2009-03-23 09:43 ET - News Release

Mr. John Braden reports

IGC RESOURCES UPDATE-PRODUCTION POTENTIAL AT BLACKBURN GOLD PROJECT

IGC Resources Inc. has released an update as to activities at its Blackburn gold project in Western Australia.

Initially acquired in 2005 because it offered the company an opportunity to establish an early production profile and cash flow, subsequent falling gold prices and escalating operating costs following that time delayed the company's plans to proceed to production. Instead, the company focused upon exploring for additional gold resources at the property with the intention of improving the economics through increasing the existing gold resources.

In 2006 the company embarked upon an ambitious exploration program seeking to prove that the genesis of the ore could be related to a large intrusion or porphyry at depth and provide significant upside to the project. In 2008, as a result of further geophysical work and the success of 2007 diamond drilling work, further testing of targets outside the known deposit areas identified mineralized zones with a grade tenor of between one to 1.5 grams per tonne. The zones were located up to 400 metres east and at least 5,000 metres to the north of the known deposit.

These programs substantially increased the opportunity to identify and develop additional resources at the project. The existing Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects-compliant resource estimate is 51,300 tonnes at 5.92 grams per ton measured, 328,900 tonnes at 1.47 grams per tonne indicated and 6,244,600 tonnes at 1.06 grams per tonne inferred.

In response to a strengthening gold price in Australian dollar terms and falling fuel and labour costs the company is now planning to re-evaluate original scoping studies and mining proposals with a view to possibly commencing production by way of trial or small-scale mining at the property.

The review will focus on the near-term production of already delineated material at surface possibly as a low-cost heap leach operation. It will also explore the possibility of extracting the higher-grade underground shoots identified beneath the historical Jinkas open pit.

Over the coming months the company will re-examine all the exploration drill data, historical scoping studies and mine plans and will determine if a return to production in the immediate future is economically feasible. Surplus funds generated as a consequence of production could then be reinvested into continued exploration work on the property over time.

The company's technical group still believe that there are geological parallels to the Boddington mine which is located in a similar geological setting some 150 kilometres away and which now boasts over 26 million ounces.

Even with tightened capital markets, the right confluence of operating parameters and improving gold price may well suit a return to mining of the pre-existing resources.

The company is also aware that growth through acquisition is an opportunity borne from the current global economic crisis, and is actively identifying and evaluating gold projects and companies that may fit well with IGC's current strategic direction.

The company reminds shareholders that whist IGC is focused on gold and to a lesser degree, copper, it also has an indirect exposure to the coal and uranium (solid energy) sector with its 28-per-cent equity in Atomic Resources Ltd.

Atomic now has though its joint venture with the Tanzanian government, measured, indicated and inferred coal resources (JORC-compliant) in Africa and is looking to work with that government to develop energy solutions and power generation solutions for the country.

Chrisant Mzindakaya, speaking as chairman for the Tanzanian National Development Corp. (NDC), was recently quoted in the privately run Guardian newspaper in Tanzania as saying: "Tanzania plans to build a 400-megawatt coal-fired power plant by 2012 at a cost of $1.2-billion (U.S.). Tanzania suffered serious power cuts in 2006 after drought slashed hydropower production, making the need to diversify to other electricity sources more urgent. NDC intends to build the plant near two coal deposits in southwestern Tanzania and is working through Tancoal Energy Ltd., a joint venture with Pacific Corporation East Africa, a subsidiary of Australia's Atomic Resources Ltd."

The Tanzanian project is now progressing to bankable feasibility study and is looking to a positive outcome early in 2010.

Technical information in this announcement was reviewed by Dave Holden, president and chief executive officer, who is a member of the Australian Institute of Mining and Metallurgy and a qualified person as defined under NI 43-101.