SOUTH AMERICAN GOLDAND COPPER COMPANY LIMITED Registered OfficeNew York Representative Office SUITE 800, PURDY’S WHARF420 MADISON AVENUE 1999 UPPER WATER STREET, TOWER 1NEWYORK, NEWYORK10017 HALIFAX, NOVASCOTIA 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 29, 2005 South American Gold and Copper Company Limited Announces Letter of Understanding with Rio Tinto Mining and Exploration Ltd. on Pimenton Porphyry Copper Deposit Toronto, Ontario, Canada – South American Gold and Copper Company Limited (“the Company”) (Toronto Stock Exchange Symbol SAG) is pleased to announce today that it has entered into a Letter of Understanding (“LOU”) with Rio Tinto Mining and Exploration Ltd., a subsidiary of Rio Tinto plc, London, England (“Rio Tinto”) which will serve as the basis for entering into a formal joint venture agreement for the exploration and development of the porphyry copper system at Pimenton. Pimenton is located within the Central Porphyry copper belt of Chile in an area of current and intense exploration activities. Stephen W. Houghton, President and Chief Executive Officer, stated that the normal time frame for completing a joint venture agreement under the Chilean legal system can take 90 to 180 days.Therefore Rio Tinto and the Company have agreed to operate under the terms of the LOU in order to commence an immediate drill program on the Pimenton porphyry deposit before the upcoming winter season in Chile. Mr. Houghton commented further that the LOU is a binding agreement on both Rio Tinto and the Company (the “Parties”).Under the terms of the LOU, Rio Tinto is committed to fund within one year an initial mutually agreed upon diamond drill program on the Pimenton porphyry copper deposit, which is currently contemplated to consist of up to four drill holes totaling 2,600 to 3,000 meters of drilling.Following the successful completion of this drill program, as determined by Rio Tinto, it has been agreed that Rio Tinto will have the option to enter into a formal joint venture agreement with the Company under the terms of the LOU, excluding the current gold mining operations at Pimenton. Under the terms of the LOU, the joint venture agreement would contain a minimum budgeted schedule of expenditures by Rio Tinto over a four year time frame and the completion of a feasibility study on the project within seven years of the date of the LOU, at which time Rio Tinto would earn a 60% interest in the project.More details of the joint venture agreement between the Parties will be announced at such time as and if the joint venture agreement is finalized. Connors Drilling S.A. is scheduled to move two diamond drill rigs to the Pimenton property in mid-April 2005 for the commencement of initial drilling on the Pimenton Central area, one of two drill targets areas which have been identified at Pimenton.Winter weather conditions will determine if this initial drill program can be completed during the remainder of this exploration season in Chile. Mr. Houghton stated that the Company is pleased to be working with a company of Rio Tinto’s stature in the global mining industry as its partner in conducting the exploration and possible future development of the Pimenton porphyry copper deposit. 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 by 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 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.
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