Island-Arc Resources: Vanuatu Gold Project, Epithermal Gold Targets Identified.

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 23, 1997-- Island-Arc (VSE:IAR.) announces that a Phase 1 ($250,000) exploration program has been completed on its six prospecting licenses in the Republic of Vanuatu (formerly the New Hebrides). Vanuatu is situated in the South Pacific, approximately 3/4 of the way between Hawaii and Australia.

Island-Arc is exploring for epithermal precious metal deposits with one million ounce gold potential, occurring as high grade veins, or as disseminated deposits amenable to bulk tonnage mining methods. The recently completed reconnaissance program consisted of stream silt, rock and soil sampling along with prospecting and geological mapping. This work has defined two areas on Malakula Island that may represent the upper levels of epithermal gold systems.

The most promising is the Orap License located in the northwest portion of Malakula Island where rock samples returned values up to 0.86 grams per tonne gold, 1.4 percent lead, and 9.5 percent zinc in grab samples from quartz and chalcedony veins with pyrite and sphalerite. Both veins and vein breccia occur with open space filling textures cutting altered mafic volcanics. Anomalous pathfinder metals have been detected including up to 68 ppm silver, 26.8 ppm antimony and 91 ppm arsenic. Mercury analyses are pending. Overall the results define a north - northwest zone 2.3 kilometers in length. A diorite intrusion with anomalous gold up to 0.44 grams per tonne gold in grab samples occurs two kilometers to the south. This trend lies four kilometers east of the Mt. Wingtar copper-gold porphyry prospect.

A second zone occurs 50 kilometers to the southeast of Orap in the Mobarek License where a one day traverse found chalcedony veins and breccias in altered mafic volcanics. Nine grab rock samples taken returned between 0.11 and 0.59 grams per tonne gold over a one kilometer strike length.

Island-Arc interprets the results, especially from Orap, to represent the upper levels of an epithermal system with significant strike length potential. The presence of two nearby intrusive bodies may be evidence of a proximal heat source for a hydrothermal system to have formed a precious metal bearing epithermal system. Further work is being planned to define the framework of the system at depth. This would include detailed ground magnetic and IP surveys, plus soil and rock sampling. This second exploration phase would begin in late August to September with the objective to define targets for drilling.

Island-Arc owns an 80 percent interest in the Vanuatu project. Redstar Resources Ltd., (a company that has one director in common), has the right to back-in for a 20 percent interest, thereby reducing the Island-Arc's interest to 64 percent. Island- Arc has a further right to increase its interest to; 80 percent if Redstar exercises its back-in right, or 100 percent if Redstar does not exercise its back-in right, by completing the issuance of up to 200,000 common shares in four equal installments. In either case Island-Arc's interest is subject to a 3 percent NSR that can be purchased for $3,000,000.

Island-Arc is continuing to review other mineral exploration opportunities along the Rim of Fire.

ON BEHALF OF THE BOARD OF DIRECTORS OF ISLAND-ARC RESOURCES CORPORATION

Kim M. Phillips, President

Note to Editors: The Vancouver Stock Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of the contents hereof.

CONTACT: Island-Arc Resources Corporation

Kim M. Phillips, 604/682-4488

1-800-868-4788

604/682-8728 (FAX)