Drilling Report

Mercator Gold PLC
09 May 2005

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

            ANNEAN JOINT VENTURE COMMENCES LARGE DRILLING PROGRAMME

LONDON - 9th May 2005, Mercator Gold plc, (AIM:MCR) as operator of the Annean
Joint Venture, with St Barbara Mines Ltd (SBM) announces the commencement of a
large drilling programme at its gold exploration projects near Meekatharra,
Western Australia.

The programme will focus on resource extension drilling at the Yaloginda mine
tenements, including Bluebird, Jess and Surprise, and exploration drilling at
Tuckanarra and Meekatharra North.

HIGHLIGHTS

•         Drilling has commenced on a 20,000 metre programme involving both
          diamond and reverse circulation rigs;

•         SpaDiS(TM) analysis of results from the 2004 programmeme has
          highlighted high grade zones for further exploration drilling at both 
          Surprise and Bluebird;

•         High-grade intercepts at Bluebird and Surprise previously excluded
          from resource calculations have been verified, and as a result the 
          Company has commissioned its first preliminary resource estimates at 
          both Bluebird and Surprise;

•         Further drilling at Tuckanarra and Maid Marion (Meekatharra North)
          will target significant gold anomalies.

Yaloginda Mine Tenements

The Company will focus its drilling activity on its Yaloginda mine, proving up
additional gold resources beneath and adjacent to the Bluebird and Surprise
abandoned pits, as well as  drill testing the Jess target and commence drilling
at Great Northern Highway and South Junction. These drill targets are within 4km
of the Bluebird mill and gold processing facility of joint venture partner St
Barbara Mines Ltd. In addition to RC drilling, diamond core drilling will
commence in the first week of May.

At Surprise the Company will drill new targets at depth and along strike to
identify additional high-grade ore shoots to expand the size of the Surprise
system. The Surprise targets are based on the results of ongoing SpaDiS(TM)
analyses that show high-grade zones in structures oblique to the strike trend of
the host porphyry, controlled by packages of flat quartz veins within a 45
degrees south plunging envelope.

Mercator will conduct preliminary resource assessments on mineralisation at
Yaloginda. Data validation at Bluebird is complete and some twinned confirmation
drill holes will be required at Bluebird to verify legacy RC drilling. The
Company is scheduling initial confirmation drilling for mid-May and early-June,
synchronous with drilling deep targets beneath the known mineralisation at
Bluebird. The deep Bluebird targets arise from ongoing SpaDiS(TM) analyses that
for the first time recognise distinct and repeated flat high-grade ore shoots
within the steep easterly plunging ore envelope.

Tuckanarra and Meekatharra North

In April, the Company commenced a three-hole RC drilling programme at Tuckanarra
to test geophysical anomalies in the search for high-grade gold-bearing
pyrrhotite ores. Three-dimensional pole-dipole surveys conducted by the Company
in October 2004 revealed distinct chargeable but resistive anomalies indicative
of sulphide presence.

On completion of the Tuckanarra programme Mercator will drill two RC holes at
Mingah. Mingah, on the Kurara East tenement group on the south side of the Norie
Pluton, is a broad zone of anomalous gold located by air-core drilling but not
further examined. The holes are targeting depth in the range 150 to 200m
designed to go through the overlying clays of Lake Annean in to the bedrock to
determine the geology and mineralisation potential.

At Meekatharra North, the Company drilled 93 air-core holes as a regional
targeting tool in 2004. Thirteen holes returned gold grades over 0.5 g/t. One
diamond core hole drilled at Maid Marion confirmed continuity of mineralisation
at depth from previous RC drilling with six significant intercepts in banded
iron formation and mafic schist (announced previously). This hole also
intersected gold-related semi-massive sulphide mineralisation identified from
three-dimensional pole-dipole survey carried out in October 2004. The Company
will continue its exploration at Meekatharra North with a programme of RC
drilling expected for June or July.

                                    - Ends -

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]

Ocean Equities Ltd
Guy Wilkes                                         Tel: [phone]

Phillip Securities UK Limited
Nick Bealer                                        Tel:  [phone]

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


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.

Note to editors

Mercator Gold plc ('AIM-MCR; MCRW'), which joined AIM on 8 October 2004, has 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 70%
interest in the Meekatharra properties by spending AUD$8 million (approx GBP3.1
million) on exploration. Mercator recently announced that it has spent the first
AUD$1 million and has elected to proceed towards the first step of earning 45%
with a minimum expenditure requirement of AUD$2 million before 3rd March 2006.

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).

Mercator management has an exploration target of 2,000,000 ounces of gold
contained within four resources, each of at least 500,000 ounces within the
Annean Joint Venture area.

The Company has reported initial high-grade drilling results from the first two
target areas, Bluebird and Surprise.


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