Cartaway Resources Corporation Enters into an Agreement with KBK No. 134 Ventures Ltd.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 7, 1996--CARTAWAY RESOURCES(Alberta Stock Exchange: CWA ) Cartaway Resources Corporation ("Cartaway") announces that it has entered into an agreement with KBK No. 134 Ventures Ltd. ("Ventures"), a company controlled by Jim Pattison of Vancouver, B.C. whereby Ventures has acquired a 40 percent participating interest in Cartaway's mineral properties in the Okak Bay area of Labrador, which it can retain by providing a total funding commitment of $8 million.

Ventures has agreed to provide Cartaway at the outset with $500,000 to be used for general working capital and $2 million to be spent on the Okak properties, including the Cirque prospect. On completion of the expenditure of the $2 million, Ventures can elect to:

i) retain a $2.5 million convertible debenture of Cartaway, secured by all of Cartaway's interests in the Okak properties, which would be convertible during a five year term into units of Cartaway consisting of one common share at $0.80 and a two year warrant to purchase an additional common share for $0.87 in the first year, or $0.96 in the second year; or

ii) retain a 10 percent carried interest in the properties and a $500,000 convertible debenture on the above described terms, or

iii) provide an additional $5.5 million to be spent on the properties to thereby fully vest in a 40 percent participating interest in the properties and retain a $500,000 convertible debenture on the above described terms.

The agreement is subject to regulatory approval and funds will be advanced upon appropriate registration of Venture's interest on title.

With the funds in place, Cartaway plans to promptly commence a 5,000 meter drill program on the Cirque prospect. Evaluation of the drill core and assay results from the drilling completed earlier this year on the Cirque property has led Cartaway to the conclusion that the sulphides encountered represent replacement lenses which have been injected onto the anorthosites and were derived from a sulphide source at depth. Currently the Company has a large loop, time domain, electromagnetic survey underway on the Cirque property to help with the selection of drill hole locations.

The Company has also completed a PEM survey on the LB-H property located 20 kilometres north of the Cirque and has defined a flat lying, strong conductor overlain by fluvial-glacial gravels. This conductor will be drill tested this fall.

A PEM survey is also planned for the LB-J property located 10 kilometres north of the Cirque where two drill holes completed this spring returned interesting copper and nickel values at the base on an eight meter thick troctolite sill. This survey will be followed up further drilling. Both the LB-H and LB-J properties are subject to the agreement between Cartaway and Ventures.

For more information please contact Sterling Pacific Capital Inc. toll free at 1-800-663-0510 or locally at 604-669-2701. We may also be reached by fax at 604-687-1405. -0- On behalf of the Board of Directors John Ivany President -0- The Alberta Stock Exchange has neither approved nor disapproved the contents herein.

CONTACT: Sterling Pacific Capital Inc.

John Ivany, 800/663-0510 (Toll Free)

604/669-2701

INTERNET: http://www.sterlingpac.com

E-MAIL: [e-mail]