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Operations and Project Update at the Hammerstone Quarry

Posted on: Thursday, 10 August 2006, 12:00 CDT

CALGARY, Aug. 10 /PRNewswire-FirstCall/ -- Birch Mountain Resources Ltd. ("Birch Mountain" or the "Company") (BMD:TSXV and AMEX) is pleased to provide an operations and project update. "Our quarry is open, we are supplying aggregates to oil sands road building projects, plus we have purchased the first equipment for our quicklime operation," says Derrick Kershaw, Senior Vice President. "We are positioning ourselves to supply limestone products that meet the demands of the Alberta oil sands industry."

QUARRY OPERATIONS

During the first half of 2006, there has been significant progress with the Muskeg Valley Quarry (MVQ) portion of our Hammerstone Project with almost 6 million tonnes of overburden and pit material excavated to open access to all four layers of limestone, each layer having particular qualities of value in different applications. The active quarry is 20 hectares (50 acres) in size, within a total development of 96 hectares (240 acres) cleared for expansion. Our aggregate has been used to construct the infrastructure including haul roads, stockpile sites, lay-down areas and the surface water management system.

Supply of aggregates to oil sands road building projects is now underway. To assure our ability to supply the high volume, spot market business, significant volumes of crushed aggregate products have been produced, and are in stockpiles ready to be loaded out. Within the production plan, additional quantities of limestone rock have been drilled and blasted and are ready to be excavated and fed to the crushing operations.

To improve efficiency, the Company purchased a Hitachi EX 1800, 14 cubic yard hydraulic shovel that, among other duties, will be used for the selective excavation of the 20 metre thick Unit 3 limestone. This large shovel will reduce unit-operating costs and eliminate drilling and blasting of most of Unit 3.

NEW HIGH-CAPACITY CRUSHING PLANT

To increase production, Birch Mountain has brought forward the acquisition of our own high capacity crushing plant using capital lease financing arrangements. "This modern plant is capable of producing aggregates to meet rigid specifications with a high degree of consistency and reliability," says Russ Gerrish, Vice President of Operations and Engineering. "Components will start arriving in the next 3 - 5 weeks, and when complete, our new plant will be producing aggregates at the rate of 1,400 tonnes per hour or more. The new plant has been tailored to maximize the potential of our limestone deposit, and will have the production capability to deliver the full range of aggregate products that meet or exceed Alberta Transportation and CSA specifications. This new crushing plant will operate in addition to the contract crushing spread already producing on site."

PURCHASED THREE ROTARY KILNS

Birch Mountain purchased three existing rotary kilns and associated pre-heaters from Northwest Alloys, Inc., a subsidiary of ALCOA. Following regulatory approval, quicklime plants incorporating the kilns will be constructed and phased into production providing up to of 400,000 tonnes of quicklime per year. A contractor has begun to dismantle the equipment at its current location in Addy, Washington, and is preparing it for shipment to the Hammerstone site. "Purchasing new equipment currently involves long lead-times and a risk of cost escalation. We've had independent verification of the suitability of this equipment for our applications, enabling us to proceed with confidence that we will achieve our schedule for producing our first lime in early 2009," says Kershaw. "Having sourced these long lead-time items, including detailed engineering drawings, gives us improved capital cost and project schedule certainty."

Birch Mountain is developing the industrial mineral potential of its extensive mineral properties in the oil sands region of northeastern Alberta and believes the strong global demand for oil and the heightened profile of Alberta's oil sands will ensure long-term demand for limestone products from the MVQ and Hammerstone Project.

Forward Looking Statements: This news release contains certain forward-looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization, resources and reserves, exploration results, research and development results, and the future plans and objectives of Birch Mountain are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Birch Mountain's expectations are disclosed elsewhere in documents that are available to the public at http://www.sedar.com/ and http://www.sec.gov/.

The TSX Venture Exchange does not accept responsibility for the adequacy

or accuracy of this news release.

Birch Mountain Resources Ltd.

CONTACT: Douglas Rowe, President & CEO or Derrick Kershaw, Senior VicePresident, Birch Mountain Resources Ltd., Tel (403) 262-1838, Fax (403)263-9888, http://www.birchmountain.com/

Source: PRNewswire-FirstCall

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