Toronto,Ontario - May 8, 1997

South American Gold and Copper Company Limited Updates Progress on its Catedral/Rino Limestone Deposits

Toronto, Ontario, - South American Gold and Copper Company Limited reported today that it has completed 846.5 metres of diamond drilling on its Catedral limestone deposits and is now in the final stages of completing 1630 metres of diamond drilling on the adjacent Rino limestone deposit. As previously reported, work performed on these deposits to date by the Company in conjunction with its independent consulting firm, Behre Dolbear & Company, Inc., indicates an inferred resource potential of 989 million tonnes of good quality cement raw feed limestone for the manufacture of Portland Type I cement.

At Catedral, the Company has completed drill hole C-2 to a total depth of 611.0 metres which encountered 549 metres of limestone and was still in limestone when stopped due to rig capacity. Drill hole C-4 was drilled to 117.75 in depth, of which over 47 metres was in limestone before entering gypsum. C-1 and C-3 were drilled to 87.75 metres and 30 metres respectively in quartzite before being stopped. Drill holes C-1, C-3 and C-4 were drilled in an unsuspected fault zone which has locally interrupted the main limestone horizon.

At Rino, drill hole R-2 was drilled to a total depth of 580.75 metres of which over 300 metres from the surface was in limestone. Drill hole R-1 has been drilled to 516 metres entirely within limestone. R-3 is currently drilling in limestone at 257 metres to a projected depth of 450 metres.

Drill core obtained to date from the Catedral/Rino diamond drill program is currently being mapped and sampled under procedures established by Behre Dolbear & Company, Inc. The laboratory assaying will be conducted by Australian Laboratory Services, Stafford, Brisbane, Australia, with check samples sent to Construction Laboratories, Inc., Skokie, Illinois, in the US. The Company expects to begin receiving assay results in early June. The purpose of the drill program at Catedral/Rino is to confirm the presence of cement grade limestone for the manufacture of Portland Type I cement and the resources to support a major cement manufacturing facility in the Santiago area.

SAGC and its 50% interest partners hold a 100% interest in nearly 40,700 hectares covering and extending beyond the Catedral/Rino project deposits.

Stephen W. Houghton, President and CEO of SAGC, stated the current price of US $120.00 per tonne of cement in Chile is among the highest in the world. There is also a severe shortage of cement quality limestone to serve the current market and its projected annual 10% growth that is both accessible and within a 120 kilometre distance of Santiago. Based on the Catedral/Rino deposits' favorable location, its projected very low mining costs and its immediate access to the newly constructed gas pipeline which will be transporting natural gas from Argentina to Santiago, Chile, the Company's independent engineering consultants, Behre, Dolbear & Company, Inc., have estimated the direct manufacturing costs for Portland Type I cement delivered to the Santiago market from the Cathedral/Rino deposits to be less than US $45.00 per tonne.

Mr. Houghton further stated, "To the best of our knowledge, there are no other limestone deposits within reasonable commercial access to the Santiago cement market which have the requisite requirements for providing a new cement manufacturing facility with such low costs as the Catedral/Rino deposits when compared to current or proposed cement manufacturing facilities servicing the Santiago cement market. If the assay results of the current drill program confirm the results of the prior testing on the Catedral/Rino deposits, SAGC's 50% interest in the Project could be of significant future value to the Company."

SAGC is a mineral exploration company with extensive gold properties in Chile and Peru. Its common shares are listed on The Toronto Stock Exchange under the symbol SAG.

For further information: Stephen W. Houghton, President and CEO; William C. O'Donnell, EVP and CFO (odonnell@sagc.com). Telephone: (212) 983-9300, fax: (212) 983-9314.