Ashton Mining of Canada Inc.: Results for the Six Months Ended June 30, 2003.

Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 26, 2003

The Quebec project continues to be the main focus of Ashton Mining of Canada Inc. ("Ashton" or the "Corporation")'s activities. The identification of a colourless octahedral diamond in excess of four carats in size was the highlight of the second quarter of 2003. The diamond was discovered embedded in drill core while preparing kimberlite material from Renard 65 for processing. Renard 65 is one of eight kimberlitic bodies discovered on the Foxtrot property in the Otish Mountains in Quebec. Outlined below is a discussion of Ashton's activities and financial results for the second quarter of 2002.

The information provided below reflects results to August 15, 2003.

Quebec

A winter and spring drilling program was completed in late April. Information obtained from drilling has provided the Corporation with a preliminary understanding of the surface dimensions of five of the kimberlitic bodies previously identified, namely Renard 2, 3, 4, 5 and 6. The drill results also confirmed that Renard 5 and Renard 6 constitute a single body, now named Renard 65. The additional material collected from these bodies is currently being processed for diamond content through Ashton's dense media separation ("DMS") plant in North Vancouver. Results from Renard 4 were announced in June. Progress results for Renard 65 were released in June and July. Final results are expected before the end of August. The diamond content of the combined material collected from Renard 4 in 2002 and 2003 is 50 carats per hundred tonnes ("cpht"), based on a total of 4.07 carats of diamonds recovered. Approximately 6.95 tonnes of the material collected in 2003 from Renard 65 has been processed to date. It has returned 2.35 carats of diamonds for an estimated diamond content of 34 cpht for this sample. These results from Renard 65 exclude the large octahedral diamond that was found in drill core while preparing the 2003 mini-bulk sample for processing and the 1.21 carats of diamonds recovered from 0.82 tonnes processed in 2002. The large diamond has an estimated weight of more than four carats and has been left embedded in the core. Diamond results for the samples collected from Renard 2 and Renard 3 are not yet available. The table below summarizes the current status of the delineation and mini-bulk samples of Renard 2, 3, 4, and 65 and the results to date.

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                                   Quantity of Material
                                Collected for Determination
                                     of Diamond Content
                                        by DMS (tonnes)
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         Estimated    Maximum                              Estimated
           Surface   Vertical                                Diamond
         Area upon   Depth of                             Content of
        Completion Kimberlite                               Combined
         of Winter    Drilled                                   2002
              2003         to Collected Collected     Total and 2003
Kimber-    Program       Date        in   to date  Material  Samples
 lite    (hectares)   (metres)     2002   in 2003 Collected    (cpht)
--------------------------------------------------------------------
Renard 2        0.6       225       4.9       2.0       6.9       67
                                                             (Note 1)
--------------------------------------------------------------------
Renard 3        0.3       194       4.9       1.5       6.4      134
                                                             (Note 1)
--------------------------------------------------------------------
Renard 4        1.0       240       4.1       4.1       8.2       50
--------------------------------------------------------------------
Renard 65       1.5       294       0.8      17.0      17.8  (Note 3)
            (Note 2)
--------------------------------------------------------------------

Note 1: Results are based on 2002 sample material only. Sample material collected in 2003 has not yet been processed.

Note 2: Renard 65 was previously interpreted to be two distinct bodies, then named Renard 5 and Renard 6.

Note 3: Final results are pending completion of processing of the remaining sample material collected in 2003. To date, excluding the +4 carat diamond, 3.56 carats of diamond have been recovered from 7.77 tonnes of processed material.

Target drilling during the winter program resulted in the discovery of one new kimberlite, named Renard 9. In the third quarter, caustic dissolution analysis of 212 kg of material from this body returned very encouraging initial diamond results, including the recovery of a 0.11 carat diamond. It confirmed that Renard 9 is significantly diamondiferous and that it warrants further evaluation. Delineation drilling and mini-bulk sampling of Renard 9 is expected to occur in 2004.

Ashton is very encouraged by the progress of its exploration work to date on the Foxtrot property and the Renard cluster in particular. The Corporation is currently reviewing the nature, extent and timing of further evaluation of the Renard kimberlitic bodies, including the collection of larger bulk samples and more systematic delineation drilling, in addition to carrying out further exploration on the property.

Ashton and its joint venture partner have also recently staked additional mineral claims in the Otish Mountains. As a result, the Foxtrot property has increased in size by about 30 percent to approximately 200,000 hectares. In total, the joint venture now holds approximately 433,000 hectares in north-central Quebec, including 309,000 hectares in the Otish Mountains.

