SOURCE: Dutch Gold Resources, Inc.

January 15, 2008 08:30 ET

Dutch Gold Resources Releases Letter to Stockholders

ATLANTA, GA--(Marketwire - January 15, 2008) - Dutch Gold Resources, Inc. (PINKSHEETS: DGRI), a developer and operator of proven gold mines and a regional mill in North America, today released a letter to stockholders from CEO Daniel W. Hollis.

The text of the letter in its entirety is contained below:

Dear Fellow Stockholder,

On behalf of the Board of Directors, management team and staff, it is my privilege to update you on the progress that we have made at Dutch Gold Resources, Inc. during 2007 and outline our vision and strategy to grow the company. We believe that Dutch Gold is in the right business, at the right time, with the right people and the right mines.

The past year marked a period of transformation and change for Dutch Gold. Following the acquisition of Dutch Mining, LLC in January 2007, we improved the company in many ways while strengthening our financial position.

--  We made key investments to upgrade our equipment, workforce and
    infrastructure.
    
--  We found new ways to increase our precious metal recovery rate.
    
--  We took measures to improve our cost structure and establish Dutch
    Gold as a credible, consistent and profitable gold mining company.
    

Operations Review

Throughout 2007, we strengthened our infrastructure via major investments in new tools, equipment and heavy machinery. We anticipate our commitment to modernizing our operations should maximize the long-term value of our mining assets by reducing our cost per ounce of production.

High precious and base metals prices have resulted in tremendous industry-wide demand for drilling equipment and specialized mining apparatus. We believe Dutch Gold's strong and well-connected management team has given the company an advantage in procuring and placing the following key equipment into service during 2007:

--  In May, we installed a Knelson Concentrator at the Merlin mill to more
    efficiently process the free gold we discovered.
    
--  In June, we further enhanced the ore recovery circuit at the mill by
    installing a new Gemini table.  Tail values have decreased considerably,
    indicating that the equipment is performing per specifications.
    
--  In September, we installed a 24" Telsmith Cone Crusher with an
    advanced magnet system and double deck screens, which reduces our average
    particle size to less than half an inch.  This modification will decrease
    our maintenance costs and further reduce downtime.  Our mine also took
    delivery of a brand new, highly coveted Hagby Onram 1000/3 diamond core
    drill.  The drill represents an important victory for Dutch Gold since such
    drills are currently hard to procure with wait times often greater than one
    year.
    
--  In October, we began operating a new assay lab on site.  With the new
    lab in operation, we will be able to analyze ore grades within 24 hours,
    thereby providing the mine and mill with swift, accurate and valuable
    information.
    

The above equipment upgrades, combined with the hard work and determination of our staff, have resulted in a current mill capacity of 330 tons of ore per day.

Our Company Is Our People

Production at the historic Benton mine in Southwest Oregon resumed in March 2007 and the company has been shipping gold concentrates on a monthly basis ever since.

Getting to this point was no small task. In our industry, a shrinking talent pool has led to a decade-long shortage of miners, engineers, mill workers and geologists with the experience and expertise needed to execute our plans. Our general manager, Patrick Engel, along with mine superintendent Tim Hunter and mill superintendent Fred Wilcox, have done a phenomenal job of recruiting some of the best talent in the industry away from our competitors.

These workers were attracted to Dutch Gold by the Benton mine's proven production history, our exciting growth plans, and our willingness to invest in the training and tools to bring out their best. We believe the new hires recognized us as a promising employer with a bright future. Dutch Gold has been successful this year because of dedicated teamwork.

Dutch Gold is committed to providing a safe work environment for all of our employees. An excellent safety performance record is an important company asset and will result in reduced insurance premiums. We have invested heavily in modern safety equipment, training and certification this year in order to keep abreast of MSHA safety regulations and reporting requirements. We also require employees to submit to drug testing in advance of hiring, and remain subject to random testing during their employment.

We are committed to never sacrificing safety in order to cut costs. We take safety very seriously, and our safety efforts are yet another quality that set us apart from the competition, while enhancing the value and credibility of Dutch Gold's reputation in the eyes of the marketplace and employees alike.

