Dawson, Hughes-Lang sell mineral rights to subsidiary for $1-

** year ** With $3 million needed for expanded exploration programs on three placer gold projects, Calgary- based Gold City Resources is attempting to raise $1,750,000 during the current year.

Located 35 miles southeast of Dawson City, Yukon, in the Indian River Valley, the properties are situated on 15,000 acres of gold-placer mineral rights which are thought to host two million oz of fine gold.

On January 15, a private company owned 50% by Dawson Eldorado Mines and 50% by the Hughes-Lang Group completed the largest property transaction in Yukon history by acquiring a 100% interest in those mineral rights.

The agreement requires the buyer to pay $1 million annually for 20 years to maintain the lease- purchase deal. Royalty revenues are approximately $750,000 per year from current operations, according to a Dawson Eldorado report.

After conducting a test mining joint venture with the Hughes-Lang Group (22.5%) and Pacific Trans- Ocean Resources (22.5%) last year, Gold City produced 1,340 fine oz gold (2,200 oz of sluice run gold) over 800 sluicing hours (40 days) from the Quartz property.

With additional stripping and testing already complete, Gold City is planning to double its gold output from this operation in 1988.

Beginning on March 1, operations at the Ruby Creek mine project are also being conducted in a joint venture involving Gold City, 55%, Hughes-Lang (22.5%) and Pacific Trans-Ocean 22.5%.

As a major tenant in the area, Gold City has just completed an access road to the Ruby Creek mine property and the company says it is planning combined production of 15,000 oz of sluice run gold from the Quartz, Ruby Creek and McKinnon Creek mines during 1988.

The McKinnon mine operation at Indian River is a 50%/50% joint venture involving Gold City and Huges-Lang.

According to Gold City President Paul White, gross revenues from production at Quartz are estimated at $5.5 million with earnings projected in the 15 cents to 20 cents per share range.

Since it has allowed exploration options with Dawson Eldorado Mines at the Kiwi zinc and Keno Hill properties in the Yukon and at Willow Creek, Nev., to expire, Gold City says it is free to concentrate on its Yukon projects.

Under a previous agreement, Gold City was required to spend $100,000(US) on the Willow Creek gold prospect by Dec. 31, 1989. A former high grade gold producer, the property is being explored for high and low grade ore.

Gold City, which reported earnings of $240,000 or 4.4 cents per share for the year ended Oct 31, is 25%- owned by Dawson Eldorado.