Morgain Minerals Inc.
TSX VENTURE : MGM

Morgain Minerals Inc.

October 07, 2005 16:19 ET

Morgain Minerals Draws Down Second Tranche of Loan

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 7, 2005) - Morgain Minerals Inc. (TSX VENTURE:MGM) announced today that it has drawn the second tranche from its C$5,000,000 loan advanced from H. Morgan & Company in the amount of C$2,500,000 (see news release dated March 29, 2005).

Morgain will use the second portion of the loan (C$2,500,000) to complete the first 30,000 tonnes bulk heap leaching test and continue with additional bulk mining and heap leach testing of up to 100,000 tonnes of ore at Morgain's Castillo Mine located in Durango, Mexico and for general working capital purposes. Commercial production planning, design and permitting will be initiated at the Castillo Mine.

The Castillo Mine is located in a very favourable area of Mexico with excellent infrastructure and a good year-round climate. These features, coupled with excellent mining conditions, should allow the production cost per ounce of gold to fall into the medium to low range.

About Morgain Minerals Inc.

Morgain Minerals (TSX VENTURE:MGM) is a junior mining company whose vision is to acquire and develop a portfolio of profitable low-grade gold mines in Mexico. The Company is currently focused on bringing its Castillo Mine into production through a series of mining and heap leaching tests to determine the best operating methods and machinery. Visit Morgain's website at www.morgainminerals.com for further information.

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

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