PINNACLE REACHES DEVELOPMENT MILESTONE

June 1, 2004 Denver, Colorado -- Pinnacle Resources, Inc. (PNRR:OTCBB; PIN:Frankfurt; Berlin) announced today that it has obtained a mining authorization from the Minerals and Energy Department of the Republic of South Africa for its vanadium/titanium/iron ore deposit in the Northern Province of South Africa.

The granting of the Mining Authorization is the culmination of four years of work by the Company to develop a mining plan, an environmental management plan, the discovery and development of the water resource required to treat the ore and a social plan that addresses the needs and desires of the local tribes residing on the property. The Company is pleased to report that it has been joined by a Black Empowerment Partner who has purchased a one-third interest in the property in conformance with South Africa's policy that seeks to include nationals in the mining of the nation's major natural resources.

With the authorization in hand VanMag, Pinnacle's 66.67%-owned South African subsidiary, can now pursue a bankable feasibility study and an eventual joint venture agreement with a major industry partner. The magnitude of the mining plan was projected at the minimum rate of 30,000 tons of magnetite per day.

A previous techno-economic study, dated April 2003, by Ross Glanville and Associates indicated that the property hosted vanadium/titanium/iron mineralization in excess of 300 million tons contained in two separate beds lying within 200 meters from the surface. Metal content was estimated at 6.8 million tons of vanadium pentoxide and 33 million tons of titanium dioxide. Glanville projected a net present value for the property of $73.6 million based on the recovery of vanadium alone.

"The timing of this important development is fortunate for Pinnacle" said Dutch Hildebrand, Chief Financial Officer of the Company, "as the price and demand for vanadium products have been climbing dramatically. The price of vanadium pentoxide has more than doubled since March of 2003. Pinnacle is currently engaged in discussions with several major Far East consumers of vanadium and iron ore with a view toward joint-venturing the building of a mine and processing plant".

This news release contains forward looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These forward looking statements include expressions of beliefs, expectations, hopes, or intentions regarding the future which may or may not come to pass. It is important to note that actual results may differ from those expressed in such forward-looking statements. Although Pinnacle believes its properties have potential, they are in early stages of exploration and development which have not shown to contain proven economic reserves. There can be no assurance that if identified, any resources might be economically extracted, or funding available, or that any such properties might be acquired in the future. If projects are acquired, there can be no assurance of any economic benefit, of cash flow to the company.

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