Drilling Report

Mercator Gold PLC
27 June 2006



27 June 2006



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


                   Additional Report on Drilling at Bluebird



  • The Company has completed its successful drill programme at Bluebird.
    Latest results are now available and include 23m @ 5.5 g/t, 16m @ 2 g/t, 10m
    @ 2.3 g/t, 9m @ 7.9 g/t, 7m @ 4.9 g/t, 6m @ 4.3 g/t, 5m @ 11.2 g/t, 5m @ 5.6
    g/t 4m @ 5.2 g/t, 3m @ 6.9 g/t and 2m @ 29.3 g/t gold.
  • The Company has received encouraging results from metallurgical testwork
    carried out on representative samples of the Prohibition ore body.



Bluebird



Mercator Gold plc is pleased to announce the results from reverse circulation
and diamond core drilling at Bluebird. Significant down-hole intersects (>1.0 g/
t Au) received since the last media release include but are not limited to:



  • 23m @ 5.48 g/t Au; 16m @ 1.99 g/t Au; 7m @ 1.67 g/t Au; 4m @ 5.2 g/t Au
    and in the same hole 3m @ 6.96 g/t Au; 4m @ 3.22 g/t Au; 1m @ 16.34 g/t Au
    from the Bluebird North lodes.
  • 9m @ 7.92 g/t Au and  the same hole 5m @ 11.26 g/t Au; 7m @ 2.47 g/t Au
    and in the same hole 3m @ 5.94 g/t Au; 6m @ 2.09 g/t Au and in the same hole
    6m @ 2.07 g/t Au; 5m @ 5.65 g/t Au and in the same hole 3m @ 3.85 g/t Au; 5m
    @ 2.17 g/t Au; 4m @ 4.51 g/t Au; 2m @ 29.32 g/t Au on the central Bluebird
    lodes.
  • 6m @ 4.32 g/t Au; 1m @ 4.33 g/t Au on the Polar Star structure, to the
    south east of Bluebird.
  • 10m @ 2.36 g/t Au; 7m @ 4.9 g/t Au within the Edin Hope alteration zone,
    to the south west of Bluebird.



Drilling is targeted at increasing the Bluebird resource currently defined as
5,280,000 tonnes @ 1.9 g/t Au for 326,000 ounces.  The bulk of these ounces is
contained within five high grade domains, 1,698,000 tonnes @ 4.5 g/t Au for
244,000 ounces, surrounded by a lower grade alteration halo. Additional
structures within 500m of Bluebird that are being targeted include Edin Hope
(south west of Bluebird), Polar Star (south east of Bluebird), and Bluebird
North.



Of particular significance was the 2m @ 29.32 g/t Au which is about 40m down dip
of a previously reported 8m @ 11.1 g/t Au intersection.  These results confirm
the extension of high-grade gold mineralisation immediately north of Bluebird,
in the gap between the Bluebird and Bluebird North pits. Complete results on
mineralised zones are being digitised and a new resource evaluation has
commenced. The resource statement will be a critical element of mine
optimisation and evaluation for profitable and sustainable production.



To the south of Bluebird, results include 10m @ 2.36 g/t Au.  There is potential
for this to be part of a previously undetected fault off-set of the Edin Hope
zone.  Further work will test this theory. Additional drilling will be planned
based on a re-assessment of all of the southern Bluebird lodes in the position
of the South Junction pit.  This work will continue as a priority to determine
if any mining potential exists.



A metallurgical test hole has been drilled at the northern end of the Bluebird
mineralisation.



Additional drill rigs



The Company has acquired the use of three additional drill rigs, bringing the
total on site to five rigs.



Diamond core drilling has commenced at Prohibition and Vivian-Consols where the
company has a programme of 7,000m which follows up the earlier drill results of
7m @ 6.5 g/t, 69m @ 3.5 g/t, 46m @ 1.9 g/t and 28m @ 6.9 g/t all in the same
hole. Prohibition has a current resource of 2.3Mt @ 3.6 g/t for 270,000oz and
the adjacent Vivian-Consols 0.9Mt @ 7.4 g/t for 234,000oz.



RC drilling continues at Prohibition, Vivian-Consols and Surprise. At Surprise
the Company has a programme of 6,000m of drilling comprising mostly RC designed
to test the grade on cross-cutting faults with an aim of increasing the grade at
Surprise.



The third additional rig is capable of conversion between rotary air blast and
aircore and has commenced a 5,000m programme at Twelve Mile Well 6km south west
of Bluebird. The structural target at Twelve Mile Well is the north extension of
the fault that hosts gold at Caledonian and Aladdin open pits, where that fault
again passes through banded-iron formation.



Drilling results



All mineralisation intervals quoted in this press release are 'down-hole'. Full
details of the drilling results are available on the Company's website which is
www.mercatorgold.com



Prohibition metallurgy study



In early May 2006 a pre-planned diamond drill hole was designed to intersect the
mineralised ore zones of the Prohibition orebody to provide 300 kilograms of a
representative sample for metallurgical test-work. Previous reports referred to
possible refractory aspects of the sulphide component of the ore horizons.



A metallurgical test-work programme and engineering study is currently underway
to evaluate possible processing routes for treating the semi-refractory
Prohibition sulphide ore. The work has been split up into two notional stages to
enable exploratory work to done on small sub samples in Stage 1, followed by
optimisation work in Stage 2.



The results of the Stage 1 work have been completed with the following
highlights



  • The ore sample assayed 5.10 g/t Au and contained significant coarse gold
    values. Deleterious compounds and elements are present in only very low
    amounts.
  • Gravity concentration produced 19% gold recovery to a final cleaned
    concentrate (suitable for direct smelting).
  • Prohibition ore allows 83% overall gold extraction under standard Carbon
    In Leach processing methods.
  • Regrinding the concentrate produced by bulk sulphide gravity concentration
    to 80% passing 15 microns increases gold extraction to 91%.
  • Further treatment using alkaline oxidative methods increase gold
    extraction to 94%.



Stage 1 has clearly defined the need to produce a gravity concentrate which is
neither capital nor operating cost prohibitive and delivers a 91% gold recovery.
The focus on Stage 2 will determine the operating parameters for alkali
treatment of the sulphide concentrate fraction.  As this concentrate fraction is
relatively small, capital and operating costs are not considered prohibitive and
have the potential to lift overall recovery to 94%.



The Managing Director, Mr P Harford, said:



'The Bluebird resource estimate is now underway and the company expects to see a
substantial upgrade in the total number of resource ounces. We are now ready to
consider the economics of an open pit mine at Bluebird.'



'We are very happy with the metallurgical test-work results received from
Prohibition. The suspicion that the ore body may be refractory has been allayed.
Bluebird and Prohibition continue to provide encouragement to the Company in its
endeavours to bring both these areas into a profitable mining operation.'



Consent for release



Julian Vearncombe (BSc (Hons), PhD, FGS, RPGeo, FAIG) is a Director of the
Company and consents to the inclusion of the exploration information in the form
and context in which it appears here. Julian Vearncombe is a Competent Person
for the reporting of these results as defined by the JORC Code 2004 Edition. The
Prohibition metallurgical testing was managed by Mr Denis Geldard (Mining
Engineer AWASM) the Company's Operations Director who has over thirty years in
mining and metallurgy experience in Australia and internationally and who
consents to the release of this information in the format presented here.



For further information please contact:


Mercator Gold plc
Patrick Harford              Managing Director        Tel: [phone]


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


Parkgreen Communications
Justine Howarth / Ana Ribeiro                         Tel: [phone]







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