Drilling Report

Mercator Gold PLC
08 September 2005



                               MERCATOR GOLD PLC

                       ('Mercator Gold' or the 'Company')



8 September 2005



  Indicated and inferred gold resources in Annean JV area increase to 690,100
                                     ounces



LONDON - Mercator Gold Plc (AIM, MCR & MCRW) as operator of the Annean Joint
Venture ('Annean JV') near Meekatharra, Western Australia, announces a
significant increase in indicated and inferred gold resources .



  • Exploration drilling at Bluebird and Surprise within the Yaloginda mine
    area of the Annean JV has established indicated and inferred gold resources
    of 467,000 ounces. More than half of these resources are at a grade of 4.5g/
    t Au and all are within 1.5 km of the Bluebird Mill.

  • The additional gold resources, calculated by Mercator's independent
    resource consultants, lift the total indicated and inferred gold resources
    in the Annean JV Area to 690,100 ounces.

  • Management is highly encouraged by the results and, having expended A$3
    million (£1,260,000) on exploration, has notified the joint venture partner
    St Barbara Mines Ltd that it has now earned a 45% interest and will proceed
    to Stage 3 of the Joint Venture by spending an additional A$1 million on
    exploration to secure a 51% interest. The Company is on track to achieve the
    51% interest in calendar 2005, well ahead of the March 2007 target date.

  • The Bluebird global resource is 326,000 ounces comprising 5,280,000 tonnes
    @ 1.9 g/t, within which are indicated and inferred high grade resources of
    1,698,000 tonnes @ 4.5 g/t for 244,000 ounces. The Bluebird resource is from
    surface.

  • The Surprise resource is 141,000 ounces comprising indicated resources of
    1,220,000 tonnes @ 0.9 g/t and inferred resources of 2,965,000 tonnes @ 1 g/
    t. The Surprise resource is from surface.

  • The new resources bring the Annean joint venture to a total of indicated
    plus inferred resource of 690,100 ounces gold.

  • Significant potential exists to increase the resource at Bluebird north
    and south of the current resource and at depth, and to increase the grade at
    Surprise with infill drilling of high-grade shoots that produced intercepts
    such as 15m @ 45.1 g/t and 6m @ 36 g/t.




  • Commenting on the results, Mercator's Managing Director, Mr Patrick
    Harford said: 'I'm very pleased with progress to date, in particular the
    discovery of additional ounces at a cost of just US$7 per ounce.  The new
    resources are the result of our aggressive, geologically focused exploration
    achieved in less than 12 months from  our listing on the AIM market. We are
    well on track to delineate sufficient quality resources to sustain a
    long-life mining operation at Meekatharra.'

  • Full details of the resource estimates have been posted on the Company's
    website at www.mercatorgold.com



For further information please contact:
Mercator Gold plc
Patrick Harford, Managing Director                                  Tel:  [phone]
Terry Strapp, Chairman                                              Tel : [phone]
Michael de Villiers, Finance Director                               Tel:  [phone]

Julian Vearncombe, Exploration Director                             Tel: [phone]
Email:     [e-mail]
Web:       www.mercatorgold.com

Beaumont Cornish Limited
Roland Cornish / Felicity Geidt                                     Tel:  [phone]
Ocean Equities Limited
Will Slack                                                          Tel: [phone]


King & Shaxson Capital Ltd
Nick Bealer                                                         Tel:  [phone]
Parkgreen Communications
Justine Howarth / Ana Ribeiro                                       Tel:  [phone]



Mercator operates a continuous disclosure policy with respect to exploration
results. Company news releases are based on technical information approved by
Julian Vearncombe (Company Director), BSc, PhD, FGS, FAIG, RPGeo.



The independent resource evaluations were undertaken by Rick Adams (a Director
of Cube Consulting Pty Ltd), BSc MAusIMM who has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the 'JORC Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves'.



Note to editors



Mercator Gold plc was admitted to AIM on 8 October 2004, and entered into the
Annean Joint Venture with St. Barbara Mines 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 Gold Pty Ltd (the
company's wholly owned subsidiary) has a right to earn a 45 per cent interest in
the Meekatharra Properties by spending AUD$3 million on exploration by 2 March
2006, with a minimum expenditure of AUD$1 million by 2 March 2005. If Mercator
earns the 45 per cent interest, it can elect to increase this interest to 51 per
cent by spending a further AUD$1 million by 2 March 2007. If Mercator earns the
51 per cent interest, it can elect to increase its interest to 70 per cent by
spending a further AUD$ 4 million by 2 March 2009. If Mercator earns the 70 per
cent interest, St. Barbara Mines must then contribute pro-rata on any further
expenditure or dilute its interest by a standard dilution formula.

The Directors have set the Company an exploration target of 2,000,000 ounces of
gold contained within four resources, each of at least 500,000 ounces within the
Annean Joint Venture area.

The Company has reported initial high-grade drilling results from the first two
target areas, Bluebird and Surprise.




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