Cerro Dorado, Inc. Enters Into Agreements to Acquire Three Significant Gold/Copper Projects in Chile.

SALT LAKE CITY--(BUSINESS WIRE)--Oct. 1, 1999--

Cerro Dorado, Inc. (OTC-BB:CDCH) is pleased to announce that it has signed Letter of Intent Agreements with Fremont Gold Corporation to acquire controlling interests (80 to 100%) in three significant gold/copper projects in northern Chile. It is the intention of Cerro Dorado and Fremont Gold that the Letters of Intent will be replaced by formal, signed option agreements on or before October 10, 1999.

The properties being acquired and the terms of the agreements are as follows:

CENIZAS: Porphyry Cu-Au project under option form RTZ 

Encompassing over 13,000 hectares of exploitation and exploration claims, the Cenizas project is situated along the West Fissure Fault Zone (WFFZ) midway between the Escondida and El Salvador porphyry copper deposits in northern Chile. A number of operating, world-class mines are situated along the WFFZ, including Chuquicamata (CODELCO), El Abra (Cyprus Amax), Quebrada Blanca (Cominco) and Collahuasi (Minorco). Although this part of Chile is known as the most productive copper province in the world, the gold content of WFFZ-controlled copper deposits is known to increase progressively toward the southern end of the belt, where the Cenizas project is located.

Prior work undertaken by Rio Tinto Mining & Exploration Ltd. has included geochemical sampling, geologic mapping, IP, ground mag and resistivity surveys, as well as limited trenching and shallow drilling. Work to date has defined a large area of hydrothermal alteration and significant associated gold mineralization along the WWFZ portion of the property. Numerous drill targets have been identified.

Fremont Gold has agreed to assign all of its rights and interests in its December 1998 agreement with Rio Tinto for US$25,000 and 100,000 Restricted Common shares of Cerro Dorado.

The underlying agreement with Rio Tinto requires a minimum exploration expenditure of US$200,000 by December 11, 1999, with US$300,000 and US$500,000 exploration expenditures required during 2000 and 2001, respectively. Upon completion of the work commitments, Cerro Dorado would be required to make a US$250,000 cash payment to Rio Tinto to earn its l00% interest.

Resguardo: Large gold resource with significant upside potential 

Located 80 km north of Copiapo, the 5,300 hectare Resguardo project encompasses an 9+ km long segment of the Atacama Fault, a significant regional structure and one of the most important metallogenic features in Northern Chile. The Resguardo property has a similar geological setting to that of Phelps Dodge's Candelaria mine, located 100 km along the same regional structure (in 1997, Candelaria produced 97,500 oz Au and 340 million lbs. Cu).

At Resguardo, gold mineralization is hosted within and adjacent to the Atacama Fault Zone. Prior drilling by Fremont Gold on one small portion of the main shear zone identified a zone of continuous mineralization over 700 meters long that remains open along strike and down dip. An independent resource calculation on this zone indicates a contained gold resource of between 118,000 and 384,000 ounces at an average grade of approximately 1 g/t Au.

Apart from the main shear structure, numerous other targets on the property have not been fully tested. Follow-up drilling is warranted on several other target areas, including one exploration hole that intercepted 23 meters averaging 4.04 g/t Au. There are also a number of copper showings in the property that have not been sampled or drilled.

Cerro Dorado will be granted an option to earn an 80% interest in the Resguardo property by agreeing to assume the terms of Fremont Gold's underlying lease agreement; CDCH will be required to spend a cumulative total of US$1.5 million on exploration, with minimum expenditures of US$100,000 and US$200,000 prior to October 2000 and 2001, respectively. Cerro Dorado is negotiating a first right of refusal over Fremont Gold's remaining 20% interest, while the owners will retain a 5% NSR on gold and a 1.5% NSR on all other minerals produced from the Resguardo project.

MILAGRO: A high-grade, manto-style gold deposit

At the Milagro project, located about 60 km south of Copiapo, old open pit and underground workings along a 1+ km strike length, exhibit extensive alteration and disseminated/sediment-hosted mineralization over significant widths and continuing along strike. There are signs of epithermal mineralization elsewhere on the property.

Fremont Gold previously entered into an option agreement with Sali Hochschild S.A. in May 1998 to acquire a 70% interest in Milagro by completing certain annual exploration work, including a bankable feasibility study, within a 4-year period. Fremont Gold has agreed to assign all of its rights and interests in the Milagro property to Cerro Dorado in return for 100,000 restricted CDCH Common shares, plus a commitment for a minimum US$50,000 private placement financing into Fremont Gold.

Note: This News Release may contain certain "forward-looking statements" within the meaning of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Cerro Dorado Inc. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future could differ materially from those anticipate in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed under the heading "Risk Factors" and elsewhere in documents filed from time to time with the United States Securities and Exchange Commission and other regulatory authorities.