Southwestern Gold - Letter Agreement Signed with Cominco Limited - Minaspata Property, Peru.

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 28, 1996-- Southwestern Gold Corporation (SWG- TSE) is pleased to announce that the Abancay Joint Venture has signed a letter agreement with Cominco Limited on the Minaspata Property in Peru. The Abancay Joint Venture is comprised of Southwestern 50 percent, Cambior (CBJ-T, ME, Amex) 41.5 percent and Cambiex (CBX- TSE, ME) 8.5 percent. Located 110 kilometres southwest of Cuzco, the Minaspata Property is comprised of 28,600 hectares of exploration concessions.

Underlying the property is a gold system associated with quartz- alunite alteration within Tertiary volcanics extending for about 1200 metres by 600 metres. Vertical sampling of silicified ledges returned values of 60 metres 0.9 g/t gold and 50 metres of 0.7 g/t gold with 10 m intervals of up to 1.73 g/t gold. Also located on the property is the eastern extension of the porphyry Cu/Mo system on Southwestern's Pistoro property. Cominco is presently drilling on the Pistoro property.

Terms of the agreement allow for Cominco to earn 50 percent of the Minaspata Property by fulfilling the following:

a) Cash payments of U.S. $2,800,000 over the next three years including U.S. $400,000 on signing;

b) drilling of 10,000 metres over the next three years including a minimum of 2,500 metres in the first year.

Upon the completion of the above, Cominco will have earned 50 percent of the property. Cominco has 30 days to perform a due diligence on the mineral tenure of the property and once completed plans a drilling program as soon as possible. Cominco will be the operator.

John G. Paterson,

President

The Toronto and Montreal Stock Exchanges have not reviewed and are not responsible for the adequacy or accuracy of this release.

CONTACT: Southwestern Gold Corporation

Mr. George Plewes,

Chairman

604/669-2525

or

Southwestern Gold Corporation

Mr. Harold Keevil,

Investor Relations 

604/669-2525

604/688-5175 (Fax)