Kit Resources Ltd. George Lake Program Advances Project Towards Production.

TORONTO--(BUSINESS WIRE)--Sept. 25, 1997--Kit Resources Ltd. (TSE:KIT.) Kit Resources Ltd. is pleased to announce that the recently-completed summer field program at the George Lake gold project in the Northwest Territories has advanced closer to production on a number of fronts.

The drilling program consisted of 184 holes totaling 21,000 metres. Of these, 157 were infill drilling holes while the remainder were exploration holes that tested 12 separate targets. Assays from 8,000 of the 10,000 samples generated in the program have been received, and to date the best holes reported have been at Goose Lake and the Locale 1 & 2 deposits, which collectively comprise more than 80% of the project's two million ounce resource. Preliminary results from the smaller GH and Slave deposits do not appear to have improved those resource bases, while those from the Lone Cow Pond deposit have not yet been received.

Company geologists are now working with ore reserve specialists from H.A. Simons Ltd. to design computer models of the deposit, eventually allowing new resource calculations to be completed.

Highlights of the drill results received to date include the following holes from the Goose Lake deposit, which are expected to add to the existing resource: -0-

Hole        Intersections (m)  Core Length (m) Grade (g/tonne)
97-GO-001   184.5-189.9            5.0            5.54(x)
and         210.6-234.9           24.2           12.8 (x)
and         252.8-254.7            1.95          33.3 (x)
97-GO-002   144.2-162.0           17.8            8.5
and         165-7-189.5           23.8           15.9
97-GO-003   108.9-114.5            5.6            6.1

(x) previously reported

Holes 002 and 003 were drilled 30 and 60 metres respectively above 001. A further 11 holes were drilled on the Goose Lake deposit, and assays are pending.

A total of 91 infill holes were drilled at Locales 1 & 2. The drilling appears to confirm past resource estimates, although the final impact awaits the computer modeling exercise. Some of the better holes from the program are: -0-

Hole      Intersections (m)   Core Length (m)   Grade (g/tonne)
97L1-017    74.5-77.1              2.6              21.2
97L1-021   165.9-174.7             8.8               9.6
97L1-042   148.4-161.9            13.5              23.5
97L1-044   121.3-135.3            14.0              13.1
97L2-013    74.9-76.9              2.0              24.4
97L2-024    98.2-104.0             5.8              13.9
97L2-025    47.4-55.7              8.4              10.8
97L2-026    45.9-48.1              2.3              45.0

Exploration holes testing for additional deposits have so far been mixed. The best hole was from the Aiomon Zone on the Boot Lake property, where three holes were drilled. One returned 11.4 grams gold per tonne over 3.4 metres, while the other two returned low values. At the Hammer Zone, where seven holes were drilled, one hole returned 5.5 g/tonne over 3.9 metres and another assayed 6.9 g/tonne over 2.0 metres. All of the drilling results will be posted on the company's website when the assaying is completed.

Considerable progress was also made in the collection of baseline environmental data required to permit a future mining operation. This program was managed by Norecol Dames & Moore. While final reports have not been received, no serious environmental concerns have been identified. One more season of data collection will be necessary to satisfy regulatory requirements. Metallurgical testwork has begun at Process Research Associates Ltd. of Vancouver, where a program under the direction of Dr. Morris Beattie will continue testing initiated by past operators towards establishing a milling design.

All of the results of this year's program will contribute to a feasibility study to be conducted by H.A. Simons Ltd. later this year. Included in the scope of work will be trade-off studies to identify the preferred location for the milling of ores from these deposits. A prefeasibility study prepared earlier this year estimated that by shipping ore to a nearby mill, gold could be produced for US$242 per ounce. A further study estimated the price would drop to below US$200 per ounce if a mill were constructed on site.

In another initiative, the charting of the waters of nearby Bathurst Inlet is progressing very well in the first year of a 2-year program. This is significant because when it is demonstrated that deep-sea vessels can access this part of the central Arctic, the economics of developing and operating mineral properties in this undeveloped region will fundamentally change. Kit spearheaded an effort earlier this year to have the Canadian Hydrographic Service undertake this work. In a remarkable example of cooperation, CHS personnel are performing the work from a Canadian Coast Guard vessel in a study funded by the CHS, the Government of the Northwest Territories, the Kitikmeot Inuit Association, a shipping company which owns ice-breaking vessels, and mining companies that are active in the region. During the program, the Canadian Coast Guard vessel successfully reached the proposed port site in southern Bathurst Inlet.

CONTACT: Kit Resources Ltd.

Kerry Knoll, 800/889-3406