St. John's, Newfoundland - New Island Resources Inc. (TSXV-NIS) announces that it has signed a letter agreement with Anaconda Gold Corporation (TSXV-ANX) whereby Anaconda can earn up to 60% interest in New Island’s Pine Cove gold property near Baie Verte, Newfoundland.

The property is highly prospective and contains the Thunder and Lightening deposit where drilling has defined a geological reserve totalling 2.75 million tonnes grading 3.0 grams per tonne. A feasibility study completed in 1993, and reviewed by mining consultants Watts, Griffis and McOuat, was based on mineable, diluted reserves totalling 1.865 million tonnes grading 3.19 grams per tonne. Adding lower grade material to be processed during the mine life would give mineable gold reserves totalling 217,000 ounces. While these historical reserve calculations were not completed in accordance with National Instrument 43-101 standards, they are considered to be reliable and relevant by the parties.

Anaconda can earn an initial 30% interest in the property by expending $500,000 by December 31, 2004 to update and complete a new feasibility study. It can obtain an additional 30% interest upon making a production decision and arranging financing for the project. Cash flows from operations will be first applied to pay back project capital costs and thereafter shares 60% - 40% between Anaconda and New Island, respectively.

Anaconda must also issue 250,000 common shares from treasury and pay $30,000 within 90 days of signing a formal agreement.

This agreement remains subject to receipt of regulatory approvals and the completion of a formal agreement requiring Board approval.

For further information, please contact:

Harold Wareham, President, Telephone: (709) 576-7711   Fax: (709) 576-2236 Email: info@newislandresources.com www.newislandresources.com

Statements contained in this release that are not historical facts are forward-looking statements, which involve known and unknown risks and uncertainties not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements .