Mongolian Resource Play

[Tackler]

Asia Gold outlines Mongolian progress

2004-06-21 09:07 ET - News Release

Mr. Bill Trenaman reports

ASIA GOLD CORP.: EXPLORATION PROGRESS REPORT ON OYUT OVOO AND WESTERN GOBI PROJECTS, SOUTHERN MONGOLIA

Asia Gold Corp. has released results on the early progress of the company's $4.7-million 2004 exploration program on a variety of gold and copper targets in Mongolia's south Gobi region. Asia Gold holds a 100-per-cent interest in two groups of mineral exploration licences totalling 39,540 square kilometres, one of the largest and most prospective mineral exploration holdings in Mongolia.

Oyut Ovoo project -- 3,730 square kilometres (reported in Stockwatch Jan. 8, 2004)

A first-stage scout diamond-drilling program on the Oyut Ovoo project was completed in May. Six holes totalling 1,715 metres were drilled to test two targets within an area of about four square kilometres.

The first target is a skarn-intrusive complex with widespread surface copper mineralization coincident with induced polarization (IP) chargeability and magnetic anomalies. Five holes, OVD-1 to OVD-5, drilled to test the target intersected minor amounts of copper mineralization associated with pyrite in epidote-magnetite skarn intervals.

The second target is a large IP anomaly (D002), about one kilometre southeast of the first target. One hole, OVD-6, was drilled to test the second target. OVD-6 intersected anomalous copper mineralization in weakly altered granite between downhole depths of 120 metres and 243 metres. Three highly anomalous copper intersections were recorded in this interval: 15 metres averaging 0.14 per cent copper, 12 metres of 0.21 per cent copper and six metres of 0.28 per cent copper. A table of drill results for OVD-6 will be posted to Asia Gold's website at www.asiagold.com.

Further work is planned to fully evaluate the highly anomalous copper mineralization discovered in OVD-6 and define the full extent of the D002 IP chargeability anomaly.

The Oyut Ovoo property comprises five contiguous mineral licences in south central Mongolia, about 300 kilometres north of Ivanhoe Mines' Oyu Tolgoi copper-gold project. Copper-gold mineralization associated with skarns and hydrothermal breccias is widespread on the property over an area of approximately three square kilometres.

Western Gobi property -- 35,810 square kilometres

Dune epithermal-gold prospect (reported in Stockwatch March 4, 2004)

A first-stage scout diamond-drilling program on the Dune epithermal-gold vein prospect, comprising 918 metres in six holes, was completed in June. Three of the six holes intersected the vein structure at depths of up to 75 metres below surface. Three holes were abandoned at shallow depths due to difficult ground conditions. Assays are pending for the three holes that intersected the vein structure.

Asia Gold plans to start a second-stage drill program at Dune in early July to test the down-dip extension of the epithermal vein system along the known 450-metre surface strike length. The second-stage drilling program will consist of about 10 shallow holes totalling between 600 metres to 800 metres. An IP survey is in progress at Dune to explore for new targets associated with a large rhyolite dome that occurs in the footwall of the epithermal vein system.

The Western Gobi property is located within the major tectonic belt that hosts the Oyu Tolgoi deposit and other large-scale gold and copper-gold deposits in the Tian Shan mineral belt. The geology of the Western Gobi property comprises volcanics, sediments and intrusives of lower to mid-Paleozoic age that were deposited in both island-arc and continental margin environments. The eastern boundary of the Western Gobi property is about 150 kilometres west of the Oyu Tolgoi project.

The diamond drilling programs at Oyut Ovoo and Dune were performed by CanAsia Drilling of Ulaanbaatar, Mongolia. Drill core samples were prepared and analyzed by Analabs Pty. Ltd. of Ulaanbaatar. Analabs is a subsidiary of SGS Limited, an ISO-accredited Australian analytical company. The Oyut Ovoo and Dune sampling and assay programs were conducted pursuant to international standard quality assurance and quality control procedures.

Yagaan epithermal gold prospect (reported in Stockwatch Jan. 14, 2004)

A large-scale exploration program -- consisting of detailed and regional geological mapping, geochemical sampling, trenching and IP -- was started on the Yagaan prospect in May. Diamond drilling is planned to start in late July. Epithermal gold mineralization occurs at Yagaan in sheeted and stockwork quartz veins and breccias associated with a large gossanous rhyolite complex that forms a prominent topographic feature.

Reconnaissance exploration

Reconnaissance exploration on the large and prospective West Gobi project resumed in May, 2004. The objective is to develop a pipeline of new gold and copper-gold targets for detailed exploration and diamond drilling during the 2004 field program. Expert analysis of a comprehensive regional geological database is providing new targets for field follow-up. The Har Temee and Ridgeline hydrothermal alteration systems, identified by reconnaissance work in 2003, were mapped and sampled in May. Asia Gold plans to conduct IP surveys on these targets after completion of the Dune IP survey.

Asia Gold is conducting its 2004 Mongolian exploration program with a highly qualified and experienced team of 12 exploration geologists and two geophysical crews. Expenditures to the end of May, 2004, are approximately $500,000.