Sur American Gold Corporation

Nigel H Maund

Investor Summary

The writer visited SUR's exploration prospects at COMVAL and BATOTO on the 8th and 9th of January, 2005. This brief report summarizes the key findings.

SUR has assembled an impressive ground holding portfolio of some 90 km2 in the highly prospective Compostela Valley of South Eastern Mindanao, Philippines, located just 40 km SSW of the world class DIWALWAL low sulfidation epithermal gold vein system (between 4 to 5 million ounces assumed mined to date by some 40,000 local miners).

SUR's licenses cover a major splay fault developed off the eastern side of the Philippine Fault. This fault system traverses a large, coarse grained, virtually equigranular, diorite porphyry in which late, mesothermal, structurally controlled, quartz - pyrite - gold vein stockwork veining and vein array systems are developed about NNE and NW striking shear structures.

The company has undertaken a large program of channel sampling along prospect tracks, and excavated a system of prospect adits, in particular the Clark Exploration adit (crosscut) and the Tarale 11 adit at the TARALE - BATOTO prospect. The Clark crosscut has intersected a NNE striking shear vein array system with a true width of at least 30 metres at a very encouraging average grade of 3.10 g/t Au over the mineralized width. The crosscut is still within this structure and its eventual true width has not yet been determined.

In this locale, the entire diorite intrusive is mineralized at a relatively low level, with structural stockwork of hairline quartz veins and veinlets, containing heap leacheable grades of between 0.25 g/t Au and 10 g/t Au with a weighted average of about 2g/t gold for the entire 111 metre length of the crosscut. The crosscut is still in progress. The scope for parallel systems to be discovered nearby is considered by this writer as excellent. Cumulatively, these may comprise a sizeable bulk tonnage resource target.

At the Tarale 11 adit, SUR is bulk testing another shear vein array system in a near horizontal structure. Overall sample returns from this vein average better than 30 g/t Au over a 1m to 2.0m mined width from at least 100 m of exploration workings. A halo of lower grade 1.0 g/t to 2.0 g/t Au surrounds the main vein for at least two meters on either side. Parallel vein systems can be observed in exposed hillside cuts. SUR is also bulk testing another 8 veins in the same area.

Therefore, scope to discover stacked systems can be considered as good. The big question is, "are there sufficient veins for a bulk tonnage deposit".

SUR is headed up by President and CEO, Rennie Blair, former Chief Geologist for Australia's huge Mt Isa Mine in Queensland, Australia.

Above l-r: Mining Engineer Wally Abaga and Geologist Nonoy Estoque, vein at the Clark Adit and Stockwork at Batoto

Rennie is a real professional who is not inclined to "guild the lily". Most importantly Rennie has an excellent local team headed up by a highly experienced, low key, competent Australian, Brett Taylor and Atty Melanio T Andresan, a well known indigenous lawyer and is the recognised Datu Sangkupan of the Mandayan Tribe. The technical team comprises equally experienced, Filipino geologist, Nonoy Estoque, Mining Engineer Wally Abaga and miners and samplers many of which have been recruited from indigenous peoples.

SUR's approach has been very much the right one for the Philippines, with a slow, step like, build up in exploration, keeping costs under tight control and limiting the expected negative financial impact of operating in the Philippines. The complex and delicate political issues in the Philippines have been sensitively and intelligently handled, so that the company has achieved local acceptance, without attempting to buy influence, and is now poised to steadily rack up the exploration without attracting problems caused by insensitive and unintelligent management in this regime.

SUR's exploration assets comprise part of a large mineralized porphyry type system, with a superimposed complex structural array of mesothermal gold quartz vein and stockwork targets. These could host gold mineralization in several open cut gold deposits of varying dimensions which collectively may have substantial total gold potential, in a strongly hydrothermally altered and mineralized area measuring at least 3,500 meters by 2,500 meters.

SUR's next move, following a detailed structural analysis of the various vein systems, must be to complete the infill exploration program, involving grid controlled soil sampling, trenching and a staged program of surface drilling to tie seemingly disparate areas together, and define its first open cut resource. This will enable it to raise more capital for what will hopefully be a big expansion in exploration and evaluation drilling later on in 2005 and 2006.

SUR has another exciting, and geologically similar, prospect in this area, which the writer did not visit, at T'Boli. This prospect already has 7,000m of exploration drilling completed, and should be a target for further exploration and evaluation drilling over the coming year.

In the writers view, SUR is a well managed junior exploration company with considerable upside potential, and, as such, constitutes an exciting exploration play for the investor prepared to accept reasonable business risks, and to hold for the longer term upside potential gains.

IMPORTANT NOTE

The writer has no stock in SUR AMERICAN GOLD CORPORATION, and has accepted no remuneration or any other form of gifts, etc. for compiling this article. The article is, therefore, entirely unbiased and objective. SUR paid for the writer's air ticket, transportation and food whilst on site.

NHM

[email protected]

13 February 2005