Pure Gold Minerals Inc.

Pure Gold Minerals Inc.

February 24, 2005 15:05 ET

Pure Gold Minerals Inc.: Rights Offering


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: PURE GOLD MINERALS INC.

TSX SYMBOL: PUG

FEBRUARY 24, 2005 - 15:05 ET

Pure Gold Minerals Inc.: Rights Offering

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 24, 2005) - Pure Gold
Minerals Inc. (the "Company" or "Pure Gold") (TSX:PUG) is offering its
shareholders who are resident in British Columbia, Alberta,
Saskatchewan, Manitoba and Ontario ("Eligible Shareholders"),
transferable Rights to purchase units in the Company.

The Company has set the rights price at below market as the Company is
allowed to do for its own shareholders. The use of a rights offering
allows shareholders to participate in the on-going financing of the
Company without dilution. The support of our shareholders is appreciated
by the management and directors of the Company and, through past rights
offerings, shareholders have allowed the Company to maintain its
interest in diamond exploration in Alberta, Nunavut and the Northwest
Territories.

Each shareholder of record on March 3, 2005 ("Record Date"), will
receive one right for every common share held. Six (6) Rights plus $0.07
will entitle the shareholder to purchase one unit ("Unit"). Each Unit
consists of one common share of the Company and one-half of one Series A
Warrant. Each whole Series A Warrant entitles the holder to purchase one
additional common share of the Company at $0.10 per share until April 7,
2006.

The Rights Offering will expire on April 7, 2005 ("Rights Expiry Date").

The Rights will be posted for trading and the Company's common shares
will commence trading on the Toronto Stock Exchange ("TSX") on an
ex-rights basis on March 1, 2005. The Series A Warrants have been
conditionally approved for listing on the TSX commencing on the Rights
Expiry Date - subject to certain conditions including minimum
distribution requirements.

In the event that all of the offered rights are exercised, Pure Gold
will receive gross proceeds of approximately $1,231,000 which will be
used to fund the Company's exploration programs in Nunavut and Northwest
Territories, pay for the expenses of the Rights Offering and for working
capital.

A detailed Rights Offering Circular and Rights Certificate will be
mailed to all Eligible Shareholders on March 7, 2005. Computershare
Investor Services Inc. will make every effort to sell the rights which
would have been issued to ineligible shareholders on their behalf.

Pursuant to their entitlement as shareholders under the basic
subscription right and the additional subscription privilege, two
directors/officers of the Company have agreed to participate to
subscribe for an aggregate of
3,570,000 Units.

Also, the Company has been informed by Bolder Investment Partners Ltd.
that they intend to subscribe under the additional subscription
privilege for an aggregate of 3,570,000 Units ($249,900).

The Company will pay any member of the Investment Dealers Association of
Canada and Canadian stock exchanges, a Soliciting Dealer Fee of 7% of
the Subscription Price ($0.0049 per Unit) for each Unit for which a
subscription is procured.

EXPLORATION UPDATE

Colville Lake

The 2004 exploration program on the 6 million acre Colville Lake
Property Northwest Territories consisted of till sampling for Kimberlite
Indicator Minerals and a 29,000 kilometer airborne magnetic survey. The
till sampling program was completed by early fall and the airborne
magnetic survey was completed in late November. A total of 329 till
samples were collected along wide spaced regional lines that were
located to evaluate the possible source of the Kimberlite Indicator
Minerals (KIMs) anomalies from a regional stream sediment survey
completed by De Beers Canada Inc. ("De Beers") in 2003. The widespread
presence of KIMs in the 2004 samples confirmed the results of the stream
sediment survey conducted in 2003 by De Beers. The airborne magnetic
survey was completed by Goldak Airborne Surveys and the results are now
being processed and interpreted for possible kimberlite targets. To
date, a number of magnetic anomalies have been identified on both the
main or south block and the north block. Once the final results of both
the KIM sampling and the airborne magnetic survey are available, the
Company will finalize exploration plans for 2005. Preliminary results
have identified areas of interest throughout the Permit area that will
be evaluated in detail. The Company intends to conduct further airborne
magnetic surveys over the west section of the Main Block and follow-up
till sampling for KIM throughout the Permit area. The Company is
operator of the program and Rick Kemp, P.Geo., Qualified Person as
defined by NI 43-101, was responsible for the design and implementation
of the 2004 field program. Pure Gold has the option to earn an 85%
interest in the Property subject to certain reversionary rights to De
Beers.

North James River

The North James River Property is located immediately west and to the
north of the High Lake massive sulphide property currently being drilled
by Wolfden Resources Inc. ("Wolfden"), approximately 550km
north-northeast of Yellowknife, NWT. Wolfden has recently announced the
discovery and ongoing delineation of a second high-grade massive
sulphide deposit and a separate new high-grade gold discovery on the
Property. Exploration completed in the summer of 2004 consisted of
geological mapping, prospecting and sampling of four known showings: Hi
Lake (Lake 980), Silver Bullet, Black Ice and Grumpy. Results from the
2004 Program confirm gold mineralization at these showings, with high
concentrations of 82.4 gpt gold over 0.5 metres and 60.3 gpt gold over
1.2 metres at the Silver Bullet showing. In addition, a rock grab sample
collected from a separate vein set 50 metres east of the mineralized
zone returned 86.4 gpt gold. A total of 15 channel samples were
collected from along the 50 metre vein exposure at the Silver Bullet
showing with an average grade of 11.8 gpt gold. Twenty six channel
samples were collected from the Black Ice showing with a high value of
10.1 gpt gold and an average of 1.6 gpt over a strike length of 40
metres. Samples varied in width from 0.4 metres to 1.3 metres.

The surface Land Use Permit was granted in August 2004 and in early
October, the water license was received. Starting in March 2005, the
Company plans to drill test the Black Ice, Silver Bullet and Grumpy
Prospects which form part of the three kilometre long Cygnet Lake Gold
Zone. In addition the Bumpa Prospect, discovered in 2004 on a separate
structure, will also be tested.

The Company is operator of the program and Geoff Goodall, P.Geo.,
Qualified Person as defined by NI 43-101, was responsible for the design
and implementation of the field program. All samples were assayed by
Acme Laboratories of Vancouver, B.C.


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Pure Gold Minerals Inc.
    Donald R. Sheldon
    President
    (604) 687-2038
    (604) 687-3141 (FAX)
    Website: www.puregold.ca