Bonanza Mining Corporation reported that the Shag property time domain 3D IP survey report has been received from SJ Geophysics Ltd. In addition, a report has also been received from a ground magnetic survey conducted by SJ Geophysics Ltd. on Bonanza's ShagMag property located approximately 12 km southeast of the Shag property IP survey location. The ground magnetic survey confirmed a previous airborne magnetic anomaly identified by the Geological Survey of Canada (the "GSC") and a one day follow up ground investigation found it occurs within altered, zebroid textured Cambrian carbonate rocks but no igneous rocks were located. The anomalous area needs to be further explored by expanding the ground magnetic survey area, soil sampling, prospecting and geological mapping to locate a potential igneous body and any associated sulfide mineralization.

The Shag and ShagMag properties are situated in the Rocky Mountains of southeastern British Columbia approximately 24km due east of Radium Hot Springs and 35 km northeast of the town of Canal Flats and can be readily accessed by good logging roads from both of those towns. There are two active mines in the area: Baymag Inc. mines magnesite at its Baymag mine on the Cross River approximately 20 km north along strike from the Shag property and CertainTeed Corp. mines gypsum at its Kootenay West mine approximately 45 km southwest of Shag property, near Canal Flats, British Columbia.

The Shag properly has twenty separate lead, zinc and silver strataform MVT style mineral occurences hosted within three separate horizons in middle Cambrian age dolostone formations along a carbonate platform to shale basin transgressive-regressive reef complex margin. Since the first zinc-lead showings were discovered on the Shag property in 1977, there have been numerous historical exploration programs conducted on the property by Rio Tinto, Esso Minerals and others, that included soil and rock sampling surveys, IP and VLF-EM geophysical surveys, geological mapping and four diamond drilling programs. The GSC conducted the above mentioned regional airbome magnetic survey over a large area of southeastern British Columbia and southwestern Alberta and it outlined a 30 km wide magnetic low anomaly that passes under the Shag and ShagMag properties and trends northeasterly for approximately 200 km from Canal Flats, British Columbia to Red Deer, Alberta. This anomaly appears to be a major basement graben or shear fault zone that is named the Red Deer lineament.

The style of lead-zinc mineralization on the Shag property and its geological basin margin setting are similar to the Pine Point district MVT lead-zinc mineralization that is also within a transgressive/regressive barrier reef complex along a shale basin margin. At Pine Point numerous deposits were formed in Devonian age carbonate rocks above a basement fault named the Great Slave Shear Zone. The Shag property is geologically similar to the Pine Point lead-zinc mining district of the NWT where Cominco Ltd. found that IP surveys were the most effective geophysical technique for locating lead-zinc deposits since they had high chargeability, and that is the reason why Bonanza decided to conduct a time domain 3D IP survey along the Albert river valley across the northern portion of the Shag property.

There are three zinc-lead mineralized transgressive - regressive carbonate horizons known on the Shag property which occur in the Eldon and Waterfowl formations which are well exposed on the property higher in the stratigraphic section than the Cathedral formation. The Cathedral formation hosts the past producing Monarch and Kicking Horse mines -100 km along strike near Field, British Columbia and is the most prospective middle Cambrian formation in the district. Low resistivity zones are located adjacent to or coincident with the high charegeability Southwest Cl and C2 anomalies and the Central anomalies.

The exception to this is the Southwest C3 chargeability anomaly that is coincident with the near surface western portion of a large high resistivity anomaly. The high chargeability anomalies identified by the time domain 3D IP survey are very significant, high priority road accessible drill targets that Bonanza intends to drill test later this year and in respect of which Bonanza last November submitted a Notice of Work application to conduct the drill program to the BC government.