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Pinaya Project Trench Results - 30 m of 2.22 g/t Gold, 0.19% Copper

September 21, 2004
ASC Industries Ltd. has provided the following update on exploration activities at its wholly owned Pinaya gold project, located in south-central Peru.

The company is in receipt of trench results from across the main open pit. As previously reported in Stockwatch on Sept. 2, 2004, the open pit is within the east-central part of an induced polarization (IP) geophysical anomaly that is up to 200 metres to 300 metres wide and exceeds 1,400 metres in length. The IP anomaly is coincident with an gold soil anomaly with assay values between 100 parts per billion and 3,080 parts per billion gold. Other similar anomalies exist throughout the property.

At the main gold zone, six lines spaced 25 metres apart were channel sampled across the open pit. A total of 144 samples were collected, with each of the 5.5-metre chip samples representative of the surrounding rock. The samples averaged 1.34 grams per tonne (g/t) gold, with a low value of 0.04 g/t gold and a high value of 10.52 g/t gold. This average does not include 27 prior samples, which averaged 1.47 g/t gold. From north to south:


PINAYA SAMPLE RESULTS

Line Trench Length Gold Copper
(metres) (g/t) (per cent)

I-J 18 0.96 0.04
G-H 30 2.22 0.19
E-F 57 1.02 - *
incl. 33 1.59 - *
C-D 63 0.91 0.09
incl. 48 1.10 0.12
A-B 31.5 1.32 - *
incl. 19.5 2.00 - *
South
trench [1] 30 0.95 0.13
incl. 17.5 1.54 0.20

* Assays pending.

[1] The south trench is located approximately 225 metres further to the south.

In addition, several pits between 5.5 metres to three metres deep, were sampled beneath the floor of the main open pit. Eleven channel samples, collected from these pits, averaged 2.88 g/t gold (copper values are pending).

Based on the results obtained to date, the company believes the mineralization at Pinaya is consistent with a high-sulphidation epithermal gold model, which may be underlain at depth by a buried porphyry copper-gold system. Notable Peruvian examples of high-sulphidation epithermal gold deposits include the Yanacocha mine with greater than 40 million ounces of reserves and the Pierina mine with greater than seven million ounces of reserves.

Within the vicinity of Pinaya, are two additional examples of epithermal gold deposits. The privately owned Aruntani gold mine, which is reported to produce approximately 180,000 ounces annually, is 130 kilometres southwest of Pinaya along the same geological belt. Given the infrastructure within the region, this gold mine was put into production for a low capital cost of $25 million (U.S.). Reserves are thought to be on the order of one to two million ounces at an average grade of 1.2 g/t gold. Within 50 kilometres to the north of Pinaya, is the Rescatada gold project, which is reported to host an oxide resource of 500,000 ounces to one million ounces. Recently, Anglogold granted privately owned Minera Aruntani the right to develop the project.

The 2004 exploration program at Pinaya, including the collection of all rock and soil samples, is being conducted and managed by Dahrouge Geological Consulting Ltd. under the direction of Jeff Reeder, PGeo, a qualified person under National Instrument (NI) 43-101.
 
     
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