Pure Gold Minerals Inc.

Pure Gold Minerals Inc.

August 11, 2006 15:24 ET

Pure Gold Minerals Inc.: Corporation Closes $3,619,320 Brokered Private Placement and $319,000 Non-Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 11, 2006) - Gordon Keevil, President of Pure Gold Minerals Inc. ("Pure Gold" or the "Corporation") (TSX:PUG), is pleased to announce that further to the Corporation's news releases dated May 17, 2006 and June 13, 2006, the Corporation has closed the brokered private placement through Pacific International Securities Inc. (the "Agent"). The Agent placed 52,145,000 flow-through shares at $0.06 per share and 8,177,000 units (the "Units") at $0.06 per Unit (collectively the "Offered Securities"). Each Unit consists of one common share and one-half of one common share purchase warrant, each warrant entitling the holder to purchase one common share at an exercise price of $0.09 per common share for a period of 18 months from August 10, 2006 (the "Closing Date").

The Agent received a fee equal to 7% of the total gross proceeds raised payable in the amount of $155,361.84 cash and 1,633,176 units ("Commission Units"). Each Commission Unit consists of one non flow-through common share of the Corporation and one-half of one common share purchase warrant (each whole warrant a "Commission Warrant"). Each Commission Warrant entitles the holder to purchase one common share of the Corporation ("Commission Warrant Share") at an exercise price of $0.09 per share for a period of 18 months from the Closing Date. In addition, the Agent received 6,032,200 Agent's options equal to 10% of the number of Offered Securities sold, which are exercisable for a period of 18 months from the Closing Date at a price of $0.07 per share.

The Corporation has also raised $184,000 in proceeds from a non-brokered private placement, issuing 350,000 flow-through shares at $0.06 per share and 2,716,668 units on the same terms as for the brokered placement. The Corporation has paid a finder's fee equal to 5% of the gross proceeds received from the sale of the portion of the flow-through shares and units for which that finder arranged, payable in cash.

The flow-through proceeds raised in this offering will be used for general exploration expenditures which will constitute Canadian exploration expenses (as defined in the Income Tax Act) and will be renounced for the 2006 taxation year.

Further to the news releases dated July 26, 2006, the Corporation also announces that the private placement with De Beers Canada Inc. ("De Beers") has closed contemporaneous with closing of the brokered private placement, De Beers acquired 10,000,000 units at $0.06 per unit. Each unit consists of a common share and one-half of one common share purchase warrant, exercisable at a price of $0.09 per share until July 19, 2008.

These private placements, along with the Corporation's recently completed Rights Offering, give the Corporation additional exploration funds necessary to complete the required work programs on its existing properties and, in turn, allows the Corporation to acquire and to explore new properties it is currently evaluating.

"The closing of the private placements and the rights offering totalling in excess of $5 million represents a further milestone for Pure Gold as they assure the Corporation's ongoing participation in the High Arctic Program with De Beers, one of the most significant agreements that Pure Gold has ever concluded," stated Gordon Keevil, President. The properties within the High Arctic Portfolio include Baffin Island, Eden Point, Muskox Hill, Chartrand Lake, Byron Bay and Mount Pelly (the "Properties") comprising 10.8 million hectares (26.8 million acres).

Operations are continuing on several of the Properties and in particular the Baffin Island Project, where significant advances have already been made. Exploration in 2006 includes ground and airborne geophysics, widespread prospecting and geological mapping and drilling to test expand and define the Amon Kimberlite, which was discovered in late 2005 and evaluate new kimberlite targets defined by the ongoing exploration program. Further results will be released as they become available to the Corporation. Pursuant to the agreement announced May 17, 2006 between De Beers and the Corporation, the Corporation has the right to earn up to an 85% working interest in the Properties.

De Beers is the operator of these exploration programs and Donald R. Boucher, Professional Geologist and De Beers' Technical Manager, Joint Venture Projects, is the Qualified Person pursuant to National Instrument 43-101.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S Securities Act and applicable state securities laws or an exemption from such registration is available.

This release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration and development activities and events or developments that the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see our public filings at www.sedar.com for further information.

Contact Information

  • Pure Gold Minerals Inc.
    Gordon Keevil
    (604) 687-2038
    (604) 687-3141 (FAX)