Drilling Report

Mercator Gold PLC
08 August 2006


August 8 2006



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

      Report on Drilling at Surprise and Prohibition-Vivian-Consols (PVC)

                                   HIGHLIGHTS

  • Assay results from the Surprise drilling programme are now available and
    include:

                    5m @     77.7 g/t
                    1m @    358.9 g/t
                    7m @     11.4 g/t
                    5m @     14.0 g/t

  • At Prohibition results from two holes drilled down the host rock but
    across the faults controlling high-grade gold within geologically defined
    boundaries has intersections of:

                  100m @     3.45 g/t
         including 38m @      6.0 g/t
                    4m @      7.9 g/t
                    7m @      3.1 g/t
                    5m @      4.9 g/t

    and
                  142m @     2.27 g/t
         including 12m @      5.7 g/t
                    8m @      6.1 g/t
                    9m @      3.3 g/t
                   11m @      4.8 g/t
                    7m @      4.2 g/t

These results confirm extensive gold mineralisation down the dip of the
ferruginous chert and the potential for significant resource upgrades.

  • Other drilling at Prohibition and the adjacent Vivian, Consols and Mudlode 
    include:

                   29m @      4.0 g/t
                   26m @      3.6 g/t
                   18m @      4.0 g/t
                   10m @      5.8 g/t
                    8m @      3.5 g/t
                    8m @      3.4 g/t
                    7m @      6.7 g/t
                    6m @      3.4 g/t
                    2m @     44.4 g/t

    At Prohibition-Vivian-Consols (PVC) the results to date are sufficiently
    encouraging that the company is planning a resource drill-out.


Mercator Gold plc (AIM:MCR) is pleased to announce additional results from RC
and diamond core drilling at Surprise (1.5km from the Yaloginda gold processing
facility) and at PVC (17km from the gold processing facility).

Surprise

Significant drilling results (>1.0 g/t Au) received include but are not limited
to:

  • 5m @ 77.7 g/t from 139m
  • 1m @ 358.9 g/t from 114m and in the same hole 7 m @ 11.4 g/t from 120m and
    7m @ 3.2 g/t from 142m
  • 5m @ 14.0 g/t from 183m
  • 5m @ 4.1 g/t from 173m
  • 4m @ 5.0 g/t from 112m

At Surprise, on-going drilling is targeting an increase in the grade by defining
high-grade zones for resource evaluation and development. Drill holes are aimed
at demonstrating continuity and defining the limits of the high-grade zone just
30 to 60m below the existing pit floor (80 to 110m from surface). On completion
of the drill programme all results will be forwarded to an independent
consultancy for a revised resource evaluation.

Prohibition-Vivian Consols (PVC)

Prohibition, Vivian and Consols were separate underground and open cut
operations with past operators at Meekatharra. Mercator recognises these to be
part of a significant linked mineralised system. The Vivian lode is less than
200m from Prohibition and some drill holes into the deeper parts of Prohibition
also intersect the Vivian lode. In the southeast corner the so-called Mudlode
occurs adjacent to the Consols open cut. Significant drill intersects (>1.0 g/t
Au) received include but are not limited to:

Prohibition lodes

  • 100m @ 3.45 g/t (including 4m @ 7.9 g/t from 118m, 38m @ 6.0 g/t from
    164m, and 5m @ 4.9 g/t from 220m)
  • 142m @ 2.27 g/t (including 8m @ 6.12 g/t from 121m, 9m @ 3.38 g/t from
    131m, 7m @ 4.20 g/t from 148m, 11m @ 4.82 g/t from 175m and 12m @ 5.72 g/t
    from 193m)
  • 8m @ 3.4 g/t from 364m
  • 6m @ 3.4 g/t from 352m

Vivian and Consols lodes including Mudlode

  • 29m @ 4.0 g/t from 222m and in the same hole 18m @ 3.9 g/t from 253m and
    7m @ 6.7 g/t from 273m (Mudlode)
  • 26m @ 3.6 g/t from 189m and in the same hole 8m @ 3.5 g/t from 178m
    (Mudlode)
  • 10m @ 5.8 g/t from 64m
  • 3m @ 6.4 g/t from 65m
  • 2m @ 44.4 g/t from 279m

Readymix Lode

  • 2m @ 12.2 g/t from 145m

Prohibition holes 06PRRD016 and 06PRRD017 including the results 100m @ 3.45 g/t
and 142m @ 2.27 g/t were drilled from west to east, collared in the Prohibition
haul road respectively 125m and 60m north of our previously announced hole
06PRRD001 that included intersects 150m @ 2.44 g/t (including 69m @ 3.5 g/t and
7m @ 6.5 g/t) and 28m @ 6.9 g/t. The holes 06PRRD016 and 06PRRD017 drilled the
gold-hosting and fault-bounded ferruginous chert down-dip at a high-angle to the
faults that control the high-gold grades.

These holes demonstrate extensive down-dip gold mineralisation in the
ferruginous chert and confirm the potential for significant upgrades in the
resource currently 2.3 Mt @ 3.6 g/t. The other Prohibition holes were drilled
from east to west crossing the ferruginous chert at a high-angle sub-parallel to
the gold controlling faults.

At Vivian and Consols two intersects through the so-called Mudlode include 29m @
4 g/t and 26m @ 3.6 g/t. These results support the previous drilling results
from the previous owner that intersected 54m @ 4.2 g/t, 33m @ 5.7 g/t and 30m @
3.4 g/t. The two diamond core drill holes were drilled in opposite directions
and demonstrate that this is a broad zone of mineralisation more than 20m in
width. Intersects into the Vivians lode include two holes drilling towards
Prohibition but passing through Vivians en route. These confirm existing
knowledge about the narrow but high-grade Vivians lode, extend the known
mineralisation and its' resource of 0.9Mt @ 7.4 g/t.

One drill hole intersected a possible southern extension of the Readymix
mineralisation.

At PVC the results to date are sufficiently encouraging that the company is
planning for a resource drill-out, expected to be conducted in the period
between September and December 2006.

Bluebird

The Bluebird resource evaluation conducted by independent consultants 'Cube
Consulting' has commenced.

Compilation and details of results

A detailed table of all significant drilling results at Prohibition and Surprise
is available on the Company's website www.mercatorgold.com.

Managing Directors comments

The Managing Director, Mr Patrick Harford, said: 'We are certainly doing very
well at Prohibition-Vivian-Consols (PVC).  We now have three holes that confirm
significant down-dip continuity of mineralisation within the Prohibition host
rock.  They also confirm a strike length of more than 150 metres.  Drilling
across the Prohibition host rock also indicates significant thickness (> 35
metres) and grade.  Prohibition is open down-dip and along strike to the south.

We are very pleased with progress to date and particularly with the fact that
the Prohibition drilling is intersecting the nearby Vivian Consols' mineralised
zone.

At Surprise we are hoping to improve the overall grade by targeting a coherent
high-grade zone and our results there indicate that we are on track to do so.'

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. (Australia) [phone]
Patrick Harford, Managing Director          Tel. (UK): [phone]
                                            Tel. (Australia) [phone]

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

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


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