Desert Sun Signs 'Protocol of Intentions' With State Government of Bahia, Brazil.

TORONTO -- Desert Sun Mining Corp. (TSX:DSM) announced today the signing of a 'Protocol of Intentions' by the State government of Bahia, Brazil. The receipt of Protocol from the State fulfills a major requirement prior to receipt of the final Operating Permit. Desert Sun is currently reactivating its gold mine and 4200 tonne per day (tpd) processing mill near the city of Jacobina, in the western region of the State of Bahia and expects to begin production in the first quarter of 2005.

The financial incentives contained in the Protocol enhance the viability of the Jacobina project. Desert Sun is very pleased with this tangible support from the State government and noted the following highlights:

- A key influencing factor the State government considered in issuing the 'Protocol of Intentions' is the fact that the reopening of the Jacobina mine site Project will strongly promote economic growth, the generation of much-needed high-quality jobs, and social development in central-northern Bahia.

- In recognition of the multi-million dollar investment being made by Desert Sun in reopening the mines, under its Constitution and State laws the State of Bahia grants to Desert Sun the following incentives:

-- Deferment of the ICMS (sales and services tax) on all importations of fixed assets required for the project. The deferred taxes will only be paid when dis-incorporating the assets

-- Deferment of ICMS on acquisitions of assets manufactured in Bahia

-- The State of Bahia will engage and support Desert Sun in negotiations with the Federal and Municipal Agencies seeking the reduction of 75% of the "Internal Revenue Tax" (Corporate Income Tax) for the next ten years, according to the legislation of the Northeast Brazil Development Superintendency (SUDENE)

-- The State of Bahia will assist the Company in obtaining all necessary Federal, State, and Municipal licenses

-- The State of Bahia will assist the Company in obtaining financing through public financing agencies: the Social and Economic Development Bank of Brazil (BNEDES), the State of Bahia Development Bank (DESENBAHIA) and the Northeast Bank of Brazil (BNB)

- State Governor Mr. Paulo Souto, in a recent meeting in Salvador with the President and Senior Management of Desert Sun stated: "The reopening of the Jacobina mines will bring to this economically depressed region of our State much needed support in terms of jobs and social security. The State of Bahia strongly supports such investments."

- Bahia's Secretary of Mines, Mr. Otto Alencar, while approving the paving by the State of the 11 km road that connects the mine site to the city of Jacobina, added: "The technical expertise and the commitment to a modern operation that Desert Sun brings to Jacobina and to Bahia gives us the assurance of a successful mining operation in terms of economic and regional growth, social well being and sound environmental practices."

- President of Desert Sun Mining, Mr. Stan Bharti, P.Eng., met with Mr. Souto, and Mr. Alencar, and stated: "We are committed to the reopening of the Jacobina mines and continuing to explore the large 160 km Bahia Gold Belt. We believe this Belt and the existing mines have the potential to become a major gold camp with benefits for both the State of Bahia and Brazil."

In conjunction with an extensive exploration program, the refurbishment of the 4200 tpd mill at Jacobina is well under way, the underground workings have been de-watered, heavy equipment is being ordered, and production is expected to commence in the first quarter of 2005. The mine plan contemplates average annual production of approximately 75,000 ounces of gold in 2005 and 108,000 ounces of gold per year from 2006 to 2011, at a cash cost of approximately US$190 per ounce.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements".

Desert Sun Mining is a Canadian gold exploration and development company listed on the Toronto Stock Exchange. (www.desertsunmining.com).