Toronto,Ontario - Oct,13 1998

South American Gold and Copper Company Limited Announces Antena as a Potentially Large New Gold, Silver, Copper District on the Coast of Central Chile - Mobile Metal Ion Geochemistry Assists in Identifying Drill Targets

Toronto, Ontario - The Antena project covers an area of 80 square kilometers and is located 18 kilometers southeast of the coastal city of Viña del Mar and 100 kilometers northwest of Santiago.

Drainage of the project area fed the rich gold placers of Las Palmas and Marga Marga, which were worked from before Spanish colonial times until the present. There are official government records showing a production of 1,100,000 ounces of gold from the area.

Rock outcrops at Antena are scarce and amount to no more than 5-10% of the total area. The remainder is covered by vegetation and regolith, which is typical of a mature erosion surface. The geology of existing outcrops shows mainly Jurassic granodiorites and tonalites, which were emplaced in a Paleozoic metamorphic sequence, showing northwest striking folds of a regional character.

Mineralization occurs in northeast striking gold bearing lodes, carrying tourmaline, hematite, magnetite, pyrite, chalcopyrite and gold associated with a greisen alteration of quartz and muscovite. The magnetite provides a weak but distinct magnetic signature.

Weathering, oxidation and leaching is deep. It is related to a change from a tropical climate (shown by remmant lateritic soils, tropical plant fossils, etc.) to the semi-arid present climate. Severe leaching exceeds a depth of 30 meters and can exceed 80 meters. Leaching has destroyed nearly all evidence of pre-existing gold mineralization. Sparse remnant coarse gold is the only remaining evidence of pre-existing gold mineralization.

Magnetic and chemical data has located the potential source of the gold placers. Northeast striking structures have been recognized by using "shadow" techniques and first derivative interpretation of the magnetics. This has been confirmed visually in the field.

Conventional geochemical exploration methods on soils, stream sediments and rock chips were unsuccessul. The residual coarse gold complicates the geochchemistry by the "nugget effect." To reduce this problem, 30 kilo samples of stream sediments were panned and the recovered gold grains weighed. The particles are predominantly less than 0.5 mm in size. In total, 1,502 gold particles were recovered in their natural state and were analyzed morphologically and geochemically. The morphology shows that 82% of the gold particles suffered little transport (50 to 300 meters) with the primary source being close to the sampling point.

The chemical composition of 34% of the gold particles show they have recently been exposed to erosion and are close to the source. Some 66% of the grains exhibit an ionic depuration crown indicating that they come from old residual soils very close to the source. There is no evidence of recrystalization on the borders of the gold particles indicating they are of primary origin. Electron probe work shows the gold is from a mesothermal environment.

The evidence indicates the presence of gold bearing bodies which have suffered intense leaching in their upper levels (30-80 m). This has leached the bulk of the gold to lower levels, where it will have been precipitated as supergene gold. Only the coarse gold resisted this process. These are the particles which provided the source for the grains recovered by panning, 30 kilo samples. The old placers worked in the past were formed with gold eroded from source bodies, which had not yet been subjected to intense leaching. Two thousand meters of exploratory percussion drilling in twenty holes found only traces of gold, but served to show the gold source is not widespread and by inference is from definite structures.

The MMI geochemistry, magnetic and resistivity data indicates a buried structure in the Oso zone, beneath 60 meters of extreme leaching, at least 250 meters long, with a probable width of 20 meters striking northeast. Within the structure there is a stronger zone 80 meters long and 40 meters wide. There are two other indicated mineralized structures appearing in the northwest edge of the area studied. Extensions are open on all three of the above mentioned structures.

A detailed magntic survey conducted by SAGC covered an area of 26.6 square kilometers, corresponding to 33% of the 80 square kilometers known to contain anomalous gold values. In the surveyed area there are multiple parallel northeast running structures identified by the magnetics. The geochemical results and some surface exposures show a close connection between the indicated gold bearing mineralization and the widespread northeasterly breaking. The extension in depth for the mineralization is favored by the mesothermal origin of the gold. Placer gold production from historically famous deposits originating from the area studied has been impressive.

Dr. David R. S. Thomson, EVP of Exploration of SAGC, stated, "From this general setting, the potential for finding multimillion ounces of gold at Antena, together with copper and silver values, can be inferred as being good. A drill target has now been well defined by MMI geochemistry and resistivity has further defined how the drill holes should be placed. If drilling in the Oso area is successful, the exploration techniques worked out by SAGC in cooperation with the University of Chile will serve as the basis for systematic follow up exploration of this very large potential gold district."

Stephen W. Houghton, President and CEO, stated "We have deliberated long and hard over whether or not to drill Antena at this time and have concluded that it would not be in our shareholders' interest to initiate a project which could take further extensive drilling before reaching the feasibility stage. In light of current depressed conditions in the financial markets for gold, SAGC will hold Antena, along with its Pimenton project, as a store of future values for our shareholders."

SAGC is a minerals exploration development company with extensive 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, or Mario Hernandez, EVP, Telephone (56) 2 232-5578.