Cons. Pine Channel enters into Letter Option Agreement with Minera Cascabel S.A. de C.V.

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--March 10, 1997-- Consolidated Pine Ch(VSE KPG.) Mr. Dale W. Hoffman, President of Consolidated Pine Channel Gold Corp. (the "Company"), is pleased to announce that the Company has entered into a Letter Option Agreement (the "Option") with Minera Cascabel S.A. de C.V. (the "Optionor") whereby the Company or its Mexican assignee may earn a 100 percent undivided interest in and to the Don David gold property (the "Property") which adjoins the El Sauzal property of Francisco Gold in Mexico.

The Company has been granted the exclusive option to acquire an undivided 100 percent interest in the Property by paying a total of US$150,000, by incurring a cumulative of $3,000,000 in exploration expenditures and by issuing 500,000 shares of the Company. An initial payment of US$50,000 was payable on signing the Option and the balance of US$100,000 is payable to the Optionor upon receipt of Vancouver Stock Exchange (the "Exchange") acceptance of the Option. The exploration expenditures totalling $3,000,000 are to be incurred as follows:

Date                          Amount         Cumulative
By December 31, 1997       $1,000,000        $1,000,000
By December 31, 1998       $1,000,000        $2,000,000
By December 31, 1999       $1,000,000        $3,000,000

The shares of the Company shall be issued to the Optionor as follows:

Date                          Number         Cumulative
On Vancouver Stock
  Exchange acceptance       100,000           100,000
By March 31, 1998           200,000           300,000
By March 31, 1999           200,000           500,000

The shares to be issued to the Optionor shall be subject to a hold period as required by the applicable securities laws and are also subject to the Company having filed with the Exchange an engineering report on the Property acceptable to the Exchange and summarizing the work carried out on the Property and recommending further work on the Property.

The Company shall have exercised the Option and shall have acquired a 100 percent undivided interest in the Property by making the cumulative cash payments of US$150,000, cumulative Exploration Expenditures of $3,000,000 and by issuing 500,000 shares of Consolidated Pine Channel Gold Corp..

On receiving a positive feasibility study for the Property, and on such feasibility study being accepted for filing by the Exchange, the Option further provides that the Company shall issue any unissued shares provided for above, plus an additional 500,000 shares to the Optionor. The Option also provides that the additional 500,000 shares will be issued if the Company is taken over.

In addition, the Option provides for the payment of a 100,000 share finder's fee. The Company shall issue 50,000 finder's fee shares upon receipt of Exchange acceptance and a further 50,000 finder's fee shares at the time the Company issues the first instalment of 200,000 shares to the Optionor pursuant to the Option. The Property consists of 11,135 hectares and is 14 kilometers due west of the new, major El Sauzal gold discovery. Francisco Gold has stated that the El Sauzal has a resource of 3.2 million ounces of gold at a grade of 3.5 grams.

The geology of the El Sauzal and the Don David is comparable and is characteristic of the Central Madre Occidental. The El Sauzal is contained in a silicified and hematized volcanic breccia that lies in close proximity to a granite intrusion. Several large linears connect the Don David and the El Sauzal. The Don David property also abuts the Gloriapan District, which was a famous gold-silver district during the Spanish colonial era. The Don David contains several historic high grade gold workings. It also contains at least four prominent colour anomalies (gossans), one of which has seen colluvial gold panning.

The Option further provides that it is a condition and an integral part of the transaction that the Company concurrently carry out a financing in the minimum amount of $1,000,000. Accordingly, the Company further announces that it will carry out a private placement to sell 4,000,000 special warrants (the "Special Warrants") in the capital stock of the Company at $0.30 per Special warrant to net the treasury an aggregate $1,200,000.

Each Special Warrant will entitle the holder thereof to receive one unit (a "Unit") in the capital of the Company, each Unit consisting of one common share of the Company (a "Share") and one non-transferable common share purchase warrant (a "Warrant"). Each warrant will entitle the holder thereof to purchase one common share of the Company (a "Warrant Share") at any time on or before 4:00 pm (Vancouver time) on or before March 10, 1999 at a price of $0.60 per Warrant Share on or before March 10, 1998 and at a price of $0.69 per Warrant Share at any time between March 11, 1998 and March 10, 1999. The Company has agreed to use its best efforts to file and obtain an effective date for a Prospectus qualifying the exchange of the Special Warrants as soon as possible. The aforesaid securities will be subject to a hold period of 12 months from the date of issue of the securities.

The proceeds of the private placement will be used to fund the cash payments and first year exploration expenditures on the Property.

The aforesaid transactions are subject to acceptance by the Vancouver Stock Exchange and any other regulatory authority having jurisdiction. -0-

The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of the content of this News Release.

CONTACT: Consolidated Pine Channel Gold Corp.

Dale W. Hoffman, 604/ 684-5118

604/682-8566 (FAX)

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