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Mar 18, 2004

New Government Geological Reports on Jackson's Arm

#2004-04

Kermode Resources Ltd. is pleased to report that the recently released Newfoundland and Labrador Geological Survey publication Current Research 2004 contains two companion reports covering the Jackson's Arm area. Report 04-1 is available online at http://www.gov.nf.ca/mines&en/geosurvey/.

The first of the two reports on the Jackson's Arm Area in the 2004 Current Research publication is entitled " Preliminary Report on the Stratigraphy and Structure of Cambrian and Ordovician Rocks in the Coney Arm Area, Western White Bay (NTS Map Area 12H/15)" and is authored by A. Kerr and I. Knight. The report is available online at http://www.gov.nf.ca/mines&en/geosurvey/publications/cr2004/kerr_knight.pdf.

The sediment hosted gold mineralization on Kermode's Jackson's Arm property is noted by Kerr and Knight to be "...the only extensive gold mineralization presently known to occur in Cambrian and Ordovician platformal sedimentary rocks anywhere in Newfoundland ...".

Three major thrust faults are identified for the first time in this report; two of these, the Cobbler Head Fault Zone and the Apsy Cove Fault Zone appear to be very important. Kerr and Knight note, "The current exploration for Au in the area is based on genetic and empirical models for Carlin-type deposits. In their type area (the Great Basin of the western United States) these deposits are hosted by impure limestones of similar age to those of Western White Bay. Deposits are spatially associated with important thrust faults that typically bring deep-water siliclastic rocks over platformal carbonate rocks. In this context, it is interesting that mapping in 2003 suggests that both of the known gold showings in sedimentary rocks lie close to the combined traces of two major faults that are interpreted as early thrusts." Furthermore "The Doucers Valley fault system probably originated as an allochthon boundary thrust which placed deep-water sedimentary rocks over the platformal sequence."

Additionally Kerr and Knight point out that "Carlin-type gold deposits are also commonly associated with intensely silicified limestones, termed "jasperoids"." And go on to note that "...dolostones on the Cat Arm road south of Little Coney Arm do show signs of such processes, and it is also seen in drillcore from the Apsy gold showing"

The second report "An Overview of Sedimentary-Rock-Hosted Gold Mineralization in Western White Bay (NTS Map Area 12H/15)" by A. Kerr is also available online at http://www.gov.nf.ca/mines&en/geosurvey/publications/cr2004/kerr.pdf. The gold mineralization is reviewed by Kerr "based on company assessment files supplemented by examination of key drillholes during the 2003 field season." In his summary and discussion Kerr states, "A detailed review of Carlin-type gold deposits is well beyond the scope of this report, but some features of mineralization described above are broadly consistent with such classification. These include the impure carbonate host rocks, high Au/Ag and high Au/base-metal ratios, an association with disseminated pyrite, and the strong correlation of gold and arsenic"

Kermode wishes to express its appreciation of the contribution by the Newfoundland and Labrador Geological Survey to the understanding of the geology of the Jackson's Arm area. These reports provide a substantially improved knowledge of the stratigraphy and structure of the area. This knowledge will be very useful in Kermode's continuing exploration program.

Kermode's primary exploration focus at Jackson's Arm continues to be on the discovery of high-grade sediment hosted gold deposits similar to those at Carlin, Nevada. Kermode has recently completed the first phase of a multi-phase exploration program at Jackson's Arm. This included the drilling of ten holes on The Beaver Dam Zone that demonstrated thick, continuous gold mineralization with many similarities to Carlin-type gold deposits. The second phase, which will also consist of drilling will test mineralized structures in the Road Zone, sediment-hosted gold mineralization in the northern part of the Apsy Zone and soil geochemical anomaly #14 which lies immediately adjacent to the Cobbler Head Fault Zone. This second phase will be starting soon.

Visit our website at www.kermode.com for more information.


ON BEHALF OF THE BOARD OF DIRECTORS

"D. Neil Briggs"

DIRECTOR