Anaconda Drills High Grade Intersection at Damoti Lake Gold Project.

TORONTO -- Step Out Hole Extends Mineralization

Anaconda Gold Corp. (TSX VENTURE:ANX) is pleased to report that drilling at its Damoti Lake gold project, located 200 km north of Yellowknife, N.W.T. has generated another high grading intersection.

Step out hole D05-375, drilled to test one of the lenses in the Horseshoe zone, intersected 3.61 m grading 33.88 grams gold per tonne. The hole was successful in extending a high grade lense by 6 m towards the south.

Anaconda has the right to earn a 55% interest in the 4,660-hectare project from Doublestar Resources (TSX VENTURE:DSR) by spending $2.5 million over a four-year period.

Anaconda completed 1,470 m of drilling in 13 holes during this third phase drilling program. The majority of the program focused on drilling exploration targets outside of the Horseshoe zone deposit.

Results from the program are listed below.

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Hole   From (m)  To (m)  Intersection  Grade        Notes
                             (m)       (g/t)
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365        14.0   17.02     3.02        2.04 Exploration hole
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369      227.23  228.40     1.17        7.71 Exploration hole
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370       227.5  229.24     1.74        4.04 Exploration hole
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371       26.22   26.59     0.37        4.71 Exploration hole
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373        35.4   37.63     2.23        4.55 Exploration hole
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374      103.60  106.10     2.50       11.68 Exploration hole
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375       74.40   78.01     3.61       33.88 Horseshoe step out hole
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The other six exploration holes completed in this program had no significant values.

Hole 374, drilled 100 m north of the Horseshoe zone deposit, was successful in intersecting 2.5 m grading 11.68 grams gold per tonne. Hole 369 and 370, were drilled to test an iron formation unit 100 m west of the Horseshoe zone deposit which historically had seen little drilling. Drilling in these two areas generated encouraging results which require follow-up work.

From 1992 to 1997, more than 40,000 m of drilling was completed by Quest International Resources and other previous operators on a property-wide exploration program which tested numerous gold showings and targets.

This historic work, completed in 1997, led to the estimate of resources in the Horseshoe zone totaling 455,685 tonnes grading 15.97 grams gold per tonne, according to Quest International Resources, the previous operator.

Although these historical resource estimates were not completed in accordance with National Instrument 43-101 standards, management of Anaconda believe these historical results to be relevant.

True thicknesses for the holes listed above are difficult to estimate at this time and will require additional drilling before an accurate determination can be made.

The Horseshoe zone is characterized by high grade gold mineralization associated with sulphides and quartz veining hosted in the fold closure of an amphibolite iron formation. This favourable iron formation unit strikes across the Damoti Lake claims for more than 12 km. At least 13 exploration targets outside of the Horseshoe zone have been identified warranting additional exploration work.

In 1996, limited underground development via a decline ramp to the 40-m level was successful in delineating one of the high grade lenses of gold mineralization in the Horseshoe zone. The decline ramp remains in good condition and provides convenient access to the mineralized zones for future underground exploration.

Assays were completed by ALS Chemex, an accredited assay lab which has attained ISO 9002 certification for all of its North American testing facilities.

Philip Walford, P. Geo., is designated the Qualified Person as defined by NI-43-101 and has read and reviewed the contents of this press release.

The statements made in this press release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. The TSX Venture Exchange  has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

The historical resource estimates referred to above were prepared prior to NI 43-101 by or on behalf of previous operators. The relevance, reliability and comparability of these previous estimates to current standards have not yet been determined. In some cases, the primary data no longer exists or is incomplete and some holes may require re-drilling. Anaconda Gold Corp. has not done the work necessary to verify the resource categories and is not treating them as current resources under NI 43-101. As a result, the public should not rely on these estimates.

Anaconda Gold Corporation (TSX VENTURE:ANX)