Initial Drilling Results

Mercator Gold PLC 09 December 2004 Georgian House, 63 Coleman Street, London, EC2R 5BB Tel +44-7786 486645 Fax +44-20-76380756 ANNEAN JOINT VENTURE INITIAL DRILLING INTERCEPTS HIGH-GRADE GOLD AT BLUEBIRD LONDON - 9 December 2004 - Mercator Gold plc (AIM: MCR) as operator of the Annean Joint Venture announces that initial drilling has intersected high-grade gold mineralisation at Bluebird, one of three resource-extension targets being drilled in the Yaloginda region near Meekatharra, Western Australia. Highlights • Hole 04BBRCDD002 drilled from the surface adjacent to the Bluebird open pit intersected 9m @ 4.85 g/t Au from 287m down-hole and re-entry and extension of Hole RCB201 intersected 10m @ 7.74g/t Au from 322m down-hole; • The results demonstrate high-grade gold mineralisation to 200m below the base of the Bluebird open pit, which is within 500m of the St Barbara Mines (SBM) mill. • The drilling validates and starts to in-fill more than 130 diamond and reverse circulation drill holes by previous operators at Bluebird the data from which have been compiled by Mercator as part of its SpaDiSTM analysis of the project area. These holes returned numerous high-grade intercepts, including 10m @ 10.62g/t Au, 6m @ 15.61g/t Au, 12m @ 8.63g/t Au, 6m @ 18.22g/t Au, 5m @ 15.63g/t Au, 21m @ 4.08g/t Au, 1m @ 78g/t Au, and 10m @ 9.09 g/t. Bluebird Drilling Bluebird is the first of three resource-extension targets in the Yaloginda area, immediately south of Meekatharra, Western Australia, to be drilled by Mercator. The Company considers that each has the potential to contain in excess of 500,000 ounces of high-grade gold. The targets are located along strike and below zones where more than 1,000,000 ounces of gold were mined previously from surface oxide deposits. The Bluebird mineralisation is located approximately 500m west of the St Barbara Mines mill, which at full capacity can process in excess of 1,500,000 tonnes of ore per annum. Bluebird was selected by Mercator as an early target for steep east dipping high-grade ore shoots following a detailed SpaDiSTM analysis of the project area. Mercator has drilled three new holes into large gaps in the known mineralisation envelope and re-entered two earlier holes that Mercator's analysis suggested had stopped short of the ore zones. To date results from four holes have been received and one is pending. The results received are tabulated below: Table 1 - Summary of Mercator Gold Bluebird >0.5g/t Au composited drill hole intercepts Hole ID Operator Year Location Depth Downhole Au (g/t) Collar position Intercept From To Width RL (m) (m) (m) AMG84 Zone 50 Easting Northing 04BBRCDD001 MCR 2004 641675 7043813 382 101 102 1 0.73 228 286 290 4 1.52 04BBRCDD002 MCR 2004 641711 7043907 374 111 112 1 0.52 263 247 251 4 1.83 242 273 279 6 0.69 229 287 296 9 4.85 * 04BBRCDD003 MCR 2004 641738 7044003 355 177 179 2 1.71 346 190 194 4 0.87 343 197 200 3 1.45 339 204 205 1 0.84 337 208 209 1 1.51 334 212 213 1 5.03 327 224 225 1 1.11 RCB201 SBM 1997/ 641635 7043807 166 322 332 10 7.74 # & MCR 2004 * Hole 04BBRCDD002 includes 1m @ 35 g/t Au # Hole RCB201 includes 1m @ 20.2 g/t Au The above table is based on a compositing trigger value = 0.5g/t Au, minimum composite length of 0.2m, and maximum width of internal waste 2m. Intercept co-ordinates represent the x-y-z centroid position of the composited drillhole intercept. Assay method is Genalysis 50g fire assay (FA50/AAS). Diamond tail extensions were added to historical RC drill holes BBDRC33 & RCB201 by Mercator Gold plc because the original holes did not reach the Bluebird west lode target. Mercator's Exploration Director, Dr Julian Vearncombe, commented: 'The results are very encouraging and demonstrate that mineralisation at Bluebird is more extensive than previously reported, albeit of variable grade, that gaps in the previously known mineralisation can be in-filled and that high-grade intercepts near or above an ounce can be obtained.' The drilling validates and starts to in-fill more than 130 diamond and reverse circulation drill holes by previous operators at Bluebird, the data from which have been compiled by Mercator as part of its SpaDiSTM analysis of the project area. Previous holes with intercepts greater than 50 gram metres (length of intercept multiplied by assay grade) are tabulated below. A full table of the previous drilling, including grid location is available on ewquest from the Company. Table 2 - Summary of Bluebird > 50 gram metre composited drillhole intercepts located below Bluebird pit. ------- ----------- ------- ------- ------ ------- ------ -------- Hole ID Operator Date Depth Depth Down-hole Au (g/t) Gram metres From To Width (Down-hole ======= =========== ======= ======= ====== ======= ====== width x Au) ======== RCB156 St Barbara 24/05/ 269.00 275.00 6.00 18.22 109.32 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB249 St Barbara 02/02/ 245.00 255.00 10.00 10.62 