Toronto,Ontario - Nov 25, 1997

South American Gold and Copper Company Limited and Compañia Minera Catedral Announce Further Details on 1,500,000 Ton per Year Cement Manufacturing Facility

Santiago, Chile - Compañia Minera Catedral ("CMC"), a 51% owned subsidiary of South American Gold and Copper Company Limited ("SAGC")(TSE symbol SAG), announced today further details of plans for a 1,500,000 ton per year cement manufacturing facility to be located approximately 80 kilometers south of Santiago.

CMC and SAGC, working with Penta Engineering Corp. of St. Louis, Missouri, USA, a leading engineering and consulting firm specializing in the design and engineering of cement manufacturing facilities and in the implementation of cost reduction and training programs for the cement industry, have completed a detailed study on the direct manufacturing costs per ton of cement to be produced at the new plant.

This study concludes that the fixed and variable direct manufacturing cost per ton of cement produced from the new facility will be less than US $35.00 per ton. Included in the calculation of direct manufacturing costs are:

  • Mining costs of limestone, pozzolan and gypsum.
  • Grinding and slurry preparation costs of limestone.
  • Transportation and slurry pipeline operating costs of all raw materials from mine to plant.
  • Plant costs including clinker production and subsequent grinding of clinker.
  • All fuel and power costs.
  • Equipment maintenance and repair.
  • Plant operating, administration, packaging and labor costs.
  • Contingency cost factor.
A company spokesman cited that the very low open pit mining costs and limestone transportation costs of less than US $1.50 per ton utilizing a limestone slurry pipeline for raw materials transportation from the mine to the plant site, coupled with new technologies in plant design, have enabled the project to achieve a highly favorable direct manufacturing cost per ton of cement. These factors will make CMC more than competitive with projected cement plants in the third region of Chile, located between 600 to 800 kilometers north of Santiago, versus CMC's plant site location which will be only 80 kilometers south from Santiago.

The slurry pipeline will have little or no environmental impact. The plant's design will utilize state of the art technology and will be built to US standards.

A detailed analysis of the total capital costs for the 1,500,000 ton per year cement manufacturing plant, with raw materials and finished cement storage and packaging plant are expected to be less than US $140.00 per ton of annual capacity.

CMC and SAGC also announced that the results of an independently commissioned market research study indicates that the well located, high cost efficient cement manufacturing facility will have a significant impact on the future of the Chilean cement industry.

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 in Canada and the US, Stephen W. Houghton, President and CEO; William C. O'Donnell, EVP and CFO. Telephone: (212) 983-9300, fax: (212) 983-9314; and visit our website at http://www.sagc.com. For further information in Santiago, Chile, David R. S. Thomson, EVP and Director of Exploration, or Mario Hernandez, EVP, Land Claims Administration. Telephone (56) 2 232-5578.