VANCOUVER, Feb. 12 /CNW/ - Goldrea Resources Corp. (GOR-TSX.V, PINKS: GORAF) reports the company has entered into a Letter of Intent with Rushan City to purchase up to a 100% interest in their operating 1750 TPD Daye Gold Mine located approximately 30 km northwest of Rushan City, Shandong Province, China. Goldrea currently has the option to earn a 74% interest in mineral licenses along strike and down dip from the Daye Gold Mill and open pit. Exploration drilling by Goldrea has identified several favorable intersections on the down dip extensions of the Daye Ore body at Pengjiakuang, Shandong Province, China. These down dip extensions are on a gently dipping structural breccia which passes out of Daye Mining Company mining license and onto the Goldrea Rushan Joint Venture Exploration Licenses. The above mentioned Letter of Intent is intended to amalgamate these licenses into one package 100% owned by Goldrea. The agreement is depending on due diligence evaluations of all the assets of the Daye Mining Company and its subsidiaries. At the present time mining is continuing at the Daye Gold Mine under the control and direction of the Daye Gold Mine, the Chinese owned mining company. The Daye Gold Mining Company is also Goldrea's Joint Venture Partner in their Exploration Licenses. A "Mineral Resource Evaluation Report" qualifying under NI 43-101 was completed by N.Tribe, P.Eng. and submitted to the company in January. Resource estimates address mineral values in sericite as well as in gold. The deposit is estimated to contain 147 million tonnes of sericitic resource at a grade of 20% sericite, as indicated by the drilling completed to date. The Daye Gold Mine has a contract to sell their sericite product into the plastics industry at US$187.50 per tonne and is working to expand these contracts to accommodate the full production from the plant. Although accurate assaying methods are not available for measuring sericite, the past experience of the local geologists based on visual estimates and the recoveries of the sericite in the plant, puts the percentage of sericite in the deposits at 20% sericite. These values have been consistent throughout those portions of the deposit mined to date. The gold values are less consistent than the sericite and a higher density of drilling will be required to define the gold bearing portions of the deposits well enough to design a mining plan based on which parts of the breccia contain the best values in gold. The inferred resource estimate for the gold mineralization based on wide spaced drill holes puts the tonnage at 920,600 tonnes at 2.74 grams per tonne gold. The qualifying report will be published on the company website (www.goldrea.com) and on Sedar within the next few days. Gold mineralization has been found to continue in the down dip extensions of the structural breccia mined in the open pit and a gold grade of 8 grams per tonne gold over 4 meters was intersected by diamond drill hole GZK 801. Several other favorable intersections in the down dip extensions of the ore body were also identified. The intersection in diamond drill hole GZK 801 is 600 meters down dip and to the south of the existing open pit and 350 meters down dip from underground mining currently operating in the Daye Gold Mine. Plans are underway to drive an exploration shaft into this down dip mineralization. The planned depth of the shaft is 300 metres. This shaft will allow for lateral development along strike and provide drill access for definition drilling of the gold mineralization discovered in the exploration drilling. Lateral development off the shaft will initially be driven 250 meters either way from the shaft. The shaft and lateral development will provide access for definition drilling of the favourable intersections in holes GZK 801 (8 grams over 4.0 meters), and in GZK 802, GZK 806, and GZK 813 to the west and GZK 810 and GZK 811 to the east. The shaft will be 300 meters in depth and will be driven well below the mineralized structural breccia horizon in order to provide a second definition drilling access below the mineralization and further to the south. Preliminary conceptual plans are for a 2.8 X 3.3 metre 4 compartment shaft equipped with a track fitted cage for hoisting the development muck from the lateral underground headings. This shaft will also facilitate ventilation in later mine designs. The definition drilling is initially planned for 25 meter intervals and will consist of three hole fans from drill stations cut into the drift 40 meters above the known mineralization. This will require 22 fans of 3 - 50 meter holes for 3,300 meters of definition drilling. Engineering design and environmental permitting work has commenced for a 150,000 tonne bulk test to confirm the grade and recoveries of the sericite. The product recovered from this bulk testing will be used to provide process samples for testing by the end user. Our marketing team is presently at work identifying those end users and their needs in terms of our product. The surface drill will continue to explore the numerous targets along the strike in the structural breccia as mapped on surface. Drill Results on diamond drill holes GZK 816 and GZK 817 did not return significant results. A second drill is being sought to begin work on the Langiazhaung concession 4 km north west of Rushan City. The structure at Langiazhaung has been worked by artisanal gold miners in the past but has stood idle for some time. The structure is marked by eleven abandoned shafts and dumps containing massive sulphide mineralization with gold values up to 6.0 gpt gold. Drilling is expected to begin as soon as the equipment and crews can be organized. Norm Tribe, P.Eng., consulting geologist, is presently in China working to coordinate these plans for the Langiazhaung property and the driving of the shaft on the company's exploration license adjacent to the Daye Mine. Also planned for the immediate future are Geophysical and Geochemical surveys on the Majiakuang License located 10 km to the southeast of the Daye Mine. A belt of gold deposits are being worked to the north and east of this license and the structure appears to pass onto and through the property. The license is on agriculturally active land and outcrops are virtually non-existent. Initially, I.P. surveys and soils geochemistry surveys will be conducted to test for possible extensions to this known gold belt into the license area. These surveys will be conducted by the 3rd Brigade, the Chinese government's Geological, and Geophysical Service. The people of this service are familiar with the geology of the area and have completed numerous surveys in the area in the past. Both the Langiazhaung License and the Majiakuang License are part of the existing Goldrea Resources Corp., City of Rushan, Joint Venture agreement whereby Goldrea can earn up to 74% interest. The remaining 26% is included in the above mentioned Letter of Intent. Norm Tribe, P.Eng., is the qualified person under NI 43-101 and is the engineer supervising the ongoing exploration and development in China. ON BEHALF OF MANAGEMENT "Larry W. Reaugh" ----------------- Larry W. Reaugh, President and C.E.O. ------------------------------------------------------------------------- The TSX-Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This news release may contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the Toronto Venture Exchange, the British Columbia Securities Commission and the US Securities and Exchange Commission. -------------------------------------------------------------------------