Morgain Minerals Inc.
TSX VENTURE : MGM

Morgain Minerals Inc.

November 24, 2006 08:30 ET

Morgain Board Approves Construction of Castillo Gold Project, Mexico

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 24, 2006) - Morgain Minerals Inc. (TSX VENTURE:MGM) is pleased to announce that its Board of Directors has approved the construction of its 100% owned Castillo Gold Project ("the Project") located in the State of Durango, Mexico, subject to receipt of final operating permit and construction financing.

As previously reported (see October 27, 2006 press release), an independent Preliminary Feasibility Study ("PFS") demonstrated that an open pit, heap-leach mining operation at the Project is economically viable and robust. The PFS was prepared by A.C.A. Howe International Limited ("Howe").

Highlights of the study are as follows (all dollar figures in US dollars):

- Robust project economics driven by low pre-production capital expenditures and simple mining and heap-leaching technology.

- Base Case after-tax Internal Rate of Return ("IRR") of 34% and Net Present Value ("NPV") of $13.7 million (using $450 per ounce gold and 8% discount rate).

- IRR and NPV increase to 93% and $36.0 million at $600 per ounce gold.

- Capital payback in 2.8 years under conservative operating scenarios.

- Average gold sales of 29,000 ounces per year for 12 years.

- Life of mine cash costs are estimated to average $337 per ounce using mining and crushing contractors.

- The Company believes that cash costs can be reduced by increasing production rates and by purchasing mining and crushing equipment.

Christopher E. Babcock, President of Morgain, reported that the Castillo Project is presently permitted for the extraction of 100,000 tonnes of ore. Morgain has applied for a new permit to allow the extraction of material beyond the initial 100,000 tonnes noted above. The Company expects to receive this permit by the end of this calendar year. Morgain is presently preparing a detailed internal start-up plan and expects to produce gold in the second quarter of 2007. To minimize capital expenditures and to accelerate start-up, an independent Feasibility Study is being deferred and the Company will complete the remaining design and construction details using "in-house" expertise.

About Morgain Minerals Inc.

Morgain Minerals Inc. is a resource exploration company with a number of precious and base metal properties in Mexico. Its corporate strategy is to acquire properties with known resources that can be further developed to production status. Visit Morgain's website www.morgainminerals.com for the latest corporate information.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, the timing of exploration activities, the mine life of the El Castillo Project, the economic viability and estimated internal rate of return of the El Castillo Project, the estimation of mineral resources, the results of drilling, estimated future capital and operating costs, future stripping ratios, projected mineral recovery rates and Morgain's commitment to, and plans for developing, the El Castillo Project. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "can", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Morgain to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the exploration and potential development of the El Castillo Project, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of copper, silver and molybdenum. Although Morgain has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Morgain does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.


The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

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