PMI Gold Corporation Limited (ASX: PVM)

?      PMI Gold Prospectus lodged with ASIC for up to $27.5M. Australian IPO and planned co-listing on ASX targeted for 10 December 2010 (proposed ASX Ticker: PVM). Hartleys Limited is Corporate Advisor and Broker to the Offer.

?      Large Indicated and Inferred Gold Resource base of +2.1Moz located in the heart of Ghana?s ?golden triangle?, one of the world?s most well-endowed gold regions.

?      Two near-production gold projects, Obotan and Kubi (both previous open pit operations which closed down at gold prices of between $300 and $600/oz), providing a clear path to a production decision in 2012 and outstanding exploration potential.

?      Feasibility studies to be advanced at Obotan and Kubi Gold Projects. Gold resource drilling already underway and expanding to +40,000m following IPO with up to three rigs.

?      Regional exploration to be escalated on large contiguous land-holdings covering a total of 85km of strike, with numerous drill-ready gold targets and occurrences.

?      Board strengthened with recent appointment of experienced Australian mining executives Peter Buck (former LionOre Director) as Chairman and Ross Ashton (former Red Back Mining MD) as Non-Executive Director, subject to ASX listing. Complements existing Board which includes two high-profile Ghanaian Directors.

Surging Australasian investor interest in West Africa ? one of the world?s gold exploration ?hot spots? ? is set to be tapped by Toronto Stock Exchange Venture (?TSX-V?) listed PMI Gold Corporation (?PMI Gold?), which launches its $27.5 million Australian Initial Public Offering (?IPO?) this week ahead of a planned co-listing on the ASX on 10 December 2010 (proposed ASX Ticker: PVM).

PMI Gold lodged a Prospectus for the IPO with the Australian Securities and Investments Commission (?ASIC?) on 3 November 2010. Leading Australian broking firm Hartleys is Corporate Advisor and Broker to the Offer.

PMI Gold, which has been operating in Ghana since 2002, plans to build an international gold mining house by accelerating exploration and feasibility studies at its two near-production gold projects located in southern Ghana, while at the same time launching a major regional exploration program on its large land-holding covering some 85km of strike in one of the world?s most prolific gold producing areas.

As a Canadian-listed company with West African gold assets co-listing in Australia, PMI Gold is taking a contrary path to several Australian gold explorers operating in West Africa which have traditionally sought Canadian listings to raise capital or expand their investor base.

PMI Gold?s Managing Director, Mr Douglas MacQuarrie, said the Company was taking advantage of a large and growing pool of capital in Australasia where investors had a strong understanding of the international gold sector and a growing appetite for gold in West Africa, which is now recognised as one of the world?s pre-eminent gold provinces.

?Ghana already hosts a number of +10 million ounce gold deposits such as Obuasi, Tarkwa and Ahafo ? with the West African region as a whole projected to become the world?s second largest gold producer with production approaching 9 million ounces a year,? Mr MacQuarrie said.

?With average cash costs of below A$500/oz, compared with around A$650-700/oz in Australia and many other places around the world, West Africa is now globally recognised as one of the most attractive destinations for investment in emerging gold projects? he added. ?We have a great head start in this region, having been operating there since 2002, a Board with significant local operating experience and a great asset base including a 537 sq km land position with current JORC compliant gold resources of +2.1 million ounces.?

Quality Assets in a World-Class Gold Belt

PMI Gold?s two key assets are the Obotan Gold Project, previously owned and operated by Resolute Limited, and the Kubi Gold Project, both located within world-class, multi-million ounce gold belts in southern Ghana.

The assets are located near the centre of some 200 million ounces of historical production and current gold resources, with excellent infrastructure including a transportation network, telecommunications and mining infrastructure.

The Company is targeting initial production of 100-150,000oz per annum from these two assets, commencing in 2013, for a minimum mine life of 8 years. This will be underpinned by the planned development of open pit and underground operations at the Obotan Gold Project and a high-grade underground mine at the Kubi Gold Project. In addition, a vigorous exploration program of around $8 million will be undertaken in 2011-2012 to target new gold discoveries with +1Moz potential.

