Flag Resources (1985) Limited Exploration Results West Sector Regional Wanapitei Anomaly Sudbury, Ontario

    CALGARY, Feb. 3 /CNW/ -

    1. Airborne Anomaly A Rathbun Township

    Drill hole RLE09-01, a vertical drill hole, drilled into coinciding E M.
and Magnetic Airborne Anomaly A, located east of the north end of Rathbun
Lake. Drilled 75 feet north of angle hole RLE08-01, the drill hole intersected
383 feet (117.5 meters) of anomalous nickel and cobalt values, in an altered
zone within a quartz diorite structure. Values ranged from 0.024 percent
nickel and 0.013 percent cobalt at bedrock to 0.035 percent nickel and 0.016
percent cobalt at 383 feet. It is a large anomaly and the strongest anomaly
detected by the airborne survey. Although a significantly large intersection,
the nickel and cobalt values do not appear to be enough to cause the degree of
strength of the E.M. part of the anomaly.
    Flag proposes to deepen the drill hole and to undertake an E.M. down=hole
survey, to locate the main body of sulfides projected to be the cause of the
strong E.M. anomaly.

    2. Cobalt Hill In Adjoining Mackelcan Township

    Studies of mineralization on Cobalt Hill, south of Wolf Lake confirmed
the presence of minute inclusions of 5 varieties of nickel - bearing sulfides,
with minor copper and gold in quartz veins located in pyrite mineralization
(millerite, gersdorffite, pentlandite, chalcopyrite, pyrrhotite, colorodoite,
and gold).
    The studies suggested the minerals migrated, by means of hydrothermal
saline fluids, from a nearby mafic or ultramafic intersection, confirmed
subsequently by a down-hole magnetic survey. However, the survey didn't have
the know how to determine in which direction the igneous mafic intrusion is
    Flag engaged Geotech Ltd. to complete an airborne E.M. and Magnetic
survey over the area, to locate the projected mafic source of the Cobalt hill
minerals. Flag is waiting for it to be redone by Geotech.

    3. Anomaly C Rathbun Lake

    Anomaly C, a coinciding magnetic and E.M. anomaly, detected by the
airborne survey, is 150 feet west of the small mined out deposit of massive
sulfides, located on the south east shore of Rathbun Lake.
    A grab sample, taken by the Ontario Geological Survey, assayed 10.2
percent copper, 2.22 ounces silver, 0.14 percent nickel, 0.056 ounces
platinum, 0.02 ounces gold and 34.6 ounces palladium per ton. The O.G.S.
suggested the small mined out deposit had been separated a from bigger sulfide
    Flag believes that coinciding E.M. and Magnetic Anomaly C, because of its
proximity to the rich small sulfide deposit should be given consideration as
the source from which the small deposit was separated.
    Massive epidote, cobbles and fragments of granite and diorite intersected
in a drill hole close to the anomaly's south boundary may be related to the
anomaly as they were never intersected in any other drill holes in the area.
    In the other coinciding Magnetic and E.M. airborne anomaly in Rathbun
Lake located further to the north a drill hole, to the south of it, drilled
across Rathbun Lake, intersected visable traces of pyrrhotite in most of the
drill hole.
    Flag proposes to drill the two anomalies

    4. In addition to these projects drilling has been recommended for
coinciding magnetic and E.M. anomalies east of Rathbun Lake and studies
recommended for some geological features, revealed by the airborne survey.
Flag also proposes to complete an airborne E.M. survey over the two large
magnetic anomalie in Mackelcan Township, detected by an airborne magnetic
survey. Flag also proposes an E.M. and Magnetic airborne survey over the area
in the vicinity of the north west sector of Matagamasi Lake Rathbun township
to locate the source of a 1100 feet intersection of sparse nickel, copper, and
cobalt bearing sulfides intersected in a drill hole.

    a.  Flag shares were de-listed by the TSX Venture Exchange on August 8,
        2005 and cease-traded by the Alberta Securities Commission on May 19,
        2006. The commission rejected an application for a one month
        extension to file Flag's annual financial statements. Nevertheless at
        Flag's recent annual shareholders meeting, 93 percent of the proxies
        from shareholders voted in favor of re-electing directors, giving
        approval to their work for shareholders, under difficult conditions.

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

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Flag Resources (1985) Limited

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