Southwestern Gold/Global Pacific: Joint Venture Contract Signed.

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Aug. 22, 1997--Southwestern Gold Co (TSE SWG.) Global-Pacific Miner(VSE GPJ.) Southwestern Gold Corporation (SWG-T) and Global-Pacific Minerals Inc., (GPJ-V) have successfully finalized a formal agreement to explore a large land package within the main gold belt of Inner Mongolia, China.

The Equity Joint Venture Contract was signed with Hohhot City Changdi Technology Development Industry Company, a subsidiary of Inner Mongolia Geological Exploration Bureau of the China National Nonferrous Metals Industry Corporation (CNNC) and together with the partners are establishing the Inner Mongolia Huadi Mining Co. Ltd. to operate the Joint Venture.

The Joint Venture area is located approximately 650 kilometres northwest of Beijing in easily accessible desert country in the southern part of the Inner Mongolia Plateau, just west of the giant Bayan Obo iron-rare earth mine which has established excellent infrastructure. Within the Joint Venture area, a total of 1,345 square kilometres of exploration permits have been approved and a further 800 square kilometres of exploration permits have been applied for and approvals are expected shortly. Permit applications are made by CNNC on behalf of the Joint Venture.

The Joint Venture area is well located within the main gold belt crossing Inner Mongolia. The belt is defined by a folded sequence of Proterozoic metasediments intruded by Hercynian granitoids and the region resembles the Tian Shan gold belt in the former U.S.S.R. which hosts more than 200 million ounces of gold in a number of giant deposits.

The Joint Venture area, which contains numerous gold occurrences and widespread placer deposits (and copper-zinc-iron prospects) has never been subjected to any systematic modern exploration. Work to-date has identified several target zones with the potential to host world class, bulk mineable gold deposits.

The prime target zone is a 70 to 90 kilometre long belt of carbonaceous metasediments and deformed granitoids on the southern margin of a Hercynian granite batholith. Four gold prospects within this zone have a total strike length of 18 kilometres. Initial trench sampling of one of these prospects has returned grades of 1.14 g/t gold over a width of 68 metres, including 18 metres of 2.2 g/t gold. Reported grades by CNNC include 2 g/t gold over 50 metres. Further west along the same belt, grades of up to 5 g/t gold over 5 to 15 metres have been obtained. Each of the four identified gold prospects has been the focus of small scale hard rock mining and alluvial operations by locals.

Three other target areas occupying 20 square kilometres have been identified within the granted permits. These are to the south and east of the prime target zone above and are characterized by similar lithological settings. All of the gold mineralization within these environments is localized by pronounced structural traps including mega shear zones and fold hinges. Each of these three target areas exhibit numerous small scale hard-rock gold workings and all have locally sourced placer deposits.

Work by the Joint Venture includes reconnaissance and detailed mapping, structural studies, geochemical and geophysical surveys and prospect trenching. Drill targets are being defined on all seven of the main target areas identified to date.

Under the terms of the Joint Venture Contract, Southwestern Gold and Global-Pacific can jointly earn an 80 percent interest in the project by spending US$ 2.8 million on exploration over a four year period. Once an 80 percent interest is earned, Southwestern will have a 58 percent working interest and Global-Pacific a 24 percent working interest in the foreign joint venture company.

The Joint Venture Contract, which is based on terms previously approved by the Inner Mongolia Provincial Planning Commission has been submitted for approval by provincial authorities responsible for foreign investment.

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CONTACT: Southwestern Gold Corporation

George H. Plewes, 604/669-2525

604/688-5175 (FAX)

or

Southwestern Gold Corporation

John G. Paterson, 604/ 669-2525

604/688-5175 (FAX)

or

Global-Pacific Minerals Inc.

Rui Feng, 604/689-9397

604/689-7654 (FAX)

or

Global-Pacific Minerals Inc.

Brian Findlay, 604/689-9397

604/689-7654 (FAX)