Electra Gold to raise $300,000 to explore Harvey Cove

Electra Gold Ltd (C:ELT)
Shares Issued 39,952,963
Last Close 6/3/2009 $0.055
Thursday June 04 2009 - News Release

Ms. Jo Shearer reports

ELECTRA GOLD LTD. (ELT-TSXV) ANNOUNCES PRIVATE PLACEMENT OF $300,000

Electra Gold Ltd. has arranged a non-brokered private placement of up to six million shares at a price of five cents per share for total proceeds of up to $300,000 subject to the approval of the TSX Venture Exchange.

Up to three million shares will be issued as non-flow-through shares consisting of one common share and one half warrant. Two half warrants will entitle the holder to purchase one additional common share of the company at a price of 8 cents per share for the first year and 10 cents per share in the second year. Up to three million shares will be issued as flow-through shares.

A cash commission of 7% will be paid to agents on any funds raised and there may be a finder's fee payable on a portion of the financing. The proceeds of the private placement will be used for the exploration of the Harvey Cove Project, Northern Vancouver Island, which is 100% owned by Electra. Additionally proceeds will be allocated to cover initial costs of the Suquash Coal and Hushamu Coal Projects. Also funds will be utilized in the purchase of trucks and trailers, and finally for general corporate purposes.

A high alumina source was discovered recently at Harvey Cove which will be explored in 2009. The area is west of LeMare Lake. The geyserite zones are numerous and appear, from preliminary inspection, to be similar in size to PEM100 or larger. The Potential project is situated in close proximity to existing load-out infrastructure, thereby reducing costs because there would be a minor trucking component in this operation. Harvey cove is located within the traditional territory of the Quatsino First Nation, whom Electra has built a solid working relationship with in its PEM100 operation.

The Suquash Coal Mine was in production between 1908 and 1922 on Seam #2 totalling 12,000 feet of development at the -52m elevation; exploration has occurred in intervals from 1922 to 1980. Electra has completed Diamond core drilling and samples are ready to be processed.

Two new tridem trailers have been leased and can be bought for $44,000 each. A new truck at a cost of $160,000 under warranty will significantly reduce costs.

Electra has shipped over 600,000 tons of a silica-alumina product since 2003 for gross revenue of over $10 million to cement producers Ash grove Cement in Seattle and Lafarge and Lehigh Cement in BC.