Sleeper awakened by deep drilling (June 30, 2004)

Two deeper holes at the Sleeper JV in Nevada operated by New Sleeper Gold (NWS-V) and X-Cal Resources (XCL-V), have confirmed and extended higher grade gold mineralization in the West Wood breccia zone. Bonanza grade silver mineralization has also been intersected in the deeper part of zone.

Share prices for the two companies were driven higher on the news today with X-Cal up 17% to close at 61 and New Sleeper moving up by 6 to close at 90.

The Sleeper Gold project is being operated by the partners on a 50:50 basis. The companies formed their joint venture early this year to consolidate their holdings in the 30-sq.-mile Sleeper district in Humboldt County in Nevada.

The Sleeper mine, which ceased operations in 1986, produced about 1.7 million ounces of gold and 2.3 million ounces silver. X-Cal has long held however, that the previous mining operation did not fully exploit the mineralized system and has been anxious to drill deeper.

Hole WW-14-04 averaged 12.1 grams gold and 239.4 grams silver per tonne over 54.6 metres from a downhole depth of 251.5 metres; and WW18-04 averaged 10.6 grams gold and 106.6 grams silver over 27.3 metres from a downhole depth of 197.8 metres.

Several higher grade gold with silver intercepts occur within these two intervals which have been averaged using a 3 gram gold cut-off grade. Hole 14 includes intercepts of 8.1 metres of 29.3 grams gold and 31.5 grams silver and 6.9 metres of 18.7 grams gold and 1007.8 grams silver. Hole 18 includes 8.4 metres grading 9.5 grams gold and 113.2 grams silver and 9.2 metres of 17.8 grams gold and 161.7 grams silver.

The higher silver to gold ratios are an anomaly and are associated with more intensely silicified and sulphidized portions of the breccia zone at West Wood.

The drill program at West Wood will focus on testing the extent of the new high-grade zone. At least US$6 million will be spent on exploration this year to test the resource potential and reverse circulation drilling will test less advanced targets on the property.