Mineral Deposits Limited

Mineral Deposits Limited

October 20, 2010 18:00 ET

Mineral Deposits Limited: Filing of Preliminary Prospectus for Teranga Gold Corporation

MELBOURNE, AUSTRALIA--(Marketwire - Oct. 20, 2010) - Mineral Deposits Limited (TSX:MDM)(ASX:MDL) is pleased to announce that as part of its intention to demerge the Sabodala gold operation from the Company, a preliminary prospectus has been filed with the securities regulatory authorities in each of the provinces of Canada except Quebec for a proposed initial public offering ("IPO") of common shares of Teranga Gold Corporation, a new Canadian incorporated company which is intended to own the Sabodala gold operation as well as a minority equity position in Oromin Explorations Ltd ("the Sabodala Gold Assets"). The underwriting syndicate for the offering is to be led by Cormark Securities Inc. and GMP Securities LP.

Details of the demerger proposal are set out in the Notice of Special and Annual General Meeting and Explanatory Memorandum that has recently been despatched to shareholders for the purpose of, amongst other things, seeking the approval of shareholders to effect certain transactions as part of the demerger proposal. The Special and Annual General Meeting will be held on 9 November 2010.

It is proposed that, subsequent to the demerger and IPO, MDL shareholders will own shares in Teranga Gold, which will own the Sabodala Gold Assets, as well as their shares in MDL, which will continue to own the Grande Côte mineral sands project as well as a minority interest in Teranga Gold.

The preliminary prospectus for Teranga Gold is available under Teranga's profile on SEDAR at www.sedar.com.

About MDL

Mineral Deposits Limited is an ASX and TSX listed mining company with a current focus in Senegal, West Africa through a producing gold mine, the Sabodala Gold Operation, and a to be developed mineral sands project, the Grande Côte Mineral Sands Project.

The Sabodala Gold Operation, which poured its first gold in March 2009, is located 650 kilometres east of the capital Dakar within the West African Birimian geological belt in Senegal, and about 90 kilometres from major gold mines and discoveries in Mali. The area has only recently been opened for mining and exploration and is emerging as a significant new gold camp, with more than 10M ounces of resources already discovered.

The Grande Côte Mineral Sands Project is located on the coast of Senegal starting approximately 50 kilometres north of Dakar and extending northwards for more than 100 kilometres. The large scale of the ore body and the high quality of the zircon provides the potential to establish an operation of international significance.

Senegal is one of Africa's most successful democracies, having gained independence in 1960. It enjoys a stable and investor friendly political and social environment. The government of the Republic of Senegal is MDL's valued partner and holds a 10% free carried interest in both projects, which will accrue dividends once MDL has recovered its capital invested.

Forward Looking Statements

Certain information contained in this release, including any information on MDL's plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. MDL cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of MDL to be materially different from the company's estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of MDL. Nothing in this release should be construed as either an offer to sell or a solicitation to buy or sell MDL or any other securities.

ABN 19 064 377 420

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