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Gold/Mining/Energy : CELTIC MINERALS LTD A COMPANY TO WATCH SHORT AND LONG TERM -- Ignore unavailable to you. Want to Upgrade?

To: DaveTel who wrote (665)	8/6/1998 12:27:00 PM
From: 1king	Read Replies (1) \| Respond to of 744

CELTIC AND JILBEY OPTION HUNGRY HILL TO RIO ALGOM CALGARY, Aug. 6 /CNW/ - Celtic Minerals Ltd. (''Celtic'') and Jilbey Exploration Ltd. (''Jilbey'') are pleased to announce the signing of a letter of intent with Rio Algom Exploration Inc. (''Rio'') whereby Rio can earn an interest in the Hungry Hill base metal project, Central Newfoundland. Rio Algom Exploration Inc. is a subsidiary of Rio Algom Limited, a major Canadian base metal producer. The Hungry Hill project consists of 282 claims (7,050 hectares) and is presently held 50-50 by Celtic and Jilbey. Under the terms of the agreement Rio can earn a 51% interest over a 4 year period by making $350,000 in cash payments and incurring $4,000,000 in exploration expenditures. Rio has an option to earn an additional 9% by making a $150,000 cash payment, incurring $1,500,000 in expenditures, and making a $500,000 payment within 12 months of commercial production. Rio, upon vesting its 51% or 60%, will form a joint venture with Celtic and Jilbey whereby each party will contribute their share to the project on a pro-rata basis. If a participant elects not to contribute and are diluted to a 10% interest their share will convert to a 1% NSR. Highlights of results previously obtained at Hungry Hill by Celtic and Jilbey include 4.00 metres of 4.99% zinc, 16.44 g/t silver, and 0.85 g/t gold from drill hole number 16. And most recently, drilling completed in April resulted in the discovery in hole No.22 of high grade base metal clasts (press release dated April 8, 1998). The clasts are postulated to indicate close proximity to a high grade base metal deposit(s) (press release dated May 27, 1998). Strong geological similarities exist to the Buchans mine, a former producer located 16.5 kilometres northwest of Hungry Hill, and to other Kuroko-type volcanogenic massive sulphide systems. Rio intends to initiate a program of drilling and pulse-EM geophysics. Rio will make a $40,000 payment on signing, commit to spend a minimum of $175,000, and must incur $400,000 in expenditures and make a $50,000 payment at the end of the first year in order to proceed to the second year. Rio may accelerate the payment and expenditure schedule to become vested at any time between years one and four. The agreement is subject to the parties executing an option and joint venture agreement and obtaining the necessary regulatory approvals. The Alberta Stock Exchange Neither Approves Nor Disapproves of the Information Contained Herein. -30- For further information: David Graham, President, Celtic Minerals Ltd., (403) 261-2890 or Daniel Whittaker, President, Jilbey Exploration Ltd., (902) 422-0028