PC Gold Inc.

PC Gold Inc.

May 13, 2008 09:00 ET

PC Gold Completes Initial Public Offering and Acquisition of Pickle Crow Property

OTTAWA, ONTARIO--(Marketwire - May 13, 2008) -


PC Gold Inc. (TSX:PKL) ("PC Gold" or the "Company") is pleased to announce that it has completed an initial public offering (the "Offering") of 11,500,000 common shares at a price of $1.00 per share for gross proceeds of $11.5 million, which includes 1,500,000 common shares issued on the full exercise of an over-allotment option granted to the agents for the Offering. Canaccord Capital Corporation acted as lead agent of a syndicate for the Offering which included Research Capital Corporation. In consideration for their services, the agents received a commission equal to 7% of the gross proceeds of the Offering, as well as an aggregate of 805,000 compensation options, each of which entitles the holder to purchase one common share for a period of 24 months from closing at a price of $1.00 per share. Canaccord Capital Corporation was also paid a corporate finance fee payable in common shares.

The Company has received the conditional approval of the Toronto Stock Exchange (the "TSX") for the listing of its common shares on the TSX, subject to fulfilling all of the requirements of the TSX. It is anticipated that the common shares will be listed and posted for trading on the TSX under the stock symbol "PKL" at the opening of trading on Tuesday, May 13, 2008.

Concurrently with the closing of the Offering, the Company has completed its acquisition of the Pickle Crow Property (the "Property") from Premier Gold Mines Limited ("Premier Gold") and Donald M. Ross in Trust ("Ross" and together with Premier Gold, the "Vendors"). The Property consists of 98 contiguous patented mining claims covering a surveyed area of 1,582.9 hectares located approximately 400 kilometres northwest of Thunder Bay, Ontario, near the community of Pickle Lake. Registered mineral rights and surface rights for the Property are owned by Teck Cominco Ltd. The Company has acquired a 100% interest in a 99 year mining lease (expiring July 31, 2067) on the claims comprising the Property from Premier Gold, as well as certain assets located on the Property from Ross, including a new nominal 225 tonne per day pilot mill, related equipment and stockpiles. PC Gold's leasehold interest in the Property is subject to two Net Smelter Return royalties totaling 1.25%, which the Company has the option of purchasing.

As consideration for the Property, the Company paid the Vendors an aggregate of $3.5 million and issued to the Vendors an aggregate of 9,500,000 common shares at a deemed value of $1.00 per share and 2,375,000 common share purchase warrants (the "Consideration Warrants"). Each Consideration Warrant is exercisable to acquire one common share of the Company for a period of 24 months from closing at a price of $1.40 per share. The Consideration Warrants and the shares issuable upon the exercise thereof are subject to a four month hold period expiring on September 14, 2008.

$3.5 million of the net proceeds from the Offering were used to fund the payments of cash consideration payable to the Vendors for the Property acquisition. The balance of the net proceeds will be used for exploration and potential development of the Property and for general working capital.

In addition, Premier Gold announces that it has acquired 3,800,000 common shares of the Company and 950,000 Consideration Warrants pursuant to the Company's acquisition of the Property. After giving effect to these acquisitions, Premier Gold directly and beneficially holds an aggregate of 3,800,000 common shares representing 14.8% of the issued and outstanding common shares, and 950,000 Consideration Warrants, representing 40.0% of the issued and outstanding Consideration Warrants. If its Consideration Warrants were to be exercised, Premier Gold would beneficially own approximately 17.8% of the Company's common shares on a partially diluted basis. Premier Gold has acquired the securities of the Company for investment purposes and has no present intention of acquiring other securities of the Company or disposing of any of the securities of the Company it currently holds. For further information regarding Premier Gold's acquisition of securities of the Company or to obtain a copy of the early warning report in respect of this transaction, please contact Ewan Downie, President and Chief Executive Officer of Premier Gold at (807) 346-1390. A copy of the early warning report will also be available under the Company's profile on SEDAR at www.sedar.com.

Following completion of the Offering and Property acquisition, PC Gold has 25,700,000 common shares issued and outstanding.

