Registered Office New York Representative Office
SUITE 800, PURDY’S WHARF 420 MADISON AVENUE
1999 UPPER WATER STREET, TOWER 1 NEW YORK, NEW YORK 10017
HALIFAX, NOVA SCOTIA B3J 2X2
For further information, contact:
Stephen W. Houghton, President
William C. O’Donnell, EVP
Telephone: (212) 751-0083
Fax: (212) 751 0319
Website: http://www.sagc.com

FOR IMMEDIATE RELEASE – March 3, 2005

South American Gold and Copper Company Limited Announces Financial Results

Toronto, Ontario, Canada – South American Gold and Copper Company Limited (the “Company”) (Toronto Stock Exchange Symbol SAG) announced today its financial results for its fiscal year ended September 30, 2004, and for its first fiscal quarter ended December 31, 2004.

Revenues from the sale of gold concentrates and copper gold silver concentrates from the Company’s 100% owned Pimenton gold mine for its fiscal year ended September 30, 2004, were US $938,000 and for its first quarter in fiscal 2005, were US $704,000. Mine operating costs for each of the respective periods were US $938,000 and US $937,000, before depreciation, amortization and general administrative expense. The Pimenton mine commenced start up operations on July 1, 2004, and operated for just the last fiscal quarter of the Company’s fiscal year ended September 30, 2004. Revenues for the first fiscal quarter ended December 31, 2004, were adversely impacted by substantial plant modifications and a change in mining method at Pimenton, as discussed below.
Prior to placing Pimenton into commercial production, all exploration and development costs relating to Pimenton had been capitalized. Upon commencing commercial production, these capitalized costs were transferred to producing properties on the Company’s consolidated financial statements and amortized into operations on a units of production method. As a result of this change, depreciation and amortization expense increased significantly on commencement of operations at Pimenton. On a consolidated basis, the Company reported a loss before taxes of US $3,650,000 (which included amortization and other non-cash items of US $2,072,000) for its fiscal year ended September 30, 2004, and a loss before tax of US $1,068,000 (which included amortization and other non-cash items of US $469,000) for its first fiscal quarter ended December 31, 2004.
At December 31, 2004, current assets of the Company were US $3,941,000 including cash of US $674,000 and restricted cash of US $429,000 and current liabilities of US $2,437,000. At September 30, 2004, current assets of the Company were US $3,035,000 including cash of US $226,000 and restricted cash of US $429,000 and current liabilities were US $2,723,000. The Company also held an additional US $754,000 of restricted cash on its balance sheet at December 31, 2004, and on September 30, 2004, of which US $400,000 will be released when Pimenton reaches Financial Completion as defined in the OPIC loan agreement, which the Company expects to achieve in June 2005 and the balance of US $354,000 when and if the Company has a gold hedge in place to cover the outstanding balance of the OPIC loan in the amount of US $2,488,889 at December 31, 2004. Shareholders equity was US $17,056,000 at December 31, 2004, and US $15,965,000 at September 30, 2004
Stephen W. Houghton, President and Chief Executive Officer, stated, “Pimenton has incurred normal and some unexpected start-up problems both in plant operations and in mine operations which have adversely impacted operating results of the company’s fourth fiscal quarter ended September 30, 2004, and its first fiscal quarter ended December 31, 2004.

“Required plant modifications have included the installation of a secondary jaw crusher, replacement of the cone crusher foundation, repair of the electric drive motor on the ball mill, a relocation of the Knelson concentrator and the installation of a flash flotation cell. While these new installations and modifications resulted in total down time of plant operations of nearly 45 days during the Company’s first fiscal quarter ended December 31, 2004, they are expected to have a very beneficial impact on future plant operations by increasing the plant’s daily operating capacity from 140 tonnes per day to 300 tonnes per day which will provide plant operating flexibility and operating savings as mine production increases.

“In mine operations we have faced the challenge of modifying the mining method from cut and fill with resuing to the stull method of mining. This change in mining method was implemented in September 2004 to reduce significant over breaking and gold fines losses which resulted in a lower than projected gold head grade of ore into the plant. Implementation of the stull method of mining required substantial retraining of the mine workers both in operating and in safety procedures. As a result, stope widths have been reduced from over 1.2 meters to 80 centimeters or less and head grade of ore to the plant has increased substantially.

“We expect to achieve a meaningful improvement in Pimenton`s production of gold, silver and copper concentrates during the balance of the Company’s fiscal year ending September 30, 2005 as a result of the plant modifications, change in mining method and corresponding reduction in mining widths. Commencing this current month, as a result of these changes, mine production is expected to increase up to an average of 150 tonnes per day for the balance of this fiscal year 2005 and progressively increase to an average of 200 tonnes per day in fiscal 2006. If Pimenton is successful in achieving these production rates and plant recoveries are maintained at 89% to 91%, Pimenton should produce near 1,840 gold equivalent ounces per month for the balance of the Company’s current fiscal year ending September 30, 2005, and more than 30,000 gold ounces plus copper and silver byproduct credits in fiscal 2006.”
The Company also announced that it will make a separate news release on its recent exploration activities on the porphyry copper deposit at Pimenton.
With respect to the Company’s Catedral lime project, discussions with the major copper company for a long-term lime supply contract have been delayed due to internal organizational changes which have taken place within that company. The Company has been told that discussions will recommence in the month of March 2005.
The Company also reported that its Annual Report has been mailed to shareholders and it, along with the Company’s First Quarter Report and Annual Information Form, have been filed on SEDAR and are available for viewing. These reports also contain more detailed information on the Company’s porphyry copper deposit at Pimenton and the current status of its Catedral Lime Project.
South American Gold and Copper Company Limited is a minerals producing, exploration and development company with properties and activities currently focused in Chile.
Certain information contained in this press release constitutes “forward looking statements” within the meaning of securities laws Forward-looking statements may relate to the future outlook of the Company and anticipated events or results. In particular, statements regarding the Company’s future operating results and economic performance are forward-looking statements. Forward-looking statements are made on management’s belief as well as assumptions made b, and information currently available to, management of the Company. While such beliefs and assumptions are considered reasonable by the Company, they are inherently subject to significant business, economic and competitive uncertainties and contingencies or they may prove to be incorrect. Important factors which could cause actual results to differ materially from those projected in the forward-looking statements include fluctuations in the market price of gold, changes in government legislation in the countries in which the Company operates, business opportunities which may be presented to or pursued by the Company, contests over title to properties, general and environmental risks and hazards associated with gold mining. Many of these issues can affect the Company’s actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of the Company. Readers are cautioned that forward-looking statements are not guarantees of future performance, and should not place undue reliance on them. The Company expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any changes in events, conditions or circumstances on which any statement is based.