Mr. Richard Graham reports

RHYOLITE ANNOUNCES 0.83 G/T GOLD OVER 38.2 METRES AND 17.8 G/T GOLD OVER 1.3 METRES AT PAXSON

Rhyolite Resources Ltd.'s detailed geological compilation program in conjunction with the validation sampling of diamond core drilled in 2001 has resulted in the identification of two prospective gold targets on its wholly owned Paxson project in Alaska.

The main area of interest was outlined in 2001 when an exploration program financed by Placer Dome USA Inc. defined a 1,100-metre-by-500-metre gold-in-soil geochemical anomaly totalling greater than 100 parts per billion. In 2001, two drill holes tested a very limited portion of the anomaly where surface trenching returned 3.9 grams gold per tonne over 16.4 metres at the Shalosky showing. The first hole intersected 38.2 metres grading 0.8 gram gold per tonne from 69 metres downhole, including a higher-grade interval averaging 3.8 grams gold per tonne over 2.1 metres and a second mineralized zone lower down the hole averaging 12.2 grams gold per tonne over 1.3 metres. The second hole was collared approximately 100 metres along strike and returned 17.4 metres grading 1.2 grams gold per tonne from 95.65 metres downhole, including a seven-metre interval averaging 2.2 grams gold per tonne.

Resampling and relogging of the historical drill cores in 2010 have validated the tenor of mineralization intercepted by the historical drill holes collared over the Shalosky anomaly. Hole WG01-01 returned 0.83 gram gold per tonne over the 38.2 metres including a higher-grade interval averaging 6.45 grams gold per tonne over 2.1 metres. The second mineralized zone was also increased to 17.8 grams gold per tonne over 1.3 metres.

Hole WG01-02 returned 1.22 grams gold per tonne over the 17.4-metre interval, including a 6.9-metre interval averaging 1.98 grams gold per tonne.

Mineralization is dominantly metasediment hosted with the overall sulphide content varying from less than 1 per cent to more than 10 per cent. There is a strong correlation between gold, arsenic and antimony. Copper, lead, zinc, bismuth, mercury and tellurium values are all typically low and silver values are generally only weakly to moderately anomalous.

The Shalosky gold-arsenic-antimony-in-soil anomaly extends 500 metres uphill from the previous drilling and more than 900 metres along strike to the northeast.

    
          2001 SHALOSKY DIAMOND DRILL HOLE SUMMARY AND 
                   2010 VALIDATION RESULTS
                                               2001  2010
Target                       From    To Width  gold  gold Variation
tested   Hole No.   Depth (m)  (m)   (m)   (m) (g/t) (g/t)       (%)

Shalosky WG01-01      152.4  69.0 107.2  38.2   0.8   0.8   Nominal
                  Including  75.0  79.7   4.7   2.1   1.3       -38
                  Including 105.1 107.2   2.1   3.8   6.4     +68.4
                            117.5 118.8   1.3  12.2  17.8     +45.9
Shalosky WG01-02      170.1  95.6 113.1  17.4   1.2   1.2   Nominal
                  Including  97.1 104.1   6.9   2.2   2.0      -9.1

Intervals shown are mineralized lengths of core; geometry is not 
well enough understood to reliably calculate true widths.

Geological compilation work also identified a second target that has never been drill tested and which lies three kilometres east-southeast of the Shalosky gold-in-soil anomaly. Known as the Low showing, hand trenching in 2001 returned 8.6 grams gold per tonne over 9.8 metres including a 3.8-metre interval averaging 14.3 grams gold per tonne. Individual samples returned from 3.05 grams gold per tonne to 14.95 grams gold per tonne and the mineralization remains open in both directions under talus cover.

Between the Shalosky and Low showings a third target area has been identified. Known as the OTG showing, grab samples collected in 2001 returned from no significant values up to 5.3 grams gold per tonne and float samples returned from no significant values up to 4.8 grams gold per tonne. This area has never been drill tested but will require additional geochemical and geological work to determine if a drill target can be defined.

An exploration crew has been mobilized to the project in an effort to refine drill targets.

Quality control/quality assurance

The 2001 geological data for the Paxson project were completed prior to the implementation of National Instrument 43-101 standards. All samples collected in 2001 were sent for gold fire assay and 32-element ICP analysis to ALS Chemex labs. Samples were prepared in ALS Chemex's Fairbanks prep facility and then sent to Vancouver, B.C., for analysis. Gold fire assays were on 30-gram pulp splits with an atomic absorption finish. Samples which assayed greater than 10 g/t Au were then reassayed using a gravimetric finish. Selected samples were resent for screen fire (metallic) assay. There are no records of the use of any external gold standards and blanks in the geological data. Mineralized intervals in the NQ2-size drill core were sawn longitudinally and half the drill core was sampled in standard intervals not exceeding 1.5 metres in length. Core samples were transported in security-sealed bags to the lab for analyses.

All samples collected in 2010 were sent for gold fire assay and 48-element ICP analysis to ALS Chemex. Samples were prepared in ALS Chemex's Fairbanks prep facility and then sent to Reno, Nev., for analysis. Gold fire assays were on 50-gram pulp splits with an AA finish. One in every 10 samples contains a control (blank or gold standard). Mineralized intervals in the NQ2-size drill core were sawn longitudinally and a quarter of the drill core was sampled in intervals mirrored by the 2001 program. Core samples were transported in security-sealed bags to the lab for analyses.

Qualified persons

The foregoing disclosure has been reviewed and compiled by Richard A. Graham, PGeol, president of Rhyolite and a qualified person for the purpose of NI 43-101. Carl Schaefer (certified professional geologist No. 10834), vice-president of Northern Associates Inc. (a geological consulting firm based in Fairbanks, Alaska), a qualified person for the purpose of NI 43-101 and project geologist during the above-mentioned 2001 diamond drill program, has also reviewed the information pertaining to the Paxson property for accuracy.

Mr. Schaefer is an independent qualified person as defined by NI 43-101 and has reviewed and approved the contents of this press release.