Rea/ARC Joint Press Release

Business Wire, June 7, 1996

GREENBRAE, Calif.--(BUSINESS WIRE)--June 7, 1996--Rea Gold Corp. ("Rea")(TSE:REO AMEX:REO) and American Resource Corp., Inc. ("ARC")(Nasdaq:AREE) announced today that the Rea Form F-4 Registration Statement filed with the Securities and Exchange Commission ("SEC") became effective on June 4, 1996.

The Form F-4 includes the prospectus/joint proxy statement for the solicitation of proxies from holders of Rea Common Shares for the annual and special meeting of Rea shareholders to be held June 26, 1996, and proxies from holders of shares ARC common Stock for the special meeting of ARC stockholders also to be held June 26, 1996. The Rea shareholders of record on May 15, 1996 and ARC stockholders of record on May 23, 1996 will be asked at their respective meetings to vote on, among other matters, a proposal to approve and adopt the Merger Agreement between ARC and Rea dated March 5, 1996.

Under the terms of this agreement, ARC will merge with a wholly-owned United States subsidiary of Rea. ARC stockholders will receive 2.24 shares of Rea for each ARC share held, plus or minus an adjustment based on the market or realized value on the effective date of the merger of Northern Orion shares held by ARC on Jan. 10, 1996.

As an example, if the effective date of the merger, as defined by the merger agreement were June 4, 1996, ARC stockholders would receive 2.459 shares of Rea for each ARC share held. ARC and Rea stockholders may call toll free 800/461-3538 for updates concerning this share exchange ratio.

It is estimated that at the time of the merger, the combined companies will have a market capitalization in excess of Cdn.$300 million, based upon current share prices.

James Hogan, currently president and CEO of Rea, will become chairman of Rea. Ian B. Smith, currently chairman, president and CEO of ARC, will become president and CEO of Rea. The Board will be comprised of six Directors, three each appointed by Rea and ARC.

Rea recoded a loss for the three months ended March 31, 1996 and for the year ended Dec. 31, 1995 of Cdn.$1.17 million and Cdn.$2.9 million or Cdn.$.03 and Cdn.$.08 per share, respectively. Revenue for the same periods was Cdn.$4.63 and Cdn.$15.33 million, respectively.

Rea is a Canadian mining company engaged in the acquisition, exploration, development and operation of precious metal properties. Rea operates the Mt. Hamilton Gold Mine near Ely, Nevada and is developing the Bissett Gold Mine in Manitoba.

As set forth in the Form F-4 prospectus/joint proxy statement, ARC has restated its March 31, 1996 and December 31, 1995 financial statements. ARC's net income was restated for the three months ended March 31, 1996 and for the year ended Dec. 31, 1995 to $9.74 million and $9.77 million or $.72 and $.71 per share, respectively.

These amounts reflect management's 1996 reassessment of the accounting for equity securities available for sale at historical cost to present the Northern Orion shares at a fair value and the unrealized holding gain on equity securities available for sale, net of deferred income taxes.

In addition, management restated net deferred tax assets at March 31, 1996 and Dec. 31, 1995 to reflect projected utilization of net operating loss carryforwards to offset estimated future taxable income for the sale of the remaining Northern Orion shares.

Revenues and other income for these periods were $14.53 million and $35.04 million, respectively. The effect of the restatements is summarized below: