El Misti Gold Limited Announces Commercial Production Agreement Signed.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Dec. 18, 1998--El Misti Gold Limited (VSE:EMG) announces the following:

The board of directors is pleased to announce an agreement with Roca Fuerte S.R.L. of Peru to begin commercial production on our 900 hectare (2224 acres) SAND DOS property in the District of Tintay, in the Department of Apurimac, approximately 1000 kilometers south of Lima, Peru. El Misti Gold is participating via our wholly owned Peruvian subsidiary, El Misti Gold S.A. The property has been in the company's portfolio of properties since the inception of the company.

Roca Fuerte have been field testing their proposed production process. Essentially the process is suction dredge to a Knelson concentrator. The concentrate will then be trucked to the Buenaventura smelter in Arequipa. Assays made by the Renasa Laboratory on behalf of Roca Fuerte who report their tests have averaged 172 grams of gold per metric tonne of concentrate. The concentration ratio has averaged 600:1 in production tests. Roca Fuerte plans to operate the project at a rate of 10,000 metric tonnes per day (4000 cubic meters) beginning in June 1999. Initial production will hit 5000 tonnes per day (2000 cubic meters) in April 1999. Both production rates and dates of productions are guaranteed by Roca Fuerte within the agreement.

The agreement with Roca Fuerte provides that El Misti Gold Limited will receive a royalty on gold produced by Roca Fuerte. A royalty of 7% will be paid at a gold price of US$325/oz or less. The royalty is variable with the price of gold as shown below:

-- The royalty increases to 7.5% if the price of gold is

US$ 325 - US$ 350

-- The royalty increases to 8.0% if the price of gold is

US$ 350 - US$ 375

-- The royalty increases to 8.5% if the price of gold is

US$ 375 - US$ 400

-- The royalty increases to 9.0% if the price of gold is

US$ 400 or above

NON BROKERED PRIVATE PLACEMENT $800,000

The directors wish to announce a private placement of up to 4,000,000 units at a price of 20(cent) per unit. Each unit will comprise one common share and one non-transferable share purchase warrant. Each non transferable share purchase warrant will entitle the holder to purchase one additional common share in the capital of the company for a period of one year from the date of issue at an exercise price of Cdn$0.25. A commission will be payable on the majority of the private placement.

The proceeds of the private placement will be used to pay Sinchao drill program costs, Santa Rosa property costs, convertible debenture interest and general working capital.

The above placement is subject to acceptance for filing by the Vancouver Stock Exchange.

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

On behalf of the Board,

(signed)

John Huguet

Chairman & CEO