Philex Gold Inc.

Philex Gold Inc.

September 16, 2005 11:33 ET

Philex Gold Announces Signing Of Heads Of Agreement On Its Lascogon And Danao Properties

TORONTO, ONTARIO--(CCNMatthews - Sept. 16, 2005) - Philex Gold Inc. (TSX VENTURE:PGI) announced today that its 100%-owned subsidiary, Philex Gold Philippines, Inc. (PGPI), has signed a Heads of Agreement with Transpacific Mining Limited (TML) for a joint venture on PGPI's Lascogon and Danao properties in the province of Surigao del Norte in the Philippines.

The joint venture will cover all of the land within MPSA #148, an area of 2,306 hectares in Surigao del Norte, along a northwest trending district which includes Lascogon and Danao properties where PGPI has taken approximately 1,500 chip samples from boulders, test pits and trenches. PGPI now characterizes the mineralization in Lascogon and Danao as "Carlin-like". At Lascogon, there is a 360 metre by 80 metre near surface exposure of sedimentary rock-hosted jasperoids within a wider 600 metre by 300 metre area that is geochemically anomalous for gold and its tracer elements. At Danao, the limited samples taken have shown encouraging results.

Under the terms of the Heads of Agreement, the details of which will be specified in a shareholders agreement to be executed by the parties, TML will pay PGPI the amount of $250,000 and advance $1,000,000 for exploration and drilling at the properties, starting with the Lascogon prospect, in order to earn a 40% equity in the joint venture. The work will be performed by PGPI through the joint venture and could include 6,000 metres of diamond drilling. If further development is warranted after the exploration period TML, or its qualified Philippine affiliate, can earn another 20% by advancing $10,000,000 towards the development and construction of the mine. Should additional amounts be needed to fund the project, the parties will provide such requirement according to their equity in the joint venture. Monies advanced by TML other than the initial $250,000 would be repayable out of net earnings from any mine production.

Philex Gold Inc. is a Canadian mineral exploration company active in the Philippines. Its interests include the North Project on Mindanao Island, a joint venture with Anglo American plc, as well as the former Bulawan gold mine and a number of gold prospects. The North Project includes the Boyongan copper-gold porphyry deposit discovered in 2000, the separate Bayugo copper-gold porphyry system identified in 2003, and other prospects.

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

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