Majestic Gold Corp.
TSX VENTURE : MJS

Majestic Gold Corp.

November 28, 2006 19:00 ET

Majestic Gold Completes Option Agreement With Central China Goldfields

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 28, 2006) - Majestic Gold Corp. ("Majestic") (TSX VENTURE:MJS) is pleased to announce that further to the Letter of Intent dated September 13, 2006 and amended October 12, 2006, with Central China Goldfields plc. ("CCG") (AIM:GGG), Majestic and CCG have entered into an option agreement dated November 19, 2006.

Under the terms of the agreement, CCG is granted an option to acquire a 50% interest (the "Initial Interest") in Majestic China Mining Corp. ("MCMC"), a wholly-owned subsidiary of Majestic which will indirectly hold Majestic's property interests in China. CCG must advance CAD$12.25 million to MCMC by December 31, 2007 to earn the Initial Interest and the proceeds will be used for further exploration and development of Majestic's projects in China.

Upon earning the Initial Interest, CCG will have the option, subject to approval by the shareholders of Majestic, to acquire the remaining 50% interest in MCMC (the "Remaining Interest") by the issuance of CCG shares having a minimum value of CAD$20 million or by payment of cash.

As of August 2006 Majestic holds 3.7% of CCG's ordinary share capital.

The directors of Majestic and CCG believe the agreement will benefit shareholders of both companies by allowing for the rapid development of Majestic's two advanced-stage exploration properties in China, Song Jiaguo (Shandong Province) and Sawayaerdun (Xinjiang Province), both of which have initial NI 43-101 resource estimates completed.

Additional Terms and Conditions of the Option Agreement

To earn the Initial Interest, CCG must advance the CAD$12.25 million to MCMC as follows:

- CAD$1.5 million on or before November 30, 2006;

- CAD$1.5 million on or before December 31, 2006;

- CAD$4.5 million on or before January 31, 2007; and

- CAD$4.75 million on or before December 31, 2007.

In the event that CCG does not proceed at any time subsequent to the date that it has advanced CAD$3.0 million to MCMC and prior to earning the Initial Interest, CCG has the right to terminate the option and convert all proceeds it has advanced to MCMC to common shares of Majestic. With respect to the first CAD$3.0 million, the conversion price is CAD$0.50 per share, and with respect to the remainder of the proceeds advanced, the conversion price is the ten day weighted market average price for Majestic's common shares as of the date of notice.

If CCG does not exercise its option to acquire the Remaining Interest, then Majestic has the option to acquire from treasury new shares of MCMC that, together with the shares of MCMC held by Majestic at that time, will equal 51% of the issued shares of MCMC by payment of CAD$500,000 to MCMC.

Majestic, an exploration company that has been operating in China since 2003, shall remain the operator on its Chinese projects until the date that CCG has exercised its right to acquire the Remaining Interest.

"We are pleased to have finalized our agreement with Central China Goldfields to ensure the timely development of our two most significant properties in China," said Majestic president, Rod Husband. "With our combined expertise in China and pooled resources, our two companies will be able to achieve more together than either of us would on our own."

About Central China Goldfields

CCG is a public English company listed on the Alternative Investment Market ("AIM") of the London Stock Exchange which develops and explores for economically mineable gold, silver and copper projects in China. CCG focuses on areas with historical production where modern mine extraction methodology has been under utilized. Its principal focus is on the exploration, discovery and development of gold deposits in the western Qinling fold belt. Chinese sources report that resources totalling more than 300 tonnes of gold (9.7 million ounces) have been delineated during the last 15 years, including the discoveries of Baguamiao (80 tonnes gold), Shuangwang (over 60 tonnes), Dashui (46 tonnes) and Dongbeizhai (over 60 tonnes).

CCG's property portfolio is currently made up of two flagship projects: the Snow Mountain Project in Sichuan Province (Carlin style), the Nimu Copper-Molybdenum Project in Tibet (copper oxide) and three other projects: the Dong Mao Huo Mine in Nei Menggu (oxide gold), the De Ming Ding Project in Tibet (porphyry copper) and the Xiang Shui Tan Silver-Gold Project in Hubei Province (vein type).

CCG and its local partners have defined a total of 1,300,000 ounces of gold and greater than 600,000 tonnes of contained copper in these projects (all Chinese standards). All properties are under-explored and CCG is actively developing these projects.

Further details on CCG and its properties can be found at www.ccgoldfields.com.

This news release was reviewed by Qualified Persons as defined by National Instrument 43-101, including Rod Husband, P. Geo., who has prepared the technical information contained herein.

On Behalf of the Board of Directors

Rod Husband, P.Geo., Director, President and CEO

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.


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

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