Sur American Gold Corporation is pleased to provide this corporate update on its activities and strategy and in particular its plans for project development at its Comval gold and copper-gold and T'Boli gold-silver projects, Philippines.

KEY STATEMENT

"SUR'S principal goal is to develop its projects to commercial production as soon as practicable and then to use the free cash generated to advance its exploration and expand its operations whilst enhancing shareholder value and minimizing share dilution."

Developing precious metal projects in developing countries such as the Philippines requires a steady, systematic step by step approach. The Company acknowledges that developing and maintaining excellent relationships with all levels of government with the strong support of the local community is the most important factor in the successful transition from exploration to production.

In this regard the Company is very pleased to report that since exploration commenced in June 2003 it has steadily built an operation that, in addition to other community activities has provided continuous opportunities for more than 150 people, donated to a wide variety of community projects and supported the local Indigenous Community in livelihood projects. Recently the Company has extended support assistance to a local Indigenous teacher to teach local Indigenous children.

SUR believes therefore that it is building a solid community foundation to its planned project development. This important strategy may neither be completely understood nor appreciated by some investors. To progress its projects to mining operations without unnecessary delays SUR believes that this strategy is, however essential. While it may occasionally result in some programs proceeding at a slower pace compared to other countries, the objectives are nonetheless achieved.

COMVAL GOLD PROJECT, COMPOSTELA VALLEY

BULK METALLURGICAL TESTING

The Company during late 2003-early 2004 identified many high grade gold bearing veins and wide areas of low-medium grade stockwork gold mineralization (small veins, veinlets and microveinlets all occurring together).

Accordingly a corporate decision was made in early 2004 to undertake a Bulk Metallurgical Testing ("BMT") Program as an essential part of its exploration and evaluation activities. The activity involves mining along many of these larger veins in order to better understand the nature of these gold structures and also to process the bulk mineralization to ascertain the metallurgical characteristics of as many of the veins and low-medium grade stockwork areas as possible.

Understanding the metallurgy is a key component of any good feasibility study. Good metallurgy often makes the difference between an economic and sub economic project.

As previously reported SUR has established that the Batoto gold mineralization can be processed by standard CIP methods with likely high (94%) average recoveries with low reagent consumption and high recovery times. It is now in the process of determining whether the mineralization can be processed by the low cost heap leaching method.

The goal for the Company in 2005 is to define a sufficient tonnage of mineralization through drilling to enable the Company to commence a full feasibility study to determine the appropriate mining and processing strategy.

Assuming sufficient resources are defined it could reasonably be expected that an initial operation would treat higher than average grade mineralization for 1-3 years and this would be followed by further expansions over a period of time treating lower grades until the optimum processing rate and grade is reached. This approach is consistent with the need to proceed with the participation of the community and all other levels of government in the decision making process.

GRADIENT ARRAY GEOPHYSICAL SURVEY

In addition to the Bulk Metallurgical Testing Program, SUR has undertaken more than 120 line km of a gradient array IP geophysical survey. The final reports arising from this survey are now being evaluated by the Company-in particular the survey data on initial drilling locations.

It is readily apparent from the work conducted to date that Batoto is a huge porphyry-related gold system covering more than 8 sq km and the decision about where to start drilling in order to define higher than average gold grades is a major decision for the company.

Even though the Company is well financed ($2,500,000 in cash) it does not have the large financial resources necessary to embark upon large drilling programs to define the full extent of the Batoto gold system at this time. Instead the initial drilling program to be conducted in early 2005 will involve several thousand metres in and around the Clark area of Batoto where extensive sampling and tunneling has already outlined widespread gold mineralization grading between 1-3 g/t gold.

COMVAL COPPER-GOLD PROJECT

Early in 2004 SUR Company undertook an initial exploration program at the Tagpura copper-gold project and was highly successful in outlining the presence of high grade massive sulphide copper-gold zones grading up to 2.8% copper and 1.4 g/t gold over a width of 60 metres and this program work also resulted in the discovery of wide (up to 65 metres) zones of gold mineralization adjacent to the copper-gold zones which are more than 1g/t gold.

T'BOLI GOLD-SILVER PROJECT

SUR, over the past 8 months has undertaken necessary infrastructure projects including main access tunnel rehabilitation, preparing the tunnel portal area for necessary electrical and office installation and has recently purchased a small CIP plant for the planned treatment of typical T'Boli mineralization.

Initial deliveries of mineralization to this plant is scheduled for January 2005.

In addition the Company's exploration team has been conducting tunnel mapping and sampling as well as trenching over many areas of the deposit in order to confirm previous grades and to determine the bulk mining potential in western areas of the deposit.

Sur American Gold Corporation trades on the TSX Venture Exchange (Canada) with trading symbol SUR-V.

On behalf of the board of directors

J. Rennie Blair, President

The TSX Venture Exchange has neither approved nor disapproved the contents of this news release.