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El Misti Gold Limited - Announcement.

VANCOUVER, B.C.--(BUSINESS WIRE)--July 20, 1998--

SINCHAO PROJECT ASSAY VARIATIONS

The initial results of the comparison between the "Air Classification Coarse Gold Fire Assay Method" (CGA) using hammer mill sample preparation and the normal fire assay method are depicted below(a) in graphical form for 44 samples of gold. Similar results were obtained for copper and silver values.

This significant variation has caused a decision to apply the "Air Classification Coarse Gold Assay Method" over all 1998 diamond drill results which have been determined to be "Representative Samples".

Representative samples are defined as those samples that have a recovery of 80% or higher as verified through our Quality Assurance Program.

(a) For a hard copy of the graph, please call 1-800-866-4736/416-597-3100

SINCHAO DRILLING - UPDATE

Listed below is the status of physical progress for diamond drilling to July 15, 1998:

HOLE SDH-02: Was completed at 629.7 meters (true depth of 545.3

meters) as previously reported. Assays have been received for the entire hole. CGA (Coarse Gold Assay) awaited.

HOLE SDH-03: Was completed at 492 meters (true depth of 475.2

meters). Assays have been received for the entire hole. CGA awaited.

HOLE SDH-05: Hole was completed at 498.7 meters (true depth of

434.5 meters). Assays have been received to 472 meters. CGA awaited.

HOLE SDH-06: Hole was completed at 816.5 meters (true depth of

740.0 meters). Assays have been received to 690 meters. CGA awaited.

HOLE SDH-07: Current depth 789 meters (true depth of 683.3

meters). Awaiting all assays.

HOLE SDH-08: Current depth 447 meters (true depth of 387.1

meters). Awaiting all assays.

HOLE SDH-09: Hole abandoned at 158.1 meters (true depth of

136.9 meters). Awaiting all assays.

HOLE SDH-10: Current depth 84 meters (true depth of 136.9

meters). Awaiting all assays.

For a hard copy of the map, please call 1-800-866-4736/ 416-597-3100

Holes 1 and 4 were abandoned at shallow depths due to ground conditions. Drilling has indicated widespread mineralization containing Gold, Silver, Copper and Zinc.

DEVELOPMENT CONCEPT - SINCHAO

The Company's development concept at Sinchao embraces open pit mining using electric power, single stage crushing, as well as two stage grinding and flotation facilities. Leaching of the bulk concentrates using hydrometallurgical approaches will be employed in order to produce copper and zinc metal and gold and silver bullion.

The Company's preliminary economic evaluation indicates the importance of a low cost energy source for the project, both in terms of operating and capital cost. The Company has identified such a source and steps are being taken to secure this supply.

The results of these discussions will be released in later news releases. Additionally, a high-grade starter feed resource needs to be established in order to accelerate the repayment of the capital cost. Preliminary indications suggest target recoveries of 80% for Copper, 50-70% for Zinc, Silver and Gold.

These results are based upon flotation testwork that the Company completed where 90% of the Copper, Zinc, Silver and Gold contents of the feed samples reported to the bulk concentrates.

The conceptual economic model will be further defined as metallurgical testwork proceeds and the evaluation of the power project is completed. The Company is preparing three potential flow sheets for metallurgical and ultimately economic evaluation.

Initially, bench scale tests will be conducted.

SANTA ROSA PRE-FEASIBILITY

The Company has retained Roscoe Postle Associates to complete a pre-feasibility study for the Santa Rosa project using the conventional carbon in pulp treatment.

Estimated completion time is October 31, 1998. Metallurgical results have indicated that the most viable option is to use the Dodd/Sceresini Transportable Treatment Plant with evaluation of the 2000 - 3000 TPD alternatives.

El Misti has completed 143 holes at Santa Rosa. The mine produced gold from 1990- 1994. Metallurgical test work, a preliminary open Pit Design and Block Modeling have been completed.

Metallurgical test work using Atomaer Reactor technology has been received from K.D Engineering out of Tucson Arizona. This testwork has indicated acceptable recoveries of gold and silver from oxide and sulphide samples.

SAN NICOLAS PRE-FEASIBILITY STUDY

The Company has retained Roscoe Postle Associates to complete a pre-feasibility study on the San Nicolas Mine and Heap Leach Operations. The San Nicolas Plant and Heap Leach Operations are conveniently located 3 km from the Sinchao Property and the San Nicolas Mine.

Pre-Feasibility studies will include the evaluation of the Consulado Project and the Sinchao high grade mantos mineralization. The pre-feasibility will encompass resource estimates. Open pit mine design and metallurgical evaluation will be done using alternative hydrometallurgical technology and environmental assessment.

Based on recommendations from Independent Consultants, the Company is planning to drill 2010 meters at Consulado in 21 holes as well as 3,000 meters of reverse circulation drilling on the Sinchao mantos in 15 holes in order to establish resource estimates.

The estimated completion date for the pre-feasibility study is December 31, 1998.

ON BEHALF OF THE BOARD (Signed) (Signed) ROBIN A. SLAUGHTER, President & CEO JOHN F. HUGUET,

Executive Chairman

The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release

 CONTACT: El Misti Gold
 Robin A. Slaughter, 888/356-4784


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Publication:Business Wire
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Geographic Code:1CANA
Date:Jul 20, 1998
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