Admission to AIM

Falkland Gold and Minerals Ltd
09 December 2004


                       FALKLAND GOLD AND MINERALS LIMITED

                          First Day of Dealings on AIM


9 December 2004

Falkland Gold and Minerals Limited ('FGML' or 'the Company'), an exploration
company with exclusive rights to explore for gold and minerals in the Falkland
Islands, today announces its flotation on the AIM Market of the London Stock
Exchange plc.

FGML has successfully raised a total of £10 million before expenses - £8 million
through a placing to institutional investors and a further £2 million through an
offer for subscription. W.H. Ireland Limited is acting as FGML's nominated
adviser and broker.

Key points
     
•    FGML has exclusive mineral exploration rights to substantially all of the 
     onshore land mass of the Falkland Islands above the mean average high tide
     level, covering approximately 12,000 square km ('the Licence'). The Licence 
     will be extended by the Falkland Islands Government to 31 July 2009 on 
     admission to AIM.

•    As part of Stage I of the exploration programme, a significant amount of 
     exploration has been conducted including an aeromagnetic survey of the
     Falkland Islands identifying a number of magnetic anomalies.  The 
     exploration has established the presence of alluvial gold in several 
     drainage systems as well as the presence of kimberlitic indicator minerals 
     and titanium rich gravel, together with a number of anomalies. Twenty-three 
     targets have been identified for investigative drilling.

•    In Stage II, the Directors believe that the focus of the investigative
     drilling programme will be nine of the targets which were identified during
     Stage I of the exploration work.  Further work planned on such targets will
     involve at least 12,000 metres of investigative drilling and the subsequent
     analysis of the resultant samples.

•    Stage III of the exploration programme will involve drilling a further
     fourteen of the targets that have already been identified during Stage I,
     including at least 12,000 metres of investigative drilling and subsequent
     analysis.

Commenting on the flotation, Richard Linnell, the Company's executive Chairman
said, 'We are delighted to be joining AIM today. We were very pleased with the
response to both the institutional placing and the public offer for
subscription. The proceeds of the flotation will enable us to progress the next
stages of our exploration programme in the Falkland Islands. We look forward to
reporting the progress of Stage II of our programme during the course of 2005'.


Placing Statistics

Issue Price per Ordinary Share                                                       40p
Number of Ordinary Shares placed pursuant to the Placing                      20,000,000
Number of Ordinary Shares offered pursuant to the Offer                        5,000,000
Total proceeds from the Placing and Offer (before expenses)                  £10,000,000
Number of Ordinary Shares in issue immediately following Admission            78,250,000
Market capitalisation of the Company at the Issue Price on Admission         £31,300,000



Enquiries

David Hudd                                 Matthew Jervois           Philip Haydn-Slater
Falkland Gold and Minerals Limited         Grandfield                W.H. Ireland Limited
Tel: [phone]                         Tel: [phone]        Tel: [phone]



The Falkland Islands

The Falkland Islands are located approximately 500 kilometres from the nearest
point of South America and comprise some 700 islands. The two largest islands
are East and West Falkland, with the capital Stanley lying on the eastern shore
of East Falkland.  The Falkland Islands are an overseas territory of the United
Kingdom of which Her Majesty Queen Elizabeth II is the Head of State.

The Falkland Islands' economy has traditionally been based upon agriculture and
an offshore fishing industry, and has an annual gross domestic product of about
£70 million.  The islands have a current population of approximately 3,000,
predominantly of British descent, with some 2,000 living in Stanley.

Background on the Licence and the Company

The potential for the Falkland Islands to host economic mineralisation was first
conceived by South Atlantic Resources Limited ('SARL'), a subsidiary of
Cambridge Mineral Resources plc and a shareholder in the Company, after the
analysis of samples collected during a reconnaissance visit in 1997 revealed the
potential for kimberlitic indicator minerals, gold and heavy mineral sands.

In 1998, the Licence was issued to SARL under the Falkland Islands Mining
Ordinance of 1918 ('the 1918 Ordinance') and was for an initial term of six
years.  The Licence authorised the exploration for precious stones and metals,
together with all minerals whatsoever including coal and bituminous shale (but
excluding petroleum), on or under the surface of the Licence Area.

In March 2000, a deed of variation of the Licence was agreed with the Government
to extend the periods for compulsory relinquishment, delete calcified seaweed
and peat as minerals covered by the Licence and to vest the right in the
Government to search for building materials and clay.  In January 2004, having
already extended the Licence term to 16 January 2004, the Governor authorised an
extension to the term of the Licence for a further three years such that the
Licence is valid until 16 January 2007.  Furthermore, the Government has agreed
to extend the Licence to 31 July 2009, subject to Admission having taken place
by 16 January 2007.  In that event, the Company is required to relinquish 50 per
cent. of the Licence Area by 16 January 2007.

