Phrygian announces joint venture agreement with Malaysian Mining Corporation.

VANCOUVER, B.C.--(BUSINESS WIRE)--Oct. 25, 1995--PHRYGIAN MINING CORP. (VSE:PHG) Phrygian Mining Corporation ("Phrygian") is pleased to announce that the Casierra Diamond Syndicate (the "Syndicate") has signed a letter of agreement with the Malaysian Mining Corporation Berhad ("MMC") to continue exploration on the Syndicate's marine diamond leases in south western Sierra Leone.

Under the agreement, MMC can earn a 51 percent interest by taking the project into full commercial production on or before August 15, 1997. The next phase of exploration is currently being finalized, with mobilization to Sierra Leone planned before the end of December, 1995.

The first phase of exploration on the 660 sq. km. marine diamond leases was carried out by the Syndicate between December, 1994 and February, 1995.

These leases are considered to have a high potential for the discovery of marine alluvial diamonds similar to those areas currently being exploited along the coast of Namibia in Southwest Africa. DeBeers have recently been granted concessions adjacent to Casierra's marine SEPLs in Sierra Leone.

A phase 1 exploration was undertaken by the Syndicate in order to evaluate the potential for marine, terrace and paleo beach strand alluvial diamonds within the Casierra ("Mano") Leases, particularly where the Moa and Mano Rivers discharge into the Atlantic Ocean. The work consisted of satellite imaging and air photo interpretation, placer churn and banka drilling plus pitting and sampling using an excavator. A jig and gravity processing facility was used to evaluate the field samples. This program was completed in February, 1995 with very positive results.

The Casierra leases surveyed cover shallow water areas offshore from the Mano and Moa Rivers in Southern Sierra Leone. Both rivers are known to be diamondiferous, producing on average, 70 percent gem quality diamonds. The first phase of the geophysical surveys identified several large channel features that can be connected from line to line off the mouths of the Moa and Mano rivers, with sediments characterized by high gradient magnetic anomalies. The largest of the channels located is over 1,000 metres wide. Macro diamonds were recovered from three shallow sample sites with weights ranging from 0.34 carats to 0.54 carats, three of which were high quality. Macro diamonds were recovered from approximately 60 percent of the sample sites. Additional samples were processed on board.

The samples recovered are representative of shallow marine gravel deposits. The deeper basal portions of the gravels have yet to be tested. The coarser clastic component of the mud/clay samples indicates a sufficiently strong sediment transport system to deliver diamonds of the 1 to 2 carat size into the marine sediments in much of the area investigated. The submarine channels identified indicate potential environments for concentration of diamonds in areas beyond the modern beach strands and nearshore coarse clastics. While it would be highly speculative to estimate grade or tonnes based on the very small samples recovered from two separate channels, the geophysical data suggest that the channels could contain multi-million yards of sediments which we have demonstrated are diamondiferous. A potentially large diamond reserve is indicated by these early exploration results.

Additional marine leases are pending which would triple the leased area. De Beers have undertaken a similar program on adjacent leases.

Phrygian has a 33.3 percent working interest in Casierra (undivided 26.7 percent net interest) and the rights to assume operatorship of the non-marine leases upon the point of concluding a production feasibility scenario. The Syndicate's operating company is Casierra Development Fund Inc.

Other Phrygian assets include

1) Option on Kyrgystan Gold Concessions - the concessions contain several gold properties including one of which has estimated reserves of 15.9 million tonnes containing an average gold of 4.87 grammes per tonne (77433 kg or 2.49 million troy ounces). Appropriate joint venture documentation is currently being drafted on two properties.

2) Gold properties in British Columbia - known as the Zeballos property and Tofino property, both of which have histories of production. Valuations are currently in process on these properties with a view to disposition of the properties either for cash or via a joint venture arrangement.

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

CONTACT: Phrygian Mining Corporation, 416/214-0655