Canyon Resources Reports 2006 Results and Future Outlook



    GOLDEN, Colo., March 2 /CNW/ -- Canyon Resources Corporation (Amex:   CAU),
a Colorado-based mining company, is pleased to provide a summary of the
results for the Company's full year ended December 31, 2006.

    
    Financial Results
    
    We recorded a net loss of $2.7 million, or negative $0.07 per share, on
revenues of $1.3 million for the year ended December 31, 2006.  This compares
to a net loss of $15.6 million, or negative $0.46 per share, on revenues of
$4.1 million for the year ended December 31, 2005.  The decrease of $12.9
million in net loss was due primarily to the following factors:

    
    *  Positive variance of $11.0 million due to last year's $9.2 million
       impairment of McDonald Gold Project that also reduced depreciation by
       $1.8 million.
    *  Negative variance of $1.8 million in selling, general and
       administrative expenses primarily due to the expensing of share-based
       payments and holding costs at the Briggs Mine.
    *  Positive variance of $1.7 million in asset retirement expenses due to
       no significant upward adjustments during 2006 and the elimination of
       the asset retirement obligation related to the McDonald Project.
    *  Positive variance of $1.6 million due to the gain on asset exchange
       with Newmont.  The gain was the result of the estimated fair value of
       the acquisition of Briggs Mine royalty previously held by Newmont.
    *  Positive variance of $0.9 million related to the gain on sales of
       securities.
    *  Negative variance of $0.7 million in gross gold sales margin due to
       lower gold sales and higher cost of sales.
    *  Positive variance of $0.4 million regarding last year's debenture
       conversion expense.
    *  Negative variance of $0.2 million related to the cumulative effect from
       the adoption of FASB Staff Position No. EITF 00-19-2, Accounting for
       Registration Payment Arrangements.
    

    We ended the year with $4.0 million of unrestricted cash and short term
investments.  The $2.5 million of short term investments are all auction rate
certificates that have maturities ranging from seven to 28 days.  We began the
year with $5.6 million in cash.  Sources of additional cash during 2006
included a net of $5.2 million raised in equity transactions and the sale of
securities for $0.9 million.  Cash used in operations during 2006, excluding
purchases of short-term investments, amounted to $6.1 million, and capital
spending for the Briggs Mine re-start totaled $1.6 million.  Significant uses
of cash for operations are summarized as follows:

    
    *  Selling general and administrative expenses amounted to $3.2 million.
         -  Includes holding costs at the Briggs Mine of $0.6 million, and
         -  Includes ongoing legal costs for McDonald of $0.2 million.
    *  Exploration spending amounted to $1.3 million.
    *  Asset retirement obligation spending amounted to $1.5 million primarily
       for capping the old leach pads and water treatment studies at the
       Kendall Mine and leach pad rinsing at the Briggs Mine.
    

    For the year ended December 31, 2006, we sold 2,165 ounces of gold at an
average price of $585.  For the comparable period of 2005, we sold 9,263
ounces of gold at an average price of $445.  The London PM Fix gold price
averaged $603 and $445 per ounce for the year 2006 and 2005, respectively.

    
    Operating Activities and Other Developments
    
    2006 was a successful year for Canyon.  We were successful in our
drilling programs and were able to increase our estimates of mineralized
material for the Briggs, Reward and Cecil R projects.  At Briggs, we completed
feasibility work and developed reserves and resources for future underground
and open pit mining and successfully demonstrated the potential to further
increase underground mineralization at the site.  At Reward, we completed a
pre-feasibility study, increased reportable mineralization, initiated a final
feasibility study and commenced the permit process.  In Montana, we were
successful in advancing towards final closure of the Kendall Mine, we
restructured and reduced reclamation liabilities in our Seven-Up Pete Venture
and we defined a number of industrial mineral projects on our extensive
mineral right positions.  We continue to pursue the McDonald takings lawsuit
against the State of Montana.  Also during the year, we developed two uranium
joint ventures in the southern Powder River Basin of Wyoming using information
from our past exploration files.  Most importantly, we developed a significant
presence on the major gold trends in Nevada through the swap of assets in
Montana as described below and through successful claim staking efforts.  We
currently control five gold properties in Nevada:  Reward, which is in the
permitting stage; two more that can be classified in the advanced exploration
stage; and two that can be classified in the grass roots exploration stage.
This significant presence in major U.S. gold districts provides us with a
strong future of potential gold project development opportunities.  We are
diligently working on plans to unlock the value of these properties.

