Operational Update

Falkland Gold and Minerals Ltd
18 July 2005


18th July 2005

           FALKLANDS GOLD AND MINERALS LTD ('FGML' or the 'Company')
                              
                               Operational Update

Falkland Gold and Minerals Limited, the exploration company with exclusive
rights to explore for gold and minerals in the Falkland Islands, is pleased to
provide the following operational update.

The Company has been drilling targets identified from its 2004 aeromagnetic
survey of the Falkland Islands, a number of which have coincident alluvial gold
in adjacent drainage systems. FGML identified at least 23 targets and has
commenced exploration activities to investigate these targets.

Drilling commenced in March 2005 and as of the end of June a total of 2,630
metres of HQ core had been drilled on three targets located near our Goose Green
facility (targets T5, T6 and T7).

The first analytical results from the drilling program have now been received
and the Company can report the following findings relating to target T5 in East
Falklands :

Sub-economic indications of gold (Au) were identified in three intersections
(0.19 grams Au/tonne over 0.75 metres; 0.19 grams Au/tonne over 1.0 metre and
0.18 grams Au/tonne over 1.0 metre). There was one sub-economic intersection of
platinum (Pt) and palladium (Pd) (0.17 grams Pt/tonne over 1.0 metre and 0.14 Pd
grams/tonne over 1.0metre). A silver showing of 3.5g per ton over a 1.3 metre
intersection was also identified in doleritic intrusions.

The gold and platinum anomalies were associated with carbonaceous shale and
mudstones in an area which appears to be a structurally controlled fault wedge.

Whilst the values received are sub-economic, they are of great geological merit
to the exploration. The anomalies associated with the shale and mudstones and
those with the doleritic dyke are encouraging as they demonstrate that the
earlier exploration work has correctly identified anomalous areas. The results
and core logs have also been re-submitted for analysis to enhance the original
geophysical study.

This is the first drilling ever done on the Falklands and these initial assays
are starting to validate the initial target selection from the geophysical and
geochemical work carried out in 2004. Whilst this scientific success should
assist in homing in on potential economic success, there is a need for
considerable exploration work in order to fully understand the geological
settings and to then focus in on any higher grade zones.

FGML has also commenced target refinement soil sampling on Target T11 where
geochemical sampling has returned anomalous gold results confirming the original
stream geochemical samples. The gold anomalies are co-incident with platinum and
silver anomalies. At this stage, only a quarter of the geochemical work is
complete but these preliminary results are encouraging.

Drilling continues in East Falklands with 20 of the initial 23 identified
targets still to be investigated. As work advances on these targets and assay
results are received back from the laboratory and interpreted, the Company will
continue to report its findings on a regular basis.


Enquiries

Bell Pottinger Corporate & Financial
Nick Lambert / Paddy Blewer [phone]




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