Flag Resources (1985) Limited and the Alberta Securities Commission



    CALGARY, Sept. 18 /CNW/ - Although inhibited by a cease-trading order on
its shares, FLAG completed a recommended airborne survey over its holdings in
Rathbun and Mackelcan Township, Sudbury, Ontario, Canada.
    SID MISCZUK, FLAG's chairman, provided $40,000.00 and FLAG's president,
MURDO MCLEOD, provided $75,000.00 for the initial funding of the project.

    The airborne magnetic and EM surveys outlined more mineral prospects than
had been found in 28 years of previous exploration.

    
    The New Finds

    a) The airborne surveys resulted in the discovery of mineralized quartz
    diorite over a large area in Rathbun Township. Anomalous nickel values
    were intersected throughout two shallow drill holes 4900 feet apart and
    in a large surface exposure 800 feet southeast of the second drill hole.
    It is a significant discovery for FLAG as quartz diorite is associated
    with major ore deposits in the adjoining Sudbury Igneous Complex.

    b) Magnetic anomaly throughout Rathbun Lake, recommended for drilling.

    c) Coinciding EM and magnetic airborne anomalies, east of Rathbun Lake,
    recommended for drilling.

    d) Rathbun Lake magnetic anomaly, at south end of lake, intersects near
    surface rich mined out massive sulfide lens (selected sample - 10%
    copper, 34 ounces palladium ), as it changes passing under the Nipissing
    Gabbro and Huronian sediment contact, prime study of the area
    recommended.

    e) E.M. anomaly at north end of Rathbun Lake and in peninsula at south
    end of Rathbun Lake.

    f) Magnetic anomaly underlying and to the northwest of Wolf Lake.
    Magnetic anomaly on east side of Laundry Lake Fault, into Laundry Lake,
    northeast of Wolf Lake, Mackelcan Township. Airborne EM survey
    recommended.
    

    Five varieties of nickel-bearing sulfides, confirmed by 2001-2003 studies
to be in quartz veins in mineralization at Cobalt Hill, southeast of Wolf
Lake, Mackelcan Township - suggested to have migrated from a nearby
mineralized mafic or ultramafic intrusion.

    As reported, these new discoveries have created a bright outlook for the
future value of FLAG shares.

    Notwithstanding these significant discoveries, the ALBERTA SECURITIES
COMMISSION is demanding that SID MISZCZUK and MURDO MCLEOD resign as directors
of FLAG RE

SOURCES. In a hearing scheduled for February, 2009, the Commission is demanding that they resign as directors or officers of any issuer, and to be permanently prohibited for acting as such, that they cease trading in or purchasing any securities and that they be denied any of the exemptions contained in Alberta laws. These are the Commission's rewards to SID MISCZCUK and MURDO MCLEOD for their discoveries and 28 years of diligent service for FLAG shareholders. Although they are 80 and 81 years old, respectively, for the past 28 years SID MISZCZUK's company provided funds for most of FLAG's financial requirements ($8,000,000.00). MURDO MCLEOD was directly involved in FLAG's exploration program, including the airborne surveys. He founded FLAG 55 years ago in 1953. The two have commented that they are fortunate that they are not in their nineties, as the Commission may have demanded a life imprisonment sentence. Tracing recent events with the ALBERTA SECURITIES COMMISSION, the Commission rejected an application, in May, 2006, from FLAG's auditors for a one month extension to file the 2005 annual financial statements, cease trading FLAG shares on May 19, 2006, for late filing of financial statements. In December of 2006, FLAG applied to the Commission, requesting that its cease trade order on FLAG shares be rescinded, as it was up to date in its filling of financial statements. The application was not processed by the Commission. Instead the Commission commenced its first review of FLAG's financial statements in 28 years. Allegations of financial improprieties, in the 2003-2005 financial statements were made, by the Commission, in a 3 page report in April 2007, a 25 page report in January 2008, and recently, in a report on August 14, 2008. In the August 14, 2008 report, the Commission alleged that FLAG's 2003-2005 annual financial statements were not prepared in accordance with Generally Accepted Accounting Principles (GAAP). The annual financial statements are prepared by FLAG's auditors, independent of any management input, but, for whatever reason, the Commission alleged that they were the responsibility of FLAG's chairman and president, and with their allegation of the statements not being prepared in accordance with G.A.A.P., demanded the resignation of Chairman SID MISZCZUK and President MURDO MCLEOD, as detailed in this press release. It is FLAG's contention that the Commission had no legal basis for extending its cease trading order on FLAG's shares, by alleging improprieties in the 2003-2005 annual financial statements, as there were no improprieties. The 2003-2005 annual financial statements were prepared in accordance with "Canadian Generally Accepted Accounting Principles". These financial statements were deemed acceptable by shareholders and the investing public. Accordingly, FLAG proposes to ask the ALBERTA SUPERIOR COURT to rescind the Commission's cease trading order on FLAG's shares. After 28 years of peaceful existence with the Exchange and Commission, the past 4 years have been difficult, to the detrement of FLAG shareholders. MURDO MCLEOD PRESIDENT FLAG RE

SOURCES CALGARY, ALBERTA, CANADA Call toll free 1-888-531-7798

For further information:

For further information: Murdo C. McLeod, President, Phone: (403)
262-8883, or toll free in North America: 1-888-531-7798, Fax: (403) 262-8886

Organization Profile

Flag Resources (1985) Limited

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