Q-Gold Resources Ltd.

Q-Gold Resources Ltd.

June 13, 2005 17:55 ET

Q-Gold Announces Exchange Approval of Minimum CDN $900,000 to Maximum CDN $1.8 Million Short Form Offering

FLAGSTAFF, ARIZONA--(CCNMatthews - June 13, 2005) -

Mr. J. Bruce Carruthers II reports:

Q-Gold Resources Ltd. ("Q-Gold"), announced today that it has received approval for a Short Form Offering Document (SFOD) from the TSX Venture Exchange (the "Exchange") pursuant to exemptions available under applicable securities legislation and the policies of the Exchange. As previously announced, Northern Securities Inc. ("Northern") will act as exclusive agent for Q-Gold in connection with this SFOD financing.

The offering qualifies the distribution of a minimum of $900,000 being 4,500,000 flow-through common shares ("Flow-Through Shares") and/or units ("Units") in the capital of Q-Gold, to a maximum of $1,800,000 being 4,500,000 Flow-Through Shares and 4,500,000 Units at a price of $0.20 per Flow-Through Share and $0.20 per Unit. Each Unit consists of one Common Share ("Common Share") in the capital of Q-Gold and one common share purchase warrant (a "Warrant"). Each Warrant entitles the holder thereof to acquire one additional Common Share at a price of $0.25 if exercised within 24 months from the date of issuance. In the event that only the minimum amount of the offering is completed, a maximum of 1,000,000 Flow-Through Shares will be eligible for issuance.

Pursuant to an Agency Agreement dated February 23, 2005 between Northern and Q-Gold, Q-Gold has agreed to pay Northern a cash commission equal to 10% of the aggregate proceeds of the offering plus a 5% Financial Advisory Fee payable at closing in cash or Units at the discretion of Northern. In addition, Q-Gold has agreed to issue to Northern a non-transferable option to acquire that number of Units ("Agent's Units") equal to 20% of the total number of Units sold pursuant to the Offering, exercisable at a price of $0.20 per Agent's Unit for a period of two years from the date of issuance. Each Agent's Unit has identical terms to the Units under the offering. Q-Gold will also issue to Northern a non-transferable option to acquire that number of Common Shares and/or Flow-Through Shares (at the discretion of Northern) equal to 20% of the total number of Flow-Through Shares sold pursuant to the Offering, exercisable at a price of $0.20 per Common Share or $0.22 per Flow-Through Share for a period of two years from the date of issuance. Furthermore, Q-Gold will pay Northern a $20,000 non-refundable work fee, an additional work fee consisting of 50,000 Agent's Units and compensate Northern for its reasonable fees, costs and expenses related to the offering.

Proceeds of the offering will be used to complete Q-Gold's previously announced reverse takeover transaction pursuant to TSX Venture Exchange Policy 5.2, to fund a proposed work program on Q-Gold's gold exploration properties in the Greenstone Belt of Northwestern Ontario near Mine Centre, to repay outstanding debt and for general corporate purposes. Upon approval of the reverse takeover by the Exchange and the closing of the offering, Q-Gold expects to be reinstated as a "Tier 2 Qualifying Issuer" on the Exchange.

This release may contain forward looking statements implying an assessment that the resources described can be produced profitably in the future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated.

SEC 12g 3-2(b) Exemption # 82-4931

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Q-Gold Resources Ltd.
    J. Bruce Carruthers II
    (928) 779-0166
    (928) 779-0107 (FAX)