Alberta

In the first quarter of 2003, the drilling of two targets identified from an electromagnetic geophysical survey conducted in 2002 resulted in the discovery of two additional kimberlites on the Buffalo Hills property, K296 and K300. As a result, Ashton and its joint venture partners have now identified 38 kimberlites in Alberta.

Caustic dissolution analysis of core samples completed during the second quarter confirmed that both kimberlites contain diamonds. However, the results are not sufficiently encouraging to warrant further work on these bodies at the present time.

Nunavut and the Northwest Territories

Exploration field activities commenced in late March on project areas in Nunavut and the Northwest Territories. The programs encompassed ground geophysical surveys over airborne geophysical anomalies, some of which are associated with indicator mineral anomalies, followed by drilling. The program was completed in May and focussed on the Kim, Ric and Kikerk Lake properties in Nunavut and the Green property in the Northwest Territories. Seven targets were tested by drilling. One kimberlite, named Caltha, was discovered on the Ric property. Narrow kimberlite dykes were intersected at a second target on the Ric property and at one target on each of the Kikerk Lake and Green properties.

Caustic dissolution analysis from samples of the Caltha kimberlite was completed in July and indicated that this body does not contain diamonds.

The Kim, Ric and Green properties are governed by the Slave joint venture agreement under which Ashton holds an 89.4 percent participating interest. The Corporation's participating interest in the Kikerk Lake property is currently 52.5 percent. On March 7, 2003, Ashton exercised an option to increase its interest to 59.5 percent in this property by carrying one of the other two joint venture partners through to completion of a feasibility study.

The summer portion of Ashton's exploration programs on the Slave craton is now underway. Current activities will focus primarily on properties located in the Coronation Gulf region of Nunavut. The principal focus will be the collection of indicator mineral samples to better define previously identified geophysical targets and known indicator mineral anomalies.

RESULTS OF OPERATIONS

Including the contributions of the Corporation's joint venture partners, gross exploration costs in the second quarter were $2.6 million (2002 - $2.9 million) bringing to $6.0 million the total expenditures for the first six months of the year (2002 - $5.4 million). Ashton's share of these expenditures was $1.6 million (2002 - $1.9 million) and $3.4 million (2002 - $3.5 million) respectively. Most of these expenditures were incurred in order to carry out geophysical surveys and drilling programs. This is consistent with the corresponding period in 2002 and reflects the nature of exploration activities traditionally carried out during the winter months.

In accordance with specific policies and procedures, Ashton reviews the status of its exploration projects and properties on an ongoing basis. Deferred exploration costs attributable to projects and properties that are abandoned or no longer deemed to be significant with respect to their mineral potential are written off when that determination is made. During the second quarter, deferred exploration costs written off to operations amounted to $1.7 million (2002 - $1.8 million). These charges relate to expenditures incurred on the 2003 winter drilling programs in Alberta and Nunavut which did not result in the discovery of kimberlites that are likely to be the subject of further evaluation. They also include $610,000 of costs incurred on the Thonokied property since June 2001. During the second quarter of 2003, Ashton elected to terminate its option to earn a 75 percent interest in this property following two years of exploration.

Including the write-off of deferred exploration costs, the loss for the three months ended June 30, 2003 amounted to $2.0 million (2002 - $2.2 million) or $0.04 per share (2002 - $0.04). For the first six months of the year, the loss amounted to $2.5 million (2002 - $2.6 million). Higher investor relations costs for the first half of 2003 compared to the corresponding period in 2002 result from the Corporation's increased levels of activity.

Investment income for the first quarter of 2003 is higher in comparison to 2002 due to higher market yields.

FINANCIAL CONDITIONS AND LIQUIDITY

Cash on hand at June 30, 2003 was approximately $13.1 million (December 31, 2002 - $13.2 million) and working capital was $12.7 million (December 31, 2002 - $13.1 million).

On June 5, 2003, Ashton closed a private placement of approximately 2.6 million units at $1.50 per unit. Each unit is comprised of one common share and a half warrant. A whole warrant entitles the holder to purchase, not later than July 31, 2004, one common share for $1.95. QIT-Fer et Titane Inc., a member company of the Rio Tinto group, purchased 2.0 million of the units sold under this offering. With the completion of this transaction, the Rio Tinto group beneficially owns approximately 36.7 million common shares of Ashton representing 63.0 percent (December 31, 2002 - 62.4 percent) of the total number of shares currently issued and outstanding.

Ashton's current treasury, supplemented by the proceeds of approximately $4.0 million from this private placement, is sufficient to support the exploration programs planned for the remainder of 2003. It also provides the Corporation the financial flexibility to increase its level of activities in the short-term if warranted by results that are currently awaited. Ashton intends to monitor the prevailing conditions in capital markets to ensure that the Corporation continues to be well funded in 2004 and beyond.