Antofagasta To Acquire 3,150 Square Kilometre Atacama Copper Property

TORONTO - Antofagasta Gold Inc. has entered into an exclusive Memorandum of Understanding (the "MOU") for a four year option agreement to earn an 80% interest in the Atacama Copper Property. The Property consists of approximately 3,200 contiguous square kilometres (320,000 hectares) in Chile's Antofagasta Region II, home to some of the world's largest mining operations, and covering a large undrilled portion of the highly prospective Jurassic and Paleocene-Early Miocene copper porphyry belt.

The Property commences approximately 40 km NE from the city of Antofagasta, and is traversed by major highways, railways, and high-tension power lines, most of which service existing operating copper mines in the region. The claim block, roughly 120 km by 40 km running almost north south, covers most of the land between several major producing mines in the area. A map showing the outline of the claim blocks and the location of the larger mines in the immediate area can be found here.

William Randall (M.Sc., P.Geo), President & CEO of Antofagasta Gold, commented: "signing this landmark MOU marks the beginning of an exciting new era for Anofagasta Gold. The opportunity to be the first to prospect within the heart of Chile's world class copper district is extraordinary, given the dominant control over mineral title by the country's largest mining companies. This ground, underexplored and covering large tracts of two productive copper porphyry belts, provides our shareholders with unparalleled exposure to potential world class discoveries."

Most of the copper porphyry deposits of the region belong to the Paleocene-Early Eocene world class Copper - Molybdenum porphyry belt which extends from southern Peru to northern Chile for a distance of over 1300 km. One of the more recent major discoveries in the immediate region is the Spence enriched Cu-Mo deposit. Spence, located 4 kilometres west of the Atacama Copper property boundary was discovered under 60 metres of gravel cover by Rio Algom in 1996 and is related to three Paleocene dacite porphyry intrusive and tourmaline breccias aligned NE-SW. The deposit has a 20m thick oxide zone followed by a well developed enrichment blanket averaging approximately 60m in thickness. The deposit lies on the intersection of prominent NE and NW trending structural lineaments.

Upon entering into a definitive option agreement regarding the Atacama Copper Property, Antofagasta Gold will have three properties under option covering approximately 346,000 hectares. All the properties are within the Antofagasta region of Chile, at low altitudes and within producing mining camps. Approximately 6350 metres of diamond drilling have been completed on the Capricornio Property.