Newmont Enters Agreement With Novagold to Explore Eagle Plains' McQuesten Gold Property, Yukon

Eagle Plains Resources Ltd. (EPL:CDNX) wishes to report that NovaGold Resources Inc. (NRI:TSE) announced today that they have entered an agreement with Newmont Exploration of Denver, Colorado to explore the McQuesten (formerly Wayne) property, located in the Keno Hill Mining District, 40 kilometers northeast of Mayo, Yukon. The property consists of 46 quartz mining claims and is accessed via the all-weather Silver Trail highway with an adjacent hydro-electric power transmission line. NovaGold in 1999 purchased from Viceroy Exploration Ltd. the right to earn a 70% interest in the property from Eagle Plains by expending Cdn$1,000,000 and assuming cash payments totaling $320,000.

The agreement allows Newmont to earn a 51% interest in the existing NovaGold option by expending Cdn$3,750,000 on behalf of NovaGold over five years and making payments to NovaGold totaling Cdn$200,000. The agreement grants Newmont a First Option to purchase an additional 19% equity interest in the project by paying NovaGold US$3,000,000 and granting NovaGold a sliding scale royalty. Newmont has a Second Option to acquire an additional 10% equity for Cdn$2,000,000 should that equity become available as a result of dilution. After Newmont has earned its 51% equity interest in the project, NovaGold has the option to require Newmont to arrange funding of a all exploration costs to complete a feasibility study by providing NovaGold a loan to be reimbursed from 90% of its share of mine cash-flow.

The McQuesten property is characterized by limited surface exposures resulting from a thick mantle of frozen glacial till. Bedrock geology is locally exposed by trenching and reveals a sedimentary sequence consisting of calcareous metaclastic sediments, graphitic schist and limestone assigned to the Late PreCambrian Hyland Group. Late Cretaceous quartz monzonite dikes intrude these host rocks along near east-west structural zones. Gold mineralization occurs within and along footwall contacts of the dikes, and within structural zones in the calcareous sediments. A broad deformation zone related to the Robert Service Thrust has caused widespread structural preparation within reactive sedimentary host rocks. Two major zones have been identified to date: the West and East Zones.

Gold mineralization associated with these structural zones is visible in both trench excavation and drill core. Drill holes in the West Zone contain up to 18.3 meters of 3.74 g/t gold and drill holes in the East Zone contain up to 16.3 meters of 2.19 g/t. Both zones remain open along strike. Induced polarization surveys reveal a promising anomaly just south of the East Zone (Southeast Anomaly). Ground and airborne magnetic data suggests that the East Zone and Southeast Anomaly are part of a continuous 2.4 km mineralized trend.

Eagle Plains is pleased to welcome Newmont as a participant in the McQuesten Project, and looks forward to the benefits afforded the company by working with a stable, experienced, major gold mining entity. Eagle Plains has a 100% interest in over twenty base metal and precious metal properties in western Canada. Its properties are currently under option to Canadian and international corporations including Kennecott Canada Exploration Ltd., Rio Algom Exploration Ltd., Novagold Resources and CanAustra Resources. Through existing agreements, the company is carried for $9,000,000 in exploration expenditures, and stands to receive $1,000,000 in cash payments. Eagle Plains is well-funded, and is aggressive in its efforts to carry out responsible, effective exploration activities throughout its theatre of operation.

On behalf of the Board of Directors

Signed

“Tim J. Termuende”
President and CEO

For further information on EPL, please contact Mike Labach at 1 866 HUNT ORE (486 8673)
Email: mgl@eagleplains.com or visit our website at http://www.eagleplains.com

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