Majestic Gold Corp.

Published : February 25th, 2010

Announces Agreement to Acquire Remaining 40% of Muping Joint Venture and Commence Mining Op

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Keywords :   China | Gold | Gold Mine | Recovery |
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Re:   News Releases - Wednesday, February 24, 2010
      Majestic Announces Agreement to Acquire Remaining 40% of Muping
      Joint Venture and Commence Mining Operations at Muping Gold
      Project, Shandong Province, China
=======================================================================

Vancouver, British Columbia, February 24, 2010 -- Majestic Gold Corp.
(TSX.V:  MJS) ("Majestic") is pleased to announce that it has entered
into an agreement (the "Acquisition Agreement") with seven individuals
(the "Muping Group") to acquire the remaining 40% (the "Muping JV
Interest") of Yantai Zhongia Mining Enterprise ("JVCo").  As part of
the proposed transaction, JVCo will acquire the Mining Permit required
to commence mining operations at Muping and will commence mining
operations. 

JVCo is the Chinese joint venture company previously established by
Majestic and Shandong Muping Gold Mine.  JVCo holds exploration permits
and licenses for the "Muping" or "Song Jiagou" mineral property (the
"Property"), located near Yantai, in Shandong Province, China.  On
completion of the acquisition, Majestic's interest in JVCo and the
Muping project will increase from 54% to 94%. 

Majestic has entered into the Acquistion Agreement to facilitate
commencement of mining operations at the Muping Project.  A National
Instrument 43-101 compliant geological report filed on SEDAR on May 23,
2006 calculates an inferred mineral resource for the Property as
follows:

"At a gold cutoff grade of 0.5 g/t, the Inverse Distance resource
estimate is 13.5 million tonnes at an average grade of 0.88 grams /
tonne gold.  The Kriged resource estimate at the 0.5 g/t cutoff grade
is 14.4 million tonnes at an average grade of 0.77 g/t gold. Because of
the high nugget effect, the inverse distance estimate is considered to
be a more realistic estimate than the kriged estimate."

The referenced report notes that the resource estimate "...would be
improved by the acquisition of more sample data in areas where data is
now sparse or absent."  Accordingly, based on work carried out on the
Property since 2006, Majestic has commissioned an updated resource
estimate compliant with NI 43-101.  Majestic expects to receive that
report and updated resource estimate by the end of March, 2010.  A
feasibility study has not been completed and there is no certainty the
proposed operations will be economically viable.

The Acquisition Agreement provides that Dahedong Smelter Mill
("Dahedong") will carry on mining operations on the Property.  Dahedong
owns two mills with processing capacities of 200 tonnes per day and
1,200 tonnes per day respectively, together with related buildings and
other mining facilities, machinery and equipment.  Those mining
facilities are situated adjacent to and are available and ready for
immediate use in mining operations on the Muping Property.  The
Acquisition Agreement also provides for construction of one new mill
and related facilities (collectively the "New Mill") with an output of
at least 5,000 tonnes per day. The cost of acquiring the land for the
New Mill will be borne entirely by Dahedong if its capacity does not
exceed 5,000 tonnes per day.  If Majestic designates a larger capacity
mill, the costs of the land will be borne as to 75% by JVCo and 25% by
Dahedong.  In either event, construction costs will be borne as to 75%
by JVCo and 25% by Dahedong.

Under the Acquisition Agreement, mining operations will be carried out
by Dahedong at no cost to Majestic.  Dahedong will be responsible for
mining, transporting and processing ore and tailings and other waste
material from the Property for a period of 30 years (the "Mining
Term").  Dahedong will also be primarily responsible for dealings with
Chinese governmental authorities in respect of Mining Operations.  As
compensation for the use of Dahedong's mining assets and equipment
during the Mining Term, Dahedong will be entitled to 25% of the net
profits ("Net Profits") of JVCo derived from mining operations during
the Mining Term.  To cover Dahedong's operational costs, Dahedong will
receive �75 per tonnne (Approx. Cdn$11.50/tonne) (the "Mining Fee") for
all mining, transporting and processing services required to produce
concentrate suitable for delivery to a refinery or smelter.  Dahedong's
share of Net Profits and the Mining Fee will be payable solely from
proceeds from the sale of production of gold and other metals from the
Muping Property.  No cost, expense or other liability will accrue to or
be payable by JVCo, Majestic Yantai or Majestic with respect to Mining
Operations

