Asia Gold Corp.

Asia Gold Corp.

July 05, 2005 08:30 ET

Asia Gold Signs Option Agreement for Mongolia Exploration with World's Largest Resources Company

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 5, 2005) - David Owens, President of Asia Gold Corp. (TSX VENTURE:ASG), is pleased to announce that the company has executed an Option Agreement with BHP Billiton World Exploration Inc. (BHP Billiton) on 3,629 square kilometres (the West Falcon Gobi Area) located within Asia Gold's large West Gobi Property in southern Mongolia. The West Gobi Property is prospective for porphyry copper-gold deposits.

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. Following 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.

BHP Billiton also has agreed to purchase Units of Asia Gold with a total value of US$1,000,000. The Units comprise one common share and one warrant to purchase one half of a common share of Asia Gold. The share price will be set at 115% of the weighted average closing price of Asia Gold's shares over a 20-day period prior to the Payment Date. The Payment Date is 10 days following approval of the Option Agreement by the TSX Venture Exchange. The warrants have a term of two years and an exercise price equal to 150% of that same weighted average closing price.

"Asia Gold welcomes BHP Billiton as a new and significant shareholder," said Mr. Owens. "The BHP Billiton investment and exploration commitment add substantial present value to the company and also the opportunity for future significant shareholder benefits."

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.

David C. Owens, a qualified person as defined by National Instrument 43-101, supervised the preparation of the information in this release. Asia Gold's exploration program in Mongolia is managed by Richard Gosse, Vice-President Exploration, and Andrew Gourlay, Senior Exploration Geologist, both qualified persons as defined by NI 43-101.

Ivanhoe Mines Ltd. (TSX:IVN)(NYSE:IVN) owns 51% 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. - Investors
    Bill Trenaman
    (604) 688-5755
    Asia Gold Corp. - Media
    Bob Williamson
    (604) 688-5755