05/05/2005- Reports 2004 Results

[Franko10 ™]

Morgain Minerals Inc. Reports 2004 Results
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Vancouver, BC, May 5, 2005 - Morgain Minerals Inc. (TSX-V: MGM) (the
"Company") has released the results of its operations for the year
ending December 31, 2004. The following summary should be read in
conjunction with the Company's audited financial statements and
Management Discussion and Analysis available at www.sedar.com.

Company Highlights

* A completely new set of directors and officers was appointed to
reflect the progression of the Company from the exploration stage to
the development stage of the Castillo property (previously known as El
Cairo) under the direction of Chester Millar. Morgain's head office was
moved from Toronto to Vancouver.

* The Company entered into a loan agreement pursuant to which H.
Morgan & Company will advance Morgain C$5,000,000. The loan will bear
interest at the rate of 12% per annum and will be secured by a floating
charge on Morgain's assets and a pledge by Morgain of the shares of its
Mexican subsidiaries. This loan will enable the Company to fund the
first phase mining and leaching operation of the Castillo property.

* In 2004, C$3.0 million was raised from the exercise of warrants and
options.

* In March 2004 a 2,500,000 units issue consisting of a common share
and one purchase warrant per unit was closed for net proceeds of
C$750,000. Each purchase warrant entitles the holder to acquire an
additional common share of the Company at $0.35 until April 2006.

* The Company added to the Castillo land package by purchasing a
strategic mineral claim consisting of 95 hectares located on the east
side of the Castillo claim group. Morgain acquired the claim in
consideration of 500,000 common shares of the Company, a cash payment
of US$20,000 and a 2% net smelter royalty.

* The Company acquired surface rights and mineral concessions required
for the long-term production of gold at the Castillo property and filed
permit to conduct first phase mining and leaching operation.

Results of Operations

For the year ended December 31, 2004, the Company had a net loss of
$1,458,103 ($0.03 per share), an improvement of $1,302,471 or 47%
versus the $2,760,574 net loss in 2003 when $1,503,779 of industrial
minerals property costs were written off and $650,285 of Morgain's
investment in Compania Minera El Arca was written down. In 2004,
$723,275 and $217,737 in stock based compensation and property
investigation respectively were expensed (nil in 2003).
General and administrative expenses in 2004 was $28,186 higher (+6%)
than 2003 mainly due to the relocation of the Company's corporate
offices from Toronto to Vancouver and higher legal, audit and
accounting expenses arising from the corporate reorganization.

Capital Resources and Liquidity

As of December 31, 2004, the Company had $1.3 million in cash and cash
equivalents compared to $285,000 at the end of 2003.

In 2004, $2.6 million was raised from the exercise of warrants,
$750,000 from a private placement offering and another $371,000 from
the exercise of stock options for a total of $3.7 million raised during
the year. $1.7 million was spent on the Castillo property mainly on the
acquisition of the additional land package adjacent to the claim, on
securing the surface rights agreements and on further preliminary works
as the Company is poised to start its 30,000 tonnes heap leach bulk
test. The budget for the bulk test is US$3.4 million in twelve months,
net of gold sales expected to be generated during the test, after which
further financing initiatives will be considered towards expanding the
Castillo into a self sufficient and profitable mining operation. As the
Company did not have sufficient funds to finance the bulk test, a loan
was signed in March 2005 whereby H. Morgan & Company will advance
Morgain C$5.0 million at the rate of 12% per annum, secured by a
floating charge on Morgain's assets and a pledge by Morgain of the
shares of its Mexican subsidiaries. Under the terms of the loan
agreement, C$2.5 million has been advanced to date and the remaining
C$2.5 million at a mutually agreeable future date.

Outlook

The Company remains focused on developing its 100% owned Castillo
project towards a profitable mining operation. With the successful
acquisition of surface rights and mineral concessions required for the
long-term production of gold, the Company has filed for a permit to
conduct a first phase mining and leaching operation. The information
gained from this operation will be used to plan and seek a permit for
the full-scale operation of the Castillo Mine. Morgain expects to be in
receipt of the necessary permits for mine start up and leaching by the
second week of June 2005. Gold sales from the first phase mining
operation are expected to commence during the third quarter of 2005.

Morgain is confident it will be able to meet all of its future
operating and financial requirements.

For further information, please contact:
Chester F. Millar - Chairman and President
Telephone: [phone]


The TSX has neither approved nor disapproved of the information
contained herein.

Copyright (c) 2005 MORGAIN MINERALS INC. (MGM) All rights reserved.
For more information visit our website at
www.morgainminerals.com/ or send mailto:[e-mail]
Message sent on Thu May 5, 2005 at 2:03:41 PM Pacific Time