Lexam VG Gold Inc.
TSX : LEX
OTCQX : LEXVF
FRANKFURT : VN3A

Lexam VG Gold Inc.

September 27, 2011 21:37 ET

Lexam VG Gold Inc.: Positive Results Expand Mineralization and Open Up Potential at Buffalo Ankerite

TORONTO, ONTARIO--(Marketwire - Sept. 27, 2011) - Lexam VG Gold Inc. (TSX:LEX)(OTCQX:LEXVF)(FRANKFURT:VN3A) is pleased to announce encouraging exploration results from twenty-one new holes at the Buffalo Ankerite Project, located in Timmins, Ontario, Canada. Drill highlights include: 13.44 grams per tonne (gpt) gold over 2.2 metres, 8.82 gpt gold over 3.4 metres and 27.10 gpt gold over 1.2 metres. The holes contained in this release were focused on expanding Buffalo Ankerite's South Zone to the west and at depth. In addition, drilling has discovered what appears to be a potentially new mineralized structure parallel to the existing resource.

"With historic production totalling 1 million ounces of gold, Buffalo Ankerite is one of the largest historic mines owned by a junior in Timmins. Our exploration drilling continues to demonstrate that the zones extend beyond the limits of the previous mining, returning encouraging grades over potentially mineable widths. The focus for the remainder of 2011 is to further grow the resource, in order to prepare an updated estimate, which is scheduled for the first quarter of 2012," stated Tom Meredith, President and CEO.

South Zone Resource Expanded West and at Depth (Fig. 1 and 3)

Drilling in the upper portion of Buffalo Ankerite's South Zone focused on extending the mineralization beyond the current resource and the previously mined areas. Holes completed in this area returned 7.50 gpt gold over 2.4 metres, 27.10 gpt gold over 1.2 metres and 11.64 gpt gold over 1.4 metres, successfully extending the near surface resource by up to 50 metres laterally. Drilling also tested for deeper mineralization within the same area, returning 8.82 gpt gold over 3.4 metres and 5.12 gpt gold over 1.6 metres, with the results occurring 350 and 450 metres below surface, respectively. These results demonstrate the potential to expand the existing resource in multiple directions. The grades encountered in these holes are consistent with the Buffalo Ankerite Mine's past production.

Six additional holes were also drilled to test the deeper potential. Each of these holes intersected the zone but returned lower gold values. Although lower grade, these holes indicate that the zone is continuous over a potentially large area.

Discovery of a Potential New Parallel Zone (Fig. 1, 2 and 3)

Buffalo Ankerite is comprised of several parallel zones. Recent drilling has encountered what appears to be a new zone located between Goldcorp's former producing Aunor Mine (past production 2.5 million ounces) and Lexam VG Gold's Buffalo Ankerite Mine (past production 1.0 million ounces). One of the initial holes from this area returned 13.44 gpt gold over 2.2 metres within a wider intercept that returned 3.47 gpt gold over 16.8 metres, starting at 550 metres below surface. A second deeper hole, located 800 metres below surface, returned 5.74 gpt gold over 0.9 metres, showing the zone extends at depth.

Four additional holes also tested the potential of this new zone, intersecting Quartz-tourmaline breccia veins with anomalous gold values. Although early, the results are encouraging and could represent an exciting exploration target.

Buffalo Ankerite South Zone Mineral Resource

tonnes gpt oz. Au
Indicated 1,217,114 4.59 179,322
Inferred 1,800,828 4.35 251,872

P.A. Bevan, P.Eng., February 11, 2009 -"Qualifying Report on the Buffalo Ankerite Property, South Porcupine, Ontario, Canada (NTS 42E 12/SW)"

(1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

(2) The quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

(3) The mineral resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.

Exploration Drill Program

Four diamond drills are operating at the Buffalo Ankerite Project. Three of the drills are located at the North Zone, with the remaining drill located at the South Zone, where the results from this news release were focused. Lexam VG Gold is planning to update the resource estimate for Buffalo Ankerite based on the 2011 drilling and anticipates publishing the results in the first quarter of 2012.

Buffalo Ankerite

Lexam VG Gold owns a 100% interest in the 1,063 acres of the Buffalo Ankerite property. During the period 1926-1953 the Buffalo Ankerite Mine produced 1,018,000 ounces of gold with an average recovered grade of 6.51 grams per tonne.

