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Jan 12, 2004

Gold in Carlin-Type Setting - Drilling Resumes at Jackson's Arm

#2004-01

- Gold in Carlin-Type Setting
- Drilling Resumes at Jackson's Arm

Initial results from Kermode's ongoing core drilling program on its Jackson's Arm property in Newfoundland have confirmed the existence of a large gold bearing mineralized system in a Carlin-type setting. Individual gold values up to 10.02 g/t occur within thick, continuously mineralized sections over core lengths in excess of 45 meters.

The Jackson's Arm property was previously explored in the 1980's. This work was focussed on the extensive gold occurrences in granite. Kermode recognized the potential of the property to contain Carlin-type gold deposits in the sedimentary rocks overlying the granite. Expert geologists have reviewed the Jackson's Arm property and have pointed out the many similarities between Jackson's Arm and Carlin on all scales from regional to local. These experts have also stated that the little explored sedimentary rocks are the most prospective for Carlin-type gold occurrences.

Kermode's exploration model for Jackson's Arm is therefore based on the prolific Carlin, Nevada mining district that has produced over 50 million ounces of gold. This model has been strongly confirmed by Kermode's initial drilling. Kermode's exploration is focussed on the discovery and delineation of gold in sedimentary rocks on the property.

Kermode's initial drill program is focused on the Beaver Dam Zone near the South end of the extensive property. The Beaver Dam Zone was discovered by drill testing soil geochemical anomalies during the last drill program by the previous property owner in 1990. A number of widely spaced holes were drilled at that time.

Kermode's first hole JA-03-01 encountered a continuous 33.2 meters of gold mineralization of which 22.6 meters was in sedimentary rocks and averaged 1.52 g/t gold, the best individual assay was 10.02 g/t gold over 1.0 meter. Hole JA-03-02 encountered 45.4 meters of continuous gold mineralization of which 34.3 meters were in sedimentary rocks including a section of 7.0 meters averaging 1.48 g/t gold. The best individual sample in this hole was 9.77 g/t gold over 0.5 meters.

Drilling resumed on January 5th. Kermode plans to drill an additional 10 to 15 holes in the Beaver Dam Zone. This zone is the first of numerous targets, including newly discovered soil geochemical anomalies that Kermode plans to drill test this season.


ON BEHALF OF THE BOARD OF DIRECTORS

"D. Neil Briggs"

DIRECTOR

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