Anaconda Gold Begins Third Phase Drill Program at Damoti Lake Gold Project.

TORONTO -- Mine Site Permitting Program Initiated

Anaconda Gold Corp. (TSX VENTURE:ANX) and Doublestar Resources Ltd. (TSX VENTURE:DSR) are pleased to report that a third phase drill program has started at their Damoti Lake gold project, located 200 km north of Yellowknife, N.W.T.

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

The 1,200-m drill program is designed to provide additional data from the Horseshoe deposit required to complete a new resource study - a key component of a feasibility study scheduled for completion this year.

The program is also designed to test new targets in the favourable banded iron formation unit approximately 200 m north of the Horseshoe zone. Three holes will be drilled from the west limb of the folded synclinal iron formation through to the east limb in order to test the area of the little explored Lookout zone in the west limb and for mineralization in the east limb at a depth of 200 m. The Horseshoe zone deposit is located in the east limb of the iron formation.

Last year, Anaconda Gold completed 2,721 m of drilling in two programs designed to confirm and better define resources in the Horseshoe deposit. This work was successful in generating numerous high grading intersections which confirmed the high grade nature of gold mineralization at Damoti Lake. (See Anaconda Gold press releases dated June 16, 2004, May 17, 2004 and December 21, 2004)

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.

The favourable iron formation unit strikes across the Damoti Lake claims for more than 12 km and has been duplicated by folding several times thereby increasing the potential of the property. 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.

Anaconda Gold and Doublestar Resource have also engaged Gartner Lee Limited to provide general design work for a water settling treatment plan and permit application assistance required for dewatering the decline ramp this summer.

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.

Anaconda Gold Corporation (TSX VENTURE:ANX)