Channel Resources Ltd. Announces Terms of Letter Agreement with Placer Dome Exploration/Africa Eurasia Limited for the Bombore and Naoube Permits, Burkina Faso, West Africa.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov. 19, 1999--

Channel Res.(TSE:CHU.)

Channel Resources Ltd. ("Channel") announces that it has entered into a letter agreement (the "Agreement") with Placer Dome Exploration (Africa Eurasia) Limited ("Placer") setting forth the principal terms and conditions by which Placer may acquire from Channel a 20% interest in the Bombore Permit and a 15% interest in the Naoube Permit, located in Burkina Faso, West Africa (the "Option").

Placer will fund an initial work program in the amount of U.S.$500,000 on the Bombore Permit within a period of twelve months from the execution date of the Agreement. Channel will be the operator of this initial work program.

In consideration of the grant of the Option, Placer will release the Tounte, Manaboule, Madougou and Bouroum North Permits which are the subject of the letter agreement dated February 27, 1998 between Channel and Placer Dome Africa Limited.

In order to maintain the Option, Placer shall, in addition to funding the initial U.S.$500,000 work program on the Bombore Permit, incur the following work costs on Bombore:

             Date                                 Work Costs
Second Anniversary of Agreement                 U.S.$1,000,000
Third Anniversary of Agreement                  U.S.$1,500,000
Fourth Anniversary of Agreement                 U.S.$2,000,000

     Total (inclusive of initial U.S.
    $500,000 work program costs)                U.S.$5,000,000

Placer has also entered into an agreement with Solomon Resources Limited ("Solomon") to acquire Solomon's interest in the Bombore Permit, the Naoube Permit and the Soubeiga Permit (the "Placer / Solomon Agreement"). Solomon will grant Placer the right to purchase all such interests, on an optional basis, in consideration of payments of U.S.$250,000 thirty days after execution of the Placer / Solomon Agreement and on each of the first and second anniversary of the Placer / Solomon Agreement, as well as a payment of U.S.$2,000,000 on the third anniversary of such agreement.

If Placer earns a 20% interest in the Bombore Permit and a 15% interest in the Naoube Permit from Channel pursuant to the Agreement, and if Placer acquires Solomon's interests in the Bombore and Naoube Permits pursuant to the Placer / Solomon Agreement, Channel and Placer shall establish a Burkina Faso mining company, owned 35% by Channel and 65% by Placer, to hold the Bombore Permit and the Naoube Permit (the "Mining Company") for the purpose of developing and placing a mine into production.

Placer will provide all funding required by the Mining Company following exercise of the Option by Placer until completion of a feasibility study on the Bombore Permit. Such funding will be by way of a loan at U.S. prime plus 2% and otherwise on terms commensurate with prevailing mining industry standards. All revenue from any mine brought into operation would be applied towards reimbursement of Placer for funds loaned to the Mining Company. On completion of a feasibility study on the Bombore Permit, Placer will use reasonable efforts to arrange senior financing for a mine on terms, including interest payable, commensurate with prevailing mining industry standards. In the event equity financing is required for such mine, Channel may within sixty days after a production decision is made, elect by notice in writing to Placer:

1. to participate in the development and production by providing its 35% share of equity financing for the mine;

2. to participate in the development and production of a 10% interest by providing 10% of the equity financing for such mine and have the right to acquire an additional 16% interest (for a total 26% interest), sixty days after the commencement of production by paying 16% of the development and production costs incurred by Placer together with interest at a 2% premium over the senior financing interest rate; or

3. to convert its interest to a 5% net profits interest.

During the currency of each of the Agreement and the Placer / Solomon Agreement, the Option and Joint Venture Agreement dated for reference July 1, 1996 among Channel and Solomon shall be suspended.

Channel views this agreement as a major step for the exploration and development of the Bombore Permit. Channel previously announced an Indicated Resource at the Bombore First Target on the Bombore Permit of 1,200,000 ounces gold defined in oxide material over 7 mineralized zones with a total strike length of 8,500 metres, from surface to an average depth of 50 metres, with a cut-off grade of 0.5 gram per tonne. The initial U.S.$500,000 work program on the Bombore Permit will consist primarily of Reverse Circulation drilling to test deposit strike and depth extensions, Diamond Core infill drilling and metallurgical testing. In addition, Rotary Air Blast drilling will assess other targets on the Bombore Permit.

Channel has filed a Material Change Report pursuant to the requirements of Ontario Securities Commission Policy Statement No. 9.1 (the "Policy Statement"). Channel will send a copy of such Material Change Report to any shareholder upon request and without charge. Although Placer is a related party to Channel by reason of the fact that Placer holds 14.47% of the issued and outstanding shares of Channel, Channel has relied upon certain exemptions contained in sections 18.2(5) and 20.1(1) of the Policy Statement which relieves it from the obligations to obtain a valuation and the approval of minority shareholders. Placer has no representation on the Board of Directors of Channel or on its management, the transaction was negotiated at arm's length with Placer and has been approved in writing by independent shareholders holding in excess of 20% of the issued shares of Channel, being a higher percentage than that held by Placer.