Sur American Gold Corporation: Initial Gold Production From Trial Mining and Processing at Comval Gold Project, Philippines.

News Editors/Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 12, 2004

Sur American Gold Corporation (TSX VENTURE:SUR) is very pleased to advise that it has commenced its previously announced trial mining and processing operation at its Comval gold project, Philippines.

An initial trial bulk parcel of about 20 tonnes was processed several weeks ago. The gold mineralization was derived from several Batoto veins and resulted in the production of approximately 18 ounces of bullion. The bullion has arrived in Canada for refining and other metallurgical work. The metallurgical recovery was estimated at more than 90%.

A larger 300 tonne parcel has been approved for trial processing by the Philippines MGB (Mines and Geosciences Bureau) and is planned to be processed during the next 3-4 weeks. The source of this second batch of mineralization is also from the Batoto project, mainly in the Tarale zone where sampling of about 150 tonnes from 8-10 veins to date suggests grades well in excess of those of the initial test. These veins are currently being developed for the full scale trial program.

The initial processing is being undertaken on a toll basis at a 250 t/day CIP plant at Monkayo, about 40 km from the Comval site.

The purpose of these initial tests is to ascertain the metallurgical nature of the Comval mineralization and in particular to its treatment by simple CIP (carbon-in-pulp) processing. To date the results suggest that CIP appears to be a likely method.

TRIAL MINING AND PROCESSING PLANS AT COMVAL

The Company is on schedule to begin full scale trial processing from Comval at a rate of between 50-100 t/d (or a planned annualized rate of between 18,000-36,000t/y by the end of 2004.

Recent bulk sampling of the Tarale veins indicate that several of these veins contain grades in excess of 100g/t gold (up to 400g/t gold).

The Company has an option to lease a plant from the JBMM Company at Monkayo which has offered the Company a CIP plant which is fully permitted and is adjacent to the current 250 t/d plant currently being used for the treatment of the smaller parcels as well as for JBMM's own purposes of treatment of mineralization from their Diwalwal operations.

Data obtained from the full scale trial processing operation and the on-going exploration program (including planned drilling programs) will be used generate firm data for a full study to ascertain the feasibility of a much larger mining and processing operation.

T'BOLI BULK MINING AND PROCESSING PROGRAM

The Company plans to replicate the Comval program at the T'Boli Gold Project in South Cotabato Province. Considerable drilling and underground development sampling has established a National Policy 43-101 compliant inferred resource of 420,000 oz gold and 1,600,000 ozs of silver. Previously metallurgical work has resulted in excellent metallurgical recoveries and has established that the TBoli mineralization also appears suitable for treatment by the CIP method.

Based of work completed to date the grade of the T'Boli mineralization is lower than the Batoto veins, particularly those in the Tarale area and therefore gold output will be correspondingly lower although silver will be higher as a result of the higher silver grade of the T'Boli veins.

Previous exploration during 1996-1997 by Sabena Limited, which is now a subsidiary of the Company consisted of more than 7000 metres of core drilling which outlined a 43-101 compliant inferred resource of more than 400,000 ozs of gold and 1,600,000 ozs of silver in 2.4 million tonnes grading 5.5 g/t gold and 21 g/t silver (see table below). Drilling was only conducted to a depth of about 300 metres and all veins remain open at depth and along strike.

The T'Boli gold-silver project consists of 7 high grade steeply dipping epithermal quartz veins where sampling of veins in underground development also revealed "bonanza" gold assays of up to 656 g/t gold and 1630 g/t silver over intervals of about 0.5 metre. Many other vein grades exceed 100 g/t gold with correspondingly high silver values. Assaying by the 30g fire assay technique was undertaken at the McPhar Laboratory in Manila which is an ISO 9002 accredited laboratory.

The bonanza gold values often occur in soft, extremely high grade narrow zones which, in the opinion of the Company may not have been recovered during the core drilling programs. Lack of recovery of soft rock (and often high grade gold zones) is a common problem in core drilling programs which has prompted the company to embark upon an extensive re-assaying of many of the T'Boli veins exposed in the underground development openings by bulk leaching at the JBMM laboratory at Monkayo, Compostela Valley Province where the Company conducts its initial assaying of its Comval gold samples.

INFERRED MINERAL RESOURCE

------------------------------------------------------------------
                            Gold  Silver   Contained     Contained
Zone                Tonnes   g/t     g/t   Gold (ozs)  Silver (ozs)
------------------------------------------------------------------
Tunnel-South
 Vein              584,000  10.2    50.0     191,700       939,000
------------------------------------------------------------------
Tunnel-North
 Vein A            586,000   3.5    18.9      65,300       355,000
------------------------------------------------------------------
Tunnel-North
 Vein B            227,000  10.1    20.3      74,000       148,000
------------------------------------------------------------------
Total Tunnel
 Resource        1,397,000   7.4    32.1     331,000     1,442,000
------------------------------------------------------------------
Drilling
 Resource          980,000   2.9     4.7      91,000       150,000
------------------------------------------------------------------
TOTAL RESOURCE   2,400,000   5.5    21.0     420,000     1,600,000
------------------------------------------------------------------

The above estimate conforms to National Instrument 43-101 and CIM Standards.

Mineral Resource calculation methodology as practiced in Canada and Australia does not allow for the inclusion of the full "bonanza" assay grades in a resource calculation because of the impact such high grades may have on resource estimates. Generally only a small percentage of the very high grades are included in any calculation.

Maps and cross sections of the T'Boli area are available on Sedar and were filed in January 2003. "Independent Technical Report Prepared For Sur American Gold Corporation by Cooper Geological Services Pty Ltd" was filed on Sedar in February 2003.

EXPLORATION UPDATE

Concurrently with the trial mining developments the Company will continue an aggressive exploration program to outline to ultimate production potential of all its projects. This work will consist of geophysics, systematic mapping, sampling and drilling.

All sampling and sample preparation practices are approved by Mr. Rennie Blair, Company President who is the qualified person as required by National Policy 43-101 and the person responsible for the technical information contained in this new release.

Sur American Gold Corporation is well financed with nearly $3 million in its treasury. The Company trades on the TSX Venture Exchange (Canada) with trading symbol SUR-V.

On behalf of the board of directors

Alicia Nicholson, Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.