About the Pickle Crow Property

The Property hosts the past-producing Pickle Crow Gold Mine. The Pickle Crow Mine was a well known asset when in production and remains well known in the industry today. It was among the highest grade, longest-lived underground gold mines in North America, operating continuously from April 23, 1935 through September, 1966 and producing in total approximately 45 tonnes (1,446,214 Troy oz.) of gold and some silver. Average recovered gold grade over the life of the mine was 16.14 g/t gold (0.47 oz/T). Operating in a fixed gold price environment ($35/oz), the mine earned substantial profits through World War II, labour shortages and constantly declining real gold prices (adjusted for inflation), for 28 consecutive years. Challenged by the declining real gold price and increasing costs from deeper operations, the mine recorded its first operational loss in 1964, and closed in 1966 with mineralization in place, productive veins open to depth, and largely untouched zones of iron formation hosted gold within the workings. The Property lay dormant for many years, but saw extensive near surface work by various operators through the course of the 1980's, 1990's and first part of this decade. This historical work, which included several non NI-43-101 compliant estimates of the grade and tonnage of gold mineralization remaining on the Property, outlined substantial zones of gold mineralization within, or in close proximity to, existing workings.

At Pickle Crow, the past producing high grade veins are known from the historical drilling record to remain open to depth. Of these veins, only a minority actually outcropped on surface, whereas more than a dozen are known in deeper areas of the mine, indicating a robust mineralized system which may be intensifying with depth. Moreover, several substantial zones of iron formation hosted gold remain within the historic workings and at depth. Previous operators did not mine this type of mineralization as it was generally below their cut off grade of 8.57 g/t gold (0.25 oz/t gold) and the existing mill was not capable of processing both vein and iron formation material. The unexplored ground below the historic workings is therefore considered as prospective from an exploration standpoint as the shallower areas mined in the past. There are, in addition, several areas on the Property which host near surface mineralization or remain prospective for same. Consequently, there is believed to be considerable potential to expand the Property's known zones of gold mineralization.

A major exploration and development program on the Property, comprised of two recommended phases and a third provisional phase, was called for in the NI 43-101 Technical Report prepared on the Property by independent consultants MPH Consulting Limited of Toronto. Phase 1 of this program, estimated to cost approximately $2.3 million and running until December 31, 2008, has now begun with a preparatory program of data compilation, digitization and modeling which will serve as a guide for a program of surface based, shallow, intermediate and deep exploration drilling to get underway with multiple drills, subject to equipment availability, in Summer 2008. Other Phase 1 activities may include staffing and drilling contractor selection, permit renewal and/or acquisition, possible construction of onsite camp, office and related facilities, evaluation of the condition of the No. 1, No. 3 and Albany shafts, reconstruction of survey grids, initial metallurgical test work, and a possible economic scoping study based on historical technical information. Phase 2 of the exploration and development program is expected to cost about $2.7 million and to run from January 2009 to December 2009. Phase 2 will focus on the continuation of the surface drilling and metallurgical test work, as well as detailed planning for underground exploration drilling and resource establishment. Phase 3, currently estimated to require about $13.0 million, will be undertaken conditional upon satisfactory results from the Phase 1 and Phase 2 work. Anticipated Phase 3 tasks would include dewatering of the workings and rehabilitation of shafts to gain access for underground exploration of known zones of iron formation hosted gold mineralization, including some 18,000 metres of outline and definition diamond drilling, completion of resource estimates to NI 43-101 standards, evaluation of various potential production scenarios, and completion of geological, exploration, metallurgical, mining, processing, environmental, infrastructure, sales and marketing studies to bring the project to prefeasibility and then to feasibility study status by NI 43-101 standards.

Additional information about the Property and the Company can be found in PC Gold's final prospectus dated April 30, 2008, which has been filed and is available on SEDAR at www.sedar.com, and on the Company's website at www.pcgold.ca.

Neil Pettigrew, M.Sc., P.Geo., Vice President, Exploration for PC Gold and a Qualified Person as defined by NI 43-101, has reviewed and approved the technical information in this press release.

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume any obligation to update any forward-looking statements, save and except as may be required by applicable securities laws.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

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