Reserve Statement

Mercator Gold PLC
20 June 2007


                   


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


                      MINING RESOURCE TO RESERVE STATEMENT


Mercator Gold Plc has finalised mining and metallurgical studies on its
previously reported resources of Bluebird, Surprise, Prohibition and Vivian -
Consols, all located in the Meekatharra region of Western Australia.

The Company is pleased to announce:

   • Probable reserves of 432,000 ounces of gold;
   • First production from the Surprise Open Pit scheduled late June 2007;
   • Yaloginda processing plant on track to treat initial ore 1 July 2007;
   • All key personnel to manage the Meekatharra Gold Operations have been
    sourced;
   • Mining contract awarded to Mining and Civil Australia.




Managing Director, Patrick Harford, commented:

'The Reserve base underpins our decision to recommence production at Meekatharra
with 432,000oz of Reserves. In addition, the ongoing Resources to Reserve work
currently being undertaken at a number of locations will further strengthen the
company's growth platform. We look forward to a truly profitable and sustainable
future.'

Table 1

OPEN PIT PROBABLE RESERVES                 TONNES         GRADE        OUNCES
Bluebird                                1,461,000       2.53g/t       119,000
Surprise                                  827,000       2.35g/t        63,000
Subtotal                                2,288,000       2.46g/t       182,000
UNDERGROUND PROBABLE RESERVES
Prohibition                             1,372,000       4.06g/t       179,000
Vivian - Consols                          233,000       9.54g/t        71,000
Subtotal                                1,605,000       4.85g/t       250,000
                              TOTAL                                   432,000

Grade is grammes per tonne. Ounces are Troy ounces. Small numeric differences
may occur due to number rounding. This applies throughout this release.



Table 2
----------------                      ----------      ---------         --------
CURRENT RESOURCE                       TONNES          GRADE            OUNCES
INDICATED & INFERRED
---------------                     ----------        ---------        ---------
Mudlode                              446,000          5.46g/t           78,000
(3.0 g/t cut-off)
---------------                     ----------        ---------        ---------
Fatts                                180,000          3.65g/t           21,000
(3.0 g/t cut-off)
---------------                     ----------        ---------        ---------
TOTALS                               626,000                            99,000
---------------                     ----------        ---------        ---------

Note: Mudlode and Fatts remain in the Resource category pending further access
and stope design.

MINING OPEN PIT

Surprise

The Surprise open pit lies within 800 metres of the Yaloginda Carbon in Leach
(CIL) processing plant. Pit Optimisations were conducted on the resource models
resulting in the pit being deepened from 55 metres to 120 metres.

Geomechanical studies were conducted by Coffey Mining to determine wall slope
designs. As this open pit lies in close proximity to a major arterial highway,
statutory requirements necessary to ensure wall stability integrity is
maintained have resulted in a reduction of ounces mined from previously reported
reserves.

A mining contract has been awarded to Mining and Civil Australia, which has
mobilised a fleet of equipment ready to commence mining within the next few
weeks subject to DOCEP (Department of Consumer and Employment Protection)
approvals.

A grade control program has been completed for the first 30 metres and has
returned positive variance to the reserve model.

Bluebird

The Bluebird open pit has been optimised to a total depth of 180 metres, which
extends the existing pit 100 metres below floor. The proximity of Bluebird to
the Yaloginda processing plant (less than 1,000 metres) and the proximity to
ideal waste dump locations have had positive impacts on mining costs. Detailed
geomechanical studies have been completed by Coffey Mining to determine wall
slope design parameters, which become more critical with the open pit being
extended a further 100 metres in depth.

Mining costs have been received from Mining and Civil Australia utilising
larger, higher capacity earthmoving equipment for this larger open pit. The
larger equipment reduces the unit mining costs, whilst ensuring the productivity
rates required to meet the overall schedule.

Table 3

OPEN PIT PROBABLE RESERVES                TONNES         GRADE          OUNCES
Bluebird                               1,461,000        2.53g/t        119,000
Surprise                                 827,000        2.35g/t         63,000
                            TOTAL                                      182,000


Mining Schedule

Open pit mining commences with Surprise. Low grade ore will be used first to
build up gold inventory over the initial three-month period, followed by higher
grade ore over the ensuing six months. Pre-stripping of the Bluebird open pit
will commence once final approvals have been received from the statutory
authorities (expected timing of three to four months). Bluebird ore would then
be blended with Surprise to smooth monthly gold outputs.

