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X-Cal Resources Ltd.

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      X-Cal Resources Ltd. is a Toronto Stock Exchange-listed gold exploration company with three North American properties located in geological settings that are known to host commercial gold deposits and that are close to existing infrastructure.  It plans to expand the resource base of its properties and contract development with established operators.

      The prime asset controlled by X-Cal is the 20,000-acre (30 square mile) Sleeper gold property in Nevada, a district-scale project that straddles the northern extension of the Battle Mountain Trend.  The property is centered on the Sleeper gold mine that produced approximately 1.7 million ounces at an average cash cost of $158 per ounce between 1986 and 1996.

      In order to understand the opportunity at Sleeper today, it is essential to recognize that:

  The Sleeper mine was built without full geological evaluation of the area.

  The geological understanding of the Great Basin has advanced dramatically since the mid-1980s.

  Other major gold deposits in Nevada occur as part of a cluster of deposits.

      Through an extensive program of geophysics, geochemistry, satellite imagery, surface sampling, initial drilling, analysis of data from earlier operations, and state-of-the-art three-dimensional modeling, X-Cal has identified over forty targets throughout the Sleeper district:

  Each target has the potential to host a deposit of at least one million ounces.

  Several of the targets combine key characteristics of Sleeper and other major Nevada gold deposits.

      X-Cals work provides substantial evidence that the Sleeper ore body was not fully exploited and may well be just one of a cluster of deposits in the district.  The gold grades encountered at Sleeper indicate that new discoveries are likely to be commercially attractive in any sustainable gold price environment.  The land position is of sufficient size that it could host several major gold deposits.  The company has developed a two-year, $10 million work program designed to expand the existing resources at Sleeper and facilitate new discoveries.

      X-Cal owns 100% of the Mill Creek property, northwest of the Placer/Kennecott Pipeline gold mine.  Mill Creek appears to be a key exploration-for-reserve-replacement property.  X-Cal is in discussion with other mining companies regarding joint venturing this property.

      The company also holds 100% of the Snowbird property in British Columbia in a setting where deposits of one million ounces or more are possible.  X-Cal has recently engaged an engineering firm to compile and review existing data and intends to undertake bulk sampling and drilling to expand the resource.

      Major mining companies have expanded production through acquisition.  We believe that their focus will switch to reserve replacement.  Nevada properties such as Sleeper and Mill Creek are important potential sources of new reserves.

Last modified: January 3, 2007