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Eskay Mining Updates on Exploration at SIB Project

ESKAY MINING CORP. (TSX VENTURE:ESK)(FRANKFURT:878 985)(BERLIN:878 985) has reported on the 2010 Eskay exploration program on its SIB claim block which is under option from St. Andrew Goldfields.

Our primary exploration target is precious metal enriched massive sulphide deposits similar to those at Barrick's Eskay Creek Mine property, which abuts the northern boundary of the SIB Claims.

Exploration in 2008 and 2010 on the Eskay SIB Project focused on drill testing the SIB Claims, and in particular, the extensions to the Lulu Zone. Otherwise a very prospective gold-silver discovery, the Lulu zone is terminated on surface and down dip by the younger Coulter Creek Thrust Fault ("CCTF"). Gold, silver and base metal-enriched stringer and semi-massive sulphides at the Lulu Zone have the same geochemical and geological characteristics as the nearby Eskay Creek deposit, and are hosted by a continuous succession of the favourable Eskay Rift rhyolite and mudstone. The Company is drill-testing the down faulted Eskay stratigraphy for the continuation of the Lulu Zone.

Each of the 2010 drill holes was targeted at an area lying eastward and at greater depth below the Lulu Zone and under the CCTF. The Eskay Creek stratigraphy lies within the Salmon River formation, part of the Jurassic Hazelton Group. Older, footwall volcanic and sedimentary rocks are the Betty Creek formation.

Mac Balkam, President and CEO of the Company commented "The 2010 program is the Company's second exploration season at the SIB Claims and we are pleased with our success there to date. As a result of this program, the Company will embark on an extensive geophysical program using the data gathered from the Company's exploration to date. Information on this geophysical program will be reported on as it develops. With our program coming up short of our budgeted spending, work on the geophysical model will continue into the winter with field work beginning as soon as possible in the spring of 2011."

Discussion of Results

Exploration in 2008 and 2010 on the Eskay SIB Project focused on drill testing the "SIB Claims", and in particular, the Lulu Zone, a gold, silver and base metal-enriched zone of stringer and semi-massive sulphides having the same geochemical and geological characteristics as the Eskay deposit. This year's program was designed to follow-up on the four holes drilled in 2008 in the vicinity of the Lulu Zone.

In 2008, Hole EK08-133 intersected the Lulu Zone and returned a 10.0 metre intercept grading 9.0 g/t Au, 405 g/t Ag and 0.19% Zn from 55.7 to 65.7 metres depth, including a 2.3 metre intercept from 55.7 to 58.0 metres depth that graded 15.9 g/t Au, 1299 g/t Ag and 0.49% Zn.

The success of past drilling programs at Lulu Zone was hampered by the close proximity of the CCTF that is a major, shallow easterly-dipping fault. The thrust fault intersects and offsets the Lulu Zone both in the downdip direction as well as along strike to the south. Previous drilling had tested the "hangingwall" block located above and to the east of the CCTF. Prior to 2008, no attempt had been made to test the location of the offset portions of the Lulu Zone and its host stratigraphy below and to the west of the CCTF in the "footwall" block.

The goals of the 2008-10 drill testing have been fourfold: 1) to confirm the location of the CCTF in the subsurface; 2) to confirm the presence of favourable Eskay Rift rocks below the CCTF; 3) to determine the amount of offset along the CCTF; and 4) to locate extensions of the Lulu Zone and/or other favourable strata within the Eskay Rift rocks below the CCTF. The 2008-2010 drilling has been completely successful in confirming the first two of these goals. Furthermore, we now know that there is at least 400 metres thickness of favourable Eskay Rift rocks below the CCTF and we now have a good understanding of the location of the fault. The offset of the CCTF is better constrained with each additional drill hole; we now know that the offset is not so severe as to render it impractical to drill test below the fault.

This year's program has refined the interpretation of the Eskay Rift rocks in the footwall panel to the CCTF; a good portion of these rocks have never been observed in previous exploration programs. Notably, a significant portion of the Eskay Rift succession at surface in the vicinity of the Lulu Zone has been offset by the fault and eroded. In the footwall panel to the CCTF, we now know that we have a fully preserved, unbroken section of the Eskay Rift rocks. This panel of rocks is blind to the surface but can be intersected by drilling. This new 2010 diamond drilling has defined a new, virtually untested belt that is open to the west and/or at depth and extends for 3.5 kilometres north from the Lulu Zone to the property boundary and perhaps for another 2 kilometres south from the Lulu Zone. To date, only eight drill holes on the Eskay SIB Project have pierced this extensive package of highly prospective rocks in areas below the CCTF. In contrast, over 130 holes have tested the rocks above the CCTF.

The 2010 field program concluded on October 7. Five drill holes (EK10-136 to EK10-140) were completed for a total 3856.7 metres of drilling.

Drillhole EK10-136

This hole was designed to follow up on the intersection of gold-enriched stockwork sulphide mineralization in Hole EK08-134. It tests the Eskay stratigraphy in the footwall of the CCTF located about 100 metres south of Hole EK08-134. Salmon River Formation rocks, basalts in this case, were intersected at a depth of 600 metres. The presence of basalt suggests that the hole has pierced rocks above the Lulu Zone target horizon. No significant alteration or mineralization was intersected. Future targets seem to lie eastward from this hole.

