Island-Arc Resources Vanuatu -- Property Applications Made.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Dec. 6, 1996-- Island-Arc Resources (VSE IAR.) Island-Arc Resources Corporation has completed an initial technical review of mineral exploration opportunities in the country of Vanuatu (formerly the New Hebrides) in the South Pacific, approximately 3/4 of the way between Hawaii and Australia. As a result of the encouraging results generated by this review, the Company has applied for six prospecting licenses in Vanuatu covering approximately 170 square miles.

The position of Vanuatu along the Rim of Fire targets the archipelago as having potential for porphyry copper-gold and epithermal gold mineralization. North of Vanuatu, the volcanic arc hosts epithermal gold deposits at Sorowar, Ladolam (Lihir) and Kabang immediately east of New Ireland (Papua New Guinea "PNG"), Porgera, PNG and at Gold Ridge on the Solomon Islands; it also hosts the mega-porphyry copper-gold deposit at Panguna on Bougainville. East and south of Vanuatu, epithermal gold deposits occur at Emperor on Fiji, and at Golden Cross, Thames, Waihi, and Karangahake in the Coromandel goldfield of the North Island, New Zealand.

The mineralization in the southwest Pacific is intrinsically related to calc-alkalic volcano-plutonic arcs constructed during subduction along plate boundaries. However, the epithermal deposits east of PNG, in Fiji and in the Coromandel goldfield are also associated with felsic to mafic alkalic rocks and normal faulting indicating an extensional tectonic regime, probably in a backarc or intra-arc setting. In Vanuatu, since the Late Miocene, subduction and arc volcanism were accompanied by regional transtensional tectonism, but from about 3 Ma to the present the locking of the subduction zone by collision of the d'Entrecasteaux zone with the arc has resulted in a local transpressional stress regime.

The mineralization of possible economic potential in Vanuatu is divisible into three main types: -0- -- volcanic-hosted epithermal gold; -- intrusion-hosted porphyry copper-gold; and -- "Porgera-style" gold. -0- EPITHERMAL GOLD IN VANUATU

Important epithermal-style gold prospects in Vanuatu are known in three areas: southeast Espiritu Santo, southeast Malakula, and north Efate. The prospects on Espiritu Santo and Malakula are broadly similar in many respects, and some of their characteristics are summarized below. -0- -- The prospects are located on a near major northwesterly or north-northwesterly trending faults, generally localized where the major structures are intersected and disrupted by cross-cutting structures.

-- The mineral occurrences are hosted by a highly mixed sequence of andesitic to locally trachytic volcanics, volcaniclastic sediments, and minor limestone.

-- Deposits occur in a wide variety of styles, including: quartz stockworks; quartz veins; silicified volcanics; tectonic, hydrothermal, and vent breccias; shears; and silica-sulphide +/- manganese replaced limestone. Gold-bearing amethystine quartz is present in south Malakula.

-- A high base-metal content is commonly manifested as Zn - Pb +/- Cu sulphides and strongly anomalous base metals in soils.

-- Extensive post mineral faulting has led to complex structural and lithological relationships at most prospects.

-- Envelopes of clay - pyrite +/- sericite +/- carbonate +/- hematite +/- alteration accompany the deposits.

-- Petrological and alteration-mineralogy studies show that the mineralization is of typical low-sulphidation type occurring at levels ranging from about 50 m below the paleosurface to the deep epithermal-subvolcanic transition. -0-

At Fatmalapa on north Efate, gold is hosted by quartz veins in propylitized and argillized shoshonitic mafic volcanics on the margin of a large caldera-like feature. The quartz veins are controlled by ring fractures, and the gold is associated with anomalous As, Sb and Hg in soils.

PORPHYRY COPPER-GOLD IN VANUATU

A number of Late Miocene small multiphase strongly fault-controlled high-level intermediate (diorite, microdiorite and andesite) stocks intrude the Miocene volcanics and volcaniclastic sediments in central and north Malakula, and in western Espiritu Santo. Some of these intrusives have associated porphyry-style copper-gold occurrences, the characteristics of which are summarized below: -0- -- They are located near major regional faults.

-- They are associated with magnetite-bearing oxidized intrusives.

-- Detrital gold occurs in drainages, and locally anomalous gold, copper, and base metals are found in stream sediments and soils.

-- They are accompanied by propylitic, sericitic and local potassic alteration.

-- Sulphides (pyrite +/- chalcopyrite +/- minor pyrrhotite) occur as disseminations, veins, stockworks and irregular masses within and near the intrusions.

-- Small gold-bearing magnetite +/- pyrite +/- chalcopyrite skarn bodies are present in limestone adjacent to intrusives in southwest Espiritu Santo, and as creek float in north Malakula. -0-

Geochemical haloes and intrusive relationships suggest that, in some cases, the present level of erosion coincides with the tops of the mineralized systems.

"PORGERA-STYLE" GOLD IN VANUATU

In northwest Espiritu Santo (at Pealapa) gold without appreciable copper or extensive porphyry-style alteration is associated with a locally brecciated strongly fault-controlled high-level intermediate (diorite porphyry) intrusive complex. The intrusive complex is located on a major regional fault marking the western margin of the Big Bay graben. Some features of this style of mineralization are set out below: -0- -- A significant detrital gold train is shedding in several creeks.

-- Gold is associated with pyrite in shears, fault breccias, crackle breccias and quartz veins.

-- The deposit is accompanied by silica - chlorite - epidote - carbonate alteration.

-- The deposit is accompanied by weakly anomalous copper, zinc and silver in rocks and soils. -0-

Until 1984, mineral prospecting for base and precious metals in Vanuatu was sporadic and at local scale. However, since the discovery of the epithermal gold deposits at Ladolam, Gold Ridge, and other places along the Rim of Fire, systematic exploration has been undertaken on all the medium to large islands, which has led to the recognition of various important gold prospects.

After 1988, the exploration activity tapered off, but since the early 1990's a few companies have carried out detailed exploration in areas prospective for gold mineralization. So far, little drilling has been undertaken, and Vanuatu is less explored than areas of equivalent potential elsewhere in the southwest Pacific or eastern Australia. Most of these prospective areas have not been explored in sufficient detail for adequate evaluation.

The Company intends to commence a first phase exploration program consisting of geological mapping and prospecting, geochemical and geophysical surveys in early 1997 upon receipt of government approvals for its license applications.

Island-Arc will own a 60 percent interest in the Vanuatu project and it has a further right, subject to regulatory acceptance, to increase its interest to 80 percent, subject to a 3 percent NSR, by completing the issuance of up to 200,000 common shares in four equal installments. Island-Arc is continuing to review other mineral exploration opportunities along the Rim of Fire.

ON BEHALF OF THE BOARD Kim M. Phillips, President -0-

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CONTACT: Island-Arc Resources Corporation

Kim Phillips, 604/682-4488 or 800/868-4788

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