Cusac Gold Mines: Gold Production Resumes at Table Mountain; Increased Production and Exploration Forecast for 1999; Tailings Pond Contains 28,000 Ounces of Gold.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Oct. 21, 1998-- Guilford H. Brett, president of Cusac Gold (TSE:CQC.) (OTC BB:CUSIF), reports that gold production of approximately 1,000 ounces was achieved from surface mining of the Bear Vein and significantly higher production is planned commencing spring 1999 at the Company's Cassiar Gold Property in North Central B.C.

Cusac is the 100 percent owner and operator of the high-grade Table Mountain Gold Mine and 300 ton per day mill and has recently optioned and can earn up to 70 percent of the adjoining Taurus Gold Project where a bulk tonage, low-grade resource of over 1,000,000 ounces has been outlined. Cusac can mine up to 250,000 tons per year subject to a 2.5 percent net smelter royalty.

Also, after considerable research, Cusac has determined that its Table Mountain tailings pond contains over 28,000 ounces of gold in material grading 1.25 grams/ton. Preliminary test work with a local recovery systems firm has indicated that 70 percent of this gold can be recovered. Initial economic scoping suggests significant financial benefits.

Mining of the Bear Vein will continue underground during the fourth quarter, with ore stockpiled for milling in the spring of 1999. On the Taurus project, a number of targets have been identified for possible 1999 high-grade surface and underground mining. These areas include the Central Vein where a drill-indicated reserve has been outlined of 32,500 tons grading 0.628 ounces per ton gold.

Formerly under option to Cyprus Canada, exploration on the Taurus Project has totalled over $4 million, including over 100 drill holes. This work has led to a number of gold resource calculations for a number of large mineralized zones on the property. One estimate completed in 1995 by Cyprus is as follows:

88-HILL ZONE PLUS HIGHWAY ZONE

            Avg Horiz  Avg Grade
Zone         Width (m)  (g/t)    Tons      Grams       Ounces

A) 88 Hill
0.5 g/t cutoff  10.0   1.40  22,462,728  31,514,465  1,013,213
0.7 g/t cutoff   9.4   1.56  18,740,864  29,225,029    939,606
1.2 g/t cutoff   8.9   1.98  11,092,209  21,921,647    704,797
1.5 g/t cutoff   7.8   2.35   7,087,743  16,629,048    534,636

B) Hwy Zone
0.5 g/t cutoff   8.2   1.20   5,945,461   7,130,066    229,237
0.7 g/t cutoff   8.6   1.28   5,235,183   6,712,190    215,802
1.2 g/t cutoff   8.9   1.84   1,924,203   3,538,017    113,750
1.5 g/t cutoff   9.7   1.88   1,760,739   3,303,094    106,197

C)  Total of 88 + Hwy
0.5 g/t cutoff   9.1   1.36  28,408,189  38,644,531  1,242,450
0.7 g/t cutoff   9.0   1.50  23,976,047  35,937,219  1,155,408
1.2 g/t cutoff   8.9   1.96  13,016,412  25,459,664    818,547
1.5 g/t cutoff   8.8   2.25   8,848,482  19,932,142    640,833

D)  88 Hill Pit
0.5 g/t cutoff  10.3   1.45  18,215,057  26,422,869    849,515
0.7 g/t cutoff   9.8   1.67  14,493,194  24,133,433    775,908
1.2 g/t cutoff   9.5   1.91   9,027,846  17,250,996    554,632
1.5 g/t cutoff   7.9   2.50   5,680,584  14,196,804    456,438

In summary, the above calculations suggested the combined 88-Hill plus Highway Zone resource is 28.4 Mt at an average grade of 1.36 g/t Au (0.040 opt, 1.2 million ounces). The average width would be about nine meters.

Cyprus Canada withdrew from the project in 1996. International Taurus Resources Inc. assumed control at that time and completed five additional diamond drill holes and 36 reverse-circulation drill holes. Based on the results, Taurus commissioned a new resource estimate, pertaining to the 88-Hill area only, that calculated:

Drill indicated reserves:
     13,586,000 tons grading 1.01 gpt containing 442,197 ounces.

Drill Inferred reserves:
     27,355,000 tons grading 0.67 gpt containing 585,693 ounces.

The above estimate assumed that all of the material within 88-Hill would be mined, waste included, and, as such no cut-off grade was used. Cusac geologists believe that there is potential to better define discreet zones of mineralization within 88-hill of sufficient grade for a low cost, 500 ton per day operation. Cusac's existing mill can be modified to operate at up to 500 tons per day.

TAILINGS POND

There are currently two tailings ponds at the Table Mountain Mine -- an "old" pond and a "new" pond. The new pond was constructed by Cusac in 1993-94 and has been used exclusively by Cusac. The "old" pond contains all the tailings from production prior to Cusac taking over operations. Testing of the old pond carried out during 1997 and 1998 by Cusac research engineer V. Zhuravlev, M.Sc., Ph.D., has estimated that the pond contains 700,879 tons grading 1.25 grams per ton Au, containing 28,202 ounces of gold.

A variety of recovery methods and processes have been tested. One commercially available system has shown in initial tests that 70 percent of the contained gold can be recovered in a relatively simple and inexpensive circuit. Pre-feasibility work is now underway with the objective of commencing operations in the spring of 1999.

REPORT COMPLETED

A recently completed independent engineer's report on Cusac's Cassiar gold camp by Consulting Geologist Dale Sketchley, M.Sc., P. Geo., identifies numerous promising targets for both high and low grade mineralization. A $2.3 million exploration program has been proposed. Cusac is currently seeking funding for its exploration and development programs.

Guilford H. Brett, Vice President and Director Cusac Gold Mines Ltd.

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