Drilling Report

Mercator Gold PLC
16 May 2006



                               MERCATOR GOLD PLC
                       ('Mercator Gold' or the 'Company')


 Interim Report on Drilling at Bluebird and Confirmation of Drilling Results at
                                  Paddy's Flat


  • Promising initial results from the Bluebird programme are now available
    and include 8 m @ 11.1 g/t Au, 4 m @ 10.1 g/t Au, 17 m @ 3.1 g/t Au, and 10
    m @ 3.0 g/t Au
  • Confirmation of the previously announced drilling results at Prohibition
    Zone, Paddy's Flat, including intersects 7m @ 6.5g/t, 69m @ 3.6g/t, 46m @
    1.9g/t and 28m @ 6.9 g/t all in hole 06PRRD001 representing a modest
    increase of the previously reported grade.


Bluebird

The resource at Bluebird is currently defined as 5,280,000 tonnes @ 1.9 g/t Au
for 326,000 ounces.  The bulk of these ounces are contained within five high
grade domains, 1,698,000 tonnes @ 4.5 g/t Au for 244,000 ounces, surrounded by a
lower grade alteration halo.

Additional structures being targeted include Edin Hope (to the south west of
Bluebird), Polar Star (to the south east of Bluebird) and Bluebird North.

Mercator Gold plc is pleased to announce that RC and diamond drilling has been
underway since 23 February with the aim of increasing the Bluebird resource and
that the programme is on target to achieve its objective.  First drilling
returns at Bluebird include the following highlights:

  • 1 m @ 15.7 g/t Au, 8 m @ 11.1 g/t Au, 5 m @ 1.6 g/t Au, 2 m @ 3.9 g/t Au,
    4 m @ 2 g/t Au, 3 m @ 4.3 g/t Au, 4 m @ 10.1 g/t Au, 17 m @ 3.1 g/t Au, and
    3 m @ 6.90 g/t Au on the Bluebird lodes.
  • 10 m @ 3 g/t Au from the only Bluebird North drill hole result, received
    thus far.
  • 0.6 m @ 21 g/t Au, and 4m @ 2 g/t Au on the Polar Star zone.
  • 7 m @ 1.6 g/t Au, 2 m @ 2.4 g/t Au, and 7 m @ 1.1 g/t Au on the Edin Hope
    zone.

Of particular significance was the 8 m @ 11.1 g/t Au intersection.  This hole
was targeting mineralisation immediately north of the Bluebird pit, in the gap
between the Bluebird and Bluebird North pit, and supports the extension of the
high grade Bluebird domain north of the currently defined resource.

Only one result has been received from the Bluebird North resource drilling,
with RC drilling results still outstanding, and diamond drilling still in
progress.

The Bluebird lodes have generally been the highest grade structures, within
close proximity (1.5 kilometres) of the treatment plant.  To take advantage of
this strategic location, future mining is expected to be centred on the Bluebird
deposit.

Sterilisation drilling over the mill, and office area, returned no significant
result, and indicate that mill, and powerhouse refurbishment can be carried out,
as planned.

A more detailed table of drilling results for Bluebird is available on the
Company's website.


Paddy's Flat Prohibition Zone

As announced on 20 April 2006, hole 06PRRD001 is collared in the haul road, 70
metres below surface. The revised results show a modest increase in grade
reflecting the use of the more reliable fire assay technique. In addition, these
results are complete, whilst the earlier results had a small number of
un-reported intervals.


In hole 06PRRD001 geologically defined intersects occur as listed below:

      From -> to metres          Description         Grade * thickness g.m/ Vertical Depth metres
                                                                t
         27 to 33                 7m @ 6.54g/t                 45.8                    93
         93 to 94                 1m @ 2.1g/t                  2.1                    143
      171 to 240 (1)             69m @ 3.58g/t                247.0                   232
        252 to 254                2m @ 2.41g/t                 4.8                    271
      266 to 312 (2)             46m @ 1.96g/t                 90.2                   299
      317 to 321 (3)              4m @ 4.25g/t                 17.0                   323
        323 to 324                1m @ 1.16g/t                 1.2                    327
      402 to 430 (4)             28m @ 6.96g/t                195.0                   401
        464 to 465                1m @ 1.07g/t                 1.1                    439



Notes on table

The drill assay table in this press release is based on geological intervals
that are illustrated in a diagram which will be available on the Company's
website. The 'from -> to' value is the distance down the hole. The
vertical depth is the distance from surface at which the intersect is first
recognised (note that the hole was drilled within the pit). The assay method for
all samples is Genalysis 50g fire assay (FA50/AAS). Note (1) the interval 69m @
3.58g/t includes 21m of internal dilution at an average grade of 0.54 g/t, (2)
the interval 46m @ 1.96g/t includes 18m of internal dilution at an average grade
of 0.55 g/t, (3) the interval 4m @ 4.25g/t includes a high grade zone of 2m @
7.48 g/t from 319m, and (4) the interval 28m @ 6.96g/t includes a high grade
zone of 13m @ 10.26 g/t from 403m.

Hole 06PRRD001 was drilled parallel to the host rock type but across at a
high-angle to fault structures. The results confirm the Company's analysis based
on SpaDiS(TM) technology, that mineralisation shows significant down dip
continuity, dipping east towards the Vivian Consols resource. This geological
interpretation contrasts with previous modeling of the Prohibition resource (2.3
Mt @ 3.6 g/t for 270,000 ounces) that assumed narrow (mostly less than 10m wide)
west dipping fault zones. The results presented here raise the possibility of
considerably more mineralisation available for potential mining without
significant drops in grade. The Vivian Consols resource (0.9 Mt @ 7.4 g/t for
230,000 ounces) is about 300m to the east with components dipping west towards
Prohibition. The Company is in the final stages of designing a drill programme
due to commence in month's time. This programme of about 10,000m of RC and
5,000m of diamond core drilling targets the expansion of the existing
Prohibition resource and will test the relationship of the Prohibition and
Vivian Consols mineralisation with a view to future mining economies.
Specifically the drilling will:

  • test the along strike reproducibility of the above Prohibition result;
  • determine the width of the host ferruginous chert and mineralisation at
    depth;
  • provide detailed data on fault and host rock geology to enable the develop
    a three-dimensional model of mineralisation;
  • provide data for revised evaluations on the resources at Prohibition and
    Vivian Consols, and assess the depths to which these deposits may be mined
    in an enlarged open cut operation.

The Managing Director, Mr Patrick Harford, said: 'The Company is very pleased
with the results received to date.  The Bluebird drilling is on target to
confirm and upgrade the resource there, whilst the Prohibition Zone at Paddy's
Flat promises to be a much bigger mineralised system than previously thought.
Significant drilling programmes at Surprise, Meekatharra North and Paddy's Flat
are due to commence soon and work continues on target definition at a number of
other prospects.'


Consent for release

Julian Vearncombe BSc (Hons), PhD, FGS, RPGeo, FAIG is a director of the Company
and consents to the inclusion of the information in the form and context in
which it appears here. Julian Vearncombe is a Competent Person for the reporting
of these results as defined by the JORC Code 2004 Edition.



For further information please contact:

Mercator Gold plc
Patrick Harford                     Managing Director  Tel: [phone]

Email: [e-mail]
Link to website:  www.mercatorgold.com

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





Note to editors

SpaDiS(TM) is a software programme developed by Vearncombe & Associates Pty Ltd
that uses fractal technologies, including autocorrelation, to generate
high-grade targets from historic exploration data. Mercator Gold has a
contractual arrangement for the on-going use of SpaDiS(TM).






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