Lexam VG Gold has an option to earn a 60% interest in the Aunor claim, which lies contiguous to the west of the Buffalo Ankerite claims and which hosts a portion of the South Zone's mineralization. The Aunor claim is surrounded on 3 sides, east, north, south, by the Buffalo Ankerite property.

About Lexam VG

Lexam VG Gold explores for gold in the Timmins area of northern Ontario, Canada. Lexam VG Gold was formed on January 1, 2011 by the merger of Lexam Explorations Inc. and VG Gold Corp., resulting in a well-funded exploration company that is 27% owned by Chairman Rob McEwen. The company is carrying out an aggressive exploration program with 70,000 metres of drilling planned for 2011, designed to build the resource base and to test the potential on its four key property assets: Buffalo Ankerite (100% interest), Fuller (100% interest), Davidson Tisdale (68.5% interest) and Paymaster (60% interest). Lexam VG Gold has $12.4 million in cash as of June 30, 2011, with no bank debt. The company has 225,545,265 issued and outstanding shares.

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/LEX-Fig1.pdf

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/LEX-Fig2.pdf

To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/LEX-Fig3.pdf

LEXAM VG GOLD.....WE ARE GOLD!

Technical Information

The information presented in this press release has been reviewed and approved by Kenneth Guy, P.Geo, a consultant to Lexam VG and the Qualified Persons responsible for the exploration program at the Paymaster as defined by National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101"). For further information about the Paymaster property see the technical report titled "Summary Report on Exploration and Resource Technical Report on the Paymaster Option" prepared by Kenneth Guy and P.A. Bevan, dated December 20, 2010 (the "Paymaster Report"). The Paymaster Report is available on SEDAR under VG Gold Corp.'s profile (a predecessor company to Lexam VG Gold).

All drilling was completed using NQ size core. Gold analysis of the samples collected by Lexam VG Gold was assayed by ALS Chemex. Analysis consisted of a fire assay of a 30-gram sample with an atomic absorption finish. Samples assaying over 10.0 gram per tonne Au are re-assayed with gravimetric finish. Samples noted to contain visible gold are analyzed via total metallic assay method. A rigorous Quality Control and Assurance Program is in place, using control samples such as blanks and duplicate checks. In addition, duplicate analyses of 10% of the samples are corroborated by check assays performed at a third party laboratory.

Cautionary Note to U.S. Investors

All resource estimates reported by Lexam VG Gold are calculated in accordance with NI 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Caution Concerning Forward-Looking Statements

This press release contains certain forward-looking statements and information. The forward-looking statements and information express, as at the date of this press release, Lexam VG's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of precious or base metals, mining industry risks, risks associated with foreign operations, risks related to: litigation, property title, the Paymaster Option, the state of the capital markets, whether shareholder and regulatory approvals for the proposed transaction are forthcoming, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves and other risks.

Readers should not place undue reliance on forward-looking statements or information. Lexam VG undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See Lexam VG's Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. All forward-looking statements and information made in this news release are qualified by this cautionary statement.

To learn more about Lexam VG Gold (TSX:LEX), visit our website: www.lexamvggold.com.