106.20 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB155 St Barbara 22/04/ 245.00 257.00 12.00 8.63 103.56 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- BBD7 St Barbara 11/08/ 341.82 348.00 6.18 15.61 96.47 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB274 St Barbara 18/03/ 286.00 296.00 10.00 9.09 90.90 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB226 St Barbara 10/02/ 87.00 108.00 21.00 4.08 85.68 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- BBD2 St Barbara 14/08/ 359.00 364.00 5.00 15.63 78.15 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB227 St Barbara 12/03/ 87.00 104.00 17.00 4.59 78.03 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB273 St Barbara 06/04/ 322.00 323.00 1.00 78.00 78.00 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB232 St Barbara 24/02/ 70.00 80.00 10.00 7.78 77.80 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB139 Endeavour 10/05/ 74.00 96.00 22.00 3.18 69.96 ------- Resources 1986 ------- ------ ------- ------ -------- ----------- ------- RCB127 Endeavour 14/12/ 77.00 92.00 15.00 4.60 69.00 ------- Resources 1984 ------- ------ ------- ------ -------- ----------- ------- BBD2 St Barbara 14/08/ 402.84 414.20 11.36 5.87 66.68 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB150 Endeavour 10/07/ 146.00 161.00 15.00 4.38 65.70 ------- Resources 1986 ------- ------ ------- ------ -------- ----------- ------- RCB138 Endeavour 05/05/ 130.00 139.00 9.00 6.89 62.01 ------- Resources 1986 ------- ------ ------- ------ -------- ----------- ------- RCB183 St Barbara 22/01/ 269.00 277.00 8.00 7.75 62.00 ------- Mines 1997 ------- ------ ------- ------ -------- ----------- ------- RCB137 Endeavour 04/05/ 83.00 100.00 17.00 3.55 60.35 ------- Resources 1986 ------- ------ ------- ------ -------- ----------- ------- BBD17 St Barbara 15/09/ 188.85 197.35 8.50 7.05 59.93 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB158 St Barbara 02/05/ 325.00 334.00 9.00 6.60 59.40 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB173 St Barbara 06/07/ 307.00 315.00 8.00 7.39 59.12 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- BEN132 St Barbara 02/07/ 205.00 208.00 3.00 19.43 58.29 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- BEN180 St Barbara 05/02/ 129.00 151.00 22.00 2.63 57.86 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB177 St Barbara 23/07/ 376.00 383.00 7.00 8.26 57.82 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB103 Endeavour 04/12/ 82.00 97.00 15.00 3.82 57.30 ------- Resources 1984 ------- ------ ------- ------ -------- ----------- ------- RCB157 St Barbara 26/04/ 304.00 310.00 6.00 9.21 55.26 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB253 St Barbara 04/02/ 68.00 84.00 16.00 3.39 54.24 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- BBD5 St Barbara 09/08/ 460.00 473.70 13.70 3.94 53.98 ------- Mines 1996 ------- ------ ------- ------ -------- ----------- ------- RCB182 St Barbara 18/01/ 242.00 249.00 7.00 7.63 53.41 ------- Mines 1997 ------- ------ ------- ------ -------- ----------- ------- RCB230 St Barbara 18/02/ 82.00 96.00 14.00 3.81 53.34 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB188 St Barbara 23/03/ 156.00 166.00 10.00 5.25 52.50 ------- Mines 1997 ------- ------ ------- ------ -------- ----------- ------- RCB229 St Barbara 16/02/ 118.00 129.00 11.00 4.71 51.81 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB263 St Barbara 26/02/ 61.00 87.00 26.00 1.98 51.48 ------- Mines 1998 ------- ------ ------- ------ -------- ----------- ------- RCB209 St Barbara 27/11/ 368.00 372.00 4.00 12.51 50.04 ======= Mines 1997 ======= ====== ======= ====== ======== =========== ======= Conclusion Following the completion of the current drilling program, and integration of the new results with the historical data, Mercator will plan a follow-up drilling program for the New Year, to extend the Bluebird mineralisation along strike and at depth. The Company's current 20,000m drilling programme under the Annean Joint Venture is on-going. For more information Mercator Gold plc Patrick Harford, Managing Director Tel: +44 (0) 7786 486645 Terry Strapp, Chairman Tel : +61 (0) 8 9322 7422 Beaumont Cornish Limited Rod Venables / Roland Cornish Tel: +44 (0) 7628 3396 Phillip Securities UK Limited Nick Bealer Tel: +44 (0) 20 7553 8281 Parkgreen Communications Justine Howarth / Ana Ribeiro Tel: +44 (0) 20 7493 3713 Note to Editors Mercator Gold plc ('AIM-MCR') 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 a 70% interest in the Meekatharra properties by spending AUD$8 million (approx. GBP£3.1 million) on exploration. SpaDiSTM is a software program developed by Vearncombe & Associates that uses fractal technologies, including autocorrelation, to generate high-grade gold targets from historical exploration data. This information is provided by RNS The company news service from the London Stock Exchange

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