Mercator Gold PLC

Meekatharra Gold Corporation

An offer from Meekatharra Gold Corporation (‘MGC’) to acquire the Meekatharra gold project in Western Australia has been accepted by the administrators of Mercator Gold Australia Pty Ltd (‘MGA’) on behalf of creditors. Mercator is the largest creditor of MGA. The acquisition is expected to complete during 2010, and it is anticipated that Meekatharra Gold Corporation will seek a stock market listing in Toronto.

The creditors of MGA will have a 25% interest in MGC, and Mercator has invested, by way of a loan convertible into shares, an additional C$200,000 into MGC. Mercator has also agreed to contribute A$1.5 million in the form of a two year convertible instrument in itself to a trust established to hold the creditors’ interest in MGC. In return, Mercator will be entitled to 50% of the creditors’ interest in MGC.

The Meekatharra mining complex is currently on care and maintenance. Total resources at Meekatharra stand at approximately 42.4Mt grading 1.7g/t for 2.4 million oz Au, with a current minable inventory of approximately 8.48Mt at 6.08g/t for 1.66 million oz Au. The deviation of the Great Northern Highway has been completed, which would allow mining of the Surprise pit to resume if desired.

Once MGC has acquired the Meekatharra project, Mercator will reassume control of MGA and with it large operating and capital tax losses, which are of significant value.

Meekatharra Gold Project - Background

MGA, Mercator’s Australian operating subsidiary, entered voluntary administration in late 2008 as a result of financial distress arising from difficulties encountered by gold mining operations at the Meekatharra gold project.

Gold production at Meekatharra commenced in the last quarter of 2007, with the production of 9,479 oz Au to 31 December 2007; 10,852 oz Au to 31 March 2008; and 11,846 oz Au to 30 June 2008. Some exploration success was also achieved, with additional gold resources delineated at multiple prospects.

Unfortunately, the commencement of gold production at Meekatharra coincided with a catastrophic deterioration in operating conditions for the entire Australian gold mining sector. Runaway increases in the prices of fuel, labour and consumables combined with a strong Australian dollar put tremendous pressure on the viability of MGA’s mining operations. Delays to the grant of permits required for the deviation of the Great Northern Highway in time to allow optimal mining of the Surprise pit and to the grant of permits required for other planned pits also critically handicapped the operation.

The detection of a potential threat to the Great Northern Highway from instability in the wall of the Surprise pit led MGA to suspend mining operations at Surprise in late September 2008, precipitating significant losses associated with its forward sales of gold during a period of extreme volatility in the gold price.