OPTION AGREEMENT SIGNED WITH MOUNTAIN BOY MINERALS
Stewart Area Exploration Programs to Begin
Super Flow-Through Financing Arranged
Pinnacle Mines Ltd. reports that it has entered into a joint venture agreement with Mountain Boy Minerals Ltd. whereby Pinnacle can earn up to 51 % of Mountain Boy’s interest in its 100% owned Silver Coin and 55% owned Dauntless projects as well as the 100% owned FR claims by spending $1.75 million on exploration over a 3 year period. In addition, Pinnacle has the right to earn an additional 9% in the projects by bringing one of the projects to production.
These properties, which are contiguous, are located 24 kilometers north of Stewart, BC. The Silver Coin property consists of 59 units in 21 claims and the Dauntless property has 30 units in 4 claims all of which are located along the Big Missouri ridge. The Silver Coin property includes the former producing SB property from which approximately 100,000 tons of ore was mined from two zones called the Facecut and “35” Zone and processed in the nearby Premier mill. According to past published results, it appears that several hundred thousand tonnes may remain in these zones. Grade of these zones is unknown.
At present the companies will focus their efforts on a large massive sulphide zone that has been exposed over a width of at least 25 meters. Work to date indicates that this zone is part of a horizon that is over 500 meters in strike length and over 200 meters of height. It is poorly exposed along a talus-covered portion of the Big Missouri ridge.
At the higher levels of outcrop exposure, massive sphalerite, galena, chalcopyrite and pyrite is exposed in a rock face 30 meters high. Chip sampling across the north and south exposed portions of the zone have yielded the following assays:
| Chip Line | Width | Au (g/t) | Ag (g/t) | Cu (%) | Pb (%) | Zn (%) |
| North side | 5.6 m | 0.7 | 156.3 | 1.46 | 1.13 | 12.2 |
| South side | 11.2 m | 0.72 | 105 | 0.79 | 1.82 | 4.3 |
Preliminary exploration has indicated that the zone continues up hill beneath vegetation-covered portions of the property. The Company plans to drill test this zone as part of their ongoing evaluation of the property.
In addition a sulphide-bearing zone that is at least 7 meters wide has been outlined in a talus slope that is on strike with the massive sulphide zone but 200 meters lower in elevation.
| Sample | Width | Au (g/t) | Ag (g/t) | Cu (%) | Pb (%) | Zn (%) |
| L. Sulphide | Grab | 25.2 | 352 | 1.83 | 4.41 | 23.9 |
The companies plan to fully expose and then sample this zone, which contains much higher precious values than other zones being tested.
Chip sampling of the surface expression of the ‘35” Zone has given the following results:
| Chip Line | Width | Au (g/t) | Ag (g/t) | Cu (%) | Pb (%) | Zn (%) |
| 1 | 5.0 m | 13.49 | 37.08 | 0.22 | 0.19 | 2.65 |
| 2 | 5.0 m | 11.97 | 55.75 | 0.44 | 0.25 | 3.96 |
These chip lines are at the north and south side of a 40- meter long exposure.
On the properties, there are two main types of mineralization including high-sulphide base-metal gold rich and low-sulphide gold rich types, both consistent with the two main types of mineralization at the nearby, former producing Silbak-Premier mine which produced 4.7 million tons that yielded approximately 1.8 million ounces gold, 41 million ounces silver, 4.2 million pounds copper, 62 million pounds lead and 20 million pounds zinc.
In addition to work on these properties, Pinnacle Mines has mobilized crews to the Stewart region to begin exploration activities on its wholly owned Surprise Creek and El Dorado properties.
The Surprise Creek Property is approximately 150 sq. km. in size and covers the contact zone between the Mt. Dilworth rhyolite and overlying Salmon River sedimentary formations, the same stratigraphic sequence that is host to numerous gold deposits including Eskay Creek, Snip and Premier-Big Missouri mines. During a limited 2003 work program, three areas of importance were identified for follow-up in 2004.
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An area containing a field of siliceous boulders up to 2 metres in diameter. Several grab samples were anomalous in copper, zinc and silver with individual samples running as high as 2.8% copper, 4.8 % zinc and 213 grams/tonne (g/t) silver.
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An area containing a field of boulders up to 0.5 metres in diameter. The boulders are a black argillite with 25% quartz stockwork containing a fine grained black sulphide with abundant green staining indicating possible arsenopyrite. One grab sample assayed 3076.8 g/t silver.
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An area containing boulders up to 2 metres in diameter consisting of up to 50% quartz stockwork in altered andesite, individual veins with coarse pyrrhotite, chalcopyrite, arsenopyrite and pyrite. Values range from 0.08 g/t to 13.02 g/t gold and silver up to 371.2 g/t.
In addition, Pinnacle will commit a portion of its 2004 budget to the El Dorado, a property with little exploration in the last 30 years and only sporadic work efforts since the early 1900s. Pinnacle crews have yet to explore the property however, BC Minister of Mines Annual Reports over several decades document numerous gold and silver showings. In 1928, a sample across 1.5 metres, from a cut 27 metres above the Frenchman Tunnel, assayed 27.4 g/t gold, 68.6 g/t silver and 2.3% copper. A 1946 report indicates several silver-rich boulders assaying up to 10.3 g/t gold and 5,136 g/t silver were located but their source was not found.
Mr. E. Kruchkowski, P. Geol. is in charge of the exploration programs on behalf of the Company.
Pinnacle Mines Ltd., subject to regulatory approval, has agreed to offer of up to 500,000 flow-through units at $0.65 per unit to generate gross proceeds of up to $325,000. Each unit will consist of one common flow-through share and one non-flow-through share purchase warrant (“Warrants”). The holder of two Warrants will be entitled to acquire one additional share for a period of 12 months from the date of the offering at a price of $0.75 per share. It is anticipated that a commission of 8%, payable in cash or in units of the Company, may be paid on a portion of the financing.
Pinnacle Mines Ltd. is a Canadian based mineral exploration and development company whose activities are international in scope. Its primary assets are located in both Canada and China. In Canada, Pinnacle holds several properties in Northwestern British Columbia, in proximity to numerous past and producing mines including Barrick Gold’s famed Eskay Creek Mine. In China, Pinnacle’s current focus is in Southeast Yunnan, an area being increasingly considered for its potential to host significant mineral resources including “Carlin” style gold deposits.
On behalf of the Board of Directors
“Andrew W. Bowering”
President and CEO
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