White Tiger Gold Ltd.

White Tiger Gold Ltd.

May 25, 2012 17:41 ET

White Tiger Announces Default by Century Mining Corporation Under Forward Gold Purchase Agreement

TORONTO, ONTARIO--(Marketwire - May 25, 2012) - White Tiger Gold Ltd. ("White Tiger") (TSX:WTG) announces that its wholly-owned subsidiary, Century Mining Corporation ("Century"), has received a notice from Deutsche Bank AG, London Branch ("Deutsche Bank"), advising that Deutsche Bank has elected to terminate its Forward Gold Purchase Agreement (the "Forward Agreement") with Century as a result of the occurrence and continuation of an event of default (the "Default"). Century had previously advised Deutsche Bank that Century would not have sufficient gold production or cash to satisfy its May 2012 obligations. In connection with the Default, Deutsche Bank intends to enforce its security on the property of Century, including Century's Lamaque project in Val d'Or, Québec and its San Juan Project in Arequipa Department, Peru. The Default and the enforcement proceedings are not expected to affect White Tiger's Russian assets.

Century has determined to accept and not take steps to remedy the Default. Century has taken this decision following a review of the viability of the Lamaque project in light of ongoing operating losses and continued lower than anticipated gold production, combined with Century's continuing obligations to deliver gold and/or make cash payments under the Forward Agreement. As a result of the above decision, White Tiger will no longer be funding Century's operations or any payments due by Century under the Forward Agreement.

Operations at Century's Lamaque gold mine in Val d'Or, Québec were restarted in January 2010, with the expectation that ore production would be ramped up to 2,000 tonnes per day by mid-2011. However, the mine has suffered a series of technical issues that significantly extended the ramp-up period and the mine continues to operate at a non-commercial rate of gold production. Accordingly, Century has not been producing sufficient quantities of gold to satisfy the gold delivery obligations under the Forward Agreement. Where there is a shortfall in any month in the number of gold ounces deliverable by Century to Deutsche Bank under this agreement, Century is required to pay to Deutsche Bank an amount in US dollars equal to the shortfall. A failure to make any required payment to Deutsche Bank would result in a default under the Forward Agreement.

As described in White Tiger's annual information form, audited annual financial statements and related MD&A for the year ended December 31, 2011, Century's ability to continue operations at its Lamaque mine was dependent upon its obtaining additional financing to fund its exploration and development activities and to bring its Lamaque mine to its intended capacity. To this end, White Tiger solicited lenders and investors in its efforts to obtain debt and/or equity financing and, as disclosed in White Tiger's May 11, 2012 press release, White Tiger has also explored the possible sale of Century's San Juan project as a means of improving Century's financial situation. Despite White Tiger's attempts, these efforts have proved unsuccessful and Century was unable to negotiate the refinancing of the Forward Agreement with Deutsche Bank.

At the time of its business combination with Century, White Tiger outlined its expansion and growth strategy to become a mid-tier gold producer within five years by creating a balanced portfolio of exploration/brownfield and producing gold assets through acquisitions and mergers. Century was intended to be part of this plan, as Century possessed a large resource base with the potential for increased gold production.

Since the completion of business combination in October 2011, White Tiger has invested more than $30 million and very significant management time in efforts to achieve commercial gold production at the Lamaque project.

Century's initial plans were to produce 2,000 tonnes of ore per day from three portals at the Lamaque mine: 800 tonnes per day from each of the North Wall and the Flats and 400 tonnes per day from Sigma West. Since the completion of the business combination, Century has spent considerable time and money developing the North Wall and, during the first quarter of 2012, it commenced ore stoping from this area.

White Tiger believes the following principal factors (which only came to light as Century's operational exposure in the North Wall increased in 2012) affected Century's inability to reach commercial production.

On August 2, 2011, Micon International Co. Limited completed a National Instrument 43-101 ("NI 43-101") compliant technical report on the Lamaque project entitled "Technical Review of The Mining Plan/Operations And Audit Of The Resource and Reserve Estimates For The Lamaque Mine Project, City Of Val D'Or, Bourlamaque Township, Abitibi County, Quebec, Canada, NTS Map 32C/04" (a copy of which is available on Century's SEDAR profile at www.sedar.com) (the "2011 Report"), which report was an update of the technical report prepared on June 24, 2009 by Ross F. Burns, P.Geol, LG and Callum Mark, M.Sc.; P. Geo., entitled "Technical Review Lamaque Mine - Re-Opening of the Underground Mining Operation" (the "2009 Report"). As disclosed by Century in its August 11, 2011 press release, the 2011 Report contained significantly lower estimates of mineral resources and reserves than those estimated in the 2009 Report.

In the top 1,000 feet of the North Wall, where the mine is presently operating, the estimated proven and probable reserves decreased by 50% in terms of ore tonnes and 30% in terms of grade. Century has attempted to deal with this reduction in estimated mineral resources and reserves by diamond drilling for potential replacement resources and changing the development program.

