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Cedar Mountain Encounters Extensive Gold at Kelly Creek Project

Cedar Mountain Exploration Inc. (TSX VENTURE:CED) announced that the results of its 2010 work program on the Kelly Creek Project, located on the Seward Peninsula, Alaska, has identified extensive gold in soil anomalies within a 17 km by 5 km corridor. The individual anomalies and the prospective stratigraphic and structural corridor largely remain open and untested.

"We are very excited with results of Cedar's 2010 program at Kelly Creek," stated Charles Chebry, President and CEO of Cedar. "Our initial geochemistry program has delineated an impressive footprint of a significant gold district, with numerous drill ready targets. We are just beginning to understand the scale of the mineralization and indications are that the potential to expand the district are excellent," added Mr. Chebry.

Soil sampling during the 2010 field season focused on four key areas the Kelly Creek, Fox, Wolf and Wolverine prospects. Sampling grids or lines were established over each of these areas and B horizon soils were collected by hand shovel. This region of the Seward Peninsula was not glaciated during the last ice age and it has been demonstrated that soil horizons containing elevated Au, As, Sb, and Hg assays are developed directly over mineralized host rocks, and as such soil sampling is highly effective technique to identify and delineate priority drill targets along the mineralized trends. Significant soil anomalies (greater than 20ppb) have now been established over permissive stratigraphic and structural contacts within a 17 km long by 5 km wide corridor.

Reconnaissance stream sediment sampling by Anaconda Minerals Company led to the discovery of the Kelly Creek prospect in 1982. Soil sampling completed in 1983, 2007, and 2010 included grid surveys with 50 m spaced sample intervals along 100 m spaced lines that in total cover over a 2.5 km2 area. Low level gold values are widespread in the area but a strong and coherent gold-in-soil anomaly, up to 300 m wide, is now well defined for over 2 km across the headwater slopes of Kelly Creek. The gold values in this anomaly range from about 20 ppb to over 1000 ppb and are commonly 50 to several hundred ppb. The anomaly remains open along strike.

In 1984, Anaconda Minerals Company drilled four small diameter core holes in one part of the Kelly Creek prospect (see accompanying cross section). KC-4 targeted a schistose marble/graphitic schist contact that was only weakly and locally mineralized. KC-2 was inclined to the southwest and drilled under the main mineralized zone. Both KC-1 and KC-3 were inclined to the northwest and intersected gold-bearing rocks. KC-1 intersected 1.07 g/t over 23.5 m and KC-3 intersected 0.83 g/t over 32 m. The core data show that gold is disseminated in graphitic schist and more irregularly distributed in quartz vein stock-works, quartz-cemented breccias, and silicified zones. Arsenic, antimony and mercury are also anomalous in the prospect area.

Structures that help control mineralization at Kelly Creek appear to be reverse faults subsidiary to a regional high angle fault system. This structural control, the carbonaceous and partly calcareous host rock composition, the disseminated character of the gold mineralization, the associated sulfide and alteration minerals, and the anomalous geochemical suite are similar in several respects to deposits in the Carlin trend of Nevada.

The Fox prospect was discovered by reconnaissance soil surveys. The presence of a reverse fault and schist-marble contact subsidiary to a regional high angle fault system and a few low level gold anomalies in nearby stream sediments targeted the area for reconnaissance soil sampling in 2007. The contact that was sampled in 2007 is sub-parallel to the reverse fault that is a control on Kelly Creek prospect gold mineralization some 2 to 3 km to the south-southeast. Samples collected in three widely spaced traverses across the schist-marble contact in 2007 were weakly anomalous in gold and in some cases arsenic, antimony, and mercury.

In 2010, 14 soil lines were completed at the Fox prospect across the schist-marble contact along about 5 km of its strike. The spacing between these lines varied from a few to several hundred meters and the sample spacing along them was 100 m Low level gold values in these soils define large and coherent anomalies and the anomalies are sub-parallel to the schist-marble contact. As presently known, the stronger parts of the anomaly (where samples contain more than 100 ppb gold) are close to the schist-marble contact in the southern part of the prospect area.

The Fox prospect area will require much more detailed sampling and geologic mapping to define the extent, continuity, and location of stronger gold mineralization. However, the gold-bearing areas are large as strike lengths greater than 2 km are indicted by the 2010 data.

A soil survey completed in 2007 discovered the Wolverine prospect. It is located in the northern Kelly Creek trend about 6.5 km southeast of the Kelly Creek prospect. This area was targeted for a soil grid survey because of the presence of anomalous stream sediments in an adjacent drainage, a gold-bearing reconnaissance soil sample on a slope in the drainage headwaters, and the projected trace of a high angle fault through an area where calcareous and graphitic metasedimentary rocks are in contact.

Soil sampling completed at the Wolverine prospect in 2007 and 2010 included a grid survey with 50 m spaced sample intervals along 100 m spaced lines that in total covered about a 2 km2 area. The soil surveys defined a strong and coherent gold-in-soil anomaly, up to 300 m wide, that has a strike length of 1 km. The gold values in this anomaly range from about 20 ppb to over 1000 ppb and are commonly 50 to few hundred ppb.

The Wolf prospect was discovered by soil sampling along the marble-schist contact that localizes part of the Kelly Creek prospect 1 km to the north. The initial sampling in 2007 was followed up in 2010 by extension of the Kelly Creek soil grid south between the Kelly Creek fault and Erin Creek. The soil sample lines were 100 m apart and the sample interval along them was 50 m.

The 2007 and 2010 soil data define two areas of anomalous gold concentrations in the Wolf prospect area. One with gold-in-soil values up to 97 ppb is about 50 m wide and extends in a northwest direction for over 400 m. This anomaly appears to be structurally controlled by a high angle fault that trends northwest and offsets the marble-schist contact controlled by the Kelly Creek fault.

The second area of anomalous gold values is about 300 m to the south and localized along the schist-marble contact controlled by the Kelly Creek fault. The highest gold value in the soils here is 27 ppb but only the edge of the anomaly appears to have been sampled. As presently known, it extends for 600 m along the schist-marble contact. If mineralization here is similar to that at Kelly Creek, it is expected to be hosted by schist in the footwall of the Kelly Creek fault. In this case the gold-bearing zone is likely to extend to the west under hanging wall marble. More detailed sampling along the Kelly Creek fault contact is needed to completely define this anomaly.

Cedar Mountain Exploration Inc is currently planning its 2011 exploration program at the Kelly Creek Project. The 2011 program will comprise extensive drill testing of the identified anomalies, extension of and continued establishment of soil grids over the prospective stratigraphy and structure and reconnaissance sampling over the newly acquired 52,600 acre extension of the permissive rock package (see CED press release dated October 6th).

To view the Kelly Creek Property maps, please click on the following link:

The Property

The Kelly Creek Property is located on the Seward Peninsula some 60 to 90 miles north of Alaska's prolific Nome mining district. Kelly Creek is a drill-permitted early-stage gold exploration property comprising 89,600 acres (36,260 hectares). Historic results indicate the presence of (meta)sediment-hosted gold deposits.

The Company's disclosure of a technical or scientific nature in this press release has been reviewed and approved by Peter Kleespies, P.Geol. who serves as a Qualified Person under the definition of National Instrument 43-101. The Kelly Creek project represents an early stage property and does not contain any mineral resources as defined by National Instrument 43-101.


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