Spur Ventures Inc. - Jacobs Engineering Provide Positive Report On Yichang Phosphate Deposit.

VANCOUVER, British Columbia--(BUSINESS WIRE)--June 8, 1999--

Jacobs Engineering Inc. has provided Spur Ventures Inc. the initial "conceptual" report relating to the Yichang phosphate project in China. The conceptual report, the first of three reports leading to a bankable feasibility report, concluded that the project is technically feasible and is without "fatal flaws". Jacobs believes that the cost of phosphate rock should give the Yichang project a significant cost advantage over imported granular fertilizers.

Jacobs' feasibility study is divided into three stages, the conceptual design report, the alternative evaluation report and the final report. Upon selecting the preferred alternatives, the engineering and cost estimates will be refined to provide a total project cost estimate +/-15% accuracy and a project implementation schedule. In addition, Jacobs' will provide a guarantee to ensure project success and will provide Spur with the confidence necessary to warrant a significant investment.

The Jacobs conceptual report addresses a number of important aspects:

RESOURCE AUDIT

Jacobs' geology team confirmed that all methods and standards used in previous drilling programs are acceptable. The two largest deposits, Dianziping and Skukongping, contain a total phosphate resource of 90 million tonnes of in-site ore in the "proven/probable" category and will be exploited in the first 24 years of the proposed operation. The three subsidiary deposits, which will succeed the first two deposits, contain a total phosphate resource of about 360 million tonnes of in-site ore in the "probable/possible" category.

MINING STUDY

The Jacobs' report confirmed that the deposits are composed of flat-lying, stratabound, sedimentary phosphorites. Access to the ore bodies can be made, in most cases, through adits driven from the surface outcrops. The modified drill-and-blast, room-and-pillar mining methods can be successfully applied. Truck haulage with the main haulage ways driven into the ore zone is recommended.

BENEFICIATION STUDY

Jacobs' report confirmed that sufficient testing has been completed by several Chinese organizations over a 20-year period to establish confidence in the process performance. A beneficiation process using heavy medium separation (HMS) has been confirmed by a commercial laboratory in England. The two-stage, heavy medium separation will be used for producing a low-cost acceptable quality concentrate of greater than 30% phosphorus pentoxide (P2O5).

SLURRY PIPELINE STUDY

In the slurry pipeline study, the Jacobs' report confirmed that the proposed transport pipeline with inside diameter of 20cm is technically feasible, and within the design limits of proven slurry pipeline designs.

CHEMICAL PLANTS

Jacobs recommends a product mix of high analysis diammonium phosphate (DAP) and low analysis NPK. NPK is a compound fertilizer containing all the three essential nutrients, nitrogen (N), phosphorous (P), and potassium (K). NPK will make use of a low quality phosphate rock and satisfy the increasing domestic demand. Two options are recommended for ammonia need, either purchasing externally or manufacturing on-site using natural gas. Currently, a natural gas pipeline to Yichang City is under construction by the Chinese government and is expected to be completed by year 2001. Single plants for the production of ammonia, sulfuric acid and phosphoric acid are recommended based on a capacity of 480,000 tonnes per year of P2O5 reducing capital costs, as well as operating and maintenance costs.

INFRASTRUCTURE STUDY

Jacobs' infrastructure study confirmed that the Maojiagang site for the chemical complex is 23 km from the center of Yichang City and 0.5 km from the Yangtze River. The site has a configuration of 560 m x 1193 m. The wharf site, about 1.5 km from the Maojiagang site, has a shoreline of about 1,000 m. For chemical complex, power will come from an existing 220 KV transformer substation 2 km from the chemical plant site. Gypsum will be disposed through a pipeline to a disposal area 1.8 km from the phosphoric acid plant. Water for the chemical complex will be pumped from Yangtze River. For the mining operation, water supply will be from nearby sources supplemented by a reservoir 13.5 km from the mine site.

With the receipt of a positive conceptual report and the final project approval, Spur has now firmly established itself as the first and currently the only western company to secure a mineral fertilizer project in China. Spur is now in a strong position to move forward with confidence to complete the feasibility study and to achieve the final objective of putting the project into production with appropriate financing and/or joint venture partners. -0-

ON BEHALF OF THE BOARD OF DIRECTORS
OF SPUR VENTURES INC.

Y.B. Ian He
President & Director

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