Argentina Gold Recommends Rejection of Barrick Offer and Announces Preliminary Resource Estimate on Amable Target at the Veladero Project

Business Wire, Dec 31, 1998

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Dec. 30, 1998-- Argentina Gold(VSE:ARP.) Argentina Gold Corp. (ARP-V.S.E.) announced today that its Board of Directors unanimously recommended that shareholders reject the offer by BGC Acquisition Inc., a wholly-owned subsidiary of Barrick Gold Corp., to purchase all of the outstanding common shares of the company at a price of $4.00 per share. A special committee of directors of Argentina Gold, independent of management, recommended that the Board urge rejection of the Barrick offer.

In making its recommendation, the Board concluded that: -0-

     -    The Barrick offer is inadequate, opportunistic and coercive

     -    In the opinion of LOM, the offer significantly undervalues
          Argentina Gold shares and is inadequate

     -    The market clearly recognizes that the Barrick offer
          is inadequate

     -    Barrick has rushed its offer in an attempt to acquire
          100 percent of the Veladero Project before further
          exploration results are announced

     -    The Barrick offer is inadequate and fails to give
          recognition to the underlying fundamental value of Argentina
          Gold and its very prospective exploration properties

     -    Barrick has confirmed that the value of Argentina Gold is
          substantially greater than its offer

     -    Barrick's offer is its latest coercive attempt to
          obtain control of the Veladero Project without paying fair
          value

The special committee obtained an opinion from Loewen, Ondaatje, McCutcheon Limited ("LOM") that the offer significantly undervalues Argentina Gold shares and is inadequate from a financial point of view to the holders of Argentina Gold shares. A copy of the LOM opinion is contained in the Notice of Change to the Directors' Circular of Argentina Gold dated Dec. 30, 1998 which is being mailed to shareholders.

"The Board has clearly determined that the Barrick offer is inadequate, opportunistic, coercive and not in the best interests of the company and all of its shareholders," said William Rand, the chairman of the Special Committee. "The market clearly recognizes that the Barrick offer is inadequate." The closing price of the shares on the VSE yesterday, Dec. 29, 1998, was $5.15, and the shares have traded as high as $5.75 since the offer was announced, with the offer representing a 44 percent discount to that price.

"One would have thought that a company of the stature and sophistication of Barrick would have been prepared to offer to purchase Argentina Gold shares from all of the public shareholders at a price of at least $5.50 per share being the price which Barrick had privately indicated to insiders of Argentina Gold that it was prepared to pay," added Rand.

"In view of the fact that in excess of 14 million shares of Argentina Gold have traded over the past 14 trading days with an average closing price of $5.33 and a high price of $5.75, an offer of $4.00 per share is not only inadequate, it is insulting and a waste of everyone's time."

Preliminary results of the 1998/99 exploration program at the Veladero Project have been excellent, with corresponding increases in Argentina Gold's share price as results have been announced.

Barrick, who is the joint venture partner at Veladero and has access to all non-public information in respect of the Project, has rushed its offer to try and acquire 100 percent of the Project before further exploration results are announced and reflected in the market. Barrick's coercive and opportunistic offer is clearly an attempt to do this without paying fair value to Argentina Gold and its shareholders.

Argentina Gold also announced today a preliminary inferred resource estimate for the Amable target at the Veladero Project dated Dec. 29, 1998 by Dr. James W. Stewart, P.Geo. of 31.8 million tonnes with an average grade of 2.02 grams of gold per tonne and 43.1 grams of silver per tonne for 2.06 million ounces of gold and 43.9 million ounces of silver.

This resource includes 50 metre by 50 metre high grade blocks that aggregate 900,000 tonnes with an average grade of 17.36 grams of gold per tonne and 71.7 grams of silver per tonne for 502,468 contained ounces of gold and 2,076,806 contained ounces of silver.

The resource estimate does not take into account the results of Hole 96 released by Argentina Gold today which returned 202 metres of 2.61 grams of gold per tonne and 21.43 grams of silver per tonne including 107 metres of 3.95 grams of gold per tonne and 28.45 grams of silver per tonne. More importantly, Hole 96 confirmed that the Amable target is open to the southeast of the resource.

When combined with the previously announced resource estimate at the Filo Federico target, Argentina Gold has reported preliminary resource estimates of 4.46 million ounces of gold and 118.9 million ounces of silver at the Veladero Project.

The Barrick offer is inadequate and fails to give recognition to the underlying fundamental value of Argentina Gold. Argentina Gold is the largest holder of exploration properties in a very prospective border area of Argentina along the Chilean border, part of the El Indio gold belt.