Subject to the scheduling of the open pits, ore production from Bluebird and
Surprise over an 18 month period will rise to an annualised gold output of
120,000ozs at an expected process rate of 1,250,000 tonnes per annum.

Mining Underground

The Prohibition orebody will be accessed and serviced by a 5.0m x 5.5m decline.
The mining methods will be predominantly large mechanised sub level open stopes.
Geomechanical studies of the rock types, conducted by Peter O'Brien and
Associates have confirmed the methods proposed and identified the support
mechanisms for decline and stope development.

Red Rock Engineering, a specialist underground mining consultant has provided
all decline access and stope design, inclusive of schedules, operating and
capital costs.

Prohibition lies within 250 metres of the Eastern line of lodes known as
Vivian-Consols and Mudlode. These lodes were historically mined as narrow vein
high grade orebodies. Access and services to these lodes will be shared with
Prohibition.

Ventilation and second egress will be provided from an existing
three-compartment shaft that lies within 400 metres of the Decline Portal.

Initial access will target Prohibition to 300 metres below surface and
Vivian-Consols to 250 metres below surface.

Reserve development from the identified resources at Mudlode and Fatts will be
notified following the completion of the detailed stope design presently being
undertaken.

The Prohibition, Vivian - Consols and Mudlode orebodies remain open along strike
and at depth. The Company believes that considerable Resources and thereafter
Reserves remain to be delineated once access to drilling locations has been
established.

The table below outlines the stoping profiles expected over the initial
development phases before additional underground drilling programs are
undertaken.

Table 4

STOPING                             LOM                                  OUNCES
Prohibition tonnes        1,372,000 tonnes @ 4.06g/t                    179,000
Vivian-Consols tonnes       233,000 tonnes @ 9.54g/t                     71,000
                                                      
                  TOTAL                                                 250,000

Metallurgy

A number of metallurgical studies have been conducted on the projects specified
above by highly regarded metallurgical consultants AMMTEC, Bateman Minerals and
Metals and Orway Mineral Consultants. Since the Yaloginda CIL plant previously
treated some of the ore types represented above and was designed to treat
variable ore types no new circuits are required in the initial production phases
other than the addition of a gravity circuit.

The following table highlights the respective ore characteristics identified
from metallurgical test work.


Table 5
------------        ----------         ---------      -----------    ---------
PROJECT NAME       BOND MILL         GRAVITY GOLD      CIL GOLD       LEACH
               Work Index kwhrs/t       % rec           % rec         hours
  ------------      ----------         ---------      -----------    ---------
Surprise            12 to 15          14.5 to 34         93.5        12 to 24
------------        ----------         ---------      -----------    ---------
Bluebird           12 to 15.3          14 to 40       93.5 to 98     12 to 48
------------        ----------         ---------      -----------    ---------
Vivian              15 to 18             19.7           97.9           24
------------        ----------         ---------    -----------      ---------
Consols             15 to 18              53           93.6            24
------------        ----------         ---------    -----------      ---------
Prohibition         18 to 23              25           83.5*           24
------------        ----------         ---------    -----------      ---------

*Prohibition ore requires additional flotation and ultra-fine grinding to
liberate gold. Recoveries of 90 to 95% are then achievable. Testwork was
undertaken by Bateman Minerals and Metals.



Competent Persons Report - Consent for release

The information in this report, which relates to the Surprise, Bluebird,
Prohibition, and Vivian - Consols Ore Reserves, is based on information compiled
by Alan Coles and Denis Geldard.

Alan Coles and Denis Geldard are full time employees of Mercator Gold Australia
Pty Ltd and are Members of the Australasian Institute of Mining and Metallurgy.

Alan Coles and Denis Geldard have sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as Competent Persons as defined
in the 2004 Edition of the 'Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves'.

Alan Coles and Denis Geldard consent to the inclusion in the report of the
matters based on this information in the form and context in which it appears.



For further information please contact:

Mercator Gold plc
Terry Strapp, Chairman                 Tel: [phone]
Patrick Harford, Managing Director     Tel: [phone]

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

Bankside Consultants Ltd               Tel: [phone]
Simon Rothschild
Keith Irons
Oliver Winters

AIM: MCR




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