Southwestern cuts more gold at Boka (May 19, 2003)

Vancouver — Southwestern Resources (SWG-T) has tabled further encouraging results from the Boka gold project in the southern Chinese province of Yunnan.

The latest drilling was focused on the area known as Boka 1 North, which is part of an extensive gold mineralization system that extends 5 km from Boka 11 in the north to Boka 7 in the south. Southwestern is drilling broadly spaced holes (150 to 900 metres apart) to test the extent of the mineralized system.

All the following holes were drilled at an angle of minus 70, and the down-hole lengths are believed to represent the true widths of mineralization:

— Hole B03-02a cut 10.4 metres averaging 3.21 grams gold per tonne starting at a down-hole depth of 229.8 metres. Results are still pending from a 158.15-metre interval that started at 240.2 metres down-hole.

— Hole B03-03 cut 85.3 metres of 1.29 grams gold starting at 40 metres down-hole, including a 12.9-metre section of 3.21 grams gold.

— Hole B03-04 cut 81.4 metres of 3.22 grams gold starting at 167.1 metres down-hole, including a 10.6-metre section that averaged 9.06 grams gold and a 32.9-metre section of 1.95 grams gold. The hole ended in mineralization.

— Hole B03-05 cut 11.8 metres averaging 3.74 grams gold starting at 83.7 metres down-hole.

— Hole B03-05 was drilled at the southern end of Boka 1 North and intersected the mineralized horizon from 83.7 metres to 95.5 metres. At 95.5 metres, the hole intersected a strong east-west post-mineralization structure and continued in the structure to the end of the hole at 307 metres. This section will be redrilled. Southwestern plans to collar the new hole 150 metres east of B03-05.

The company is currently drilling four widely spaced holes in Boka 1 North and Boka 1 South:

— Hole B03-06, at Boka 1 South, is collared 900 metres south of B03-05 and is currently at 484.5 metres. Variable amounts of sulphide and quartz-carbonate stockwork occur from 154 metres to the present depth of drilling. The hole cut the mineralized horizon about 500 metres down-dip from the tunnels at Boka 1 South.

— Hole B03-09 was collared about 300 metres northwest of B03-2a and is currently in the mineralized horizon at a depth of 262.6 metres. Sulphide and quartz-carbonate stockwork occur from a depth of 153 metres. This hole is the first to test the Boka 11 zone.

— Hole B03-08 was collared 600 metres north of B03-06 and is in the mineralized horizon at a depth of 197.6 metres with variable quartz-carbonate sulphide mineralization starting at 125 metres.

— Hole B03-07 was collared 120 metres northeast of hole B03-04 and is now in the mineralized horizon at a depth of 330 metres. The quartz-carbonate stockwork and sulphide mineralized zone was intersected at 175 metres in the hole.

Gold mineralization is associated with quartz-carbonate stockworks and heavy sulphide breccia zones hosted in carbonaceous sediments and in places by gabbro.

Southwestern Gold recently completed a soil survey of Boka 1 and Boka 11 in the north and Boka 1 and Boka 7 in the south. Results indicate a continuous, prominent, gold-in-soil anomaly between Boka 1 and Boka 7, a distance of 3,000 metres. The anomaly remains open to the south. The survey was conducted along 200-metre-spaced east-west-trending lines, with samples collected at 100-metre stations.

The company is investigating various options to expedite the sample-processing procedures. One option is to have an independent qualified prep lab established in Kunming, the capital city of Yunnan.

Southwestern Gold recently shipped four 200-kg samples of both oxide and sulphide material to SGS-Lakefield Research in Ontario for preliminary metallurgical studies.

The Boka project is a Sino-foreign joint venture between Southwestern Gold and Team 209 of the Yunnnan Nuclear Industry. Southwestern can earn a 90% interest by spending US$4 million over four years and making a payment of US$1.7 million.

Investors were not sufficiently impressed by the latest drill results to hold on to Southwestern’s stock. In the ensuing selloff, the company’s shares lost almost half of their value. At presstime, shares were trading at $8.80, down from almost $15 prior to the unveiling of the results.