Additionally, the majority of the mineral reserves and resources in the Lamaque dykes and shears are still below current mining depths. The dykes and shears accessed late in the first quarter of 2012 have performed below expectations, with dykes currently reporting at widths of 10 feet to 15 feet (compared to the 25 feet forecast in the 2011 Report) and grades achieved are also less than the grades estimated in the 2011 Report. Shears that account for 89% of North Wall mineral reserves and resources have to date resulted in an even poorer reconciliation of reserves and resources to production with much lower actual tonnages and grades achieved.

Century instituted a diamond drill program after the closing of the business combination with White Tiger, and this has had some success in defining new mineralized areas in the North Wall and Flats, but this has not been successful in replacing the tonnage or grade of the mineral reserves lost from the 2009 Report to the 2011 Report.

Century's diamond drilling program in Sigma West has been successful in defining the mineralized dyke in that area. Century had planned to mine 400 tonnes per day at Sigma West by the end of the first quarter of 2012, however the province of Québec Ministry of Durable Development, Environment and Parks ("MDDEP") delayed for an extended period the reopening of Sigma West to allow time for a crown pillar review. The delay meant that the Lamaque mine was not able to access Sigma West ore, which represented 20% of the planned total crusher ore feed.

Achieving good dilution control has been a principal objective for Century, and the Lamaque mine has made major improvements in this area, but despite better control of back height and material movement, the mine has struggled to maintain consistent mill feed grades above 2.5 g/t, well below forecast reserve grades.

The Lamaque mine contains substantial reserves and resources. However, the mine continues to need considerable capital development to access the deeper reserves and resources. While Century targeted production of up to 2,000 tonnes of ore per day in 2012, the delay at Sigma West and the poor reserve reconciliations to date mean that continued investment would entail increasing risk, which if not successful, could have further jeopardized White Tiger's financial position.

Going forward, White Tiger intends to focus on the continued development of its Savkino and Nasedkino projects in Eastern Russia. The Savkino mine continues to be on target to meet its expected production of 20,000 ounces of gold in 2012, and White Tiger is currently developing Phase 2 of the expansion plan at the Savkino mine with the objective of increasing gold production to approximately 50,000 ounces in 2013. In addition, an updated NI 43-101 technical report on the Nasedkino project is being prepared and is scheduled for completion in the third quarter of 2012. Based on the results of the updated technical report, White Tiger will make further determinations regarding future development at the Nasedkino project.

In light of the developments with Century, the White Tiger board of directors is reviewing financing alternatives to ensure the successful development of its Russian assets and White Tiger is currently in discussions with Kirkland Intertrade Corp. and Unique Goals International Ltd regarding the proposed loan transactions described in White Tiger's May 11, 2012 press release. Depending upon the results of such discussions, such loan transactions may be restructured and resubmitted to the TSX for approval.

In addition, White Tiger wishes to announce that Mr. Ricardo Campoy has resigned as a director of White Tiger. White Tiger thanks Mr. Campoy for his contributions.

The scientific and technical information in this press release, has been approved by Dr. Edmond van Hees, P Geo., who by reason of education, experience and professional registration, fulfils the requirements of an independent Qualified Person (QP) as defined in NI 43-101.

Caution Concerning Forward-Looking Information

This press release contains forward looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forwardlooking statements") relating, but not limited to, White Tiger's expectations, intentions and beliefs (including, without limitation, statements regarding, Deutsche Bank's intention to enforce its security on the property of Century, White Tiger's expectations regarding the affect of the Default on its Russian assets, White Tiger's exploration and development plans at its Savkino and Nasedkino projects (including the timing thereof), anticipated gold production, future plans and objectives of White Tiger, plans with respect to the preparation of an updated NI 43-101 technical report on the Nasedkino project (including the timing thereof)) and possible changes to the proposed loan transactions. Words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate" and similar terminology are used to identify forward-looking statements. Such statements are based on assumptions, estimates, opinions and analysis made by the management of White Tiger in light of their experience, current conditions and their expectations of future developments as well as other factors which they believe to be reasonable and relevant. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties that may cause actual results to vary include but are not limited to: changes in equity and debt markets; inflation; uncertainties relating to the availability and costs of financing needed to complete exploration, development and production activities; exploration costs varying significantly from estimates; delays in the exploration and development of, and/or commercial production from, the properties in which White Tiger has an interest; unexpected geological or hydrological conditions; the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties, including the failure of major mining and/or milling equipment; the availability to White Tiger of suitable financing alternatives; the ability of White Tiger to service its existing debt facilities; fluctuations in gold and other commodity prices; the existence of undetected or unregistered interests or claims, whether in contract or in tort, over the property of White Tiger; success of future exploration and development initiatives; competition; operating performance of facilities; environmental and safety risks, including increased regulatory burdens, seismic activity, weather and other natural phenomena; inability to, or delays in, obtaining necessary permits and approvals from government authorities; risks relating to labour; and other exploration, development and operating risks; changes to and compliance with applicable laws and regulations, including environmental laws; political, economic and other risks arising from White Tiger's activities in Russia; fluctuations in foreign exchange rates; and those risks set out in White Tiger's public documents filed on SEDAR. Although White Tiger believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this press release, and no assurance can be given that such events will occur in the disclosed time frames or at all.

Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable laws, White Tiger disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although White Tiger believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

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