Sur American Gold Corporation
TSX VENTURE : SUR

Sur American Gold Corporation

July 07, 2005 13:52 ET

Sur American Gold Corporation: Grades up to 390.5g/t Gold Returned at Batoto Gold-Silver-Copper Porphyry Project

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 7, 2005) - Sur American Gold Corporation (TSX VENTURE:SUR) is pleased to provide an update on exploration and project development at its Batoto gold-silver-copper porphyry project within the Comval Area, Compostela Valley Province, Philippines and in particular details on the current development of the Tarale Zone which has recently returned channel sampling grades as high as 390.5g/t gold.

According to SUR President Mr Rennie Blair, "Results from our on going exploration continue to expand the known area of alteration and mineralization now covering an area of at least 8 kms long by 4 kms wide. We are also very fortunate in that the mineralization is not covered with any significant overburden which means that the mineralization is potentially able to be extracted by low cost bulk mineable open cut methods."

RECENT EXPLORATION AND DEVELOPMENT HIGHLIGHTS

- Development of the 0.6m to 2.0 metre thick gently dipping Tarale 11 vein in the SE quadrant of the Batoto gold-silver-copper project has now exceeded 250 metres and has confirmed that the high grade vein occurs over an area of at least 2,500sq metres and is open in all directions.

- The development of the vein is effectively a room and pillar type operation and is being developed as part of the Company's ongoing bulk metallurgical testing program and to prepare the vein for commercial production scheduled for the first quarter 2006.

- The vein is one of more than 30 high grade structures that occur in the Tarale area of the Batoto project and one of more than 120 in the Batoto project area found to date. The vein has been consistently high grade on average but has a high grade variance as the following most recent channel sample assays received from the 10 current working faces:



---------------
Vein True Gold
Width g/t
---------------
1.00 14.90
---------------
1.90 0.53
---------------
0.60 390.50
---------------
0.80 35.90
---------------
1.10 3.10
---------------
2.00 19.10
---------------
1.40 5.20
---------------
0.60 0.53
---------------
0.80 35.28
---------------
1.65 20.48

---------------


- The known gold stockwork area of the Batoto project as previously reported covers an area of at least 3km by 3km which does not include the recent discovery of gold-silver and copper mineralization of porphyry style in the Santa Fe area. Recent work suggests that the known Batoto gold stockwork area of 3km by 3km may in fact be peripheral to this potentially higher grade gold-silver copper porphyry system. Field mapping and sampling is continuing at full speed in this area.

- Collection of a representative 50+ tonne bulk sample of the new gold-silver-copper porphyry discovery in Batoto Creek over an interval of nearly 200 metres has been completed and is currently waiting processing at the nearby JBMM CIP Plant that the Company has been using on a toll fee basis. This second sample follows very encouraging gold, silver and copper results of an earlier 11 tonne sample.

SECOND PHASE GEOPHYSICAL PROGRAM

A geophysical program of approx. 70 line km of induced polarization and magnetic surveys to help determine the extent of the new gold-silver-copper porphyry discovery at the Santa Fe zone is scheduled to commence in mid to late July. Line cutting and surveying has been in progress for two weeks.

DRILLING PROGRAM-UPDATE

A SUR Philippine affiliate company has advised that it has signed a contract with the Mines and Geosciences Bureau ("MGB") for the lease of a high capacity Longyear 44 diamond drill rig along with accessory equipment. In addition the MGB will provide certain experienced drilling personnel who will work with SUR's drilling consultant Mr Wayne McCallum. Mr McCallum has 30 years experience in the drilling industry with more than 10 years in the Philippines including the Comval district. The first phase of drilling is an initial 12,000 metre diamond drilling program.

SUR President Mr Rennie Blair says that "as indicated by the above summary of recent highlights when combined with the geophysical and drilling programs the next 6 months for SUR will be one of major progress. In addition we are in the final stages of processing of all regulatory requirements for approval for a medium scale CIP Plant to process high grade mineralization from our multitude of vein systems within the Comval Area."

All sampling is personally undertaken by experienced technical personnel who each have more.

than 15 years experience in correct sampling practices. Sampling practices are personally approved by Mr Rennie Blair Msc, FAusIMM, President of Sur American Gold Corporation who is a qualified person as defined by National Policy 43-101. The latest assaying was performed at the JBMM Laboratory at Monkayo, Compostela Valley Province using the 30g fire assay method.

This news release was prepared by Mr. Rennie Blair, Company President who is the qualified person as required by National Policy 43-101 and who is the technical person responsible for this news release.

Sur American Gold Corporation is a well financed junior exploration Company and trades on the TSX Venture Exchange (Canada) with trading symbol SUR-V.

On behalf of the board of directors

J. Rennie Blair, President


The TSX Venture Exchange has neither approved nor disapproved the contents of this news release.

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