Cayo Resources: Recent Southern Saskatchewan Staking.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Oct. 9, 1997--Cayo Resources Inc. (OTC/BB:CAYO)

RECENT SOUTHERN SASKATCHEWAN STAKING

Hendrik Van der Walt, Director of Cayo Resources Inc., is pleased to announced that the Company has recently staked an area totalling 625,000 acres in Southern Saskatchewan. This staking covers a large area containing highly anomalous quantities of minerals displaying kimberlitic affinity obtained from a heavy mineral diamond indicator sampling program conducted by the Saskatchewan Energy and Mines Department in 1992. Garnets of both eclogitic and peridotitic paragenesis have been recovered, however, G-9 type chrome pyropes are the most common indicator minerals present.

The staked area concentrates on known areas where in excess of 350 garnets were recovered within each sample. Examination of the physical properties of the recovered kimberlitic garnets has revealed that significant size and colour variations of the grains exists across the mineral dispersion train. This, coupled with the presence of coincident clustering of chrome diopside grains, (which do not survive long distance transport), indicates that at least two local diatreme sources may exist within the area staked by the Company.

An airborne survey will commence to evaluate the potential for kimberlitic occurrence. The staking venture is a 50/50 joint venture between Cayo Resources Inc. (CDN:CAYO) and CaribGold Resources Inc. (TSE:CG).

UPDATE ON CARIBOU MOUNTAINS

The Company confirms that in early August, eleven stream samples were collected from six drainages in the Caribou Mountains, situated north of Fort Vermillion, Alberta. The stream sampling program was initiated when the Company learned that the Geological Survey of Canada and the Alberta Geological Survey had recently collected one sample (95SH052) from the Caribou River which yielded a G-9 garnet and three chromites. The stream samples were collected by Pure Gold Resources Inc. field personnel and were processed and observed at the Ashton Mining of Canadas laboratory in North Vancouver.

Four kimberlite indicator minerals consisting of peridotitic pyrope, two possible eclogitic pyropes and one possible chromite were recovered from the concentrates using stereo microscopes. This is the first time that kimberlitic indicator minerals have been recovered in this area which is on the same Archean craton as the Peace River Arch to the south. A high resolution airborne magnetic survey is scheduled to begin flying the Caribou Mountains property, which totals 9.2 million hectares, in the October/November period. The property is 49 percent Pure Gold Minerals Inc. (the amalgamated Pure Gold Resources Inc. and Cayo Resources Inc) and 25.5 percent Alberta Energy Company Ltd and 25.5 percent Ashton Mining of Canada Inc.

CONTACT: Cayo Resources Inc.

Hendrik Van der Walt, 604/687-0300