GOLCONDA RESOURCES LTD.
TSX VENTURE : GA

GOLCONDA RESOURCES LTD.

May 18, 2011 16:48 ET

Golconda Announces the Issuance of a Secured Debenture and Operations Update

CALGARY, ALBERTA--(Marketwire - May 18, 2011) - Golconda Resources Ltd. (the "Corporation" or "Golconda") (TSX VENTURE:GA) is pleased to announce the completion of a private placement debenture ("Debenture") and to provide an operations update.

Debenture

The secured Debenture is in the principal amount of $500,000, has a term of two years, bears interest at 10% per annum with interest payable monthly and the principal is due in full at maturity.

The Corporation intends to use the proceeds from this private placement for general working capital purposes.

Operations Update

Golconda's present focus is the diamond core drilling services business provided by its wholly-owned subsidiary, Lyncorp Drilling Services Ltd. ("Lyncorp"). Lyncorp provides services to the mining industry in northern and western Canada, with its operations centre in Smithers, British Columbia.

With improved economic news and a turnaround in the mining industry Lyncorp has enjoyed an early start to the drilling season. Currently three drills are operating at the Dublin Gulch property in the Mayo, Yukon area for Victoria Gold Corp. Lyncorp expects additional contracts and programs to be finalized and mobilised over the coming weeks.

Golconda is in the business of exploration drilling in western and northern Canada and mineral property exploration and development in Nevada.

This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Corporation's disclosure documents on the SEDAR website at www.sedar.com. The Corporation 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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