INDOCHINA GOLDFIELDS IMPROVES FINANCIAL POSITION WITH DEVELOPMENT AT ASIAN COPPER AND GOLD PROJECTS SINGAPORE, Jan. 19 /CNW - AsiaNet/ - R. Edward Flood, President, and RobertM. Friedland, Chairman, announced today that Indochina Goldfields Ltd. hasundertaken a series of strategic measures in response to the current downturnin the mining industry to safeguard the company's sound financial position. Mr. Flood outlined four principal measures: 1. Indochina Goldfields has closed out gold hedge put contracts on 500,000 ounces of gold, for total proceeds of US$14.3 million. The company purchased gold hedge put contracts on one million ounces of gold for US$14.7 million in July 1997 and has closed out one half of its position to recover nearly the total original cost and realize a net gain of US$6.9 million. The put contracts had been purchased to provide a floor to support debt service of project financing. Indochina Goldfields took advantage of the current level of gold prices and closed out 50% of its hedge facility once gold fell below US$278 an ounce. Following this transaction, Indochina Goldfields has cash and liquid assets totaling approximately US$75 million. 2. Pending sustained recovery of the gold price, Indochina Goldfields has begun a program to place the Bakyrchik Gold Project in Kazakhstan on a sustained care and maintenance basis. While this will defer the timing of some scheduled investments, the company will continue to operate the new pilot plant designed by Drinkard Metalox, Inc. and built with the assistance of Kvaerner Metals of Toronto, Ontario, to test the application of an advanced hydro-metallurgical process that could boost anticipated recoveries of gold from the Bakyrchik ore. Bench-scale tests completed on the Bakyrchik ores have demonstrated that, if successful, a commercial Drinkard plant could achieve recoveries of up to 94% and replace one stage of a planned two-stage roaster in the oxidation circuit. The Drinkard pilot plant was commissioned last month at a total construction cost of US$5.5 million. By placing the project on a care and maintenance program, the local workforce has been trimmed by 50% and will provide only for operation of the recently commissioned pilot plant, site security, equipment maintenance services and administration during the stand-down. 3. Indochina Goldfields has asked the government of Kazakhstan to restructure the schedule for remaining payments totaling US$30 million for the purchase of the government's interest in the Bakyrchik mine. During the past year, the Bakyrchik joint venture, now owned 86% by Indochina Goldfields, has made payments of US$35 million to the government and has provided an additional US$50 million in working capital, infrastructure development and investments in the mine. The company is continuing to fund its social obligations in Kazakhstan. Mr. Flood said that while Indochina Goldfields remains committed to the Bakyrchik project, this is an appropriate time to concentrate resources on the hydro-metallurgical research, social welfare at the mine site and efforts to seek a potential joint venture partner. The company has proposed linking future installment payments to the successful arrangement of project financing and a sustained recovery in the gold market. Discussions with the Kazakhstan government are expected to commence later this month. 4. Effective January 13, the company's 50%-owned Monywa Copper Project joint venture, in Myanmar, began drawing down a US$90 million financing credit facility being provided by a consortium of large Japanese trading houses led by Marubeni Corporation of Tokyo. Indochina Goldfields had been providing the financing for the past two years to initiate the project, build and operate a pilot plant and fund the initial phase of construction. The construction of the project is approximately 35% complete and scheduled to begin production of copper cathode in the later part of the second quarter at an initial rate of 25,000 tonnes a year, using the solvent-extraction/electrowinning process. The availability of the Japanese financing has freed up significant company funds that were previously tied to the financing of the ongoing development of the project. Mr. Flood said that the first three measures are a comprehensive responseto the recent gold price decline below $300 an ounce. "We are optimistic aboutthe future outlook, given recent pronouncements by the U.S. Federal Reserveand forecasts by our financial advisors which suggest that gold may stabilizein mid-1998 at or near an equilibrium price of $350 an ounce." "The steps we have taken have the effect of preserving and enhancing thecompany's cash reserves at a time of declining metal prices and marketvolatility," Mr. Flood said. "Completion of all the necessary conditions to begin drawing down theJapanese financing credit facility represents a major step in the constructionand commissioning of the Monywa copper mine," he added. "We are on track toachieve our goal of becoming a very competitive producer in the global coppermarket, with a cash cost of approximately 47 cents (US) a pound." Indochina Goldfields assets include gold and copper properties and variousmineral interests in Myanmar, Indonesia, Kazakhstan, South Korea, Vietnam andFiji. The company's shares trade on the Toronto and Australian stock exchangesunder the symbol ING. For further information: R. Edward Flood, President, North America, (604)688-5755, Web site: http://www.goldfields.com/ (ING.)CO: Indochina Goldfields Ltd.ST: British Columbia