The Muping Group is currently awaiting Chinese governmental approval
for its acquisition of the Mining Permit and the Muping JV Interest
from Shandong Muping Gold Mine.  That approval is expected in the near
future and Dahedong has agreed to commence mining operations for the
benefit of JVCo immediately upon receipt of it.  Majestic Yantai will
be entitled to receive 60% of Net Profits earned between the date of
the Acquisition Agreement and the Closing Date.  After Closing,
Majestic Yantai will be entitled to receive an additional 15% of Net
Profits earned between the date of the Acquisition Agreement and the
Closing Date, as well as 75% of all Net Profits of JVCo earned after
Closing.  The remaining 25% of Net Profits will be distributed to
Dahedong by JVCo.

As consideration for the Muping JV Interest, Majestic has agreed to
issue 160,000,000 shares (the "Majestic Shares") in the capital of
Majestic to the Muping Group, all of whom are at arm's length from
Majestic.  In addition, Majestic has agreed to pay a finder's fee to a
Chinese national, also at arm's length from Majestic, in the amount of
8,000,000 Majestic Shares.

Completion of the proposed acquisition is subject to acceptance by the
TSX Venture Exchange of a filing required to be made by Majestic in
respect of the Acquisition Agreement, as well as regulatory approvals
required in China.  No control person will be created as a result of
the proposed acquisition.  One member of the Muping Group, who is also
the principal of Dahedong, will become an insider of Majestic on
closing. 

The geological information contained in this news release has been
reviewed and approved by Mike Hibbitts, P.Geo., who is a qualified
person under the definitions established by National Instrument 43-101.

On Behalf of the Board of Directors
MAJESTIC GOLD CORP.

Signed "Rod Husband"

Rod Husband, P.Geo
President

Contact:
Investor Relations: (604) 681-4653 or 1-866-282-8398
Email: info@majesticgold.net or visit our Website: www.majesticgold.net

Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 

This news release may contain forward-looking statements including but
not limited to comments regarding the timing and content of upcoming
work programs, geological interpretations, receipt of property titles,
potential mineral recovery processes, etc. Forward-looking statements
address future events and conditions and therefore, involve inherent
risks and uncertainties. Actual results may differ materially from
those currently anticipated in such statements.

=======================================================================
Copyright (c) 2010 MAJESTIC GOLD CORP. (MJS)  All rights reserved.  For
more information visit our website at http://www.majesticgold.net/ or
send mailto:info@majesticgold.net
Message sent on Wed Feb 24, 2010 at 3:15:15 PM Pacific Time
=======================================================================
.
Data and Statistics for these countries : China | All
Gold and Silver Prices for these countries : China | All

Majestic Gold Corp.

DEVELOPMENT STAGE
CODE : MJS.V
ISIN : CA5609121077
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Majestic Gold is a gold exploration company based in Canada.

Majestic Gold holds various exploration projects in China.

Its main asset in development is SONG JIAGOU in China and its main exploration property is SAWAYAERDUN in China.

Majestic Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 41.1 millions as of today (US$ 32.8 millions, € 28.8 millions).

Its stock quote reached its highest recent level on March 14, 1997 at CA$ 2.00, and its lowest recent point on September 04, 2009 at CA$ 0.02.

Majestic Gold has 912 270 016 shares outstanding.

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6/27/2013Announces Agreement to Swap Net Profits Interest for Equity ...
3/28/2013Contracts VantageWire for Marketing and Advertising Services
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2/16/2007RELEASES UNDERGROUND DRILL RESULTS AT SONG JIAGOU
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