Gold Production to Start

Mercator Gold PLC
02 February 2007


            
2 February 2007
                 
                               MERCATOR GOLD PLC

      Gold production to start at Meekatharra, Western Australia, in June

                                   HIGHLIGHTS

   • Gold production to start in June 2007
   • First year target of 120,000 ounces
   • Probable ore reserves at Surprise of 75,000 ounces gold
   • Drill intersections at nearby Prohibition deposit confirm potential
   • Yaloginda plant refurbishment on schedule for completion in March 2007


LONDON: 2 February 2007 - Mercator Gold Plc ('Mercator' or the 'Company')
(MCR.L) is pleased to announce that it will start to produce gold in June 2007
from the Company's operations near Meekatharra, Western Australia, with a first
year target of 120,000 ounces of gold.

First production will be from the Surprise open pit where the probable ore
reserve of 75,000 ounces will be mined over a 7 month period. Ore will be
transported for treatment to the nearby Yaloginda CIL plant, which has been
re-commissioned by Mercator and has the capacity to treat between 1.2 to 3
million tonnes per year of ore, depending on the hardness of the rock.

Second stage production will come from the neighbouring
Prohibition-Vivian-Consols mining area (PVC) which currently contains 380,000
ounces of indicated resource. Ongoing drilling and resource modelling of the PVC
deposit has given the company greater confidence in the resource quality and
shown the potential for a considerable increase in its size.

Patrick Harford, Managing Director, said today 'The board believes that the
Surprise, Prohibition and Vivian-Consols deposits now form the basis of a
sustainable future for Mercator. Production of an initial 120,000 ounces in our
first full year, coupled with vigorous exploration and development schedules
will strengthen the production profile of the company.'

Surprise Resources

The resource evaluation, mining optimisations, open pit design and production
scheduling of the Surprise deposit is now complete and has been approved by the
Board.

The independent, revised resource evaluation prepared by Cube Consulting Pty Ltd
is a 320% increase in gold in the indicated category, now standing at 3.6Mt at
1.13g/t for 130,900 ounces uncut (or 108,900 ounces cut). Full details including
a resource statement are included in an accompanying document that will be
posted on the company web site.

Surprise Production

The ore reserve for the optimal open pit, based upon a gold price of A$750 per
ounce, is 992,000 tonnes at 2.36g/t for 75,300 ounces gold. The open pit will
produce gold at a cash cost of A$ 342/oz.(U.S $260/OZ)

The Surprise Pit Optimisations and final Pit design has been based on current
open pit mining practices. Mining dilution 10% and ore recovery of 95%,
Metallurgical test work confirming recoveries of 93% to 95% from ore with Bond
Mill Work Index of 12 to 15 kwhrs /tonne. The optimal open pit at A$750 per
ounce is 992,000t @ 2.36g/t for 75,293oz. The pit has a strip ratio of 5.6:1 and
a net cash cost per ounce of A$342. The Surprise Pit is located within 100
meters of a major public highway. As a cut back is required to take this pit
deeper the highway has to be diverted to meet safety codes. Tenders and
approvals from statutory authorities have been received to execute this work.

Production from the Surprise pit, taking into account the high nugget effect of
the Surprise ore body, the cut and uncut grade models and after accounting for
mining dilution and recovery factors is expected to produce between 60,000 and
68,000 ounces of gold. This production should occur over a 6-7 month period.

Prohibition Drilling Intersections

The fuller potential of the Prohibition area of the PVC deposit is now apparent
as the programme of resource definition drilling nears completion.

A total of 56 holes have been drilled by Mercator Gold to date, making a total
of 180 drill holes into the mineralised host unit at Prohibition. Several of the
latest drill intersections illustrate and confirm the relatively high grade of
the Prohibition area, as indicated below:

  Hole ID        Depth       Downhole Width   Au    Collar RL
              From     To         (m)       (g/t)       (m)
               (m)     (m)                             
06PRRD035A     281     288         7          3.2       520
06PRRD042      273     274         1         46.1       518
06PRRD046      262     267         5          4.4       520
06PRRD048      368     376         8          5.0       518
06PRRD050      459     504        45          3.2       518
including      459     467         8          5.0
               488     497         9          6.1
06PRRD052      272     275         3          8.4       520
06PRRD055A      23     37         14          3.0       472
06PRRD055A     252     267        15          8.2
06PRRD055A     302     311         9          3.1
06PRRD055A     391     399         8          2.8
06PRRD055A     425     440        15          4.0
06PRRD056       35     46         11          3.4       483


Resource estimates for Prohibition and Vivian-Consols are well advanced and are
due to be completed over the next eight weeks. Mining studies and optimisation
of the various ore bodies are ongoing and are due for completion in June 2007.

Yaloginda Plant Refurbishment

The current plant refurbishment programme remains on schedule. Progressive
commissioning of all the plant components, such as crushing and stacking,
grinding, leaching, gold elution to bullion, will commence in late March 2007
and will place the plant in full readiness for gold production by June 2007.

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.

The independent resource evaluation was completed by Cube Consulting Pty Ltd
under the supervision of Patrick (Rick) Adams BSc, MAusIMM, MAIG, a director of
Cube and Ruth Jupp BSc, MAIG, a senior consultant geologist for Cube. Rick Adams
and Ruth Jupp both have sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity that
is undertaken to qualify as the Competent Person as defined in the JORC Code
2004 Edition.

Mr Denis Geldard Mining Engineer AWASM, MAusIMM, the Company's Operations
Director, is a competent person as defined under the JORC Code 2004 consents to
the Reserve computations.

For further information please contact:

Mercator Gold plc

Patrick Harford, Managing Director           Tel: [phone]

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


Bankside Consultants Ltd                     Tel: [phone]

Keith Irons                                  [e-mail]
Simon Rothschild                             [e-mail]
Oliver Winters                               [e-mail]


AIM: MCR






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