Arauco Plans Agency Private Placement.

TORONTO--(BUSINESS WIRE)--Aug. 13, 1997--Arauco Resources (VSE, TSE:ARU.) Arauco Resources Corporation is pleased to announce that it has agreed to an agency private placement of up to 1.5 million units at a price of $1.00 per unit. Each unit will consist of one share and one share purchase warrant which will allow the holder to purchase an additional share for $1.50 for a period of 20 months after the closing of the private placement. Arauco has also agreed to a private placement of up to 500,000 flow through shares at a price of $1.00 per share. St. James Securities is acting as agent for the private placement, and will receive a 6.5 percent commission and share purchase warrants equal to 10 percent of the shares issued on the closing of the sale of units, one-half exercisable at $1.00 and one-half exercisable at $1.20, in each case for two years from the date of issue. The financing is subject to receipt of all necessary regulatory approvals.

The funds will be used to advance the development of Arauco's George Lake gold project in the Northwest Territories and for working capital.

Arauco is pleased to announce that it has changed its name to "Kit Resources Ltd.". Arauco is taking steps to have the name change become effective for trading purposes in the near future. The new trading symbol will be "KIT". Arauco is also proceeding with its application for continuance as a federal corporation.

CONTACT: Arauco Resources Corporation

Kerry Knoll, 800/889-3406

or

Arauco Resources Corporation

Paul MacDonald, 800/889-3406