Lithic rises on Crypto intercept (January 28, 2008)

Vancouver — A high-grade zinc intercept at the Crypto project, in western Utah, had Lithic Resources (LTH-V, LTHIF-O) up almost 30% in recent trading.

The second of five holes completed on the project returned five mineralized horizons. The two strongest intercepts were 17.5 metres grading 27.3% zinc and 0.46% copper from 368 metres depth, and 11 metres grading 15.59% zinc and 0.45% copper from 417 metres.

News of the high-grade intercept boosted Lithic’s share price 13 or 29%. The junior has a 52-week trading range of 38.5-78 and has 36.3 million shares issued.

The first hole from the project, which sits some 161 km south- west of Salt Lake City, also encountered multiple mineralized zones, including two shallower oxide horizons. From 52.5 metres depth, the drill cut 17.6 metres grading 10.56% zinc, followed by 12.2 metres grading 21.08% zinc from 124 metres, both in oxide. The strongest sulphide intercept was 3 metres grading 15.59% zinc from 417 metres depth.

Previous drilling at Crypto showed that zinc mineralization occurs as stratigraphically controlled replacements and skarn bodies hosted in a shallowly dipping carbonate sequence near the contact with a quartz monzonite-rhyolite intrusive.

Lithic says ground conditions are good for drilling, with core recoveries at or near 100%, however difficulties on the part of the contractor resulted in slow drilling progress before the Christmas break. Since Christmas, the company added a second drill rig to the site and moved to remedy the contractor problems, and expects the drilling rate will improve.

The company plans to complete 10 more holes for roughly 6,750 metres in the current drill program. The program is designed to confirm and expand the historical zinc resource and to provide sufficient data for a new resource estimate. Three further targets will also be investigated in the near future: the extensions of silver-lead-zinc mineralization at the past-producing Utah mine, geophysical anomalies identified in 2006 that could represent a new area of Crypto-style mineralization, and porphyry-style molybdenum mineralization encountered in historic drilling.

Various companies have drilled at Crypto, completing 66 holes for some 26,300 metres. In the early 1990s, Cyprus Minerals, now part of Freeport-McMoRan Copper & Gold (FCX-N), calculated a resource estimate (not National Instrument 43-101-compliant) of 5.4 million tonnes of sulphide mineralization grading 8.7% zinc and 2.8 million tonnes of near-surface oxide mineralization grading 7% zinc.

Lithic acquired Crypto in June 2005 from a subsidiary of EuroZinc, now part of Lundin Mining (lun-t, lmc-n) in exchange for 1.5 million shares and a cash payment of $25,000. The property is subject to a 1.5% net smelter royalty pay- able to Vaaldiam Resources (VAA-T, VAAFF-O), which is also entitled to a $1-million cash payment on completion of the financing necessary to bring the deposit into production.