SOURCE: Arctic Oil & Gas Corp.

December 17, 2008 07:00 ET

Arctic Oil & Gas Corp. (AOAG) Alaska Gold Mines Financing Developments

LAS VEGAS, NV--(Marketwire - December 17, 2008) - Arctic Oil & Gas Corp. (PINKSHEETS: AOAG), a resources development company, is pleased to announce the Company's precious metals division is securing updated ore reserves reports on its Alaska gold projects and finalizing summer 2009 mining development plans.

The company is preparing a hybrid private Gold Mine Finance Offering for qualified banks and institutions.

AOAG plans to offer qualified partners, a potentially more profitable mechanism than gold exchanges for securing large quantities of gold bullion, with an effective projected net cost approximately 30% below the current spot gold price.

The Company is creating a new gold asset security that, as it will be backed by in-ground gold reserves, could be carried on an institution's books at full face value, while securing for institutions' partners a long-term future supply of gold bullion with lower gold acquisition costs than buying gold via exchanges.

The offering terms are intended to offer a lower delivery risk than the increasing counterparty risk of failure to deliver futures exchange gold contracts, which recently caused backwardation in COMEX gold. A situation which rarely occurs because there are usually a number of banks willing to profit by selling some of their bullion hoard in the spot market and simultaneously buying back gold at a lower price for future delivery, thus locking in no-risk profits.

However, because of the precarious state of paper assets and fears about the ability of futures exchanges to deliver the gold bought, banks are increasingly less willing to accept the risks that come with holding dollars while waiting until they can be used at a future date to exchange back into gold that might not be there to take.

For Institutions and investors paper money and debt asset risks include:

--  Unlimited new dollars are being created out of thin air by
    governments, and
--  Holding dollars in banks or hedge funds is rapidly increasing
    counterparty risk, due to the calamitous state of the hedge fund and
    banking industries.

Management believes that the Company's gold mine equity participation program should represent an attractive long-term gold bullion acquisition mechanism to participating institutions.

The first Gold Bullion deliveries could commence as early as June 2009 from the Stage 1 placer gold mines.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks associated with resources exploration risks related to competition, management of growth, new products, services and technologies, potential fluctuations in operating results, international expansion, commercial agreements, acquisitions and strategic transactions, government regulation and taxation. More information about factors that potentially could affect AOAG's financial results is included in its filings with the Securities and Exchange Commission.

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