Grange Gold Corporation

Grange Gold Corporation

May 24, 2005 10:48 ET

Grange Gold Corporation Announces Equipment Purchase

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 24, 2005) - Grange Gold Corporation (the "Company") (TSX VENTURE:GEG) is pleased to announce a financing by its wholly owned subsidiary the Lovitt Mining Company ("LMC") of up to $ 1,000,000 US in secured notes with a term of one year, bearing simple interest of 8% per annum, with interest paid semi-annually. The notes, issued in series, will be secured by certain real property owned by the LMC on or near the city limits of Wenatchee, Washington State. The notes will be issued in multiples of $ 50,000, and at the option of the holder, half the amount of the notes will be convertible into shares of the parent and guarantor Grange Gold Corporation, at US 0.50 per share. After six months of the initial subscription date of the notes, LMC, at its option, may repay the note at face value plus interest. If notice is given by LMC to redeem a note, the holder will have 14 days notice to exercise the equity conversion feature in full or in part, or the convertibility will expire. This financing will only be available to accredited investors. The Company may pay a finders fee or commission in connection with this issue if such payment is in accordance with Exchange policies.

$ 750,000 of the proceeds of this issue will be used towards the purchase of ultra high pressure pasteurizing equipment used by an affiliated company, Lovitt Farms Inc. ("LFI"). The Company will use any funds raised in excess of $ 750,000 for working capital. Upon closing the equipment purchase, LFI will assume all the rights and privileges of a 5 yr lease between the equipment manufacturer and LFI, with monthly payments of $ 27,500. The lease has been in effect for 34 months and has a term of 60 months. Approximately $ 475,000 has been accrued in lease payments, which will be assumed by LMC, and carried as an account receivable from LFI to LMC.

The preceding use of funds is subject to the approval of the TSX Venture Exchange (the "Exchange"). LMC intends to repay any notes outstanding by selling approximately 40 acres of land out of a land inventory in the Wenatchee area of approximately 500 acres. LMC has signed a real estate listing agreement subject to Exchange approval, anticipating gross revenue of $ 1.5 million from the sale of land to be sold in 1, 2 1/2 and 5 acre lots. As this real estate is sold, 80% of the net proceeds will be placed in trust in a segregated fund until the value of the fund equals the amount required to retire the notes outstanding.

The high pressure pasteurizing equipment is essential to the business of LFI for use in a plant and cold storage facility leased to LFI by LMC. LFI requires the use of this equipment to produce various pure fruit ciders currently in distribution in North America from Victoria, BC to Winnipeg, MA, and as far south as San Diego, CA.

The Company currently owns 29% of LFI and these shares are being held for investment purposes. In addition LMC has accrued approximately $ 90,000 in advances, expenses, and management fees owed to LMC by LFI currently. In the past, such accruals have been converted by LMC into equity in LFI. The Directors of the Company believe that the lease income from the equipment is a good alternative use of funds compared to a passive real estate investment, due to the higher potential return on capital. If the equipment purchase is completed, substantial value will be added to the plant and cold storage facility owned by LMC.

A Director of the Company has agreed to subscribe to $ 500,000 of this issue so that LMC can fulfill its intention to purchase the high pressure equipment in a timely manner.

Grange Gold Corporation

C. Lorne Brown, President

The TSX Venture Exchange has neither reviewed nor accepted responsibility for the adequacy or accuracy of the contents of this news release which has been prepared and promulgated by management.

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