| Solomon Options Four Projects in Mongolia to Asia Gold Corp. |
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Vancouver, Canada, August 18, 2005 Solomon Resources Ltd. (SRB:TSX-V) is pleased to announce that it has signed a Letter of Intent (LOI) with Asia Gold Corp. of Vancouver, British Columbia to grant an option to Asia Gold and, if exercised, form an exploration Joint Venture covering four exploration projects in the South Gobi region of Mongolia. The Agreement includes three porphyry copper-gold projects; Toste, Tsakhir, and Bor Khairhan; and one epithermal gold project: Nurag Uul. The projects contain nine licenses covering 21,245 hectares. Solomon holds the projects under option from Gallant Minerals Ltd. (see Solomon news release dated April 19, 2005). Solomon can earn a minimum of 80% in the projects from Gallant, in a two-stage earn-in. Solomon is granting Asia Gold an Option to earn a minimum 70% interest, in a similar two-stage earn-in. Asia Gold can earn a 55% interest in all of the licenses and projects by completing the following commitments to Solomon, over a three year period (i) cash payments totalling US$ 375,000; (ii) stock issuances with aggregate value in excess of US$ 600,000; and (iii) work commitments totalling US$ 1,800,000 as follows:
Upon earning a 55% interest, Asia Gold can earn an additional 15% interest in any retained project, for a total 70% interest, by completing work commitments of an additional US$ 2,500,000 on each project, over a two year period. Asia Gold also has a first right to acquire an additional 10% interest, for an aggregate 80% interest, should Gallant convert its 20% interest in any project to a net smelter royalty, pursuant to the underlying option agreement between Solomon and Gallant. If Solomon does not exercise the first stage of the underlying option agreement with Gallant, Asia Gold shall be entitled to the assignment from Solomon to Asia Gold of the underlying Gallant option agreement and Solomon shall be entitled to a 10% carried interest in the four projects. This interest shall be carried through to the commencement of commercial production on each project. Keith Laskowski, President of Solomon, stated: This agreement allows Solomon to focus on our core gold projects in Mongolia. Solomon will receive cash and equity benefits, and Asia Golds exploration expenditures will contribute towards Solomons obligations under the Gallant Option Agreement. Asia Gold is receiving excellent projects with identified drill targets, making this a good deal for both parties. Asia Gold is experienced in exploring in Mongolia, and will rapidly advance these projects. The transactions contemplated in this LOI are subject to due diligence by Asia Gold, regulatory approval by the TSX Venture Exchange; completion of a formal agreement, and approval from Gallant Minerals Ltd. About Solomon Resources Ltd.
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