Latin American Gold to purchase majority stake in Ecuador JV partner; LAG also exchanges 20% of one future project for $30 million note, thereby strengthening the company's financial condition.

GREENWICH, Conn.--(BUSINESS WIRE)--August 9, 1995--Latin American Gold Ltd. (LAG) has agreed to purchase an additional 10.1 percent of Compania Minera Zamora S.A. (Cominzasa), which will increase to 50.1 percent its equity interest in this Ecuador gold company, it was announced today by Gerard E. Munera, chairman and chief executive officer of LAG.

"LAG is fully committed to our Ecuador gold properties, where we have had very encouraging drill results. Furthermore, South American Gold Investors Ltd. (SAGI), has acquired 20 of LAG's previous 50 percent direct interest in Las Banderas. In return, LAG's U.S.$30 million non-recourse note held by SAGI, the largest investor in LAG, was cancelled. The cancellation of this note considerably strengthens LAG's financial condition," Munera said.

Las Banderas is a 5,000-acre gold property adjacent to the Guayzimi Alto tenement in Ecuador currently being explored by Cominzasa. The geological setting of this tenement is believed to be similar to that of Guayzimi Alto. Significant gold mineralization has been discovered at Guayzimi Alto in the first phase of a drill program begun in 1995. The second phase of drilling began in July at Guayzimi Alto and exploration at Las Banderas will commence this month.

In one of two steps that will increase LAG's interest in Cominzasa from 40 percent to 50.1 percent, LAG has signed a memorandum of understanding with three current shareholders of Cominzasa to purchase 5.92 percent of that company for U.S.$3.7 million plus 268,768 warrants. Each warrant would entitle the holder to acquire one share of LAG common stock until July 31, 2000. The price of each LAG common share sold to warrant holders would be U.S.$8.25 plus the amount each LAG share is selling above U.S.$20.00 at the time of the exercise of the warrants. LAG some time earlier had acquired an option to purchase 4.18 percent of Cominzasa, prior to Sept. 1, 1995, for $1.6 million.

While Latin American Gold has focused primarily on its prospective properties on the Nambija Gold Trend in Southeastern Ecuador, it also holds a prospective gold property at Kilometer 88 in Venezuela. LAG's shares are traded in the Canadian Dealing Network under the symbol LAGD.

Note: No regulatory authority has reviewed this news release prior to its distribution

CONTACT: James F. Hill, 800-204-1847