Re-admission to trading

Mercator Gold PLC
28 December 2005


FOR IMMEDIATE RELEASE                                           28 December 2005


                MERCATOR GOLD PLC ('MERCATOR' OR 'THE COMPANY')

                RE-ADMISSION OF ORDINARY SHARE TO TRADING ON AIM
         PROPOSED ACQUISITION OF ASSETS FROM ST. BARBARA MINES LIMITED
          PROPOSED PLACING OF UP TO 26,400,0000 NEW ORDINARY SHARES AT
                50P PER SHARE AFTER 1 FOR 10 SHARE CONSOLIDATION
           ADMISSION OF THE ENLARGED SHARE CAPITAL TO TRADING ON AIM
                    NOTICE OF EXTRAORDINARY GENERAL MEETING

On 3 November 2005, the Company announced, further to the announcement on 28
October 2005, the terms of the agreement to acquire St. Barbara's entire gold
exploration and mining assets in the prospective Meekatharra Belt of Western
Australia, subject to Shareholder approval. The total purchase consideration
will comprise of A$18 million (£7.56 million) in cash and New Ordinary Shares
plus the adoption of environmental bonding requirements of A$2.684 million
(£1.13 million). Due to the size of the Acquisition in relation to the Group,
the transaction is classied as a 'Reverse Takeover' under the AIM Rules, and
under the terms of the Sale Agreement, St. Barbara will be receiving New
Ordinary Shares equivalent to between 23.1 per cent. and 28.1 per cent.
(depending upon the eventual size of the Placing) of the Enlarged Share Capital.
Accordingly trading in the Company's Ordinary Shares was suspended on 28 October
2005 pending the publication of an admission document.

The Company today announces that an admission document has been posted to
Shareholders and, in accordance with the AIM Rules, has requested that trading
in the Ordinary Shares recommences today. The Acquisition is subject to the
approval of Shareholders at the Extraordinary General Meeting, details of which
are set out below. Application will be made for the Enlarged Share Capital to be
admitted to trading on AIM, subject to the Resolutions being passed by
Shareholders at the Extraordinary General Meeting and it is expected that
Admission will become effective and that trading in the Enlarged Share Capital
on AIM will commence on 20 January 2006.

DETAILS OF THE ACQUISITION

The Acquisition will comprise the purchase of the following (the 'Meekatharra
Assets'):

  • the 55 per cent. interest held by SBM in the Annean Joint Venture;

  • the 3 million tonne per annum Bluebird (Yaloginda) mill and gold
    processing facility (the 'Bluebird Plant'), together with associated plant,
    ofces, warehouses, workshop, vehicles, spare parts, consumables, 215-person
    camp and tailings dams, located 12 km south of the Meekatharra township
    within the Annean Joint Venture area. The Bluebird Plant is currently on
    care and maintenance and has an estimated replacement value of A$29.6
    million (£12.4 million);

  • approximately 120 granted exploration tenements and 44 tenement
    applications in the Meekatharra region, bringing Mercator's total holding to
    435 granted and pending tenements totalling 1,932 km2;

  • the SBM joint venture interest and benets (currently 100 per cent. but
    reducing to potentially 35 per cent.) in the Pollelle joint venture with
    Elara Mining Limited (subject to Elara's right rst of refusal) further
    details of which are set out in paragraph 11.1.10 of Part VII of this
    document;

  • land and property assets in and around Meekatharra;

  • data and intellectual property relating to exploration, mining and ore
    processing on the Meekatharra Tenements; and

  • a six month option to purchase the Annean (167,761 ha), Norie (25,784
    ha) and Cullculli (57,890 ha) pastoral leases.

The consideration for the sale is comprised of approximately A$5 million cash,
the equivalent of A$13 million in New Ordinary Shares at 50p per New Ordinary
Share and the assumption by Mercator Australia of the rehabilitation bonds
relating to the Meekatharra Tenements which are A$2.684 million (£1.13 million).

REASONS FOR THE ACQUISITION

The Acquisition will consolidate and enlarge Mercator's holding over the
Meekatharra Belt in the Murchison Gold Province, more than double the Company's
gold resource base and add signicant additional exploration ground to the
Yaloginda project area.

Ownership of the Bluebird Plant along with the enlarged resource base is
integral to giving the Company the capacity to commence gold production during
2007 should it reach its resource base criteria.

FUND RAISING

The Company is proposing to raise between £9 million and £13.2 million in the
Placing, in order to fund the payment of the cash portion of the Acquisition,
approximately A$5 million (£2.1 million), to increase exploration activity
targeting additional quality resources, to convert resources into reserves and
to provide working capital.

Under the Placing the number of New Ordinary Shares to be placed at the price of
50p per New Ordinary Share will be between 18 million and 26.4 million,
following the Share Consolidation.

The Placing is conditional, inter alia, on the passing of the Resolutions at the
EGM, Admission becoming effective and the Placing Agreement becoming
unconditional in all other respects not later than 8.00 a.m. on 20 January 2006
or such later date as the Company, Loeb Aron, Beaumont Cornish and the Joint
Brokers may agree (being not later than 8.00 a.m. on 28 February 2006). It is
expected that Admission will become effective on 20 January 2006.

The Placing Shares to be issued pursuant to the Placing will, following
allotment, rank pari passu in all respects with the New Ordinary Shares
including the right to receive all dividends and other distributions declared,
made or paid after the date of their issue. The Placing Shares to be issued
pursuant to the Placing will be created in accordance with the Act and will be
in registered form.

Pursuant to the Convertible Loan Notes Placing, on 14 December 2005, the Company
issued £1,000,000 of Convertible Loan Notes. The Convertible Loan Notes have a
term of two years from the date of issue and have a face value of £5,000 each.

EXTRAORDINARY GENERAL MEETING

The Extraordinary General Meeting will be held at 11.00 a.m. on 18 January 2006
at the registered office of the Company at Peek House, 3rd Floor, 20 Eastcheap,
London EC3M 1EB.

DETAILS OF THE SHARE CONSOLIDATION

At the Extraordinary General Meeting it is intended to propose a resolution
consolidating the entire issued and the authorised but unissued Ordinary Shares
of 1p each into New Ordinary Shares of 10p each in the capital of the Company on
the basis of every 10 Ordinary Shares being consolidated into one New Ordinary
Share. Full details of this resolution are set out in the notice of
Extraordinary General Meeting.

FURTHER INFORMATION

Copies of the admission document are available from the offices of Beaumont
Cornish Limited, Fifth Floor, 10-12 Copthall Avenue, London EC2R 7DE and the
offices of the Company at Peek House, 3rd Floor, 20 Eastcheap, London EC3M 1EB
and can be viewed on the Company's website: www.mercatorgold.com

Enquiries: Mercator Gold plc Patrick Harford, Managing Director 
[phone]

Michael de Villiers, Finance Director 
[phone]

Beaumont Cornish Limited Roland Cornish 
[phone]

King & Shaxson Capital Ltd Nick Bealer 
[phone]

Ocean Equities Ltd Will Slack 
[phone]

Parkgreen Communications Justine Howarth/Ana Ribeiro 
[phone]


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