Cathedral - Exploration Agreement With Placer Dome U.S. Inc. on Sterling Mine, Nevada.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Feb. 29, 1996-- Cathedral Gold Corporation, (TSE:CAT) announces that the Sterling Mine Joint Venture, 90 percent Cathedral, 10 percent Imperial Metals Corporation (IPM-TSE) has entered into an agreement with Placer Dome U.S. Inc. whereby Placer can earn a 65 percent interest in the Sterling Mine Joint Venture property and a 55 percent interest in the adjacent Goldspar Option Property by carrying out minimum annual exploration and development expenditures and presenting Cathedral and Imperial with a positive bankable feasibility study which provides for the economic development of an ore body in excess of 750,000 payable ounces of gold.

Under the exploration agreement, Placer will pay the Sterling Mine Joint Venture US$10,000 and has a 60 day period to develop exploration targets. At the end of this phase, in order to continue Placer will be required to make a firm commitment to complete a minimum US$150,000 exploration program before January 1, 1997. Following the first year's exploration program, Placer will be required to carry out a US$300,000 per year exploration program in order to keep the option in good standing. In order for Placer to earn any interest in the property, it must present Cathedral and Imperial with a positive bankable feasibility study which provides for the economic development of an ore body in excess of 750,000 payable ounces of gold. Once Placer completes the required positive bankable feasibility study, it will have earned a 65 percent interest in the Sterling Mine Joint Venture Property and will have the right to require Cathedral to cease its mining activities.

Proven and probable oxide reserves at the Sterling Mine are listed in the table below. In addition to the oxide ore which is amenable to heap leaching, the viability of mining a recently discovered sulphide ore lense is being evaluated. Placer Dome is expected to test for deep sulphide ore potential below the existing oxide ore reserves. -0-

               Tons       Grade (oz/t)      Ounces Gold
Proven        40,700         0.250            10,270
Probable      88,600         0.240            21,400
             129,300         0.245            31,670

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During 1995, the Sterling Mine produced 11,568 ounces of gold at cash costs of US$398 per ounce. Due to the high costs of the underground operation and the accessibility for underground mining of the proven and probable reserves, the current mining plan for the year is under review. The Sterling Mine anticipates production of 11,500 ounces of gold in 1996.

The exploration agreement with Placer meets Cathedral's objectives of providing for systematic exploration of the Sterling Mine Property without impeding ongoing mining operations, gold production or limiting Cathedral's participation in exploration potential unless a significant discovery is made. Placer brings an experienced and successful Nevada gold exploration team to Cathedral's Sterling Mine.

CONTACT: Cathedral Gold Corporation

R. Michael Jones, 604/684-4659