MSV Reports Positive Net Income For Second Quarter Copper Rand 5000 Project Feasibility Study: Profitability Confirmed.

MONTREAL--(BUSINESS WIRE)--Aug. 28, 1997--For the second quarter ended June 30, 1997, MSV Resources Inc. (ME/TSE: MSV.) reports a net income of $151,592 ($0.01 per share), compared to a net loss of $940,138 ($0.03 per share) for the same period in 1996. Most of the improvement in net income is attributable to tighter control of operating and administration costs at the Chibougamau mines.

Metal sales for the second quarter reached $9.5 million compared to $17.0 million in the same period last year.

The company processed 122,739 tonnes of ore which produced 2.9 million pounds of copper and 10,746 ounces of gold. The 187,487 tonnes of ore processed in the second quarter of 1996 included 52,000 tonnes of ore from the Copper Rand and Portage Mines which was stockpiled to allow for the processing of ore from the Eastmain mine in the first quarter of 1996.

For the first six months ended June 30, 1997, metal sales were $18.3 million, compared to $25.8 million for the same 1996 period. Income from hedging activities of $2.1 million in the first quarter of 1997, combined with a loss of $232,165 in the second quarter attributable to the depreciation of the Canadian dollar, increased total revenue for the first six months to $20.2 million.

Net income for the first six months totaled $1.2 million ($0.04 per share) compared to a net loss of $12 million ($0.04 per share) for the same 1996 period.

Mr. Andre Fortier, Chairman of the Board and Chief Executive Officer, confirmed that the feasibility study of the Copper Rand 5000 project has been completed. "On the basis of a price of US $1.05/lb. for copper, US $340/oz. for gold, US $5.00/oz. for silver and a CA dollar exchange rate of 1.39, the project will produce a 17.5 percent return", he explained. The company will now begin discussions with the government ministries concerned and financial institutions who have already indicated their interest in participating in a $30 million financing.

In other developments, the expected closing date for the financing of the agreement under which Sikaman Gold Resources will acquire 50 percent of the Corner Bay project in consideration of a $3.0 million investment, is September 30, 1997. The company is still considering the sale of a royalty on the production, which could provide a cash inflow of more that $3.5 million.

Mr. Fortier also pointed out that, in conjunction with the acquisition of the Tortigny project, announced last July, and the eventual start-up of the Corner Bay project, MSV continues to look into other acquisition opportunities in the Chibougamau region which could quickly produce additional feed for the Copper Rand mill. To this end, MSV is also planning to add a zinc circuit at this mill.

The company will proceed, as planned, with the closure of the Portage mine at the end of September and a temporary closure of the Copper Rand mine during November to facilitate work related to the Copper Rand 5000 project.

MSV Resources Inc. is a copper and gold producer. The company operates two mines the Chibougamau, Quebec region. Its shares are traded on the Montreal and Toronto stock exchanges under the symbol "MSV".

CONTACT: MSV Resources Inc.

Andre Fortier, 514/875-9037

or

MSV Resources Inc.

Lucie Brun, 514/875-9036