Calliope Metals Corp. - Updated Prefeasibility Study.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Oct. 2, 1996-- Calliope Metals (VSE:CYO.) Calliope Metals Corporation is pleased to announce the results of an updated prefeasibility study prepared by Davy John Brown Pty Ltd for its nickel/cobalt project in Queensland, Australia.

The updated report was prepared following completion of detailed pilot plant testwork undertaken by Sherritt International Corporation for Calliope using a bulk sample of representative nickel laterite ore.

The report covers an expanded plant design capable of processing 1.2 million dry tonnes per annum of nickel laterite ore through a single autoclave to produce 34,000 dry tonnes per annum of mixed nickel/cobalt sulphide product containing 18,700 tonnes of contained nickel and 1,890 tonnes of contained cobalt. The report is to an accuracy of +/- 25 percent. The key results of the report are as follows.

- A before tax net present value of A$300 million at a 10 percent discount rate

- An estimated capital cost of A$255 million plus a contingency of A$47 million (before working capital)

- An estimated operating cost of A$123 million per annum

Based upon the above results of the report the project demonstrates:

- An estimated operating surplus of A$84 million per annum

- A payback period of less than four years

- A cash operating cost of US$1.25 per lb. nickel (after cobalt credit)

Davy John Brown Pty Ltd have assumed a nickel price of US$3.50 per lb., a cobalt price of US$13 per lb., an exchange rate of US$0.75 to A$1.00, and a sale price for mixed sulphide equal to 80 percent of contained nickel and 75 percent of contained cobalt, consistent with assumptions previously used for this project.

The significant changes from the previous study impacting on the financial performance are:

- Increased contained nickel and cobalt production

- Lower unit capital costs

- Lower unit operating costs

- Higher net present value and return on capital

Davy John Brown Pty Ltd are also preparing a separate report reviewing the option of adding a metal plant to the project to enable production of nickel and cobalt metal at Gladstone.

The president of Calliope Metals Corporation, Mr. Peter Matheson stated that:

"This report demonstrates further improvement in the economics of the project following completion of Sherritt's pilot plant testwork. We now have a very robust project by any measure: return on capital, net present value or nickel cash costs, with the project based upon proven process assumptions."

ON BEHALF OF THE BOARD PETER J. MATHESON

The Vancouver Stock Exchange has neither approved nor disapproved the contents of this News Release.

CONTACT: Calliope Metals Corporation

James W. Prier,, 604/689-9188

Vancouver, British Columbia, Canada

or

Calliope Metals Corporation

Peter J. Matheson,, 617/3220-0026

Brisbane, Queensland, Australia