Mr. Joseph Kizis of Homestake reports

HOMESTAKE OPTIONS 50% OF HOMESTAKE RIDGE PROPERTY FOR $16.5 MILLION IN WORK AND PAYMENTS

Homestake Resource Corp. has signed a letter of intent to option 50 per cent of the company's Homestake Ridge property to Banks Island Gold Ltd. for a total of $16.5-million in work and option payments over a three-year period. Payments and work commitments are as shown in the table.

                      PAYMENTS AND WORK COMMITMENTS

                                             Cash         Work commitment 

On Jan. 31, 2016                         $500,000                      $-
By Dec. 31, 2016                                -               2,000,000(1)
On Jan. 31, 2017                          500,000                       -
By Dec. 31, 2017                                -               3,000,000
On Jan. 31, 2018                          500,000                       -
By Dec. 31, 2018                                -               5,000,000
On Dec. 31, 2018                        5,000,000                       -
Total                                   6,500,000              10,000,000

(1) Of which 60 must be expended by Sept. 30, 2016.

Banks Island will be operator during the earn-in period. In order to exercise the option, Banks Island is also required to deliver to the company a preliminary economic assessment by Sept. 30, 2018, or within 30 days of completion of earn-in expenditures.

Benjamin Mossman, president and chief executive officer of Banks Island, commented: "The Homestake Ridge property presents a unique opportunity to bring a significant deposit into production through the use of our existing process facilities, equipment and staff at the Yellow Giant mine, which is currently on care and maintenance. The company plans to aggressively develop the Homestake project to its full potential."

The addition of the Homestake Ridge mineral resources to the Yellow Giant operations, which are located on tidewater 320 kilometres to the south of Homestake Ridge on Banks Island, British Columbia, could significantly extend the life of operations at the Yellow Giant production facilities. The Homestake Ridge deposit is located just 35 km from tidewater at Alice Arm, British Columbia.

As part of its overall strategy, Banks Island has advised of intentions to:

1. Recommence production at the Yellow Giant mine to establish positive cash flow from operations in order to finance work commitments on the Homestake Ridge project;
2. Evaluate the use of preconcentration and complete a definition drilling program at Homestake Ridge to define high-grade resources with potential for economic extraction;
3. Commence environmental baseline work and permitting at Homestake Ridge;
4. Complete road access from Homestake Ridge to Alice Arm and establish a barge landing facility near Alice Arm;
5. Permit and construct an underground mining operation at Homestake Ridge, beginning with high-grade portions of the Homestake deposits;
6. Transport mined material from Homestake Ridge to Alice Arm overland and then via barge to Banks Island for processing at the Yellow Giant facility;
7. Continue exploration efforts for the identification and development of new deposits at Homestake Ridge.

Joseph Kizis, president of Homestake, commented: "We are pleased to have Banks Island as an experience mining partner to develop our discoveries at Homestake Ridge into near-term production, which will be enhanced and facilitated by the synergies between the Yellow Giant and Homestake Ridge projects. We also feel there remains great potential for new discoveries and expansions of existing discoveries, which will ensure a long mine life."

Homestake Ridge project

The Homestake Ridge project is located within the mineral-rich Stikine terrane of northwestern British Columbia. Exploration at Homestake Ridge has resulted in the discovery of three significant mineral deposits, with a potential fourth deposit at the Slide target. The project contains an estimated inferred resource of 911,000 ounces gold and 20,366,000 ounces silver (1,225,785 ounces gold-equivalent at a 5.6 g/t AuEq grade) and an estimated indicated resource of 124,000 ounces gold and 939,000 ounces silver (141,000 ounces AuEq at 7.3 g/t AuEq grade). Within this resource are higher-grade zones, as demonstrated by the project's highlight intercept from the 2008 drill hole HR08-87, which returned an estimated true width intercept of 52.5 metres averaging 20.99 g/t Au and 11.60 g/t silver (See Oct. 2, 2008, press release). All three deposits remain open in several directions and none of the recently discovered mineralization at the Slide target has been incorporated into resource estimates.

Rob Macdonald, PGeo, is the qualified person who has reviewed and approved the contents of this news release on behalf of Homestake.

We seek Safe Harbor.