Auriga Gold Corp.
TSX VENTURE : AIA

Auriga Gold Corp.

April 26, 2012 07:00 ET

Auriga Gold Enters Indicative Term Sheet for $10 Million Construction Loan With Resource Income Fund for the Maverick Gold Project, Manitoba

TORONTO, ONTARIO--(Marketwire - April 26, 2012) - Auriga Gold Corp. (TSX VENTURE:AIA) ("Auriga Gold" or the "Company") announces that it has executed an indicative term sheet with the Resource Income Fund L.P. ("RIF" or the "Lender") for a proposed $10 million construction loan to be used at the Maverick Gold Project, located 65 kilometers northeast of Flin Flon, Manitoba. The proposed $10 million loan will fund the refurbishment and development of the Puffy Lake Mine and Mill at the Maverick Gold Project as outlined in the Company's Preliminary Economic Assessment filed on SEDAR on February 21, 2012.

Richard Sutcliffe, Auriga Gold's President and CEO, commented, "We are pleased to be working with the Resource Income Fund as we advance the Maverick Gold Project to production. This proposed credit facility is significant in that it will provide a flexible, non-dilutive financing option for the project."

It is anticipated that the construction loan will bear interest at an annual percentage rate of 14% and shall be repaid no later than May 31, 2014 by 12 monthly payments of principal and interest beginning June 30, 2013. Auriga Gold will pay an upfront commitment fee of $100,000 along with agreed upon drawdown fees anticipated to occur in two tranches of $5mm each on or about July 15, 2012 and on or about October 31, 2012. In conjunction with the financing, it is anticipated that RIF will be granted certain common share purchase warrants.

It is intended that the loan will be secured against Auriga Gold's assets. Auriga Gold will establish a gold put option price protection program with terms subject to market conditions. The execution letter will be made final by completion of certain items including technical and legal due diligence; close of an aggregate of approximately CDN$8 million in equity raises; receipt of all necessary operating permits and approvals; and, any other required conditions that are standard for a facility of this type, including approval of the TSX Venture Exchange.

In addition, on March 23, 2012, the Company announced the closing of gross proceeds of $2.09 million of a private placement. The Company will not proceed with the second tranche of the private placement that was referred to in the March 23, 2012 press release.

About Auriga Gold

Auriga Gold Corp. is a Canadian mine development and exploration company focused on developing the Puffy Lake Mine and expanding gold resources on its Puffy Lake and Nokomis deposits (the "Maverick Gold Project"). The Company plans to upgrade and expand the resources at the Maverick Gold Project, initiate test mining, complete feasibility studies of mineral reserves, and bring the Puffy Lake Mine back into production. The Puffy Lake Mine includes a 1,000 tpd flotation mill, a developed underground ramp to 135 metres depth, is fully road accessible and close to existing mining infrastructure. The Maverick Gold Project is located in the Flin Flon Greenstone Belt of Central Manitoba. To view current images of the mill, please see www.aurigagold.ca/s/photogallery.asp.

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the proposed loan, use of proceeds and the future develop the Maverick Gold property. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks associated with the exploration, development and mining such as economic factors as they effect exploration, future commodity prices, changes in foreign exchange and interest rates, actual results of current exploration activities, government regulation, political or economic developments, environmental risks, permitting timelines, capital expenditures, operating or technical difficulties in connection with development activities, employee relations, the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of reserves, contests over title to properties, and changes in project parameters as plans continue to be refined as well as those risk factors discussed in the Company's Management's Discussion and Analysis for the Three and Six Months ended September 30, 2011, available on www.sedar.com. Although Auriga Gold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Auriga Gold does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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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