Rhyolite Drilling Extends Gold Discoveries at Paxson: Highlights Include 1.6 g/t Au Over 70.1m, 1.0 g/t Au Over 100.1m and 8....

Rhyolite Resources Ltd. ("Rhyolite" or the "Company") (TSX VENTURE:RYE) reports the results from the remaining 11 holes from its 14-hole 2011 reconnaissance diamond drill program on its wholly-owned Paxson gold project in the Tintina Gold Belt, eastern Alaska.

Drill Highlights:

Shalosky Zone:  WG11-03 - 1.01 g/t gold over 100.1 meters (131.4-231.5m), 
                including 2.5 g/t gold over 10.5 meters (221-231.5m);     

                WG11-04 - 2.21 g/t gold over 13.2 meters (85.8-99.1M),    
                including 4.5 g/t gold over 5.2 meters (85.8-91.0m);      

                WG11-12 - 1.64 g/t gold over 70.1 meters (106.5-176.6),   
                including 3.1 g/t gold over 14.7 meters (143.2-157.9m);   
                and                                                       

                WG11-13 - 2.05 g/t gold over 10.1 meters (178.9-189.0m),  
                including 3.2 g/t gold over 3.3 meters (182.4-185.7m).    

Low Zone:       WG11-06 - 4.03 g/t gold over 5.5 meters (31.7-37.2m),     
                including 8.6 g/t gold over 2.2 meters (35-37.2m).        

Project Highlights:

Shalosky Zone: A total of eight diamond drill holes comprising 1,388 meters tested the Shalosky zone over a 600 meter strike length and down to depths of approximately 160 meters below surface. The Shalosky zone is associated with a regional east-northeast, steeply dipping structural corridor adjacent to a regional thrust fault and coincident with a 1,100-metre long -by-50- to 500-metre wide greater-than-100-part-per-billion gold-in-soil geochemical anomaly.

Seven of eight core holes drilled in 2011 encountered significant gold mineralization in the estimated 5-to-35 meters wide (true width), near vertical zone of brittle fractures and healed breccias. Mineralization starts at surface and remains open, both along strike east and west, and to depth. Gold values occur in quartz veins and breccias hosted in quartz sercite schist preferentially concentrated in the structural corridor, with associated silicification and minor pyritic sulphides.

Low Zone: A total of four diamond drill holes comprising 536 meters were completed over the Low Target area with two holes testing the Hi-Low target which returned higher-grade gold values of 14.2 g/t gold over 2.8 meters (Hole WG11-05) and 8.6 g/t gold over 2.2 meters (Hole WG11-06) within a package of highly altered, oxidized calcareous metasediments intruded by mafic/intermediate dikes.

Exploration of the expanded (86.7 sq. km) property has also identified additional zones of mineralization along a 9 km long structural corridor that merit follow-up work in 2012. In addition to gold targets, a potential for base-metal massive sulfide deposits is demonstrated by sampling in the northern portion of the Paxson property at the HDS prospect where a composite grab sample from talus float returned 1.4% copper, 14.9% lead, 14.7% zinc and 91 g/t silver.

Drill Results

Shalosky Zone                              
                                                                          
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                        From            To      Interval    Weighted Grade
Drill Hole                (m)           (m)        (m)(i)        (g/t Gold)
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WG11-01(ii)             56.1          77.1          21.0               1.9
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Includes                56.1          59.1           3.0               7.2
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Includes                70.1          71.8           1.7               6.3
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And                     97.5          99.0           1.5               2.7
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WG11-02(ii)             88.3         111.4          23.1               3.5
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Includes                90.4         103.6          13.2               5.4
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WG11-03                112.0         113.7           1.7               0.9
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And                    118.2         120.2           2.0               1.6
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And                    131.4         231.5         100.1               1.0
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Includes               193.0         210.8          17.8               1.9
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Includes               221.0         231.5          10.5               2.5
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WG11-04                 85.8          99.1          13.2               2.2
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Includes                85.8          91.0           5.2               4.5
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Includes                85.8          86.9           1.1              13.7
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WG11-11                 65.5          79.4          13.9               1.0
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Includes                76.9          78.8           1.9               4.8
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WG11-12                106.5         176.6          70.1               1.6
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Includes               143.2         157.9          14.7               3.1
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WG11-13                178.9         189.0          10.1               2.1
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Includes               182.4         185.7           3.3               3.2
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WG11-14                          no significant values                    
                 short drill hole did not reach mineralized zone in hole  
                                        WG11-13.                          
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(i) Downhole widths - based on a near vertical structural interpretation 
with no stratigraphic controls true widths range from 30-80 per cent of 
downhole width. (ii) WG11-01 and WG11-02 were previously released on 
August 17, 2011. The last sample analyzed in hole WG11-12 returned 
2.03 g/t gold over 1.1 meter and last sample analyzed in hole WG11-13 
returned 0.40 g/t gold over 1.1 meter.                                 