The Obotan Project includes an Indicated Resource of 3.064Mt @ 1.59g/t for 156,000oz and an Inferred Resource of 15.637Mt @ 2.1g/t for 1.053Moz, which mainly lies below three open pits (Nkran, Adubiaso and Abore) which were mined by Resolute up until December 2002 resulting in production of 730,000oz. The operation closed when the gold price was less than US$350/oz.

Like most gold deposits in Ghana, the major gold lodes are steeply-plunging and remain open at depth, with an exploration target of 1-2Moz established beneath the Nkran pit alone. Recent drilling results beneath the open pit have returned stunning intersections of 153m @ 2.37g/t Au including 46m @ 5.23g/t Au.

PMI Gold?s development strategy at Obotan will be to expand and upgrade near-surface open cut resources via a 40,000m in-fill drilling program at Nkran and other shallow satellite deposits which offer the possibility of early cash flow to fund a major cut-back of the Nkran open pit. The Company is aiming to complete a Pre-Feasibility Study on this Project by December 2011.

?What sets PMI Gold apart from many of its West African peers is the previous mining history at its projects, where the many issues typically faced by new greenfields development projects ? including, engineering, metallurgical, community and environmental ? have already been successfully studied and addressed. This gives us a great head start for our feasibility studies,? Mr MacQuarrie commented.

The broader Obotan Project also contains numerous priority exploration targets with the potential to host +1Moz deposits within a 70km strike length of tenement holdings over a major gold belt, much of which remains untested by drilling. This region, which previously had a fragmented ownership, has been consolidated under one ownership for the first time.

The second asset, the Kubi Gold Project, is located 15km south of and along strike from AngloGold Ashanti?s 60Moz Obuasi Mine within the +100Moz Ashanti trend. Under a tribute agreement at the Kubi Gold Project, 500,000 tonnes @ 3.65g/t were mined by the previous tenement holder from two shallow pits yielding 59,000oz of gold up until 2005. This previous mining focused on just 400m of a total strike length of +1km of the deposit, with the project offering the potential to develop and mine steeply-plunging 6-8g/t shoots which remain open at depth.

An Indicated Mineral Resource of 604,000oz and an Inferred Mineral Resource of 315,000oz Au have been estimated. PMI Gold?s development strategy will be to update a 2008 Scoping/Pre-Feasibility Study produced by Golder Associates with a view to developing Kubi as a high-grade underground satellite mining operation to Obotan, a trucking distance of 110km.

Commenting further, Mr MacQuarrie, said that one exploration drill rig would for the next 12 months be targeting structural targets defined from a recent tenement wide high resolution air magnetic/radiometric survey. At Kubi, the 15km tenement strike length covers two parallel N-S structures, the Ashanti and Kubi trends, and intersecting E-W structures which appear to be associated with Perseus? nearby Central Ashanti, Ayanfuri Gold Project and correspond with an area of significant alluvial gold workings.

?For some time now PMI Gold has been intrigued by the source of these extensive alluvial gold deposits and for the first time funds from the ASX IPO will allow the Company to aggressively explore these exciting targets. Since acquiring Kubi, we have tripled our holdings in the area to cover the alluvial deposits. Kubi is one of the best exploration addresses in West Africa yet, surprisingly, many of the prospective structures have not been drill tested,? he said.

Prominent Australian Mining Executives Join PMI Gold Board

PMI Gold?s forthcoming Australian co-listing and IPO will be strengthened by the appointment of two prominent Australian mining executives to its Board after ASX listing, Mr Peter Buck as Chairman and Mr Ross Ashton as a Non-Executive Director.