Table 1. Buffalo Ankerite South Zone Drill Holes Summary Data
To view Table 1 in pdf format, please visit the following link: http://media3.marketwire.com/docs/LEX-Table.pdf
Hole # East North Elevation Length (ft) Length (m) Dip Az From (m) To (m) Width (m) Au grams/tonne
VGA-11-02 3319.2 6901.3 11030.1 2,698.9 822.6 -52 170 595.9 597.0 1.2 0.55
605.2 608.4 3.2 2.65
671.7 676.6 4.8 3.67
VGA-11-03 3319.2 6901.3 11029.9 3,059.2 932.4 -72 172 768.7 771.6 3.0 2.00
VGA-11-04 2819.8 6933.7 11028.3 2,667.3 813.0 -51 172 579.9 581.9 2.0 2.30
662.8 679.6 16.8 3.47
includes 2.2 13.44
687.9 689.0 1.1 1.67
706.5 709.0 2.4 3.00
721.8 724.2 2.5 1.26
736.9 739.6 2.7 1.99
VGA-11-05 2819.8 6933.7 11028.3 2,946.2 898.0 -65 172 761.7 762.9 1.1 1.08
774.1 775.0 0.9 3.47
859.0 859.9 0.9 5.74
VGA-11-06 2321.2 7004.8 11033.0 2,780.0 847.3 -50 173 466.9 490.5 23.6 1.44
includes 0.9 9.88
501.1 503.0 1.8 6.65
510.6 511.5 0.9 1.62
556.6 557.5 0.9 4.03
591.6 593.6 1.9 1.66
662.9 666.4 3.5 1.25
679.0 680.5 1.5 1.06
690.1 691.9 1.8 1.25
699.2 700.1 0.9 1.20
5 holes 14,151.6 4,313.4
VBA-11-164 4901.2 6572.4 11015.1 2,171.9 662.0 -45 350 11.2 14.1 2.9 4.74
19.9 21.1 1.2 0.94
39.6 43.4 3.8 0.67
127.7 129.1 1.4 2.90
134.8 162.9 28.2 1.83
includes 2.4 7.50
503.4 506.3 2.9 0.54
521.7 523.3 1.6 0.60
527.0 528.0 1.0 5.50
613.1 614.8 1.6 0.67
619.2 621.8 2.6 0.93
638.3 639.8 1.5 0.66
VBA-11-165 4757.7 6476.1 11040.0 1,851.2 564.2 -55 175 47.5 49.1 1.6 0.95
394.5 395.4 0.9 0.676
407.7 408.9 1.2 2.67
416.1 417.0 0.9 2.04
426.4 438.5 12.1 3.08
includes 3.4 8.82
466.3 467.4 1.1 0.801
470.8 474.3 3.5 0.63
487.5 489.3 1.8 2.04
537.7 539.1 1.4 0.693
VBA-11-166 4650.7 6814.0 11024.5 2,300.0 701.0 -55 180 476.1 477.7 1.6 1.15
555.0 556.3 1.2 0.96
VBA-11-167 4708.9 6999.1 10997.5 1,755.2 535.0 -70 174 393.4 397.6 4.2 1.50
VBA-11-168 4708.9 6999.1 10997.5 2,306.4 703.0 -57 174 425.9 437.0 11.1 1.35
includes 1.5 3.21
VBA-11-169 4651.0 6816.2 11024.4 2,500.0 762.0 -68 184 32.0 33.5 1.5 2.33
46.6 48.3 1.7 0.78
424.3 425.8 1.5 2.21
432.7 437.1 4.4 3.20
includes 1.6 5.12
VBA-11-170 4503.9 7191.9 11029.3 331.4 101.0 -45 174 no significant values
VBA-11-171 4503.9 7191.9 11029.3 2,366.9 721.4 -70 174 198.5 199.6 1.1 1.05
211.6 213.4 1.8 2.25
215.8 217.7 1.8 2.18
443.5 445.3 1.8 1.70
VBA-11-176 3320.0 5498.0 11006.0 1,131.9 345.0 -45 180 50.6 52.7 2.1 1.17
57.9 61.8 3.8 1.43
VBA-11-179 3320.0 5497.8 11005.6 1,279.5 390.0 -58 180 55.2 56.4 1.2 0.60
61.6 67.9 6.4 1.17
232.0 234.2 2.2 1.65
VBA-06-25e 2800.0 5600.0 11017.6 561.0 171.0 -45 180 206.0 209.7 3.7 1.18
Extended from: 292.0 242.0 243.5 1.5 1.03
to: 853.0
VBA-06-23e 3000.0 5497.2 11008.4 836.7 255.0 -45 180 261.1 262.7 1.6 0.95
Extended from: 219.7
to: 1056.4
VBA-06-24e 3000.2 5500.3 9993.2 1,082.7 330.0 -75 180 301.6 302.4 0.8 0.94
Extended from: 272.3
to: 1355.0
VBA-06-21e 3100.5 5497.2 11006.1 780.8 238.0 -45 180 270.2 271.2 1.0 0.81
Extended from: 242.8
to: 1023.6
VBA-11-181 3539.0 5611.0 11020.0 1200.8 366.0 -54 179 95.6 103.0 7.4 2.16
108.7 115.9 7.3 5.15
includes 1.2 27.1
247.4 248.5 1.1 1.94
257.6 259.3 1.8 0.93
VBA-11-182 3539.0 5611.0 11020.0 1,009.2 307.6 -76 178 112.3 115.6 3.3 1.31
end in ugo 121.7 128.2 6.4 2.93
includes 1.4 11.64
154.9 157.9 3.0 1.05
293.5 296.5 3.0 1.33
16 holes 22,264.8 7,152.3
21 holes 36,416.4 11,465.7
Legend
ft – feet; m – metres; Au – gold; Az- azimuth; ugo – underground opening.
Intervals reported here are core lengths. True widths are not known at this time. All depth reported as down hole.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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