Cusac Gold Mines: Zacatecas Joint Venture Finalised; Work Program Commences; Director Appointed.

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--June 3, 1998-- Cusac Gold Mines Ltd(TSE:CQC.) (NASDAQ:CUSIF) David H. Brett, Vice President, is pleased to report that the Company has finalised the terms of an agreement with Minera Basay, S.A. de C.V. of Chihuahua, Mexico whereby Cusac is acquiring a 50 percent interest in a number of silver, zinc, copper and gold mineral properties and a modern, fully operational 200 ton per day mill in the Chalchuites district of the state of Zacatecas. Work now underway includes mapping, sampling, road work and rehabilitation of the mines in preparation for drilling and production. Drilling by Noranda continues on the joint venture's Dos de Marzo property for large "manto" and "chimney" type structures. In conjunction with the Basay Agreement, Mr. Mario Ayub-Touche, P.Eng. has been appointed to the Board of Directors of Cusac Gold Mines Ltd.

Under the agreement with Basay, the parties have established a joint venture company called Minera Cuzac, S.A. de C.V. of which Cusac and Basay each own 50 percent. Basay will transfer its ownership rights to various claims making up 6 separate properties as well as its rights to a 200 tonne per day mill (expandable to 400 tpd). To maintain its 50 percent interest, Cusac must contribute a total of US$1,850,000 and 100,000 Cusac shares by the end of 1998 ( the issuance of these shares is subject to the approval of the Toronto Stock Exchange), at which time Cusac expects positive cash flows will already have been achieved. Of the US$1.85 million in staged, optional payments, $630,000 is due to shareholders of Basay, and the balance of $1.22 million is to committed to exploration, pre-production and production costs. The first phase of the program, now underway, requires $300,000 to be advanced by the end of July, 1998, of which $70,000 is payable to Basay shareholders ($30,000 paid), and the balance of $220,000 is directed to the work program. Of the payments to Basay, a final payment of $350,000, at the option of Basay, can be paid with 800,000 shares of Cusac, subject to the approval of the Toronto Stock Exchange.

The mill, estimated by Cusac to be worth over US$2 million, is purchasable by the joint venture for $500,000 on an optional basis. Under the terms of a lease agreement, the partners will pay $3 per ton milled, of which $2 will be applied to the purchase price.

Cusac welcomes the appointment of Mr. Mario Ayub-Touche, President of Basay, to the Board of Directors of Cusac Gold Mines Ltd. Mr. Ayub, a chemical engineer and head of the Small and Medium Miners Association of Mexico, brings to the Company a great deal of experience and knowledge in the Mexican Mining and Exploration industry.

The purpose of the partnership is to explore, develop and mine the initial portfolio of properties and to expand these holdings throughout Mexico. Cusac believes that the Chalchuhites district holds high exploration potential for the discovery of large tonnage  silver and zinc ore bodies. Historically, mining in the Chalchuhites district has focused on silver and zinc rich vein structures typically varying in width up to several metres. Recent work in the area, however, suggests that these structures have the potential to host much wider mineralized zones at depth. For example, recently announced deeper drilling below vein structures at the nearby La Colorada Mine by Pan American Silver Corp., intersected a 27.88 metre wide zone grading 475 grams per ton silver (13.85 ounces per ton). The Cusac/Basay joint venture property La Russia is located approximately 2KM from the La Colarada and hosts similar geology and vein-type silver mineralization. Four major mining companies are currently drilling in the area.

The Joint Venture's La Esmarelda Mine, a copper oxide deposit, also represents a significant exploration target. Small scale mining was done in the 1950's, when copper ore grading 8-10 percent copper was shipped directly to the smelter. The property contains a pervasively altered, broad, intrusive hosted zone (at least 70X100 metres in diametre) with abundant malachite, azurite with chalcosite and silver. The source and lower extent of the deposit is not known. The JV plans to drill this deposit to test the down dip potential as part of its first phase program. Cusac believes this zone has the potential to host a large tonnage copper oxide deposit that would be amenable to the low cost Solvent Extraction and Electro-Winning (SX-EW) recovery method. Cusac Gold Mines Ltd.

Per/

David H. Brett, Vice President -0- NOTE TO EDITORS: The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

   CONTACT:  Cusac Gold Mines Ltd.
              David Brett, 800/670-6570
              Website:  http://www.cusac.com