    
    Asset Optimization Program
    
    As part of our strategy to optimize undervalued assets and to focus on
gold deposits in Nevada, on the last business day of 2006, we completed an
Asset Exchange Agreement with various subsidiaries of Newmont Mining Company
("Newmont") to acquire the 3 percent NSR royalty held by Newmont on our Briggs
Mine in Inyo County, California.  In addition, we entered into an agreement
with Newmont to acquire an option on the Adelaide Gold Project in Humboldt
County, Nevada and the Tuscarora Gold Project in Elko County, Nevada.  In
exchange, Newmont received from us certain mineral rights, surface leases, and
facilities near Lincoln, Montana with associated intellectual property and
Newmont will assume all associated reclamation liability.  We retained a
royalty interest on mineral rights provided by us in this transaction.
    During 2006, we sold owned securities for $0.9 million.  Adding value
from underutilized assets is a continuing activity that may result in
additional asset sales, exchanges or the development of joint venture
activities.  Asset sources for these potential transactions include our
substantial mineral interests in Montana, Wyoming, royalty interests in
Argentina and the Dominican Republic, and proprietary property information
related to past exploration or development work.  It is increasingly clear
that additional funding will be required to further pursue exploration on all
of our properties and to demonstrate the real value of the Company.

    
    Briggs Mine
    
    We completed a positive re-start feasibility study for our Briggs Mine
which is already permitted.  This work has led to the development of a
strategy for the re-start of the Briggs Mine which includes both underground
and open pit mining options.  The currently defined project utilizes around 50
percent of the existing plant capacity.  Additional production potential may
be possible by the development of extensions to the Goldtooth underground
structure and the Briggs North underground zone.  Recently announced drill
results clearly display the potential for adding significant mineralization
both along strike and to depth on the Goldtooth structure.  We are continuing
to drill step-out holes to test the additional potential along strike in this
extensive, relatively under-explored, system.
    A cash flow analysis was developed for the combined open pit and
underground case without consideration of incremental underground reserve
development or satellite deposit production.  Total operating cash cost is
estimated at $434 per ounce of gold produced over approximately a three year
mine life.  As outlined in the studies, we expect a total of approximately
115,000 ounces of gold would be recovered from mined material in this period.
Initial capital to re-commence operations totals approximately $12.8 million
including deferred underground development.  At a gold price of $625 per
ounce, the "combined" case provides an internal rate of return of
approximately 24 percent and a cash flow of $7.6 million after capital
recovery.  Each $25 change in gold price affects the cash flows by $2.8
million.  A predevelopment period of approximately five months would be
required to initiate production once financing is arranged.  Underground
development would occur over a 12 month period concurrent with production.
Other than our ability to finance the re-start, which is not guaranteed, leach
pad construction and the retention of qualified personnel are the most
significant risk factors that may impact our estimated timeline.
    The current underground study assumes that a mining contractor will be
utilized over the initial three year mine life which could be extended as
additional reserves are developed.  Underground ores would be commingled with
surface mined ores at the crushing plant and processed through heap leaching.
Re-start of mining at Briggs may be financed through equity sales, debt, or
proceeds from asset sales.

    
    Reward Project
    
    The Reward Project continues to grow in size and quality.  During 2006,
we completed our Phase 1 drilling program of 6,140 feet and have developed a
new geologic model and estimate of mineralized material that currently
indicates an in-situ ore volume of 12.7 million tons at an average grade of
0.025 opt gold utilizing a cutoff grade of 0.010 opt.  Leach pad design work
has been completed as part of the ongoing feasibility study and geotechnical
slope angle studies are underway.  We have consolidated the land position and
have leased water rights for operations.  A Plan of Operations has been
submitted to regulatory authorities to commence the permitting process for
this project.

    
    Uranium Joint Venture Developments
    
    In the early 1980s, Canyon and its joint venture partners conducted an
aggressive exploration program for uranium in the southern Powder River Basin
of Wyoming.  This program included mapping and drilling that resulted in the
discovery of several occurrences of uranium mineralization.  In late 2005, we
commenced a claim-staking effort to re-establish land positions over these
former discoveries.
    Canyon entered into the Converse Uranium Joint Venture ("Converse JV")
with New Horizon Uranium Corporation ("New Horizon") in January 2006.  New
Horizon has committed to spend $1.0 million over three years to earn a 50
percent equity interest in this project.  They must expend an additional $1.0
million over the following two years to earn up to a 70 percent interest in
the project and complete a feasibility study to earn a 75 percent interest. At
this time, New Horizon has not met its earn-in hurdles and Canyon still
controls 100 percent interest in the joint venture.
    In August 2006, the Converse JV joined with High Plains Uranium ("High
Plains") to form the Sand Creek Joint Venture ("Sand Creek JV").  The Sand
Creek JV is owned 70 percent by the Converse JV and 30 percent by High Plains.
The purpose of these joint ventures is to combine information and property
positions over a portion of the total Converse JV area of interest and to
explore for and potentially develop uranium deposits in an area of known
uranium occurrences.  In total, Canyon will not be required to provide funding
until its partners have contributed between $2.0 and $2.8 million of
expenditures in these ventures.
    In November 2006, a drill program began in the western portion of the
Sand Creek JV area and, by the end of 2006, 14 holes were completed totaling
10,395 feet.  Of the 14 drill holes completed to date, 13 holes encountered
intercepts of uranium mineralization indicative of a "roll front" style
uranium deposit.

