Gold Mines of Sardinia Limited

A.C.N. 009 234 851

31 Jan 2001

For Immediate Release 31 January 2001

Promising new gold discoveries

Exploration in the eastern region of Sardinia has revealed promising discoveries of gold deposits potentially suitable for bulk mining, Gold Mines of Sardinia Limited says in its report to stock exchanges for the quarter ended 31 December 2000.

"Its early days yet but these indications are the most exciting weve seen in this area," managing director John Morris said today.

The discovery at Monte Ollasteddu represents both a high grade vein-style target and a significant lower grade bulk tonnage stockwork vein and disseminated sulphide target. The mineralisation extends 4.5km along strike and probably a further 4km to the east. A high percentage of rock chip grab and channel samples have returned values greater than 1 gram per tonne gold. Best results include 57.6, 40.3, 19.28, 12.69, 12.39, 6.31 and 5.61 grams per tonne.

Other highlights in the report include:

New epithermal gold veins and sinters discovered in the Cuglieri region, and new gold mineralisation in diamond drilling at Furtei.
Mr Jon Pither, Chairman of the AIM Trust, appointed non-executive chairman of Gold Mines of Sardinia Limited.
Navan Mining (GMS 10%) reports the potential for a large new gold discovery in Bulgaria.

Mr Morris said the company was well positioned to continue development in Sardinia.

"Operations at Furtei are continuing to function well, we are making progress with our work at the Osilo project, and construction of the sulphide project at Furtei is nearing completion," he said.

"Our financial position remains strong. We have in excess of $A22 million in cash and negotiable securities, and expect to soon receive a further $A20 million in the form of European Commission and other government funds."

Further information: Mr John Morris

+61 8 9389 7711

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Copyright 2001 Gold Mines of Sardinia Limited
Last modified: May 01, 2001