Drilling Report

Mercator Gold PLC
20 October 2004


                                  PRESS RELEASE

                               MERCATOR GOLD PLC

            ANNEAN JOINT VENTURE - DRILLING TO COMMENCE AT YALOGINDA

LONDON - 20 October 2004 - Mercator Gold plc ('AIM-MCR') as operator of the
Annean Joint Venture is pleased to announce that drilling rigs have been
mobilised for commencement of a 10,000m reverse circulation and rotary air blast
drilling program on three gold exploration targets in the Yaloginda region.

The Yaloginda drilling represents the first of five gold targets to be drilled
by Mercator before the end of the year within the 1,020 sq km Annean Joint
Venture area in the Meekatharra region of Western Australia.

Using SpaDiS (TM) technology, Mercator has reviewed the previous exploration and
production data from the Yaloginda area, where more than 1,000,000 ounces of
gold was mined previously from 18 surface oxide deposits in a 15km by 2km
mineralised zone.

The initial drilling at Yaloginda targets high-grade shoots below and along
strike from the previously mined oxide resources, which have been chosen by
Mercator for their capacity to host ore bodies containing at least 500,000
ounces of gold. Assay results from the drilling should be available within eight
weeks.

Mercator operates a continuous disclosure policy with respect to exploration
results. Company news releases are based on technical information approved by
the Company's Exploration Director, Julian Vearncombe BSc (Hons), PhD, FGS,
RPGeo, FAIG.

For further information, please contact:

Mercator Gold plc
Patrick Harford, Managing Director            Tel: [phone]
Terry Strapp, Chairman                        Tel: [phone]

Beaumont Cornish Limited
Rod Venables / Roland Cornish                 Tel: [phone]

Phillip Securities UK Limited
Nick Bealer                                   Tel: [phone]

Parkgreen Communications
Justine Howarth / Ana Ribeiro                 Tel: [phone]



Note to editors

Mercator Gold plc ('AIM-MCR') which joined AIM on 8 October 2004 has, through
its wholly owned subsidiary, Aurogenic Resources Pty Ltd, a joint venture
agreement with St Barbara Mines Limited (' the Annean Joint Venture') to explore
for economic gold resources in the Annean Joint Venture area in the Meekatharra
region of Western Australia.

Under the terms of the Annean Joint Venture, Mercator has the right to earn a
70% interest in the Meekatharra properties by spending AUD$8 million (approx.
GBP£3.1 million) on exploration.



                      This information is provided by RNS
            The company news service from the London Stock Exchange