Hedman Succeeds In Preliminary Fiberization Goals.

TORONTO -- Hedman Resources Limited (TSXV:HDM) -

- Hedman proceeding to Phase Two of CRADA with US DOE

- Hedman clarifies conceptual nature of fiberization project

HEDMAN RESOURCES LIMITED (HDM:TSX.V) ("Hedman") announced today further details regarding its fiberization testing in partnership with the United States Department of Energy.

In the interest of informative disclosure to its shareholders, management believes that a comprehensive explanation setting out the development of this program, and distinguishing it from the company's earlier initiatives, is required as a foundation for understanding Hedman's fiberization goals.

Hedman owns a mineral ore crushing facility at Matheson, Ontario. Its purpose is to process naturally occurring ore by crushing it to varying degrees of powder-like fineness. This process includes separation of unwanted elements, cleaning and may involve chemical treatments, resulting in a mineral filler that is bagged and sold to industry at a per/pound price to be used as an ingredient in product formulations. There are numerous competing mineral fillers in the marketplace and those enjoy existing industry acceptance and use in wide-ranging applications and products. Such fillers include wollastonite, calcium carbonate, talc, mica and vermiculite.

The company's main product in its formative years was Hedmanite and regarded as an alternative to asbestos. Hedmanite was abandoned as a company product many years ago.

Hedmanite is a lizardite subcategory of serpentine. Serpentine is a group composed of several minerals that are all related and possess similar chemical and physical properties. Chrysotile and antigorite are two other subcategories of serpentine. One of the principal differences in the subcategories of serpentine is the naturally occurring fibrous content. Chrysotile is highly fibrous and is sometimes classified as a type of asbestos. At no time did Hedman process or sell chrysotile serpentine.

The fibres associated with serpentine can include asbestos-like elements. Since chrysotile serpentine is the main subcategory that is the most fibrous, the term "chrysotile" is often mistakenly used to describe the fibre content present to varying degrees in other subcategories of serpentine and has been confused with asbestos.

Lizardite is significantly less fibrous than chrysotile. Hedmanite had been marketed as an alternative to asbestos. It is the naturally occurring fibre in Hedmanite that became the subject of the alleged health concerns. Hedmanite has far less fibre content than chrysotile serpentine and asbestos, and there are no conclusive studies that even chrysotile poses health issues allegedly associated with asbestos (there is legal and scientific dispute whether asbestos itself legitimately can pose a health hazard).

In the early 1990s, Hedman explored new ore deposits for a serpentine that could replace Hedmanite. As Hedman continued to follow the ore veins departing from its lizardite deposits near Matheson, the company determined that the naturally occurring fibre content decreased the further the vein stretched from its main source.

By mid-1990s, Hedman attempted to introduce viable filler alternatives. One of its principal products was Envirofil. It was serpentine and likely lizardite in nature, although the fibrous content was significantly lower than Hedmanite and satisfied then existing standards of content ratios.

Envirofil never gained industry acceptance as a filler and the company abandoned all mining at/near Matheson, Ontario.

Thereafter, Hedman's prospectors came upon a new and distinct ore deposit at Horwood Lake, Ontario. This deposit proved to be a serpentine and was tested as being legally free of chrysotile, tremolite or any alleged asbestos-like contaminant. The ore at Horwood Lake is actually an antigorite. Antigorite is a subcategory of serpentine but unlike chrysotile or lizardite, antigorite lacks naturally occurring fibre, though it shares similar chemical and physical characteristics.

Significant modifications and updates were made to the Matheson crushing facility in the belief that added capacity would be required. The company hoped to introduce its newly discovered Horwood Lake ore as a true alternative and projected extensive purchase orders. The crushed ore was initially marketed as Superfil, and eventually became known as Northfil. The key selling points were that it was a serpentine, it had an extremely high melt point and that it was independently tested and proven to be legally free of chrysotile or any type of asbestos-like contaminant.

The former senior management of Hedman was cognizant of the international industry demand for acceptable asbestos and chrysotile replacements. Equally, it was realized that industry valued naturally occurring fibre content, a property distinctly lacking in Hedman's antigorite/Northfil. In an attempt to garner industry awareness and acceptance of Northfil for sampling, testing and potential product development, Northfil was unfortunately miscast in its MSDS and product information materials as a lizardite, thereby suggesting qualities that it did not possess, in particular the tensile strength and heat resisting characteristics of the more fibrous lizardite.

The Superfil/Northfil initiative had conclusively failed by late 2003. From 1996 through mid-2003, the company had invested millions of dollars in the Matheson plant (which closed due to lack of activity), attempts to promote Envirofil, then Superfil/Northfil, and the related Firefelt project. Many press releases and shareholder meetings had touted pending purchase orders and international distribution agreements that ultimately offered little or nothing in reality. While Northfil did enjoy the high melt point associated with serpentine ores, its lack of naturally occurring fibre, and its inaccurate definition as a lizardite, resulted in compromised testing in a wide variety of independent industry applications. Further, these same failings undermined the viability of the Firefelt initiative and seem to explain why Firefelt successfully passed Underwriters' Laboratories' burn test (due to high melt point) but failed the water hose stream pressure test (due to weak tensile strength because of lack of fibrous support).

In 2004, a reconstituted board of directors ("BOD") and new management at Hedman stalled the Northfil and terminated the Firefelt initiatives as part of an all-embracing restructuring process. It then became necessary to reconsider the entire Horwood Lake deposit opportunity to determine if some commercial use could be established for the antigorite and, by extension, the facility at Matheson.

Extensive and targeted independent testing in early 2004 demonstrated that Hedman's antigorite deposits at Horwood Lake were unusual. The problem remained, though, that notwithstanding an extremely high melt point and ease in blending with other ingredients in product formulations, the lack of naturally occurring fibre necessitated the inclusion of costly binders and other additives/treatments thereby rendering Northfil at a competitive cost disadvantage against other mineral fillers.

Additional research directed Hedman's new management team to the possibility of introducing fibre to the antigorite to solve this problem. Efforts to consider the composite blending of other fillers and binders were dismissed for a variety of practical and economic reasons. Ultimately, thoughts turned to a technological process known as fiberization and being a core industrial component in ceramics and glass product formulations (e.g. pink fiber insulation).

Fiberization involves the controlled deterioration of a natural ore and then manipulating the resulting mass to transform the substance into a fibrous state. A simplistic example would be the transformation of sugar granules into cotton candy. The sugar granules begin as non-fibrous, are heat treated, and then cooled applying force to yield a fibrous end product. The cotton candy retains the sweetness of the sugar (the desired property) after being modified into the desired state of fibrous integrity.

Recently emerging health concerns about ceramic and glass fiberized products has resulted in a worldwide search for new mineral feedstock suitable to this process.

Basalt, for example, is a mineral ore that is presently being fiberized and enjoys growing international acceptance and market share. Basalt, however, does not possess a high melt point comparable to ceramics, and ceramic formulations tend to be much more expensive and may require complex treatments in the fiberization process. One result has therefore been to create composites incorporating both fiberized basalt and ceramics, to increase the deficient melt point of basalt and decrease the high cost of ceramics.

Hedman's new management concluded that if its antigorite could be fiberized, and based on its melt point being measurably higher than basalt, the result could be an enviable product that would equate with basalt/ceramic composites at a substantially lower cost, as well as offering its own specialized uses and applications.

Research into the field of fiberization led Hedman to the Albany Research Centre ("ARC") in Oregon. The ARC is part of the United States Department of Energy and is a fully equipped research and testing facility under American federal authority. One of the goals of the ARC is pioneering research and development into fiberized mineral ores, including serpentine.

The ARC became interested in Hedman's antigorite because (a) it is the only known antigorite deposit in North America, and (b) it is the only known serpentine deposit that has been conclusively shown to be free of asbestos-like contaminants. Hedman therefore supplied the ARC with a sample of its crushed Northfil, some ore directly from Horwood Lake, and its 2004 test results, to let the ARC decide whether Hedman's antigorite was suitable for the experimental attempt at fiberizing serpentine.

The ARC concluded that it was worthy of specialized research and testing.

Hedman then entered into a Co-Operative Research and Development Agreement ("CRADA") to establish a legal partnership with the United States Department of Energy ("US DOE") and to define in a binding agreement the terms and conditions of the partnership. It was only due to the unusual characteristics of Hedman's antigorite ore that the US DOE agreed to enter into a CRADA with Hedman.

The CRADA establishes a legal partnership inclusive of research, testing, prospective intellectual property rights and potential product development until 2009.

Phase One of the CRADA was designed to test the theory that serpentine could be fiberized. To the best of the company's information, this had never been successfully demonstrated anywhere in the world with serpentine. Serpentine poses some serious challenges particularly related to its water/CO2 content and very high melt point. Also, the testing procedures had to respect the intellectual property rights of others and devise a truly novel approach to the entire process.

Hedman's contribution to Phase One was $20,000 USD, one ton of ore, its independent test data and agreement to lend whatever technical expertise it could.

The project quickly met with surprising success.

Smaller scale test runs were conducted on a trial and error basis at the ARC in July of 2004. A positive series of procedures were soon identified and implemented. The ARC reported a variety of "encouraging" findings, including (a) that Hedman's antigorite fiberized more readily and efficiently than any comparable serpentine that was also considered, (b) that Hedman's antigorite ore possesses unique properties that are not easily defined but clearly of specific value to the fiberization objectives, and (c) that it would be necessary to replicate this result in a larger scale test run in order to more specifically monitor the process, calibrate the apparatus and measure the results to set the stage for further refinements and developments to maximize the desired yield of fiber versus shot as the desired end result of the entire process.

