Toronto,Ontario - May 14, 2001South American Gold and Copper Company Limited Announces Signing of Option Agreement and Drilling Contract on the Lorito Copper Prospect Toronto, Ontario, Canada - South American Gold and Copper Company Limited ("SAGC")(TSE Symbol SAG) is pleased to announce that it has finalized and signed an option agreement on the Lorito Copper Prospect located approximately 60 kilometers south of Copiapo, Chile, at an elevation of 2,700 meters. The Lorito Copper Prospect is unusually compact and well defined indicating that its potential can be tested rapidly. The Company also announced that it has entered into a drilling contract for drilling the Lorito prospect. Preparation of drill roads and the drill pads will begin shortly. The drill program, as currently planned, will consist of four to five drill holes drilled at 60º to 90º, totaling approximately 1,000 meters. The drill program is scheduled to commence on or about June 12, 2001, and will take approximately 30 to 45 days to complete. Dr. David R. S. Thomson, EVP and Director of Exploration, as previously reported, has estimated the inferred mineral resource at Lorito to be in the order of 30 to 40 million tonnes of copper ore grading 1% to 1.5% copper per tonne based on known dimensions from rock chip sampling over a known elevation difference of 150 meters and projected down a further 50 meters. Included in the inferred mineral resource is an envelope or ring with an estimated circumference of 850 meters in length and 20 to 30 meters wide, which has the potential to contain 5 to 8 million tonnes of copper ore with a potential grade of 2% to 3% copper. The mining method would be by open pit with a favorable strip ratio. Stephen W. Houghton, President and CEO, stated, "The Option Agreement is for a three year period and entitles SAGC to a 100% ownership position in the Lorito Copper Prospect. The option may be exercised at any time during the three year period from the date of signing the option agreement at an exercise price of US $500,000." Mr. Houghton also stated, "We believe it is noteworthy that the drill contractor with whom the drill contract has been signed for the initial reverse circulation drill program has, subject to regulatory approval, expressed his desire to be compensated in shares of the Company’s common stock approximately equal in value to the cash cost of a normal drilling contract. The drill contractor has also agreed, if required, to drill up to an additional 1,000 meters above the currently planned 1,000 meter drill program under a similar compensation arrangement. We view this as a strong vote of confidence in the Lorito Copper Prospect by the contractor who has more than ten years of drilling experience in Chile." South American Gold and Copper Company Limited is a mineral exploration and development company with properties in Chile. Its strategy is to develop its industrial minerals projects and to utilize potential earnings from these projects to further advance its exploration activities. Its common shares are listed on The Toronto Stock Exchange under the symbol SAG. The "qualified person" responsible for the technical statements made with respect to the Lorito Copper Prospect in this news release is Dr. David Thomson, EVP and Director of Exploration of the Company. For further information, please contact Stephen W. Houghton President and CEO at telephone (212) 751-0083, fax (212) 751-0319 and visit our website at http://www.sagc.com. |