Placing

Mercator Gold PLC
05 May 2006


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR
JAPAN





                               Mercator Gold plc

                         ('Mercator' or the 'Company')



     Placing of up to 14,285,715 ordinary shares at 70p per ordinary share



Mercator announces a placing (the 'Placing') of up to 14,285,715 new ordinary
shares of 10p each ('Ordinary Shares') at a price of 70 pence per share to raise
up to £10 million before expenses.



Cenkos Securities Limited and Ocean Equities Limited have agreed to use
reasonable endeavours to place the new Ordinary Shares with institutional
investors conditional upon, inter alia, admission of the new Ordinary Shares to
trading on AIM. Application has been made for the admission of the new Ordinary
Shares to trading on AIM and it is expected that admission will occur and
dealings will commence in the new Ordinary Shares on 8 May 2006. The new
Ordinary Shares will rank pari passu in all respects with the existing Ordinary
Shares which are currently traded on AIM. Following admission there will be up
to 53,523,009 Ordinary Shares in issue.



Mercator has secured control of most of the mineral field within the Meekatharra
District in Western Australia, comprising approximately 2,000 square kilometres
of tenement holdings which host numerous gold prospects including four highly
productive, historically significant mining centres.  Its assets include a
centrally-located mill capable, once re-commissioned, of processing 3 Mt of ore
per annum.



Mercator's exploration focus for 2006 is to re-establish the integrity of the
substantial database it has acquired by continued drilling and through the
re-interpretation of the data using the SpaDis system with the intention of
expanding the total resource base from 1.9 Moz to more than 5 Moz and the
mineable resource base to more than 600,000 oz.  In this context the Company's
directors view the preliminary drill results, announced on 20 April 2006, as
representing significant progress.  Mercator also intend to work towards the
re-commissioning of the mill and recommencement of production early in 2007.
The proceeds of the Placing will be used to fund these plans.



Patrick Harford, Managing Director of Mercator Gold, commented:



'We are very pleased with the level of support from existing and new investors.
This Placing will provide us with funding to exploit the exciting opportunities
available to us in the Meekatharra District.'



For further information contact:


Mercator Gold                                         020 7929 1010
Patrick Harford
Michael de Villiers



www.mercatorgold.com


Parkgreen Communications                              020 7493 3713
Ana Ribeiro
Justine Howarth





Cenkos Securities Limited ('Cenkos'), which is authorised and regulated in the
United Kingdom by The Financial Services Authority, is acting exclusively for
the Company as nominated adviser, joint broker and placing agent in connection
with the Placing. Cenkos is not acting for any other person and will not be
responsible to anyone other than the Company for providing the protections
afforded to clients of Cenkos or for advising any other person in relation to
the Placing. Ocean Equities Limited ('Ocean'), which is authorised and regulated
in the United Kingdom by The Financial Services Authority, is acting exclusively
for the Company as joint broker and placing agent in connection with the
Placing. Ocean is not acting for any other person and will not be responsible to
anyone other than the Company for providing the protections afforded to clients
of Ocean or for advising any other person in relation to the Placing.  The new
Ordinary Shares have not been, nor will be, registered under the United States
Securities Act of 1933 (as amended) or under the securities legislation of any
state of the United States of America or of any province or territory of Canada,
Australia, Japan, the Republic of Ireland or the Republic of South Africa. There
will be no public offering of the new Ordinary Shares in the United States.
Subject to certain exceptions, the new Ordinary Shares may not be directly or
indirectly offered, sold, transferred, taken up or delivered in, into or from
the United States, Canada, Australia, Japan, the Republic of Ireland or the
Republic of South Africa or their respective territories or possessions.  This
announcement does not constitute an offer to sell or issue or the solicitation
of an offer to buy new Ordinary Shares in any jurisdiction in which such offer
or solicitation is unlawful. Accordingly, copies of this announcement are not
being and must not be mailed or otherwise distributed or sent in or into or from
the United States, Canada, Australia, Japan, the Republic of Ireland or the
Republic of South Africa and any person receiving this announcement (including
custodians, nominees and trustees) must not distribute or send it in or into or
from the United States, Canada, Australia, Japan, the Republic of Ireland or the
Republic of South Africa. This announcement has not been approved by Cenkos or
Ocean for the purposes of section 21 of the Financial Services and Markets Act
2000. This announcement has not been examined or approved by The Financial
Services Authority or the London Stock Exchange or any other regulatory
authority.






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