MGold Resources Inc.
TSX VENTURE : MNI

July 26, 2011 11:28 ET

MGold Resources Announces Brokered Private Placement

MONTRÉAL, QUÉBEC--(Marketwire - July 26, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

MGold Resources Inc. ("MGold" or the "Corporation") (TSX VENTURE:MNI) is pleased to announce that it has engaged Macquarie Private Wealth Inc. (the "Agent") to sell, on a commercially reasonable efforts agency basis and, subject to, among other things, completion of satisfactory due diligence, a minimum of 15,000,000 and a maximum of 30,000,000 common shares of the Corporation (each a "Common Share") at a price of $0.10 per Common Share for aggregate gross proceeds of $1,500,000 to $3,000,000, respectively (the "Offering").

In connection with the Offering, the Corporation has agreed to pay the Agent a commission in the form of cash or Common Shares, at the discretion of the Agent, equal to 10% of the gross proceeds of the Offering. In addition, the Agent and its designated sub-agents, if any, will be granted options to acquire up to 10% of the Common Shares sold pursuant to the Offering (the "Agent's Options"). Each Agent's Option will entitle its holder thereof to acquire one Common Share at a price of $0.10 per Common Share for a period of 24 months from the closing of the Offering.

The Common Shares to be sold under the Offering will be offered in Canada by way of private placement exemptions and in such other jurisdictions as the Corporation and the Agent may agree. All securities issued in connection with the Offering will be subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation.

The Corporation intends to use the net proceeds of the Offering primarily to incur exploration expenditures as consideration for the contemplated acquisition of two properties located in the state of Nevada, previously announced by news release on June 16, 2011 and for working capital and general corporate purposes.

The Offering is expected to close on or about August 5, 2011, or such other date or dates as the Corporation and the Agent may agree and is subject to the receipt of all necessary regulatory approvals, including the approval by the TSX Venture Exchange.

MGold is engaged in mineral exploration for precious and base metals. The Corporation also has the Burchell Lake Property, which is prospective for gold, copper, and molybdenum, in the Shebandowan area of Northwestern Ontario. 13,271,324 common shares of MGold are currently issued and outstanding Common Shares.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained herein constitute forward-looking statements, including statements concerning the anticipated closing date of the Offering, completion of the acquisition of the properties located in Nevada and use of proceeds. Such forward-looking statements are subject to both known and unknown risks and uncertainties which may cause the actual results, performances or achievements of the Corporation to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Closing could be delayed if the Corporation cannot obtain all of the necessary regulatory approvals within anticipated timelines and will not be completed unless certain conditions customary for transactions of this kind are satisfied. The forward-looking statements included in this news release are made as of the date of this release and except as required by law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This news release may contain statements within the meaning of safe harbour provisions as defined under United States securities laws and regulations. The above statements are based on the current expectations and beliefs of the management of the Corporation and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above.

For further information, please bookmark www.mgold.ca (under construction).

Neither the 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.

Contact Information

  • In Canada: MGold Resources Inc.
    Joel Scodnick
    President and Chief Executive Officer
    (705) 522.4439
    (705) 522.8694 (FAX)
    joelscodnick@me.com

    MGold Resources Inc.
    Marc Poitras
    Chief Financial Officer and Director
    (705) 222-1700
    (705) 222-1701 (FAX)
    marc@poitrasca.ca

    In Europe: MGold Resources Inc.
    W. Ian L. Forrest
    Chairman and Director
    +41 79 202 6927
    +41.22.899.9501 (FAX)
    ian@forrestenterprise.com