    
    Conference Call
    
    Senior management will hold a conference call on Monday, March 5, 2007,
at 3:00 p.m. (EST).  Live audio of the call will be accessible to the public
by calling US/Canada dial-in number: 877-576-0177; international dial-in
number: 706-679-4128, Conference ID number: 1022617.  Callers should dial in
approximately 10 minutes before the call begins.  A conference call replay
will be available two hours following the call, through midnight March 7,
2007, and can be accessed by calling: 800-642-1687 or 706-645-9291, Conference
ID 1022617.  The conference call will also be webcast and is available at
http://audioevent.mshow.com/325318/ or via the Company's website
www.canyonresources.com.

    This press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934 as amended.  Such forward-looking
statements include, among others, feasibility studies for the Briggs and
Reward projects, mineralized material estimates, drilling capability and the
potential reopening or expansion of the Briggs Mine.  Factors that could cause
actual results to differ materially from these forward-looking statements
include, among others: the volatility of gold prices; potential operating
risks of mining, development and expansion; the uncertainty of estimates of
mineralized material and gold deposits; environmental and governmental
regulations; availability of financing; the outcome of litigation, as well as
judicial proceedings and force majeure events and other risk factors as
described from time to time in the Company's filings with the Securities and
Exchange Commission.  Most of these factors are beyond the Company's ability
to control or predict.

    FOR FURTHER INFORMATION, CONTACT:

    
    James Hesketh, President and CEO (303) 278-8464
    Valerie Kimball, Investor Relations (303) 278-8464
    www.canyonresources.com



                 Canyon Resources Corporation & Subsidiaries
               Summarized Financial and Production Information
                                 (Unaudited)

                                                       As of December 31,
                                                      2006           2005
    BALANCE SHEETS
    Assets
    Current assets                                 $4,426,800     $6,183,700
    Noncurrent assets                              12,397,800      8,463,000
    Total assets                                  $16,824,600    $14,646,700
    Liabilities and Stockholders' Equity
    Current Liabilities                            $2,392,300     $1,988,200
    Notes payable - long term                         825,000        825,000
    Other noncurrent liabilities                    3,087,200      4,944,500
    Stockholders' equity                           10,520,100      6,889,000
    Total liabilities and stockholders' equity    $16,824,600    $14,646,700

                                                           Year Ended
                                                          December 31,
                                                       2006          2005
    STATEMENT OF OPERATIONS
    Revenue                                        $1,270,300     $4,140,300
    Expenses and Other (Income)
    Cost of sales                                   1,076,200      3,214,400
    Depreciation, depletion and amortization           35,100      1,849,300
    Selling, general and administrative             4,070,200      2,269,400
    Exploration costs                               1,333,700      1,619,900
    Impairment of long-lived assets                        --      9,242,100
    Accretion expense                                 222,600        133,900
    Asset Retirement Obligation                       (14,000)     1,383,300
    Debenture conversion expense                           --        448,200
    Gain on asset disposals                                --         (7,000)
    Gain on sale of securities                       (882,200)            --
    Gain on asset exchange                         (1,594,000)            --
    Gain on release of asset retirement
     obligation                                      (340,600)            --
    Late registration rights penalties                102,000             --
    Loss (Gain) on derivative instruments              69,600       (195,400)
    Other income, net                                (238,700)      (170,000)
    Loss before cumulative effect of change in
     accounting principal                         $(2,569,600)  $(15,647,800)
    Cumulative effect of change in
     accounting principal                           $(174,700)            --
    Net loss                                      $(2,744,300)  $(15,647,800)
    Net loss per share                                 $(0.07)        $(0.46)
    Basic and diluted weighted-average shares
     outstanding                                   41,530,800     33,881,200

    CASH FLOW
    Cash and cash equivalents, beginning of year   $5,649,200     $4,638,300
    Net cash used in operating activities         (12,598,100)    (3,189,500)
    Net cash provided by (used in) investing
     activities                                     3,317,400       (333,300)
    Net cash provided by financing activities       5,145,200      4,533,700
    Cash and cash equivalents, end of year         $1,513,700     $5,649,200

    PRODUCTION & SALES DATA
    Gold sales in ounces                                2,165          9,263
    Average realized price per ounce                     $585           $445
    Average market price per ounce (London PM Fix)       $603           $445

    




For further information:

For further information: James Hesketh, President and CEO, or Valerie 
Kimball, Investor Relations, both of Canyon Resources Corporation, 
+1-303-278-8464

Organization Profile

CANYON RESOURCES CORPORATION

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