Oro Gold Resources Ltd.
TSX VENTURE : OGR

Oro Gold Resources Ltd.

July 20, 2005 13:36 ET

Oro Gold Resources Ltd.: 2nd Quarter 2005 Report to Shareholders

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 20, 2005) - Oro Gold Resources Ltd. ("Oro Gold") (TSX VENTURE:OGR) has filed its interim consolidated financial statements and the Management Discussion and Analysis (Form 51-102F) for the six months ending May 31, 2005 with the regulatory authorities through SEDAR (www.sedar.com). The interim financial statements were prepared by management in accordance with Canadian generally accepted accounting principles. This news release is being issued pursuant to National Instrument 54-102.

Operational Highlights

Oro Gold is a development stage company involved in the acquisition and exploration of mineral properties in Mexico and Central America.

Highlights of the Company's activities during the six months ending May 31, 2005, are:

- Formal Agreement entered into with Minera Camargo S.A. de C.V., a third party, to acquire up to 100% interest in certain property named Cimarron Property in the State of Sinaloa, Mexico.

- Completion of a private placement for 290,000 shares at $0.25 per share for gross proceeds of $72,500.

- Completion of an initial public offering on the TSXV of 3,000,000 units for gross proceeds of $1.2 million and the commencement of public trading on the TSXV under the symbol OGR.

- Establishment of a share purchase option plan whereby the board of directors may, from time to time, grant options to directors, officers, employees or consultants. The Company granted 790,000 share purchase options to directors, officers and consultants, at $0.60 per share to April 18, 2007.

- Continuation of Ixtapan de Oro property program by completing surface sampling and mapping of Ixtapan del Oro II to potentially expand mineralized zone.

- Continuation of property examinations in Mexico and Panama.

Result of Operations

Net loss for the three months and the six months ended May 31 2005 was $218,834 and $281,840 (period ended November 30, 2004 - $138,778) or $0.03 and $0.04 loss per share (November 30, 2004 - $2.09). These results include a write-off of resource property costs of $14,028 for the three months period ended May 31, 2005 and $54,327 for the six month period ended May 31, 2005 for generative exploration activities (November 30, 2004 - $90,646).

Operating expenses for the three months and the six months ended May 31, 2005 totalled $207,244 and $229,951 (November 30, 2004 - $48,132), of which the significant expenditures are as follows: Stock based compensation expense of $84,581 for the three months and six months (November 30, 2004 - nil): Legal and accounting of $38,089 and $41,163 (November 30, 2004 - $21,390); Wages and salaries of $31,258 and $40,618 (November 30, 2004 - $13,741); Listing and filing fees paid to various regulatory authorities of $24,628 and $25,903 (November 30, 2004 - nil); Investor relations expenses of $13,620 for the three months and the six months (nil- November 30, 2004); Rent of $4,500 and $9,000 (November 30, 2004 - $7,500); Transfer agent fees of $4,220 and $5,725 (November 30, 2004 - nil); All other costs during the three months and six months ended May 31, 2005 totalled $6,348 and $9,341 (November 30, 2004 - $5,501), which includes general office costs, telephone, bank charges and interest, amortization, and travel.

Liquidity and Capital Resources

The Company is in the development stage and therefore has no regular cash flow. At May 31, 2005, the Company had working capital of $1,148,246 (November 30, 2004 - $223,596). Cash and cash equivalents increased by $936,067 during the three months ended May 31, 2005 and $908,742 during the six months ended May 31, 2005, from $228,834 as at November 30, 2004 to $1,137,576 as at May 31, 2005. Cash used in operating activities, including changes in non-cash working capital during the three months ended May 31, 2005 was $178,817 (six months ended May 31, 2005 - $158,554), as compared to cash used in operations of $42,370 for the period ended November 30, 2004.

Cash used for investing activities during the three months ended May 31, 2005 was $49,247 and $113,141 during the six months ended May 31, 2005, $48,862 for the three months and $112,756 for the six months ended May 31, 2005 for the acquisition and exploration of resource properties and $385 for the acquisition of property, plant and equipment. During the comparative period ended November 30, 2004, the company used a total of $223,802 in cash resources, comprising of $221,562 in the acquisition and exploration of resources properties and $2,240 in investment in property, plant and equipment.

During the three months ended May 31, 2005, the Company generated $1,164,131 from its financing activities (six months ended May 31, 2005 - $1,180,437; November 30, 2004 - $495,006), comprising of cash proceeds of $1,204,202 from share issuances (six months ended May 31, 2005 - $1,276,702; November 30, 2004 - $495,006), net of share issuance costs of $40,071 (six months ended May 31, 2005 - $96,265; November 30, 2004 - $Nil).

At May 31, 2005, the Company's investment in resource properties aggregated $189,345, $161,058 being costs on the Ixtapan del Oro property and $28,287 on the Cimarron Property (November 30, 2004 - $130,916, all on the Ixtapan del Oro property), and property plant and equipment, net of amortization, was $1,813 (November 30, 2004 - $1,716).

At May 31, 2005, share capital of $1,675,441 comprised of 10,220,006 issued and outstanding common shares and 10,000 allotted but unissued common shares (November 30, 2004 - $495,006, comprising 6,720,006 shares outstanding). The Contributed Surplus of $84,581 represented the fair value of stock options granted during the 2005 period. As a result of the loss for the six month period of $281,840, deficit at May 31, 2005 increased to $420,618 from $138,778 at November 30, 2004.

On behalf of the Board

ORO GOLD RESOURCES LTD

Darren Bahrey, President

This news release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results. Such statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements. Oro Gold disclaims any intention or obligation to revise or update such statements.

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

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