One very important addition to our team this year was the July appointment of James L. Browne to our Board of Directors. Mr. Browne is a highly regarded geologist with extensive expertise in conducting property evaluations, geological analysis and ore reserve definitions. In this highly competitive environment, the demand for expert geologists like Mr. Browne is enormous. We are very fortunate to have attracted him and believe he will play a vital role in helping us to better understand the nature and occurrence of our mineralization. In turn, we believe this could lead to a dramatic increase to our proven and probable resource base at both the Benton and Gold Bug mines.

Short-Term Goals (1st Quarter 2008)

While we are pleased with our accomplishments to date, several key tasks remain to be completed in the near future:

--  Achieve full-reporting compliance with the Securities and Exchange
    Commission, including the release of audited financial results, in order to
    become more transparent to the financial community.
    
--  Apply for quotation of our shares on the Over-The-Counter Bulletin
    Board.
    
--  Announce the results of our summer drilling program.
    
--  Further develop the Benton mine.
    
--  Evaluate additional properties for potential acquisition.
    
--  Continue to build relationships with investors and expand Dutch Gold's
    presence among resource analysts and professionals.
    

2008 Objectives

--  Place the Texas mine and the Gold Bug mine into production.
    
--  Further develop the Benton mine and other associated vein structures.
    
--  Safely and responsibly produce 15,000 ounces of gold, generating
    potential cash flow with anticipated EBITDA of at least $6 million for the
    full year.
    
--  Expand our resource base and update our proven and probable reserve
    report.
    
--  Participate in several gold trade shows annually.
    
--  Advance our strategy of acquiring other proven gold-bearing mines that
    can be placed back into production.
    
--  Continue to attract, retain and reward the industry's top talent.
    
--  Maintain a passion for excellence -- plan, schedule and execute.
    

In Conclusion

We believe Dutch Gold Resources is well positioned for the future. Spot prices for several base and precious metals have broken into record-high territory and gold prices recently traded above $900 an ounce. Although we cannot forecast the price of gold in 2008, we anticipate our business would still become quite profitable even if gold prices declined from current spot prices.

It is important to note that our mines have a proven historical track record, and that more than 85 percent of the total potential mineable area remains unexplored. Our gold-bearing quartz veins are symmetrical and free of harmful metals such as arsenic and lead, which means that we can process the ore in a more environmentally friendly manner. Finally, the skill, determination and dedication of our workforce remain a critical strength that sets us apart from the competition.

Thank you for the confidence and trust that you have placed in Dutch Gold Resources, Inc. Although much hard work lies ahead, our entire team remains focused on the creation of long-term value for our shareholders. Through operational excellence and the continued pursuit of our vision, we believe we are well on our way towards achieving our goal of building Dutch Gold into one of the premier gold mining companies in the Pacific Northwest.

We appreciate your loyalty and support, and look forward to working diligently towards rewarding your commitment in the years to come.

Respectfully Submitted,

Daniel W. Hollis

Chief Executive Officer

About Dutch Gold Resources, Inc.

In January 2007, Dutch Gold Resources, Inc. acquired Dutch Mining LLC, which was founded in 1994. Dutch Gold is engaged in the mining and processing of proven gold reserves in North America. The company's strategy is to focus on overlooked resources which can be quickly and cost-efficiently brought into production. The Company currently owns two mines in Southwestern Oregon, consisting of the Benton and Gold Bug mines. Production resumed in March 2007 and the Company has begun a drilling program to prove up additional reserves and enhance future production. Please visit the Company's website for additional information at: www.dutchgoldresources.com.

The statements made in this document contain certain forward-looking statements. Words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates" or variations of such words and similar expressions, are intended to identify such forward-looking statements. The forward-looking statements contained in this release may involve numerous risks and uncertainties, known and unknown, beyond the Company's control. Such risks and uncertainties include: the ability of the Company to develop its products; the overall, global market for gold and precious metals, future actions by regulatory agencies; overall economic conditions; general market conditions; price increases of gold and other precious metals; foreign currency exchange rate fluctuations; as well as the risk factors listed from time to time in the filings of Dutch Gold Resources, Inc. with the Securities and Exchange Commission. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements, and investors are cautioned not to place undue reliance on the forward-looking statements included in this address.

Contact Information

  • Contact:
    David K. Waldman
    Klea K. Theoharis
    Crescendo Communications, LLC
    (212) 671-1020