Falkland Island Mining Law

The activities of prospecting, exploration and exploitation of minerals in the
Falkland Islands currently fall under the 1918 Ordinance.  In 2002 the
Government proposed revised legislation to replace the 1918 Ordinance which when
enacted by the Government will be the Mining Ordinance 2005.  The proposed bill
is anticipated by the Directors to become law in the first half of 2005.

In the event of a discovery, the holder of the Licence is able to apply to the
governor of the Falkland Islands ('the Governor') for mining rights, any such
application to be dealt with according to its merits under applicable
legislation.

Geological Setting of the Falkland Islands

It is now generally accepted in the geological community that in geological
reconstructions of Gondwanaland the Falkland Islands lay to the south east of
South Africa. Fossil evidence as well as paleomagnetic and stratigraphic
analyses suggest a geological similarity between the Eastern Cape of South
Africa and the Falkland Islands and support the concept that the two were
originally linked. There are also several major differences in the geology and
evolution of the Falkland Islands as compared with the south east of South
Africa, including their relatively increased tectonic and igneous activity
following the break-up of Gondwanaland. Such differences may be conducive to the
formation of mineral deposits and the Directors believe may provide the
potential for the Falkland Islands to be a new mineral province meriting
exploration.

Exploration Work Conducted Within the Licence Area

Stage I exploration work

Since the Licence was obtained, a significant amount of exploration work has
been conducted, including the analysis and modelling of near surface identified
samples gathered. This work has established the presence of alluvial gold in
several drainage systems as well as establishing the presence of diamond
indicator minerals and titanium rich gravel. Initial analysis of this gravel
provides a grade of some 79 per cent. titanium dioxide, which is well in excess
of the 55-60 per cent. that is normally found in this type of deposit. The
Directors believe other samples from elsewhere in the Licence Area contain
indicators of minerals, including Rare Earth Elements and Platinum Group Metals.
The total cost of exploration within the Licence Area to date is in excess of
US$2 million.

The source of the gold recovered remains unclear but scientific work conducted
to date indicates several sources with a probable epithermal origin accounting
for the majority of the studied gold particles.

In March 2004, the Company commissioned an aeromagnetic survey of the Falkland
Islands conducted by Fugro Airborne Surveys N.V., a geophysical consulting
company servicing the oil, gas and mining industries world-wide. The work took
place between March and May 2004 and involved the acquisition and processing of
some 32,685 line-km of magnetic and radiometric data. The survey identified a
number of magnetic anomalies and initial discrete targets, some of which are
supported by existing geochemical data and coincident stream particle gold.
Additional investigation of the magnetic and radiometric data is required in
order to evaluate their mining potential.

Following on from the results of the aeromagnetic survey, and building on the
Company's sampling work conducted to date within the Licence Area, the Company
has undertaken detailed modelling of its results and planning of an
investigative drilling programme required to test further the anomalies
identified. In order to undertake this work the Company commissioned the
acquisition of a drilling rig in November 2004 for expected delivery within the
first quarter of 2005. The cost of the rig is to be paid for out of the
Company's existing funds.

Results of Stage I exploration work

The Company has identified a number of anomalies and established a total of 23
targets for investigative drilling. From the exploration work conducted to date,
the Directors believe that the geological evidence available suggests that
economic mineralisation may exist and that the final proof, or otherwise, cannot
be established without such drilling. Independent consultants Steffen, Robertson
& Kirsten (UK) Ltd are of the opinion that the status of the project is such
that investigative drilling is appropriate.

Programme of Future Exploration Work

The principal target assets are gold and other minerals. The Company has
prepared a detailed 2-stage programme of follow-up work building upon the
results of the completed aeromagnetic survey and the initial exploration work.
The programme includes at least 24,000 metres of investigative drilling and
follow-up airborne magnetics, ground magnetics and further geological fieldwork.
The Company also plans to establish an office in Stanley for the duration of
these stages which the Directors anticipate will be substantially completed
during 2007.

The Directors intend to conduct the drilling programme on a flexible basis and
prioritise the exploration work in order to respond to drilling results as they
become available. The prioritisation of these targets is to be made with
reference to certain key criteria, including:
     
•    selecting targets which exhibit discrete magnetic anomalies which tap 
     deeper sources of mineralisation;
•    selecting targets associated with stream gold and other mineral indicators 
     detected from samples analysed to date;
•    the targets being at drillable depth; and
•    the targets being of a potential economic size.

Stage II exploration work

The Directors believe that the initial focus of the investigative drilling
programme will be nine of the targets which were identified during the Company's
Stage I exploration work. Further work planned on such targets will involve at
least 12,000 metres of investigative drilling and the subsequent analysis of the
resultant samples. It is also intended to conduct additional geophysical and
geochemical analyses within the Licence Area.

Stage III exploration work

Stage III of the exploration programme will involve drilling a further 14 of the
targets which have already been identified during the Company's Stage I
exploration work, including at least 12,000 metres of investigative drilling and
the subsequent analysis of the resultant samples.

Board of Directors

The Board comprises three non-executive Directors and two executive Directors,
all of whom are  part time.

Richard Linnell, executive Chairman, aged 60

Richard has been active in the resources sector for over thirty years and has
significant global experience in the development and marketing of resources and
commodities. In his early career he was involved in the establishment of the
Delta Manganese Project (now Manganese Metal Company) and the Murray and Roberts
Industrial Corporation, the industrial holding company of the Murray and Roberts
Construction Group. Richard's other positions have included marketing manager
for the Stainless Steel division of Middelburg Steel & Alloys and general
manager of the Manganese Division of Samancor, a joint venture between Billiton
Plc and the Anglo American Corporation. In 1997 Richard became responsible for
Billiton Plc's exploration and development activities throughout Africa. Whilst
at Billiton Plc, Richard was an originator of the Bakubung Initiative, a forum
designed to revive the South African mining industry and which led to the
establishment of the New Africa Mining Fund. Richard was previously a director
of BHP Billiton (SA) Ltd and a member of the Eskom Council. Richard is currently
a non-executive chairman of Golden Valley Mines and GMA Resources Plc and a
director of GRD Minproc Ltd, the Businessmap Foundation, Namakwa Diamonds Ltd,
South African Mineral Resources Corporation Limited and Nimag Pty Limited.

Mark Fresson, executive Finance Director, aged 40

Mark is a chartered accountant, having qualified with Touche Ross in 1989. Mark
then spent ten years in a variety of tax-related roles, within companies such as
Allied Domecq plc and the Virgin group of companies. In early 2000, Mark moved
to Nomura International plc to join the principal finance group as their head of
tax and accounting. He formed part of the team that left Nomura to establish the
Terra Firma Capital Partners private equity operation in 2002 where he
ultimately held the position of senior tax and structuring counsel. Over the
past five years, Mark has been a director of several privately-owned companies.

David Hudd, non-executive deputy Chairman, aged 59

David Hudd, a chartered accountant, was a partner in Price Waterhouse until
1982. Since then he has been chairman or chief executive of a number of listed
companies, including, from 1992 to April 1998, Vardon plc, now Cannons Group
PLC, a company he founded. He is currently executive chairman of Falkland
Islands Holdings plc which he joined in March 2002 and which is a major
shareholder in the Company. He is also non-executive chairman of API Group plc
and a non-executive director of Paramount plc, QA plc and deputy chairman of
Falkland Oil and Gas Limited.

Peter Bojtos, non-executive Director, aged 55

Peter is a professional engineer with over 32 years of experience in the mining
industry. Following his graduation from the University of Leicester, England he
worked at mines in West Africa, the United States and Canada. Peter then worked
for 12 years in Toronto for Kerr Addison Mines Limited, part of the Noranda
Group, in senior management positions. From 1992 to 1993, Peter was the
President and Chief Executive Officer of Consolidated Nevada Goldfields
Corporation, which operated precious metal mines in the United States. From 1993
to 1995, he was Chairman and Chief Executive Officer of Greenstone Resources
Limited, a company that constructed gold mines in Central America. Since 1996,
Peter has been a director of several mining and exploration companies, including
Birim Goldfields Inc, Desert Sun Mining Corp, Queenstake Resources Ltd, US Gold
Corp, Vaaldiam Resources Ltd and William Resources Inc.

Dr Robert Weinberg, non-executive Director, aged 57

Rob gained his doctorate in geology from Oxford University in 1973. Until
recently he was managing director, institutional investment at the World Gold
Council, and a director of Gold Bullion Securities. Rob has more than 30 years
of international mining industry experience having worked as a director of the
investment banking division of Deutsche Bank in London and before that as head
of the global mining research team at SG Warburg Securities. He has also held
senior positions within Societe General and James Capel & Co, where he rose to
become head of the international mining department. Rob was formerly marketing
manager of the gold and uranium division of Anglo American Corporation of South
Africa Ltd.

Operations Manager

Derek Reeves, Operations Manager, aged 40

Derek has worked on the exploration of the Licence Area since 1999 including a
2-year period during which he resided in the Falkland Islands. Derek will be
based in the Falkland Islands and his responsibilities are to supervise and
manage the Company's exploration programme following Admission. Derek has had a
21-year career in the mining and exploration business, including positions as
senior geologist with Argyle Diamond Mines, a director of Falkland Island
Mineral Development, technical director of Dampier Oil, underground geologist of
North Kalgurli Mines and business development manager with Global Petroleum. In
addition he has acted as a consultant to a number of diamond and gold
exploration companies, managing their exploration programmes.


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