UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15-d 16 of
The Securities Exchange Act of 1934

For the month ended:  July 22, 2004

Commission File Number:  0-30314

BONTAN CORPORATION INC.

(Exact name of Registrant as specified in its charter)

ONTARIO, CANADA

(Jurisdiction of Incorporation)

47 Avenue Road, Suite 200, Toronto, Ontario, Canada M5R 2G3

(Address of principal executive Offices)

(416) 860 0211

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F    x      Form 40-F    ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):   ¨

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):   ¨

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes   ¨   No   x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BONTAN CORPORATION INC.
	(Registrant)
July 22, 2004	By:   /s/  Kam Shah
Date	Chief Executive Officer and Chief Financial Officer

page 1

BONTAN CORPORATION INC.

FOR IMMEDIATE RELEASE

BONTAN CORPORATION INC. DECLINES AN OPTION TO PARTICIPATE IN A JOINT VENTURE

Toronto, July 21, 2004   --   Bontan Corporation Inc. (OTCBB: BNTNF) through its wholly owned subsidiary, Bontan Diamond Corporation ("BDC"), has decided not to exercise its previously announced option to acquire 50% working interest in a joint venture to explore and mine diamonds from the alluvium of the valley of the Paranaìba River in the Coromandel region of Minas Gerais state of Brazil. The decision was made by the Chief Geologist of BDC on the basis of newly available adverse technical data concerning the location of the joint venture.

Mr. Guardia, Chief geologist, commented, "While we are disappointed at not being able to proceed with this project as planned, we are glad that technical problems were identified at an early stage that saved our company valuable time and resources that will now be better used on other opportunities."

Mr. Kam Shah, CEO commented, "Although it is disappointing, we are encouraged by the effectiveness of our due diligence and control procedures which prevented an unprofitable financial commitment. We believe that our resident team of geologists in Brazil are now in a better position to negotiate new deals."

About Bontan Corporation Inc.:

Bontan Corporation Inc. is a diversified natural resource Company seeking high returns with minimal risks. Bontan operates, backs and invests in major exploration and exploitation plays run and organized by highly regarded geologists, geophysicists and executives.

Through its wholly owned subsidiaries, Bontan seeks highly visible opportunities in countries around the globe with a history of natural resource production that offer exciting and attractive propositions. The company will seek to minimize risk by bringing in either joint venture, carried or working interest partners, depending on the size and scale of the project.

Bontan currently has business interests in Brazil and Papua New Guinea.

For further information, please contact Kam Shah, CEO & CFO at 416-860-0175. Visit www.bontancorporation.com for more information.

For media relations, please contact Robert Kennedy at Current Capital Corp. at 416-860-0211 or visit the web site at www.currentcapital.com.

No regulatory authority has approved nor disapproved the content of this release.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plans", "confident that", "believe", "expect", or "intend to", and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements.