CANYON TO ACQUIRE TWO GOLD PROJECTS IN BURKINA FASO Highlights

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Gerald Newman
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Canyon Resources Limited ACN 140 087 261 Suite 2 Ground Floor 10 Outram Street West Perth WA 6005 ASX RELEASE 2 September 2010 CANYON TO ACQUIRE TWO GOLD PROJECTS IN BURKINA FASO Highlights Canyon

1 Canyon Resources Limited ACN Suite 2 Ground Floor 10 Outram Street West Perth WA 6005 ASX RELEASE 2 September 2010 CANYON TO ACQUIRE TWO GOLD PROJECTS IN BURKINA FASO Highlights Canyon has entered into a binding agreement to acquire control of the Taparko North and Tao Projects in north eastern Burkina Faso ( the Gold Projects ) through the acquisition of Askia Sarl Pty Ltd ( Askia Sarl ). The Gold Projects are located in the Birimian Greenstone Belts of the West African Craton. The projects are situated in major gold producing greenstone belts and both are considered highly prospective for the discovery of large gold deposits. o The Taparko North Project lies in the the same greenstone belt that hosts the 2 million ounce Taparko gold mine and the 1.7 million ounce Inata gold mine. The project is also situated in the Markoye Fault corridor that hosts the Essakane, Taparko and Bombore gold deposits and numerous artisanal gold occurrences. o The Tao Project lies in the greenstone belt which hosts the largest identified gold deposit in Burkina Faso, the 5 million ounce Essakane gold mine. The project is situated on a parallel, north east striking structure that hosts numerous artisanal gold operations. The vendor and associates of Askia Sarl have worked extensively in Burkina Faso and have previously been involved in the identification and discovery of a significant gold deposit with a current JORC compliant resource of over 1 million ounces. Initial tranche of 3.25 million shares will be issued to the vendor of Askia Sarl, subject to the completion of a due diligence process which is already underway. Canyon has conducted a site visit with representatives of Askia Sarl. Due diligence is expected to be finalised by mid October 2010, after which Canyon plans to immediately commence exploration on the Gold Projects. Initial exploration will include a first pass geochemical exploration and RAB drilling program.

Project Location Map Canyon Resources Limited ( Canyon ) (ASX: CAY) is pleased to announce that it has entered into a binding agreement to acquire control of the Taparko North and Tao Projects in

2 Project Location Map Canyon Resources Limited ( Canyon ) (ASX: CAY) is pleased to announce that it has entered into a binding agreement to acquire control of the Taparko North and Tao Projects in North Eastern Burkina Faso, West Africa, through the purchase of Askia Sarl. The Gold Projects are located in the Birimian Greenstone Belts of the West African Craton, that host numerous multi million ounce gold deposits. Both projects are located in favourable structural and geological settings with the Taparko North Project situated along the north east striking structural corridor which includes the major gold endowed Markoye Fault. Subject to due diligence, Canyon will acquire Askia Sarl and the Gold Projects, through the initial issue of 3.25 million Canyon shares to the vendor (or nominees) of Askia Sarl. Due diligence by Canyon is already underway, and as part of this due diligence, Canyon has visited the Gold Projects with representatives of Askia Sarl, as well as commencing legal enquiries in country. The vendor and associates of Askia Sarl have been involved in the identification and discovery of a significant gold deposit in Burkina Faso with a current gold resource in excess of 1 million ounces. Canyon is delighted to be able to draw on the expertise of these parties in carrying out exploration activities in Burkina Faso.

