Prodigy Gold Incorporated

Prodigy Gold Incorporated

February 09, 2011 10:24 ET

Prodigy and MPH Resources Sign Option Agreement on Magino Extension

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 9, 2011) - Prodigy Gold Incorporated (TSX VENTURE:PDG) is pleased to announce that it has signed an option agreement with MPH Resources Corp. that allows Prodigy to earn up to a 100% interest in the 112 ha Gould Gold property (the "Property") located adjacent to the Magino Mine gold property in the Township of Finan, Ontario. The Magino property is held by Prodigy's wholly-owned subsidiary, Golden Goose Resources Inc. The Gould Gold property covers an extensive sequence of gabbroic intrusive and metavolcanic rocks along a prospective structural trend that is parallel to the Magino gold deposit. In addition to the gold exploration potential, the property also gives Prodigy greater flexibility in locating infrastructure related to the possible future development of the Magino Mine.

The principal terms of the option agreement, subject to TSXV approval, are as follows:

  • Prodigy will pay MPH $10,000 and issue to MPH 50,000 common shares of Prodigy ("Shares") following acceptance by the TSXV of this transaction;
  • Prodigy can earn a 60% interest in the Property within two years of TSXV approval by paying MPH an additional $35,000, issuing MPH an additional 150,000 Shares and incurring expenditures of $250,000;
  • Prodigy can earn a 100% interest in the Property within three years of TSXV approval by paying MPH an additional $25,000 ($70,000 in aggregate), issuing MPH an additional 200,000 Shares (400,000 Shares in aggregate), incurring additional expenditures of $500,000 ($750,000 in aggregate) and granting MPH a net smelter returns royalty of 1%, which may be repurchased for $1,000,000;
  • The Property is subject to an additional 2% net smelter returns royalty held by prior owners, half of which may be acquired for $1,000,000.

About Prodigy Gold: Prodigy Gold Incorporated (TSX VENTURE:PDG) was created by unifying the assets of two Canadian Junior exploration companies: Kodiak Exploration Limited and Golden Goose Resources Inc. Prodigy is currently evaluating the Magino Mine project in Ontario as an open-pit mining opportunity with the potential for deeper, higher grade gold production The company is producing an updated N.I. 43-101 compliant resource estimate for Magino that will serve as the basis for a Preliminary Economic Analysis (PEA), establishing the economic parameters of an open pit mining operation. The PEA is expected to lead to a full feasibility study, projected for early in 2012. Bringing the Magino Mine project through the feasibility process and towards production, coupled with the exploration potential of our Beardmore-Geraldton exploration properties, are the catalysts to growing Prodigy Gold, building substantial value for Prodigy shareholders: Today's Discovery, Tomorrow's Future.

The geological information for the Magino project has been reviewed and approved by Tom Pollock, Prodigy Gold's Vice President of Exploration, who is a qualified person under the definitions established by National Instrument 43-101. Prodigy Gold QA/QC procedures are as follows: Prodigy Gold channel samples are 5 cm wide cut perpendicular to the strike of the vein and/or shear zone from mapped alteration in the footwall continuously through the vein and/or shear zone and into mapped alteration in the hanging wall. Channels are cut with a motorized circular saw to a depth of 10 cm and removed with a hammer. Channel sample spacing is nominally every 20m along strike, dependent on outcrop size and geometry. Sample intervals are selected according to geologic contacts and visible mineralization, placed into a sample bag, and shipped to the assay lab for quantitative analysis of select elements. Prodigy Gold drill cores are split down the center with a typical table feed circular rock saw or are split with a hydraulic slitting device. Sample intervals are selected according to geologic contacts, visible mineralization, and alteration, placed into sample bags and shipped to the assay lab where they are quantitatively analyzed for select elements. Drill cores are boxed, covered, and sealed at the drill rig and moved to the Prodigy Gold logging and sample preparation facilities by Prodigy Gold personnel. Prodigy Gold angle core holes are directed perpendicular to the mapped dip of the vein therefore reported drill hole intercepts approximate true thickness of the vein. All Prodigy Gold samples are currently being assayed by Chemex ALS, 2090 Riverside Dr, Timmins, ON P4R 0A2. Blank and standard samples are routinely submitted with all sample batches sent to the lab for assay. Samples are routinely sent to other labs for additional checks.

On behalf of the Board of Directors

Brian J. Maher, President and Chief Executive Officer

This release may contain forward-looking statements or statements that relate to programs that involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.

Neither 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.

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