Asia Gold adds to holdings in Gobi region

Vancouver — A letter-of-intent agreement with Solomon Resources (SRB-V) gives Asia Gold (ASG-V) rights to earn up to a 70% interest in four projects in the Gobi region of southern Mongolia.

The land package covers 312 sq. km and is considered prospective for porphyry copper-gold and epithermal gold mineralization. Drill-ready targets have been identified, but have not yet been fully explored.

Asia Gold views the acquisition of the four properties as complementary to its existing holdings in the Gobi region, which cover 25,000 sq. km of prospective ground. A US$2.6-million exploration program is under way on these properties, including sophisticated airborne gravity gradiometer surveys used to detect mineral and hydrocarbon deposits.

The preliminary agreement with Solomon allows Asia Gold to earn an initial 55% interest in the Toste T-1, Tsakhir, Nuraq Uul and Bor Khairkhan projects by paying Solomon US$325,000, issuing shares valued at US$600,000, and spending US$1.8 million on exploration within three years.

Asia Gold can boost its interest to 70% by funding and carrying out US$2.5 million of exploration on each of the projects it intends to retain within a 5-year period.

Closing of the option agreement is subject to due diligence by Asia Gold, the signing of a definitive agreement, and various regulatory and company approvals.

Asia Gold is owned 47% by Ivanhoe Mines (IVN-T) and 7.3% by BHP Billiton (BHP-N). In addition, BHP Billiton holds an option to earn a 50% interest in a portion of Asia Gold’s West Gobi property by spending US$2 million on exploration by the end of 2007. BHP can boost its interest to 70% by funding a feasibility study on one exploration target to a maximum of US$45 million.