African Gold Group, Inc.
TSX VENTURE : AGG

African Gold Group, Inc.

December 01, 2009 16:28 ET

African Gold Group, Inc. Announces a Bought Deal Private Placement of 8,400,000 Units for Gross Proceeds of $5,040,000

TORONTO, ONTARIO--(Marketwire - Dec. 1, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES

African Gold Group, Inc., ("AGG" or the "Company") (TSX VENTURE:AGG) is pleased to announce that it has entered into an agreement with Macquarie Capital Markets Canada Ltd. ("Macquarie" or the "Underwriter") to purchase, on a bought deal basis, 8,400,000 units ("Units") in the capital of AGG at $0.60 per Unit (the "Unit Price") for aggregate gross proceeds to AGG of $5,040,000 (the "Offering"). Each Unit is comprised of one common share and one-half of one common share purchase warrant of the Company (each whole warrant, a "Warrant"). Each Warrant entitles the holder to purchase one additional common share of the Company at a price of $0.90 per common share for a period of 18 months (the "Expiry Date") following the Closing Date (as defined herein). The Company has agreed to grant the Underwriter an option to purchase up to an additional 1,600,000 Units at the Unit Price per Unit for additional aggregate gross proceeds to AGG of $960,000, exercisable at any time in whole or in part up to 48 hours prior to the Closing Date (the "Underwriters Option"). If the Underwriters Option is exercised in full, the aggregate gross proceeds to AGG will be $6,000,000.

The offering is anticipated to close on or about December 16, 2009 (the "Closing Date") and is subject to certain conditions including, but not limited to, the receipt of applicable regulatory approvals including approval of the TSX Venture Exchange ("TSX-V"). The common shares and warrants comprising the Units issued under the Offering will be subject to a four-month and one day hold period commencing on the Closing Date under applicable securities legislation. Units will be available for sale to qualified offshore investors and to "accredited investors" in all of the provinces of Canada.

Proceeds from the Offering will be used to fund continued development of the Kobada Project and the Company's other assets and for general working capital and corporate purposes.

The Underwriter will receive a cash commission of 6.0% of the gross proceeds raised in the Offering and, if exercised, the Underwriters Option. The Underwriter will also receive compensation options equal to 8.0% of that number of Units issued in connection with the Offering and, if exercised, the Underwriters Option (each a "Compensation Option"). Each Compensation Option will entitle the Underwriter to purchase one Unit of the Company at the Unit Price, subject to regulatory approval, for a period of 18 months following the Closing Date.

The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, or any State Securities Laws and may not be offered or sold in the United States or to U.S. persons unless an exemption from registration is available. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States.

African Gold Group, Inc., based in Toronto, Canada, is engaged in the identification, acquisition and exploration of prospective gold projects that are situated along significant gold trends within West Africa. To date, the Company controls a total of twelve gold concessions that are consolidated in five distinct standalone exploration projects, of which three projects are located in Ghana and the remaining two are located in Mali, West Africa.

Additional Information is available on the Company's website at: www.africangoldgroup.com and on www.sedar.com and through the Company's offices at: Brookfield Place, Canada Trust Tower, 27th Floor, 161 Bay Street, Toronto, Canada M5J 2S1

On Behalf of the Board:

Michael A. J. Nikiforuk, President, Director

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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