Stephen Edell, President and CEO, attended at the ARC in late August of 2004 to witness the larger scale test run. Again, Hedman's antigorite was successfully fiberized and it was verbally reported to Mr. Edell be senior ARC staff that Phase One "exceeded the expectations" of the ARC personnel and that the ARC was desirous of further participation and expanding the CRADA relationship between the US DOE and Hedman.

Hedman submitted samples of the fiberized antigorite to McMaster University and the University of Western Ontario and confirmed that none of the desirable heat related qualities were compromised in the transformation from raw antigorite to fiberized ore. As such, the BOD can reasonably conclude that the targeted weakness evident in Northfil (lack of fibrous integrity) can be resolved favourably without any adverse compromise to the other desirable properties inherent in Hedman's unique antigorite.

Hedman's BOD decided to await the receipt of the ARC's formal report on Phase One before determining a further course of action. However, it was agreed that this exciting research with the US DOE would require Hedman to begin considering how to ultimately exploit this challenging business opportunity in view of the company's limited resources, substantial industry demand and in the best interest of its shareholders.

The BOD entered into confidential discussions with the International Mining Division of CB Richard Ellis ("CBRE") of Tucson, Arizona, to entertain a go forward plan. Hedman disclosed to CBRE its CRADA with the US DOE, the importance of protecting that partnership and the overriding priority of adhering to the obligations and limitations of the CRADA. After careful consideration, CBRE agreed to accept the engagement. CBRE was formally retained by Hedman in September of 2004 and is expected to pursue its engagement shortly.

The CBRE retainer is specifically designed to solicit large financing and/or industry joint venture partners for Hedman, once its CRADA with the US DOE has progressed to the point where industry investment and/or joint venture participation can be responsibly considered. The BOD surmises that there are strong business opportunities presented by fiberization and the CRADA; however, the massive investments of capital, infrastructure, equipment, product development and marketing necessary to fully exploit the promise of fiberization are beyond the limitations of a junior venture company such as Hedman. Nevertheless, management is of the considered view that the strength and credibility of Hedman's CRADA partnership with the US DOE and the potential opportunities that can flow from the CRADA and Hedman's unique ore deposits, can hopefully lead to business relationships and investment possibilities that are best pursued through a reputable and internationally regarded agent such as CBRE.

Hedman recently received the Phase One written report from the ARC. The Phase One report concludes that the "theory" behind fiberizing serpentine has now been proven and that continuing efforts in research and development must turn to "practical" concerns. The report recommends that the CRADA proceed into Phase Two during which new technological developments and process refinements will be undertaken to maximize the fiber yield and result in new equipment designs and procedures to be protected through joint patent applications between the US DOE and Hedman under the CRADA for anticipated Phase Three partnership progress towards actual products.

Products and applications to which the fiberized ore should readily translate include drywall, ceiling tiles, flooring and carpets, rubber, insulation, high-grade composites, fire meshing and panels, roofing materials, coatings, and military uses, to name but a few.

The company is presently negotiating the terms of expanding the CRADA for Phase Two and anticipates that this will be resolved shortly. Hedman's participation in Phase Two will remain unchanged, though a further contribution of approximately $100,000 USD will be required of the company.

The BOD is confident that the success realized in Phase One of the CRADA, its continuing and mutually rewarding partnership with the US DOE through Phase Two and ongoing, and its engagement of CBRE, will hopefully see Hedman accelerate this initiative and see economic value and a positive return on investment in 2005. This program is Hedman's primary initiative, going forward.

The fiberization process does not require the fine crushing offered by Hedman's Matheson facility. Renewed and fresh industry interest in Northfil (crushed antigorite from Horwood Lake), based on accurate definitions established by Hedman in 2004, may mature by 2005 to allow the BOD to reconsider the Northfil program and the re-opening of the Matheson facility. However, a sale of the Matheson facility remains possible and efforts to solicit a purchaser continue. The proceeds of such a sale would expedite the conclusion of Hedman's restructuring by allowing for the elimination or significant reduction of secured and trade debt and the injection of further operating and research capital. Should the Matheson facility be sold, and interest in Northfil continue to build, the BOD will seek to lease crushing time at Matheson from its purchaser or invoke plans to contract out the crushing to third parties.

Full details on all aspects of the CRADA and its projected realization through Phase Two cannot be disclosed at this juncture. Legal sensitivities and obligations under the CRADA, and the partnership interest with the US DOE in this vital project, necessitate these confidences. The BOD shall continue to work closely with the ARC to mature this project and maximize its potential for the mandated American national interest served by the US DOE and that of the shareholders of Hedman.

Certain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Hedman Resources Limited (the "Company") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements use such words as "may," "will," "expect," "anticipate," "project," "believe," "plan" and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by the Company with securities regulatory authorities to which recipients of this press release are referred for additional information concerning the Company, its prospects and the risks and uncertainties relating to the Company and its prospects. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of the Company to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

The forward-looking information contained in this press release is current only as of the date of this press release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Hedman Resources Ltd. (TSX VENTURE:HDM)