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Elray Mining: Asian Demand for Zircon Set for Intense Growth

October 16, 2008

Elray Resources, Inc. (OTCBB: ELRA), a technically-driven gold and precious metal mineral exploration company that recently entered into a joint venture to develop a zircon sands deposit in Indonesia, is pleased to provide shareholders with the following background information on the global zircon market, which looks set for ongoing growth.

Zircon is a highly valuable mineral used in a variety of industrial processes. It has experienced strong growth in both demand and price in recent years.

Indonesia emerged as a major new supplier from 2006 onwards. World consumption of zircon was about 1.25Mt in 2006. With a share of 47%, Asia (including China and Japan) now accounts for just under half of total consumption. Overall growth in demand is likely to continue at around 3.8%py to reach just over 1.5Mt by 2011. Overall growth in production is expected to be around 4.0%py to 2011. The impact of this is that prices are forecast to remain strong but decline very slightly to around US$450/t by 2011. (Source: Roskill Information Services)

Major uses of Zircon include in the glass substrates of liquid crystal displays (LCDs) and plasma display panels (PDPs). Zircon-based refractories are used in steel and glass making. Zircon is also used as a foundry sand including for the Cosworth casting process, which is used to cast aluminium motor engine heads and blocks. In the ceramic industry, zircon sand is used as an additive to glazes on tiles.

It is also used in abrasives, electronics, oxygen sensors, ceramic pigments, paints, catalysts, fuel cells, in nuclear reactor fuel tubes and in the aeronautics and space industries. In additions it is used as a neutron absorber in nuclear reactor control rods. (Source: Industrial Minerals & Rocks, 7th Edition, Kogel, Trivedi, Barker, Krukowski)

“Zircon’s properties continue to make it a valuable commodity for which demand is increasing,” commented Mr. Barry Lucas, Executive Chairman of Elray Resources. “With this project we expect to meet some of that demand and create significant value for our shareholders.”

About Elray Resources, Inc.

Elray Resources, Inc. is a junior exploration and development Corporation which has successfully accumulated a portfolio of highly prospective, heavily mineralized mining tenements in South East Asia and North America. Elray Resources, Inc.’s, primary objective is to source projects, conduct geological assessments and seek Joint Venture partners to develop the properties.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Actual results may differ from management’s expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks associated with gold & precious mineral exploration risks related to competition, management of growth, new products, services and technologies, potential fluctuations in operating results, international expansion, commercial agreements, acquisitions and strategic transactions, government regulation and taxation. More information about factors that potentially could affect the Company’s financial results is included in its filings with the Securities and Exchange Commission.

 Contacts: Elray Resources, Inc. Jake Harris Investor Relations (347) 410-9782 Email: ir@ElrayMining.com Website: www.ElrayMining.com

SOURCE: Elray Resources, Inc.




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