Adamas Resources acquires advanced-stage African gold deposit.

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Aug. 21, 1996-- Adamas Resources Corp. (VSE:AMS) (the "Company") is pleased to announce that it has entered into an option agreement with Equatorial Gold S.A.R.L. ("Equatorial Gold") and Sogrem S.A.R.L. ("Sogrem") to acquire a 75 percent interest in the development-stage Bakoudou gold project (the "Bakoudou Property"), located in Gabon, Africa. The Agreement is subject to verification of all permits and licenses for the Bakoudou Property, finalizing the specific terms for the remaining 25 percent carried interest held by Sogrem, and regulatory approval.

THE PROPERTY

The Bakoudou (pronounced "Back-a-doo") Property encompasses an area of 9.4 square miles and is located south of the city of Moanda, where COMILOG operates one of the world's largest manganese mines.

Between 1950 and 1956, an estimated 6,430 ounces of alluvial gold was recovered from the Bakoudou Property by French prospectors. The Bakoudou Property was idle until 1983, when COMILOG initiated an exploration program to look for the primary gold source responsible for the alluvial deposits. Mapping and sampling over the following two years identified a geochemical anomaly 7,200 feet long, and 325 to 980 feet wide.

Drilling by COMILOG on the far southern portion of the Bakoudou Property outlined an economic lateritic ore reserve, varying from 1.7 to 2.0 million tons grading 0.043 to 0.050 oz/ST, based on US $310/oz gold price.

Metallurgical testing in the mid-1980s by the Bureau de Recherches Geologiques et Minieres (BRGM) showed a gold recovery of 65 percent to 80 percent using gravity separation. More recent metallurgical testwork suggests gold recoveries should average 84 percent.

To date, less than 25 percent of the Bakoudou geochemical anomaly has been drilled. Additionally, prior exploration work concentrated on the top 100 feet of the deposit. COMILOG encountered significant higher-grade gold intercepts at depth, including: -0-

DRILL INTERCEPTS

Hole Number   From      To      Interval      Gold Grade
Longyear #7   200 ft   226 ft     26 ft       0.44 oz/ST
Longyear #4   230 ft   254 ft     24 ft       0.33 oz/ST
Longyear #3   300 ft   326 ft     26 ft       0.17 oz/ST

Adamas' Phase I and II exploration programs will test these deeper, higher-grade targets.

WORK PROGRAM

The Company plans to immediately embark on a reserve expansion and confirmation drilling program, conduct additional metallurgical studies and prepare for construction of a nominal 250 ton per day operation. Over the next 18 months, the Company intends to begin limited gold production, while it determines the true magnitude of the deposit.

THE TRANSACTION

The Company can earn its 75 percent interest by investing US$2,000,000 in exploration and development of the Bakoudou Property over the next 18 months, issuing 200,000 common shares in stages, and making a cash payment of US$30,000 to Equatorial Gold upon regulatory approval.

Additionally, the Company has agreed to issue 33 common shares of the Company at a deemed value of Cdn$0.42 per share, for each ounce of gold identified in the mineable reserve category, based on a US $10 in-ground value per ounce. The number of shares to be issued is capped at 3,000,000.

The first issuance will be calculated prior to any work being done by the Company, and will be based on a new engineering report, updating the mineable reserves previously identified from COMILOG's 1983 - 1985 drilling program. Additional shares will be issued each twelve months thereafter, based on new reserves delineated, as a result of work being conducted on the Bakoudou property by the Company.

The Company's trading symbol is AMS. -0-

The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this News Release.

CONTACT: Adamas Resources Corp.

Stephen B. Doppler, 303/909-5624

Richard Pearson, 604/685-2248

Investor Relations Department, 800/686-6220

http://www.kitso.com

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