South American Gold and Copper Company Limited Announces First Production at Pimenton, Assay Results of the Lucho Vein and a Private Placement Financing



    /NOT TO BE DISTRIBUTED OR DISSEMINATED IN THE U.S./

    TORONTO, Aug. 13 /CNW/ - South American Gold and Copper Company Limited
("SAGC" or the "Company") (TSX-SAG) announced today that Pimenton has made its
first shipment of 2,000 kilograms of Knelson gold concentrates and 15 tons of
copper/gold concentrates to the Codelco smelter at Ventanas, Chile. This first
batch of Knelson gold concentrates and copper/gold concentrates was from
development ore taken from the Esperanza adit. Assay results will be available
when Alfred H. Knight, an internationally recognized laboratory and our
representative at the Codelco smelter, completes its assays of the Knelson
gold concentrates and copper/gold concentrates.
    The plant at Pimenton is in the commissioning period and therefore
production of Knelson concentrates and the copper gold concentrates will be
applied to development costs. Commercial production will be declared when the
mine reaches production levels of 50% of its planned production rate of
200 tons per day. At 100 tons per day, annual production of gold will be
approximately 14,375 ounces and 33 tons of copper at a projected total cash
cost per ounce (including smelter costs, exploration and development costs,
plant costs and administration costs but excluding depreciation and
amortization costs) of approximately US $540 based on current costs.
    The Company also announced that it has intercepted the three known veins
on the Esperanza adit at Pimenton, the Michelle, the Leyton and the Lucho.
Michelle is 503 meters into the adit, Leyton is 579 meters into the adit and
Lucho is 635 meters into the adit. In addition at least three other
gold/copper veins have been intercepted in the Esperanza adit on which further
exploration work will be conducted.
    Assay results of channel samples taken every two meters from Lucho Sur
and Lucho Norte are shown below:

    
    LUCHO SUR
                           Certificate of Analysis
                       Prepared by the Assay Laboratory
                                 at Pimenton
                                                   --------------------------
                                                    gr/ton  %   gr/ton
    -------------------------------------------------------------------
                       Au    CuT    Ag
    Channel  TICKET  gr/ton   %   gr/ton Width LUCHO  Au    Cu    Ag   Width
    -------------------------------------------------------------------------
    1        13091 A  2.54  0.10    6.9   0.30  Sur  7.29  0.52  12.19  0.70
    -----------------------------------------------
    1        13092 B  38.9  3.18   50.2   0.10  Sur
    -----------------------------------------------
    1        13093 C  1.51  0.06    4.8   0.30  Sur
    -------------------------------------------------------------------------
    2        13094 A  3.60  0.08    6.7   0.50  Sur 18.76  0.81  25.13  1.20
    -----------------------------------------------
    2        13095 B  66.8  4.50  114.5   0.20  Sur
    -----------------------------------------------
    2        13096 C  14.7  0.07    7.8   0.50  Sur
    -------------------------------------------------------------------------
    3        13097 A  22.7  0.45   16.7   0.40  Sur 22.64  0.69  23.84  0.80
    -----------------------------------------------
    3        13098 B  81.3  3.40   82.2   0.10  Sur
    -----------------------------------------------
    3        13099 C  3.00  0.10   13.9   0.30  Sur
    -------------------------------------------------------------------------
    4        13100 A  17.5  1.34   38.2   0.30  Sur 26.76  1.13  28.69  1.00
    -----------------------------------------------
    4        13101 B  85.9  3.50   66.9   0.20  Sur
    -----------------------------------------------
    4        13102 C  8.65  0.06    7.7   0.50  Sur
    -------------------------------------------------------------------------
    5        13164    8.00  0.04   34.0   1.00  Sur 18.89  0.06  22.32  1.90
    -----------------------------------------------
    5        13165   85.00  0.17   18.0   0.30  Sur
    -----------------------------------------------
    5        13166     4.0  0.03    5.0   0.60  Sur
    -------------------------------------------------------------------------
    6        13167    4.00  0.76   14.0   0.50  Sur  9.43  0.41  18.00  1.75
    -----------------------------------------------
    6        13168   34.00  1.25   46.0   0.25  Sur
    -----------------------------------------------
    6        13169     6.0  0.03   13.0   1.00  Sur
    -------------------------------------------------------------------------
     Average Over 12 Meters of Strike Length equals 16.99  0.52  21.81  1.23
    -------------------------------------------------------------------------

