Drilling Report

Mercator Gold PLC
27 October 2006


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

London - Friday 27 October 2006

                Drilling Confirms Tonnage and Grade Potential at
                            Prohibition and Surprise

                                   HIGHLIGHTS

•     Resource drill-outs at Prohibition and Surprise return intersections that
include:

   Prohibition                              Surprise

     • 98m at 4.1 g/t                         • 25m at 8.5 g/t
     • 43m at 3.1 g/t                         •  7m at 11.2 g/t
     • 18m at 4.0 g/t                         • 10m at 6.0 g/t
     • 16m at 6.7 g/t                         •  8m at 6.6 g/t


•      Exploration drilling at Nannine returned 14m at 3.9 g/t.

•      Further encouraging results from Maid Marion, Whangamata and Globe West.


Managing Director Mr Patrick Harford said:

 'The drilling results from Prohibition are very exciting. Drilling across the
structures is confirming width whilst drilling down the mineralised envelope is
confirming strong and consistent grades. The high grade zone at Surprise is now
well identified. The resource assessment is now underway'

Mercator Gold is successfully drilling five projects, two of which are detailed
resource drill-outs, and three near-surface gold targets. The resource
drill-outs are confirming excellent gold grades and intersections.


Surprise

The Company has completed the drilling programme of mostly reverse circulation
(RC) at Surprise and has commissioned a resource evaluation. Drilling at
Surprise aimed to define high-grade zones of the deposit and results confirm
recumbent zones of high-grade gold including one zone >80m in length at a depth
about 90m below surface. Mineralisation at Surprise comprises free gold with a
high nugget effect and subsidiary pyrite. Significant drilling results (>1.0 g/t
Au) received include but are not limited to:

       Hole ID         Depth from Surface     Internal Dilution                 Interval
      06SURC006                87m                   1m                  11m at 2.8 g/t
      06SURC007               117m                    0                    5m at 3.7 g/t
      06SURC012               122m                   4m                  7m at 11.2 g/t
      06SURC015                42m                   4m                    9m at 2.4 g/t
      06SURC016                27m                   6m                   18mat 1.2 g/t
      06SURC018                57m                   8m                  16m at 1.5 g/t
      06SURC019               136m                   3m                    7m at 3.1 g/t
      06SURC020               135m                    0                  1m at 98.6 g/t
      06SURC021                37m                   11m                  18mat 1.2 g/t
      06SURC022                39m                   10m                 19m at 1.2 g/t
      06SURC023                34m                   1m                    5m at 6.0 g/t
      06SURC025               154m                    0                    6m at 6.2 g/t
      06SURC032               124m                    0                    8m at 5.5 g/t
      06SURC039                88m                   13m                 25m at 8.5 g/t
                                                                  including 4m at 49.0 g/t
      06SURC042                81m                   5m                    8m at 2.7 g/t
      06SURC045                96m                    0                  1m at 22.9 g/t
      06SURC046                80m                   4m                  10m at 6.0 g/t
                                                                                and
                              116m                   5m                    8m at 6.6 g/t


PVC

At Prohibition, Vivian and Consols (PVC), following earlier successful
exploration by Mercator Gold, the Company has commenced a diamond core (RD)
drill-out at Prohibition and an economic assessment linking mine development of
Prohibition with Vivian, Consols and the adjacent Mudlode, all within 500m of
each other. At Prohibition 06PRRD019 was drilled from W to E across the gold
mineralised faults, down the host rock type. The other holes listed here were
drilled from E to W across the E-dipping host rock, a ferruginous chert.
Significant drill intersections (>1.0 g/t Au) received include but are not
limited to:

