Sur Discovers Major Geophysical Anomalies at its Comval Gold Project.

VANCOUVER, British Columbia -- SUR AMERICAN GOLD CORPORATION (TSX VENTURE:SUR) announced today the discovery of a strong 800 metre wide and minimum 400 metre deep resistivity anomaly that is open at depth and partially coincident with a moderate chargeability anomaly at its Comval Gold and Gold-Copper project, located in East Mindanao, Philippines.

Also identified was a second significant anomaly measuring about 350 metres by 400 metres in the northern area of the project, about 6 km to the north of Batoto and a number of smaller anomalies.

These are some of the results of a large induced polarization geophysical survey conducted between March and September, 2004 by Elliot Geophysics International Pty Ltd (Dr Peter Elliot, M.Sc. PhD, M.AusIMM). This survey is the first geophysical survey using modern techniques completed in the Comval Gold Project area in the past 30 years.

"The survey was highly successful and in conjunction with the comprehensive ongoing geological program confirms the enormous potential of this part of the Company's total area in the Compostela Valley," says SUR President and CEO, Mr Rennie Blair.

To view a map of the GEOPHYSICAL ANOMALY (Vertical Sections Looking West) please visit the following link: http://www2.ccnmatthews.com/database/fax/2000/SUR0118.pdf

The major anomaly highlighted above occurs within the Batoto Gold project area in a zone called Santa Fe about 2500 metres to the south west of the Clark area and is represented by a very strong 800 metre wide and minimum 400 metre deep resistivity anomaly (top figure), which is open at depth and to the west and partially coincident with a moderate chargeability anomaly (lower figure). Moreover, the overall dimensions of this new discovery are not known and clearly further geophysical surveys are justified in order to help determine the magnitude of the Batoto gold system.

Further, this anomaly is believed to represent a very large intrusive (porphyry?) body which is relatively more resistive, perhaps due to a greater concentration of quartz veins, and probably/likely contains a greater concentration of sulphides (higher chargeability) than the surrounding rock mass. The top of the anomaly starts at approximately 600 metres above sea level (250 metres below the current surface) and is interpreted by Dr Elliot to continue to below 200 metres above sea level.

The anomaly is overlain by an intensive alteration system containing silicification and gold mineralization over a width of at least 1000 metres. Sampling is ongoing in this area and visible gold is seen in panned samples.

The area appears to be continuous with gold mineralization which occurs for at least 3,500 metres to the north east and which also continues to the north-west, west and south west for a further distance of at least 900 metres. Limited exploration to-date beyond this area indicates that the Batoto system is still wide open.

Based on all the currently available geological and geophysical data in the Comval area and likely geological models the Company believes that the large anomaly may represent a deeper gold-rich copper porphyry system and the gold mineralization (wider veins, veinlets and microveinlets together comprising a very large stockwork gold system) that has been discovered to date appears to occur peripheral (adjacent) to this intrusion.

To support the above postulated model increasing copper mineralization has been observed in recent mapping of the many creeks that cut through this area. These areas, however, are still higher than the expected top of the anomaly.

The overall dimensions of this new major discovery are not known. To test this, further geophysical surveys are justified (and planned) to help determine the magnitude of the Batoto gold system. In addition a geophysical survey also will be undertaken within the historic copper gold system that occurs on the eastern side of the Agusan River Valley.

"The Company is highly encouraged by this new discovery which continues to indicate the potential for a very large bulk mineable gold and now a possible gold-copper system at Batoto," added Mr Blair.

OTHER DEVELOPMENTS AT BATOTO

- The Clark exploration crosscut at Batoto, which the Company believes may represent typical grade type distributions for Batoto, has now progressed 111 metres from the tunnel portal. The crosscut continues to encounter a wide higher grade zone which is now 50.5 metres wide and averages slightly more than 3g/t gold. The entire crosscut averages about 2 g/t gold with every 2-4 metre sampling interval well mineralized.

- The sampling results from the Clark Crosscut which is between 40-50 metres below the surface clearly indicates the strong possibility of open cut mining at Batoto with processing by simple CIP and/or heap leaching methods.

- As previously reported and following the continued excellent metallurgical characteristics as determined from the CIP trial processing the Company is now proceeding rapidly to establish an on-site trial heap leaching operation. The Company believes that positive results from this trial could result in future operations at Comval involving both CIP and heap leaching operations and is presently completing all necessary documentation for continued metallurgical testing.

- The area around the Clark exploration crosscut has been selected as the initial drilling area. The drilling will be undertaken to a depth of about 120 metres and will consist of about 30 diamond drill holes. It is expected that this initial program will be followed by a much larger diamond drilling/reverse circulation drilling program. However, based on results to-date important additional geological mapping and sampling is underway and following a review of these results, the proposed initial drilling program can be more precisely scheduled.

- The Company invited International Independent Consultant Economic Geologist Nigel Maund, Bsc (Hons), Lond. MSc, DIC, MBA, MIMM, SEG to the Comval Project during January 6-8. Mr Maund has more than 30 years' international experience in Economic Geology including significant experience in the Philippines. In conjunction with his brother, Clive Maund a well known Technical Analyst/Newsletter writer, they will be preparing an independent report on the Company that should be issued in the near future.

Assays are undertaken at the JBMM laboratory at Monkayo, Compostela Valley Province using the 30 gram fire assay method with frequent check assaying undertaken at the IPL Laboratories in Vancouver, Canada, an ISO certified laboratory. To date the Company has established excellent comparison between assays undertaken locally and those completed in Vancouver.

All sampling practices are approved by Mr Rennie Blair, Company President MSc, F.AusIMM who is the qualified person as required by National Policy 43-101 and who is the technical person responsible for this news release.

Sur American Gold Corporation is a well financed exploration/development company which 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 neither approved nor disapproved the contents of this news release.

Sur American Gold Corporation (TSX VENTURE:SUR)