Southwestern Gold Corporation Announces Letter Agreement Signed with Inco Limited on New Project in Peru.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--April 27, 2000

Southwestern Gold Corporation (TSE:SWG.) today announced that it has signed a Letter Agreement through its Peruvian subsidiary with Inco Limited on a project generated by Southwestern and located in south-central Peru.

Under the terms of the Letter Agreement, Southwestern and Inco will form a joint venture and each fund 50% of the initial US$200,000 program to acquire mining concessions and conduct a reconnaissance exploration program. In order to maintain its 50% interest in the joint venture assets, Inco must contribute 100% of the next US$1 million expended on the project. The parties will then equally fund all expenditures until the management committee decides to commission a feasibility study.

Inco has the option to earn an additional 10% interest in the joint venture assets by funding 100% of the costs to prepare a bankable feasibility study. Inco also has the right to earn a further 10% interest in the joint venture assets by funding all of the costs to construct a mine. Inco will be entitled to recover construction costs from 90% of net cash flow after taxes, with the parties sharing the remaining 10% pro rata. After pay back the parties will share profits on a pro rata basis.

Exploration on the project will begin immediately, with Southwestern as operator for the project.

Southwestern Gold Corporation presently has over 23 joint ventures with companies including Newmont, PanAmerican Silver, Teck, Pasminco, Paramount Ventures, Southern Peru Copper, Asarco, Cambior, Cedimin and Inco.

Some of the statements in this news release may contain forward-looking information which involves inherent risk and uncertainty affecting the business of the Company. Actual results may differ materially from those currently anticipated in such statements.