Mr Buck worked with WMC Resources for 23 years in a variety of senior exploration and production roles, both in Australia and Brazil, before joining Forrestania Gold as Exploration Manager in 1994. Forrestania Gold was subsequently acquired by LionOre Mining International with whom he was the Director of Exploration & Geology until mid-2006. He managed the highly successful exploration team that discovered the Maggie Hays, Emily Ann, Waterloo and Amorac nickel deposits and the 2Moz Thunderbox gold deposit in Western Australia.

Also, he played key senior management role in progressing these deposits through feasibility studies to production. Mr Buck has also had key senior advisory roles in indigenous relations in Australia, LionOre?s African operations and new business development. During this period Mr. Buck was also a non-Executive Director with Gallery Resources and Breakaway Resources.

In 2006, Mr Buck played a key role in managing the divestment of a large portion of LionOre?s nickel exploration portfolio into Breakaway Resources. Following this transaction, he became the Managing Director and CEO of Breakaway and led the team that discovered extensions to a series of nickel and base metal deposits in WA and Queensland. In 2009, Mr Buck left Breakaway to pursue other professional and personal interests.  

Mr Ashton has been involved in the exploration, consulting, financing and development of international resource projects since 1972. Most recently in his capacity as Managing Director and subsequently Chair of Red Back Mining Inc., Mr Ashton was responsible for identifying the prospectivity and leading the team which discovered the multi-million ounce Chirano gold deposit in Ghana, West Africa.

In 2004, Mr Ashton re-domiciled Red Back from the ASX to the TSX with a new Canadian CEO, management and board. In 2005 Mr Ashton resigned as Red Back Chair. In September 2010, Red Back, as a 340,000 ounce per annum gold producer, was the subject of a merger with Kinross Gold Corporation which valued that company at US$7.1 billion. Mr Ashton is also a Non Executive Director of Brockman Resources Limited, an ASX-listed iron ore explorer/developer with a market capitalisation of ~A$500 million.

The appointment of Mr Buck and Mr Ashton will complement PMI Gold?s existing Board of Directors, which also includes two high profile Ghanaian Directors, Honourable J.H. Mensah, Formerly Minister of Finance, Chairman National Development Planning Commission of Ghana, and Mr Thomas Ennison, Barrister and Solicitor of the Supreme Court of Ghana, formerly Ghanaian Ambassador to Italy.  

IPO Details and Timetable

PMI Gold currently has approximately 142 million shares and 55 million options and warrants on issue with a market capitalisation of approximately A$105 million. Its major shareholders are Macquarie Bank Limited, a major private investor based in Denver and a major private investor based in Ghana. Management, Directors and their associates hold ~6.2%.

PMI Gold has lodged a Prospectus with the Australian Securities and Investments Commission (ASIC) for the issue of up to 39,285,714 shares at $0.70 each to raise up to $27.5 million. Perth-based stockbroking firm Hartleys Limited is Corporate Advisor and Lead Broker to the issue, which is scheduled to open on 9 November and is scheduled to close at 5pm on 29 November ahead of a targeted listing date of 10 December.

In a parallel offering in Canada, PMI Gold has announced a private placement to raise up to $7.5 million by the issuance of up to 10,715,000 special warrants, with the financing scheduled to close by November 29. The Canadian offering is being led by Cormark Securities Inc. on behalf of a syndicate of underwriters including, Haywood Securities Inc., Salman Partners Inc. and M Partners Inc.

Following completion of the financings, the Company will have 192,507,758 shares on issue.

ENDS

For further information:

PMI Gold:                                                                                                                             Media:

Douglas MacQuarrie, Managing Director                                                                      Nicholas Read / Paul Armstrong

Mobile: +1 604 710 8442                                                                                                   Read Corporate

Peter Buck, Chairman                                                                                                        Tel: +61-8 9388 1474

Mobile: +61 411 554 099                                                                                                   Mobile: +61-419 929 046

Important Notice: The offer of the securities in PMI Gold Corporation Limited is made in a Prospectus dated 3 November 2010. Anyone wishing to acquire the securities will need to complete the application form accompanying the Prospectus. This release does not constitute a solicitation to acquire securities in PMI Gold Corporation Limited. 

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