INDOCHINA GOLDFIELDS COMPLETES OWNERSHIP RESTRUCTURING OF BAKYRCHIK GOLD MINE IN KAZAKHSTAN, EXPANDING INTEREST TO 86 PERCENT SINGAPORE, Sept. 29 /CNW-AsiaNet/ - R. Edward Flood, President, and Robert M. Friedland, Chairman, announced today that Indochina Goldfields Ltd. has completed the ownership restructuring of the Bakyrchik gold mine project in northeast Kazakhstan, expanding its direct operating interest in the project to 80 percent. The independent shareholderss of London-based Bakyrchik Gold PLC ratified the ownership change at an extraordinary general meeting held earlier today. The plan to restructure the company was approved by 86 percent of the votes cast by the independent shareholders. "This acquisition represents a cornerstone transaction for Indochina Goldfields in the development of the company as a major long-term producer of gold, as well as copper, in the Asian mining arena," Mr. Friedland said. Indochina Goldfields paid US$65 million to expand from its original 15 percent interest in the Bakyrchik gold mine to a direct 80 percent operating interest. The total consideration includes US$15 million, for repayment of the portion of a bridge loan used to pay the second of four mine-purchase installments to the Government of Kazakhstan. Indochina Goldfields also assumed an obligation of US$30 million to make the two final project purchase installment payments to the government. The remaining US$20 million consideration represents the extinguishment of a working capital loan facility from Indochina Goldfields to Bakyrchik Gold debt-free, and with approximately US$4.5 million working capital for general corporate purposes. Indochina Goldfields continues to hold approximately 28 percent of the outstanding common shares of Bakyrchik Gold PLC, which now holds 20 percent of the Bakyrchik gold mine project. This holding constitutes an additional indirect six percent interest in the project for Indochina Goldfields. "Indochina Goldfields will now hold the controlling interest in one of the largest undeveloped gold projects in the world," Mr. Flood said. "As operator, Indochina Goldfields will take steps to develop the Bakyrchik complex in a timely manner, in a series of three carefully engineered, phased expansions." The measured, indicated and inferred resource of the project, which remains open-ended, has been estimated to total approximately 13 million ounces of gold. The resource consists of 10.5 million ounces within the definitive feasibility study (DFS) area as calculated by Minproc Engineers Limited of Perth, Australia, and an additional 2.5 million ounces outside the DFS area calculated by Western Services Engineering of San Ramon, California. Kvaerner Metals of Toronto, Canada, has been retained to complete a detailed engineering evaluation and optimized production plan. Production options being evaluated by Kvaerner Metals include a Phase I production-mining rate of approximately 500,000 tonnes of ore annually, to yield approximately 125,000 ounces of gold. Phase II expansion mining will increase the mining rate to approximately one million tonnes of ore annually to yield approximately 275,000 ounces of gold. Phase III expansion to produce over 600,000 ounces per year is currently in the pre-feasibility study stage at Kvaerner Metals. Indochina Goldfields expects to release the final results of the 500,000 tonne per year Phase I study in the fourth quarter of this year. The company is proceeding immediately with a program of underground mine development and construction for Phase I. Indochina Goldfields recently completed the purchase, for its own account, of a one-million-ounce gold hedge facility over a ten-year period guaranteeing a floor price at an average of US$362.50 per ounce of gold. "The revised production plan provides attractive financial results even at today's gold prices," Mr. Flood said. "And, in order to maximize the value of the Bakyrchik deposit for Indochina Goldfields' shareholders, the company will implement significant operational and process improvements combined with a selling price floor to protect against further declines in the price of gold." Indochina Goldfields' other assets include gold and copper properties and other interests in Indonesia, Myanmar, South Korea, Vietnam and Fiji. Indochina Goldfields Ltd. shares trade on the Toronto Stock Exchange and the Australian Stock Exchange under the symbol ING. Information about Indochina Goldfields and its projects is available on the company's Web site, http://www.goldfields.com. FOR FURTHER INFORMATION: R. Edward Flood, President, North America, (604) 688-5755.