Hi-Low Showing

Hole WG11-05 located approximately 3.2 km east southeast of the Shalosky zone, was drilled to the south, angled at -45 degrees undercutting the upper Low target (13.4 g/t Au over 3.0m trench). Hole WG11-06 was collared from the same site angled at -70 degrees.

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                        From            To      Interval    Weighted Grade
Drill Hole                (m)           (m)        (m)(i)        (g/t Gold)
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WG11-05(ii)             19.5          21.9           2.4               3.2
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And                     26.9          54.3          27.4               1.9
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Includes                38.7          52.3          13.6               3.4
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Includes                40.2          43.0           2.8              14.2
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WG11-06                 31.7          37.2           5.5               4.0
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Includes                35.0          37.2           2.2               8.6
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(i) Downhole Widths - there has been insufficient drilling to determine
true widths, (ii) WG11-05 was previously released on August 29, 2011.     

Low-Low Showing

Holes WG11-07 and WG11-08 were drilled 100 meters south and 130 meters west of holes WG11-05 and WG11-06 to test a poorly exposed showing known as the Low-Low target (3.76 g/t gold over 4 metres in 2010 trench). Holes WG11-07 and WG11-08, where drilled to the north at -45 and -80 degree angles, respectively. Hole WG11-07 returned 1.56 g/t gold over 0.4m and hole WG11-08 failed to encounter any significant mineralization.

Hunter Showing

Two holes comprising 323 meters were collared approximately 2.8-km west of the Low zone and 1 km south-southeast of the Shalosky zone at the Hunter showing. Hole WG11-09 was drilled to the north and angled at -50 degrees, while WG11-10 was collared from the same site but angled at -70 degrees. Neither hole encountered significant gold mineralization, but highly anomalous silver/tungsten values were encountered in WG11-10 within highly broken and altered metasediments with very poor core recovery (less than 50 per cent at the interface of overburden and bedrock). The unusually high values of 963 g/t Ag and 6230 parts per million ("ppm") W) in hole WG11-10 remain poorly understood.

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                        From            To      Interval    Weighted Grade
Drill Hole                (m)           (m)           (m)      (g/t Silver)
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WG11-10                 13.4          17.3           3.9             256.1
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Includes                14.6          15.5           0.9             963.0
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And                     22.2          22.9           0.7              14.1
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And                     30.8          31.4           0.6              12.4
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The lengths stated in this report are drilled intervals and do not necessarily represent true widths of mineralized sections. Holes were drilled from 330 degrees to 010 degrees and the dips of the holes ranged from 45 degrees to 80 degrees. Estimated true thickness ranges from 30 per cent to potentially 100 per cent. A detailed plan map, cross-sections, assay sheets and photo montage of select core samples from these holes will be available on the Rhyolite website at www.rhyoliteresources.com.

Moving Forward

Rhyolite intends to complete metallic screen assays on drill core samples that returned greater than 5 g/t gold. The metallic screen method separates 1000 grams of the final prepared pulp over a 100-micron dry screen. Coarse (+100 micron) and fine (-100 micron) fractions are then analyzed separately using standard fire assay procedures and the weighted average grade is then computed. This sampling method more accurately assesses gold grades in rock types where coarse gold is present that would not necessarily be represented in the standard fire assay method.

Quality control/Quality assurance

The 2011, mineralized intervals in the BTW-size drill core were sawn longitudinally and half the drill core was sampled in intervals not exceeding 3.0 meters. All samples are transported in security-sealed bags to the lab for analyses. All samples collected in 2011 were sent for gold fire assay and 48-element ICP analysis to ALS Minerals Laboratories. Samples were prepared in ALS Minerals' Fairbanks prep facility and then sent to Reno Nevada for gold assays with multi-element ICP analyses performed at ALS' Vancouver Lab. Gold fire assays were on 50 gram pulp splits with an AA finish. One in every ten samples contains a control (blank or gold standard). The Paxson property is an early stage exploration property and does not contain any mineral resources as defined by National Instrument 43-101.

Qualified Persons

The foregoing disclosure has been reviewed, compiled and is the responsibility of Richard A. Graham, P. Geol., President of Rhyolite and a "qualified person" for the purpose of NI 43-101.

ON BEHALF OF THE BOARD OF DIRECTORS OF RHYOLITE RESOURCES LTD.

Richard Graham, President and CEO

Forward-Looking Statement

Some statements in this report contain forward-looking information. These statements include, but are not limited to, statements with respect to future exploration, expenditures, transactions and financings. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, risks related to actual results of exploration activities, the timing and amount of expenditures and the completion of transactions and financings.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts: Rhyolite Resources Ltd. Richard Graham, P.Geol. 604-488-8717www.rhyoliteresources.com