby Mining Ltd. has, subject to regulatory approval, entered into an option agreement with Australian-listed De Grey Mining Ltd. to acquire an 80-per-cent interest in the Great Northern gold project.

The agreement grants Rugby an option to earn an 80-per-cent interest in a 714-square-kilometre tenement package and an additional option to purchase an 80-per-cent interest in a near-surface historical resource at Wingina Well.

Rugby's chief executive officer, Paul Joyce, stated: "For two years the company has been conducting a comprehensive search to acquire a drill-ready project, while it awaits permitting for its prospective Cobrasco and Comita projects in Colombia and the Mabuhay project in the Philippines. The Great Northern gold project satisfies all parameters required by management including:

• "Potential for discovering a high-grade gold deposit;
• "Favourable permitting regime within a highly rated investment jurisdiction;
• "Excellent infrastructure with many of Australia's largest iron mines in the region;
• "Year-round exploration and mining access;
• "Reasonable drilling costs and drill rig availability.

"Previous drilling at Wingina Well encountered intervals of high-grade gold mineralization within a larger lower-grade system. Our aim will be to test for further high-grade zones in the untested areas both downdip and along strike. We also see excellent potential for additional discoveries in extensive areas of surficial cover that are underlain by greenstones intersected by regional shears. Previous exploration identified specific targets within 30 km along strike."

The Great Northern gold project (previously Turner River) is located in the Pilbara district of Western Australia, 60 km south of Port Hedland. The region is home to a massive industrial base associated with oil, natural gas, iron ore extraction and the Telfer gold mine operation (plus-10 million ounces of gold produced since 1975 as reported on Newcrest Mining Ltd.'s website). Infrastructure includes an international airport, seaport, railways, highways and gas pipelines.

Previous exploration within the project area includes geophysical and geochemical surveys, geological mapping, and drill programs comprising 4,171 drill holes for 224,442 metres. Most of the holes were shallow and were used for geochemical sampling below extensive areas of thin cover. This exploration has provided a large technical database that will assist in the development of new drill targets.

To date, most exploration was conducted at Wingina Well, where 514 drill holes and channel samples for a total of 40,967 m were completed. Drilling indicated three higher-grade, parallel gold zones contained within lower-grade envelopes. Wingina Well has been subject to several historical resource estimates; however, they were not completed in compliance with National Instrument 43-101. Consequently, the company is not reporting any resource estimates prior to further evaluation.

Metallurgical testwork indicates the gold is fine grained and free milling. Carbon-in-leach testwork achieved gold recoveries up to 93 per cent with low reagent consumption and easy grinding of weathered material that forms the bulk of the currently estimated mineral resource. Column leach tests (heap leaching) of minus-12-millimetre material achieved a 70-per-cent gold recovery in preliminary testwork.

Great Northern project agreement terms

Pursuant to the agreement, Rugby will pay De Grey $100,000 (Australian) within five days of regulatory approval and will have two options as follows:

1. A three-year option to acquire an 80-per-cent interest in the tenements by incurring a total of $2-million (Australian) in expenditures with a minimum expenditure commitment of $500,000 (Australian);
2. An option to purchase an 80-per-cent interest in the historical near-surface resource at Wingina Well for $3-million (Australian) by paying $2-million (Australian) at any time within 54 months of date of the agreement and a further $1-million (Australian) within 30 days of a decision to mine any part of the historical resource at Wingina Well.

Cisco Montes, the company's chief geologist, qualified person within the definition of that term in National Instrument 43-101, has supervised the preparation of the technical information contained in this news release.

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