Asia Gold Corp.

Asia Gold Corp.

August 04, 2005 12:32 ET

Asia Gold Closes US$1,000,000 Financing with World's Largest Diversified Resource Company

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 4, 2005) - David Owens, President of Asia Gold Corp. (TSX VENTURE:ASG), is pleased to announce that BHP Billiton World Exploration Inc. (BHP Billiton) has closed its previously announced US$1,000,000 (C$1,234,200) purchase of Asia Gold Units (see Asia Gold's July 5, 2005, news release). The Unit purchase is part of a transaction whereby BHP Billiton was granted the option to earn a 50% interest in Asia Gold's 3,629-square-kilometre West Falcon Gobi Area, located within Asia Gold's large West Gobi Property in southern Mongolia. The property is prospective for porphyry copper-gold deposits.

The Units comprise one common share and one warrant to purchase one half of a common share of Asia Gold. BHP Billiton acquired 1,153,998 common shares, or approximately 7.31% of the issued and outstanding shares of Asia Gold, at a price of C$1.0695, which is 115% of the weighted average closing price of Asia Gold shares over a 20-day period prior to the payment date.

The warrants have a term of two years and an exercise price of C$1.395 (150% of the weighted average trading closing price for the 20 day period prior to the payment date).

Under the terms of the Option Agreement, BHP Billiton has been granted a first option to earn a 50% interest in the West Falcon Gobi Area by spending US$2,000,000 on exploration prior to December 31, 2007. The expenditures include an initial commitment to conduct a Falcon™ airborne gravity gradiometer survey over the West Falcon Gobi Area before December 31, 2006. Within 180 days of the completion of the first option, BHP Billiton has a second option to earn an additional 20% interest (for a total interest of 70%) in the West Falcon Gobi Area by funding a Feasibility Study on one exploration target up to a maximum value of US$45,000,000.

Falcon is an airborne gravity gradiometer that measures minute changes in the earth's gravity. This technology provides BHP Billiton with a unique advantage in the search for mineral and hydrocarbon deposits and has helped in the resource evaluation of some major operations, such as the Ekati Diamond Mine in Northwest Territories, Canada, and the Cannington Silver and Lead Mine in Queensland, Australia.

Ivanhoe Mines Ltd. (TSX:IVN)(NYSE:IVN) owns approximately 47% of the issued and outstanding shares of Asia Gold.

Forward-Looking Statements: Statements in this release that are forward-looking statements, including the planned exploration of Asia Gold's Mongolia properties, are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy or this release.

Contact Information

  • Asia Gold Corp.
    Bill Trenaman
    (604) 688-5755
    Asia Gold Corp.
    Bob Williamson
    (604) 688-5755