Farallon Resources Ltd. to Merge with Continuum Resources Ltd.

VANCOUVER, British Columbia -- Dick Whittington, P.Eng., President and CEO of Farallon Resources Ltd. (TSX:FAN) and Lawrence Dick, PhD, P.Geo., President and CEO of Continuum Resources Ltd. (TSX VENTURE:CNU) are pleased to announce that an agreement in principle has been reached to merge the two companies into one economic entity, which will continue to trade under the Farallon name. One Farallon share will be issued for two Continuum shares, and Continuum options and warrants will be exchanged on the same basis. Farallon will issue approximately 20 million shares for Continuum and Farallon will then have approximately 119.8 million shares issued and outstanding (or 166.5 million on a fully diluted basis), prior to any potential financings. Continuum will continue to operate as a wholly owned subsidiary of Farallon.

The merger is subject to negotiation of a definitive merger agreement, customary in a transaction of this nature. Completion will be subject to conditions, which include a mutual 90 day due diligence period and the requisite approvals of shareholders and regulatory authorities. Closing has been targeted for late 2005. A fee to be calculated in accordance with TSX Venture finders' fee policies is due in connection with the merger.

Farallon is an advanced stage exploration and development company; its primary asset is the Campo Morado polymetallic - zinc, gold, silver, copper and lead - project in Guerrero State, Mexico. Continuum is an early stage exploration company with two gold-silver projects - Natividad and San Jose - in Oaxaca State, Mexico as well as several other significant land holdings with exploration potential in southern Mexico.

Under the leadership of Dr. Dick, Farallon's Continuum subsidiary will become the precious metals arm of Farallon, responsible for discovering and developing precious metal mines in Mexico. The initial focus will be on the advancement of the Natividad and San Jose gold-silver properties through further exploration with a near term goal of mine development. Both are significant past producers. According to a geological report filed on SEDAR, the Natividad Mine produced 913,674 ounces of gold and 22,938,666 ounces of silver from 1,956,165 tonnes grading 0.469 oz/ton gold and 11.79 oz/ton silver during the period of 1940 to 2003. Production at Natividad began in the late 1700's, so total production is actually higher.

Production records for San Jose are not available; however, average grades are on the order of 5-7 grams/tonne (0.15-0.20 oz/ton) gold and 500-750 grams/tonne (14.58-21.88 oz/ton) silver. Recent drilling by Continuum at San Jose has indicated an important gold-silver resource with very significant upside exploration potential.

Farallon's objective for Continuum is to target 1,000,000 ounces of gold and 20,000,000 ounces of silver in both the Natividad and San Jose deposits, following which it is expected that Bankable Feasibility studies would be carried out. The objective is to bring both projects to production within 18 months.

Farallon's President Dick Whittington commented: "This is an exciting opportunity for both companies. Mexico is an increasingly attractive country in which to do business and Farallon has been looking to develop a division specifically focused on precious metals exploration and development. The Natividad and San Jose properties offer potential that we believe will be confirmed by our due diligence work.

Additionally, the other land holdings of Continuum offer significant early stage exploration opportunities. Under the continued guidance of Dr. Dick, we are confident that additional discoveries will be made. We look forward to working with Continuum and consummating the merger in due course. The location, size and scope of these properties will complement and enhance Farallon's ongoing exploration and development work at Campo Morado and will certainly lead to growth in value to the shareholders of both companies."

Continuum's President Lawrence Dick stated: "This merger combines the exploration potential of Continuum with Farallon's development and operating expertise, and will facilitate the early development of the Natividad and San Jose projects. Gold and silver exploration will remain the key focus for Continuum under the new structure that, when combined with the potential of the Campo Morado project, has the potential to grow the merged company into a significant producer of gold, silver, zinc, copper and lead. We look forward to working with Farallon to finalize the terms of the merger and to build a new Mexican mining company with three operations in two States."

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the companies expect are forward-looking statements. The likelihood of future mining at the Campo Morado, Natividad or San Jose projects is subject to a large number of risks and will require achievement of a number of technical, economic and legal objectives, including obtaining necessary mining and construction permits, completion of pre-feasibility and final feasibility studies, preparation of all necessary engineering for pits and processing facilities as well as receipt of significant additional financing to fund these objectives as well as funding mine construction. Such funding may not be available to the Company on acceptable terms or on any terms at all. There is no known ore at the Campo Morado, Natividad or San Jose projects and there is no assurance that the mineralization at the Campo Morado, Natividad or San Jose projects will ever be classified as ore. For more information on the companies and the risk factors inherent in its business, investors should review the companies' Annual Information Forms at www.sedar.com.

Continuum Resources Ltd. (TSX VENTURE:CNU)

Farallon Resources Ltd. (TSX:FAN)