Drillhole EK10-137

This hole was designed to test the stockwork in rhyolite and the adjacent stratigraphy about 100 metres north of Hole EK08-134. The CCTF was intersected slightly deeper in the hole than expected. Interestingly, a 12 metre interval of rhyolite with weak stockwork veining was intersected in the hangingwall to the CCTF. This is likely a wedge of the same Salmon River rhyolites mapped at surface. Assays have been received for this stockwork-mineralized interval. A 10.0 metre intercept from 463.0 to 473.0 metres depth returned assays of 0.65 g/t Au, 0.26% Pb, 0.38% Zn and 6 g/t Ag. This includes a 0.5 metre intercept from 472.5 to 473.0 metres depth that returned 2.35 g/t Au, 0.97% Pb, 1.89% Zn and 25 g/t Ag. The mineralization is very similar in style to that intersected in Hole EK08-134. This extends the zone of stockwork- mineralized rhyolite an additional 75 metres to the north. The location of the stockwork above the CCTF in this hole suggests that the mineralization in Hole EK10-137 and in Hole EK08-134 both occur in the hangingwall block to the CCTF.

In the footwall panel of the CCTF, this drill hole intersected volcaniclastic sandstone and argillite, overlain by over 100 metres of Eskay Rhyolite. No basalts were intersected and thus there is no reliable stratigraphic marker in this interval, but it is clearly a good section of Eskay Rift rocks. No significant mineralization was intersected in this section.

Drillhole EK10-138

This hole was designed to test the Lulu Zone host rocks in the footwall panel of the CCTF downdip of Holes EK08-132 and EK08-135 drilled in 2008. The CCTF was intersected at a depth of 545.1 metres depth. A sequence of interlayered Salmon River Formation rhyolite and basalt was intersected below the CCTF. Below the CCTF, a 2-metre interval contained 5% pyrite- sphalerite-galena stringers within a sheared and veined argillite unit. Within this, a 0.9 metre interval from 556.9 to 557.8 metres depth returned assay grades of 0.06g/t Au, 0.2% Pb, 0.5% Zn and 5 g/t Ag. Deeper in the hole within the basalt flow breccias, an interval from 799.4 to 803.4 metres depth contained 15% matrix-filling pyrite, but no significant base or precious metal values were detected. Some encouraging intervals of strongly chlorite-altered rhyolite were also intersected in the lowest part of the drill hole.

Drillhole EK10-139

This hole was designed to test for a possible left-lateral displacement of the Lulu Zone-equivalent stratigraphy across the CCTF. The hole was designed to test approximately 150 metres southwest of the Lulu Zone and at depth below the CCTF. In contrast to the other deep holes in this program, Hole EK10-139 was designed to drill from west to east and to not pass through the CCTF. Rather, the hole was designed to pass through the younger Bowser Lake Group sedimentary rocks and pass into the underlying Salmon River Formation.

The contact between the Bowser Lake Group and the Salmon River Formation was intersected at a hole depth of 399.4 metres. This contact is rarely, if ever, seen at surface (it is inferred from outcrop mapping), and it has never previously been drilled on the SIB Claims. It is very important to know the exact location of this contact as it provides the upper limit to the Salmon River formation and thus the uppermost limit to where Eskay-like mineralization might be expected to occur. Thus, it provides an upper geological "bracket", the lowermost "bracket" being the contact between the Salmon River Formation and the underlying Betty Creek Formation. This lower bracket is yet to be intersected in the footwall panel to the CCTF and should continue to be tested in future programs. Eskay-type rhyolites which can be correlated with Hole EK08-132 to the north were intersected through the rest of the hole down to the final depth of 636.7 metres.

The drilling of this hole was greatly compromised due to high water pressures encountered around 475 metres depth. The water pressure made advancing of the hole very difficult and created a working hazard to the drillers. As such, the decision was made to stop the hole before it reached its target depth. No significant mineralization was intersected.

The target sought in hole EK10-139 has yet to be reached, and will be tested from a different location in a future program, to avert water pressure problems.

Drillhole EK10-140

Similar to Hole EK10-139, this Hole EK10-140 was designed to test for left lateral offset of the Lulu Zone across the CCTF. However, this hole was drilled from east to west and was designed to cross the CCTF and drill a deeper portion of the Salmon River Formation than in Hole EK10-139.

The CCTF was intersected at 522.2 metres depth. Below the CCTF from depths 530.5 to 598.2 metres, the hole intersected a mixed package of volcaniclastic rock and argillite. This is very similar to the units mapped at surface that mark the transition between the Betty Creek Formation and the Salmon River Formation. This demonstrates that this hole may have drilled very close to that contact, as was the intention for the drill hole. This is very important information because, along with the upper Salmon River contact intersected in Hole EK10-139, we now know that we have a succession of Salmon River Formation that is at least 400 metres thick. The hole continued to target depth and intersected a mixture of basalt and Eskay rhyolite.

The Company is very encouraged by the results to date and looks forward to the prospect of drilling this exciting new target in the future.

The description and discussion of the 2010 exploration program on the Eskay SIB Project and its results have been approved by Sean McKinley, M.Sc., P.Geo., the Company's Qualified Person under the definitions established by National Instrument 43-101.


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