1959 UPPER WATER STREET, TOWER 1 New York Representative Office: Toronto,Ontario – June
2, 2004
FOR IMMEDIATE RELEASE South American Gold and Copper Company Limited
Announces Results of its Exploration Program in the Tourmaline
Breccia Pipe Zone at Pimenton. Toronto, Ontario, Canada – South American Gold and Copper Company Limited (“the Company”) (Toronto Stock Exchange Symbol SAG) is pleased to announce a summary of the results of its exploration program carried out during the 2004 Chilean summer in the tourmaline breccia pipe zone located in the Hondo Valley, which lies adjacent and parallel to the Pimenton Valley. A more complete report will be available on the company’s web site www.sagc.com, under the title “Porphyry copper exploration and recent vein findings at Pimenton”. All samples were assayed by ACME Analytical Laboratories S.A, with headquarters in Vancouver, British Columbia, Canada, and all drilling was done by Connors SA, Santiago, Chile, with headquarters in Kamloops, British Columbia, Canada. Quantec Geosciences, SA, whose parent is headquartered in Toronto, Canada, conducted the geophysical studies. Dr, David R. S. Thomson, Executive Vice President and Director of Exploration, with more than forty years of exploration and development experience in Chile and Peru, and acting as a “Qualified Person,” summarized the report as follows: The results of geological, geochemical and geophysical studies to date at Pimenton are consistent with indicating the possible presence of buried porphyry copper mineralization. Further geochemical and geophysical work prior to initiating a more extensive drill program is justified to establish the extent of the potential copper anomalies found so far. Strongly leached porphyry copper mineralization was identified within the Pimenton claims 3 kilometers north of the Pimenton mine area and adjacent to ground held by Codelco, the state owned Chilean mining company. Four diamond drill holes were drilled in the breccia zone for a total of 1,767 meters. A total of 884 meters of diamond drilling in two holes drilled at 45° (Holes N°1 and N°3) sited to check below the surface showing at the base of the breccia pipe outcrop, encountered favorably altered rocks carrying tourmaline with trace chalcopyrite and chalcocite. The drill intercepts of the weakly mineralized sections were 300 to 500 meters below the surface copper showings. Due to ice cemented talus, it was not possible this last season to construct road access to more favorable drill sites at the outcropping breccia pipe that would have reduced the vertical distance of drill holes N° 1 and N° 2 below the surface copper showings. Two other diamond drill holes amounting to 883 meters were also drilled. Hole N° 2, drilled 391 meters at 45° 500 meters west north west of Holes N° 1 and N° 3, tested a tourmaline breccia with remnant oxidised pyrite and some trace chalcopyrite selectively concentrated in tuff interbedded with unaffected shales. Hole N°4, located 900 meters south west of Hole N° 2 was a vertical 492 meter hole put down to test Induced Polarization data and confirmed closely the predicted sulphide intercepts consisting of disseminated pyrite with patches of trace chalcopyrite. The alteration in this hole was stronger than Hole N° 2, and was 350 meters lower in elevation. In general, the four holes amounting to 1,767 meters proved the wide extent of the altered tourmaline breccias with disseminated pyrite and trace copper minerals. Quantec Geosciences ran six induced polarization lines totaling 15.9 kilometers. Four were in the Hondo Valley and two in the Pimenton Valley. Quantec’s inverse chargeability sections derived from the field data show anomalies with pronounced horizontal components due to the bedding of the volcanics and sediments influencing the distribution of sulphides. The sections show good chargeability anomalies extending below the limit of the estimated 300 meter depth penetration of the induced polarization method used. These deeper extending anomalies may correlate with possible centers of bulk tonnage mineralization. There are five of these anomalies with minimum lengths varying from 600 to 1,200 meters. Four show a correlation between the induced polarization lines that are 200 meters apart indicating that their minimum width is 200 meters. Geochemical soil sampling coverage for copper and molybdenum is not complete at Pimenton, but there is a more than suggestive correlation of the geochemical anomalies with those of induced polarization apparently going to depth. More detailed induced polarization work is needed to check the lateral extensions of the anomalies as well as in depth. Surface exploration during this year’s field season also found eleven new leached gold vein outcrops in the Hondo Valley whose extent is restricted by surface cover. These veins occur between 2 and 3 kilometers north of the Pimenton mine area. Based on experience at the Pimenton mine, the surface leached gold values are promising and will be followed up with further exploration in the 2005 summer season. The extensive magnetometer survey identified two previously unknown strong north south breaks with possible extensions of several kilometers. Surface prospecting has found patchy gold bearing mineralization in siliceous tourmaline breccia associated with one break called the Cascade structure over widths that reach several meters and a possible length of near 2 km. The other magnetically indicated break appears to have been cut by diamond drill Hole N° 2 with two close together 10 meter intercepts of silicified tourmaline breccia and disseminated pyrite and magnetite. In addition, the Quantec magnetic survey, clearly brought out north westerly and north easterly faulting as well as areas of marked lows and highs which could become meaningful in the future as the Company’s data base expands during next years exploration season. Results of the geological, geochemical and geophysical information obtained during this exploration season at Pimenton are compatible with the presence of buried porphyry copper mineralization. This assessment has also been confirmed by a major internationally recognized mining company which made two field trips to the Hondo Valley site, extensively reviewed some 11,000 meters of drill core from previously conducted drill programs primarily oriented to gold exploration at Pimenton and was given access to certain results of the geological, geochemical and geophysical information obtained from the recently completed exploration program. In summary, Dr. Thomson stated that the Company is very pleased with the results of this preliminary exploration program and will be actively planning the 2005 exploration program both for the Hondo Valley as well as at the site of the Pimenton gold mine during the current winter season in Chile. South American Gold and Copper Company Limited is a mineral exploration and development company with properties and activities currently focused in Chile. Its common shares are listed on the Toronto Stock Exchange under the symbol “SAG.”
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