       Hole ID         Depth from Surface     Internal Dilution                 Interval
      06PRRD002               268m                   2m                      5.5m at 4.2 g/t
                              290m                   5m                      10m at 2.0 g/t
     06PRRD004A               264m                   11m                     43m at 3.1 g/t
      06PRRD008               258m                   3m                      16m at 6.7 g/t
                                                                        including 7m at 13.5 g/t
      06PRRD019               213m                   38m                     98m at 4.1 g/t
                                                                      including 15m at 4.8 g/t and
                                                                           10m at 8.9 g/t and
                                                                             5m at 21.5 g/t
      06PRRD023               164m                   11m                      18m at 4 g/t


Exploration for shallow mineralisation

The Company has commenced a programme of exploration for shallow oxide and other
near-surface ores. The Company is currently reviewing near-surface potential at
Nannine and the oxide ore potential at Maid Marion, Whangamata (north of
Bluebird), Surprise north of the open pit and Globe West (south of Prohibition).

Nannine is one of four mining centres within the Company's tenement holding at
Meekatharra. The Nannine mining centre has produced more than 200,000 ounces of
gold from surface alluvial, oxide open cut mines and lode underground mines.
Exploration drilling has commenced at Nannine, with a programme of rotary
air-blast (RAB) drilling on widely spaced lines in the central zone between the
Caledonian pit and Nannine shaft and the Aladdin pit. Whilst this area has been
the subject of some attention in the past, the Company's review of data
suggested that most legacy drilling was less than 10m deep. The Nannine RAB
drilling has identified two anomalous positions and these will be followed up
with infill lines of drilling. Significant drill intersections (>1.0 g/t Au)
received include but are not limited to:

       Hole ID         Depth from Surface     Internal Dilution                 Interval
      06NNRB026                38m                   2m                      14m at 3.9 g/t
                                                                        including 6m at 16.8 g/t
      06NNRB058                44m                    0                      2m at 1.6 g/t
      06NNRB084                27m                    0                      2m at 1.3 g/t
      06NNRB085                43m                    0                      1m at 13.7g/t
      06NNRB089                20m                    0                      2m at 1.2 g/t
      06NNRB105                39m                    0                      2m at 1.5 g/t


Maid Marion at Meekatharra North has been examined with a small RC programme.
The drilling confirms a NNE-trending zone of deeply weathered mineralisation
270m in length. Significant drill intersections (>1.0 g/t Au) received include
but are not limited to:

       Hole ID         Depth from Surface     Internal Dilution                 Interval
      06MMRC004                64m                   1m                       5m at 2.4 g/t
      06MMRC005                90m                   7m                      14m at 1.6 g/t
      06MMRC010               171m                    0                       1m at 9.2 g/t
      06MMRC025                96m                   2m                       6m at 2.0 g/t
      06MMRC037               123m                    0                       3m at 1.8 g/t

A preliminary RAB and aircore (AC) programme at Whangamata has identified a
NNW-trending zone of quartz veining at shallow mineralisation. This
mineralisation will be further defined by AC drilling and if a coherent zone the
Company will then evaluate with RC drilling. Significant drill intersections (>
1.0 g/t Au) received include but are not limited to:

       Hole ID         Depth from Surface     Internal Dilution                 Interval
      06WHRB002                19m                   6m                      38m at 1.2 g/t
      06WHRB007                36m                    0                       6m at 2.3 g/t
      06WHRB008                60m                    0                       2m at 1.2 g/t
      06WHRB028                71m                    0                       2m at 9.1 g/t
      06WHAC040                45m                   1m                       4m at 2.1 g/t


Compilation and details of results

A detailed table of significant drilling results is available on the Company's
website.

Also on the website are a Schematic Cross-Section and Schematic Long-Section of
Prohibition.


Consent for release

Julian Vearncombe BSc (Hons), PhD, FGS, RPGeo, FAIG is a director of the Company
and consents to the inclusion of the exploration 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
Terry Strapp, Chairman                               Tel:   [phone]
                                                     Mob:   [phone]
Patrick Harford, Managing Director                   Tel:   [phone]
                                                     Mob:   [phone]


Email:    [e-mail]
Website:  www.mercatorgold.com

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


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