First Mexican Gold Corp.

First Mexican Gold Corp.

February 17, 2011 09:00 ET

First Mexican Increases Land Package to 15,112 Hectares

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 17, 2011) - First Mexican Gold Corp. (TSX VENTURE:FMG) is pleased to announce that it has entered into an Option Agreement with Kootenay Gold Inc. (TSX VENTURE:KTN) which adds significantly to its property package at its Guadalupe Property in Sonora State, Mexico. The Company's current property package of 11,506 hectares is contiguous to Corex Gold Corp.'s (TSX VENTURE:CGE) Santana Property where consistently good drilling results have been demonstrated to date.

The Option Agreement with Kootenay Gold continues the land package expansion strategy of First Mexican management. The property package comprises 3606 hectares that are contiguous to the present land holdings and is considered very prospective for gold and silver mineralization with numerous historic workings present. The claims include La Cabana 1 Frac I, La Cabana 1 Frac II, La Cabana 1 Frac III and Cuatas which are 100% owned by Kootenay.

The Option Agreement allows First Mexican to acquire a 60% undivided interest by paying US$25,000 on signing, issuing an aggregate 1,200,000 common shares of FMG over 5 years and spending US$2 million on the property over 5 years. Plus Kootenay retains a 1% NSR interest which can be purchased for US$1 million. The earn-in period can be accelerated at the discretion of FMG. At completion of the earn-in a JV Agreement will be formalized. This property has been added to the existing Option Agreement with International Millennium Mining Corp. (TSX VENTURE:IMI).

Historic and recent non-compliant sampling has been conducted by Kootenay Gold with over 120 samples assayed with the highlights listed below. The samples from the Minas Viejas area of the La Cabana Frac II property is on trend and very close to the recently reported samples (news release Feb 16, 2011) from the Bailey zone of First Mexican.

Sample Highlights

  • sample # FA1322G returned 11.40 g/t gold, 92 g/t silver
  • sample # LM1041D returned 1.54 g/t gold, 672 g/t silver, .69% copper
  • sample # CA1032D returned 3.25 g/t gold, 4620 g/t silver, .698% copper
  • sample # CA984D returned 12.20 g/t gold, 877 g/t silver, 13.40% copper
  • sample # LM1046G returned 4.49 g/t gold, 504 g/t silver, 2.70% copper
Table of Key Sample Results
LOCATION SAMPLE NUMBER AU (g/t) AG (g/t) CU (%) SB ppm PB ppm
Cruz de Mayo FA1322G 11.4 94 .046 2080  
  LM1041D 1.54 672 .69 620 510
  LM1118F 0.179 2      
  MK788 0.145 7      
  MK796 0.128 4      
La CABANA FRAC II            
Minas Viejas CA1032D 3.25 4620 .698 11500 860
  MK782 1.03 182 .08 370 2990
  CA1034D 0.45 1595 .645 4830 70000
  CA1028G 0.257 3050 .127 5410 116000
  CA1029G 0.176 2540 .091 3400 115000
  CA1038G 0.117 1560 .304 1040 15600
  CA984D 12.2 877 13.40 15450 15650
  FA1323D 0.46 53 .295 1200 14050
  LM1045CH 5.42 119 .077 3710 3980
  LM1046G 4.49 504 2.70 11750 33500
  TR588 0.421 5 .070 120 2450
  TR589D .017 3 4.50    
blanks = not significant

"The Kootenay Option Agreement allows First Mexican to acquire a significant interest in ground considered highly prospective and on trend with identified targets from our existing property package. Initial reconnaissance has already begun and we intend to pursue exploration in the immediate area of the Bailey zone, we look forward to working with Kootenay going forward," said Jim Voisin, President and Chief Executive Officer of First Mexican.

SJ Geophysics Ltd. of Delta, B.C., is currently on-site continuing with the extensive 3D IP survey totaling 45 kilometres of lines which includes the survey being extended towards the Bailey zone. This 3D IP program is designed to enhance the drill targeting over multiple identified target rich areas and provide follow-up data to assist in the next phase of drilling within our continually expanding property package.

First Mexican Gold Corp. is an active explorer for precious metals in Mexico and holds an option to acquire 80% interest in the Guadalupe property package from Minera Internacional Milenio S.A. de C.V., a wholly owned subsidiary of International Millennium Mining Corp. (TSX VENTURE:IMI). The Company now has an interest in 15,112 hectares in this high potential precious metals exploration area.

On behalf of the Board of Directors,

Jim Voisin, President & CEO

We seek safe harbour.

This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the Guadalupe property and other future plans, objectives or expectations of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

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