    LUCHO NORTE

                                                   --------------------------
                                                    gr/ton  %   gr/ton
    -------------------------------------------------------------------
             TICKET    Au    CuT    Ag
    Channel    No.   gr/ton   %   gr/ton Width LUCHO  Au    Cu    Ag   Width
    -------------------------------------------------------------------------
    1        13103 A  7.18  0.40    7.7   0.30 Norte 33.91  2.13  47.05  1.05
    -------------------------------------------------
    1        13104 B  94.6  5.92  127.8   0.35 Norte
    -------------------------------------------------
    1        13105 C  0.86  0.11    5.9   0.40 Norte
    -------------------------------------------------------------------------
    2        13106 A  5.30  0.13   13.8   0.30 Norte 23.29  2.04  31.95  0.85
    -------------------------------------------------
    2        13107 B  71.9  6.66   88.6   0.25 Norte
    -------------------------------------------------
    2        13108 C  0.78  0.09    2.9   0.30 Norte
    -------------------------------------------------------------------------
    3        13109 A  14.8  0.24    9.9   0.20 Norte 65.91  2.14  29.34  1.10
    -------------------------------------------------
    3        13110 B  61.4  8.81   68.5   0.20 Norte
    -------------------------------------------------
    3        13111 C  81.8  0.78   23.7   0.70 Norte
    -------------------------------------------------------------------------
    4        13170     2.0  0.06    9.0   0.40 Norte 30.91  2.04  50.50  1.60
    -------------------------------------------------
    4        13171   105.0  9.01  206.0   0.35 Norte
    -------------------------------------------------
    4        13172    14.0  0.10    6.0   0.85 Norte
    -------------------------------------------------------------------------
    5        13173    4.00  0.09    4.0   0.35 Norte 59.65  1.10  17.05  1.00
    -------------------------------------------------
    5        13174   193.0  3.54   51.0   0.30 Norte
    -------------------------------------------------
    5        13175     1.0  0.03    1.0   0.35 Norte
    -------------------------------------------------
    Average Over 10 Meters of Strike Length equals   42.32  1.91  36.91  0.93
    -------------------------------------------------------------------------
    

    These assay results are by fire assay conducted by the Company's own
assay laboratory at Pimenton. This news release relating to the assay results
taken from Lucho Sur and Lucho Norte has been reviewed and approved by William
Hill, P. Eng., who is a Director of the Company and a qualified person under
Canadian Instrument 43-101.
    Assay results of the Michelle and Leyton veins are currently in process
and will be made available when completed.
    The Company also announced that it has filed with the Toronto Stock
Exchange a non-brokered private placement financing of up to 42,000,000 Units
at Cdn $0.05 per unit or up to Cdn $2,100,000 on a best efforts basis. Each
Unit will consist of one common share and one half purchase warrant. Each
whole warrant will be exercisable into one common share at Cdn $0.07 for a
period of 24 months from the date of closing. The proceeds of the financing
will be used for production expansion and to cover a working capital shortfall
caused by delays in the receipt of certain plant equipment which did not
enable the plant to start full operations until mid July. In the meantime,
mining development operations at Pimenton continued. The delay in starting
plant operations has caused a working capital shortfall of approximately
$1,600,000.
    Three Directors, two of whom are also officers of the Company, have
subscribed for Cdn $1,100,000 (22,000,000 units) and to date friends of the
Company have subscribed for an additional Cdn $613,320 (12,266,400 units) of
this Cdn $2,100,000 private placement financing which is subject to the
Toronto Stock Exchange's final approval.
    South American Gold and Copper Company Limited is a minerals producing,
exploration and development company with properties and activities currently
focused in Chile.

    "Cautionary Statement Regarding Forward-Looking Information. Except for
statements of historical fact, all statements and information in this press
release, including without limitation, statements and information regarding
Pimenton, the Codelco smelter at Ventanas, Chile, the Michelle, the Leyton and
the Lucho veins at Pimenton, new projects, forecasted production, future
plans, financing requirements, objectives and results constitute
forward-looking information within the meaning of applicable Canadian
securities legislation, which involve risks, uncertainties and assumptions,
many of which are beyond our control. All such forward-looking information is
based on certain assumptions and analyses made by us in light of our
experience and perception of historical trends, current conditions and
expected future developments, as well as other factors we believe are
appropriate in the circumstances. Actual results, performance or achievements
could differ materially from those expressed in, or implied by, such forward
looking information and, accordingly, no assurance can be given that any of
the events anticipated by the forward-looking information will transpire or
occur, or if any of them do so, what benefits will be derived there from.
Except as required by law, South American Gold and Copper Company Limited and
its subsidiaries expressly disclaim any intention or obligation to update or
revise any forward-looking information, whether as a result of new
information, future events or otherwise.
    The forward-looking information contained herein is expressly qualified
by this cautionary statement."





For further information:

For further information: Registered Office: 100 WELLINGTON STREET WEST,
SUITE 500, TORONTO, ONTARIO, M5K 1H1, CANADA; New York Representative Office:
420 MADISON AVENUE, NEW YORK, NY, 10017, (212) 751-0083; Santiago Office: LA
CONCEPCION 266, OF. 704, PROVIDENCIA, SANTIAGO, CHILE, Telephone:
56-2-264-2295, E-Mail: sagc@sagchile.cl; For further information, contact:
Stephen W. Houghton, C.E.O., Dr. David R.S. Thomson, E.V.P., Exploration,
Telephone: 56-2-264-2295, Website: www.sagc.com


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