3 Following a visit to the Gold Projects in Burkina Faso, Canyon Resources Exploration Manager, Chris Connell, said; Both the Taparko North and Tao Projects cover highly prospective Birimian greenstones along with major gold endowed structures. There is active shallow artisanal mining being conducted by local people on both Projects and we sighted primary quartz hosted gold specimens being mined at several locations. The favourable structural and geological settings represent an outstanding opportunity for the discovery of a large ore deposit within the tenements. Due diligence is expected to be finalised by mid October Commenting on the transformational acquisition, Canyon s Managing Director, Phil Gallagher, stated: Canyon is delighted to have been able to secure the right to acquire two such highly prospective gold projects in Burkina Faso. Canyon s acquisition of the Taparko North and Tao Projects will strengthen its asset portfolio by providing exposure to a region in West Africa that is highly prospective for hosting large gold deposits, while we continue to progress the exploration of our Western Australian gold project. About the Gold Projects The Gold Projects cover an area of 658 square kilometres over four permits in the Birimian Greenstone Belts of the West African Craton. These permits comprise two project areas known as the Taparko North Project and the Tao Project. Both Gold Projects are easily accessible by road, being approximately 240km northeast of Ouagadougou, the capital of Burkina Faso. The Taparko North Project is situated in the Yalogo Belt. This greenstone belt hosts the 2 million ounce Taparko gold mine and the 1.7 million ounce Inata gold mine. The Tao Project lies in the Gorouol Greenstone Belt which hosts the country s largest deposit, the 5 million ounce Essakane gold mine. Significantly, both Gold Projects are situated along north east striking structures. The major gold endowed northeast southwest trending Markoye Fault is recognised as hosting both the Taparko and Essakane gold deposits and the 3.7 million ounce Bombore gold deposit, situated along strike to the southwest. Numerous artisanal gold occurrences have also been located along the trend of the Markoye Fault within the Taparko North Project. The Gold Projects represent a combination of outstanding geological and structural settings in highly gold endowed Birimian Greenstone Belts, with recognised major gold hosting structures traversing the project areas. As such, the Taparko North and the Tao Projects have potential to host significant gold resources.

Artisanal workings and fine gold mined from those

Faso is a politically stable country that, although host

four new and two developing gold mines, is relatively

4 Artisanal workings and fine gold mined from those workings on the Tao Project About Burkina Faso Burkina Faso is a politically stable country that, although host to a number of multimillion ounce gold projects, with four new and two developing gold mines, is relatively underexplored, as the following table suggests. Source: Ampella Mining Limited

5 Evidence of significant brittle deformation at the Tao Project Details of the Acquisition Agreement Canyon will acquire, subject to due diligence, a 100% interest in Askia Sarl. Askia Sarl, via a wholly owned Burkina Faso subsidiary company owns the Taparko North Project, comprising three granted exploration permits and the rights to the Tao Project, comprised of one granted exploration permit in Burkina Faso. Canyon is required to complete due diligence by 15 October 2010, following positive completion of which it will issue 3.25 million shares to the vendor (or nominees) of Askia Sarl to acquire the company. To maintain ownership of Askia Sarl and the Gold Projects, Canyon is required, at its election, to issue further shares in staged payments as follows: 3 million shares to be issued by completion of the first field season (30 th April 2011) of exploration and results of the exploration being to Canyon s satisfaction; and 2.5 million shares to be issued by completion of the second field season (30 th April 2012) of exploration and results of the exploration being to Canyon s satisfaction. In addition, subject to the achievement of certain project hurdles, further issues of shares (via convertible securities, the terms of which are yet to be confirmed with ASX in accordance with the Listing Rules) to the vendors (or nominees) of Askia Sarl will be made as follows: 5 million shares to be issued subject to the definition of a 500,000 ounce indicated gold resource; and 10 million shares to be issued subject to the definition of a 1 million ounce indicated gold resource. The structure and terms of the consideration are subject to shareholder and ASX approval.

6 About Canyon Resources In addition to the agreement to acquire Askia Sarl and the Taparko North and Tao Projects, Canyon has a cohesive portfolio of tenements in the Cue Goldfield, in the Murchison region of Western Australia, a region that has produced in excess of 7 million ounces of gold over the past 100 years. Canyon s Cue Project is home to a significant number of historical workings, with individual larger workings having produced up to 50,000 ounces of gold. Exploration for narrow vein, high grade shoots, such as those at Light of Asia and Cue One North, is considered to have potential for the discovery of extensions to the existing high grade mineralised shoots. Further information about Canyon can be found in the Company s Prospectus which can be downloaded from the Company s website: Enquiries: Phil Gallagher Managing Director Tel: The information in this report that relates to Exploration Results has been compiled by Mr. Rhod Grivas and Chris Connell who are employees of the Company. Mr Grivas is a member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. He has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity to which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Rhod Grivas and Chris Connell consent to the inclusion of the information in the form and context in which it appears.

ASX RELEASE / MEDIA RELEASE 2,810 ppb gold in shallow auger samples Four new parallel zones defined up to 1500m in strike

ASX RELEASE / MEDIA RELEASE 2,810 ppb gold in shallow auger samples Four new parallel zones defined up to 1500m in strike ACN 121 539 375 Principal Office: Level 2, 23 Ventnor Avenue West Perth 6005 Western Australia Phone: + 61894817344 Fax: + 61894817355 Email: info@westafricanresources.com Web: www.westafricanresources.com