Emgold Announces Idaho-Maryland Project Update

Project Overview

Emgold Mining Corporation (Emgold or the Company) provides the following update on its Idaho-Maryland Project (Project), located in Grass Valley, California. The Idaho-Maryland Mine was once the second largest underground gold mine in California and is reported to have produced 2.4 million ounces of gold at an average recovered grade of 0.43 ounce per ton. The mine contains a NI 43-101 compliant measured and indicated resource of 472,000 ounces of gold at a grade of 0.28 ounces per ton and an inferred resource of 1,002,000 ounces of gold at a grade of 0.39 ounce per ton, estimated as of March 1, 2007 (see Emgold's NI 43-101 compliant Technical Report titled "Idaho-Maryland Mine Project" dated December 8, 2009 at www.emgold.com or, filed under the Company's profile at www.sedar.com). A detailed summary of the Idaho-Maryland Project is available at www.emgold.com and www.idaho-maryland.com.

Permitting Status

Emgold is in the advanced stage of permitting the re-opening of the mine and is completing an Environmental Impact Report (EIR) for the Project through its 100% owned subsidiary, Idaho-Maryland Mining Corporation (IMMC). The preparation of the EIR commenced in July 2007 in accordance with the California Environmental Quality Act (CEQA). A Draft EIR was completed in October 2008 by the City of Grass Valley (City), the CEQA lead agency, and its consultant Environmental Science Associates (ESA) and the public comment period for the Draft EIR was completed in January 2009. The Draft EIR indicated that of the 15 areas evaluated, the Company was successfully able to avoid or mitigate potential environmental impacts of the Project in all areas, but one. This is a major accomplishment for any mining and/or industrial project, regardless of the jurisdiction.

After reviewing the Draft EIR, meeting with various government agencies to review their comments, reviewing public comments from the Draft EIR obtained during the public comment period (letters and public meetings), and obtaining input from the local community through IMMC's community outreach program, IMMC elected in mid-2009 to clarify and amplify the project design contained in Project Applications to further mitigate and/or eliminate potential environmental impacts of the Project identified in the Draft EIR. As the air quality analysis in that document identified certain impacts to be potentially significant, the primary focus of this work was to lessen potential air quality impacts from oxides of nitrogen, random organic gases, respirable dust (PM10), and greenhouse gas emissions. The project description revisions in the Project Applications reflect the goal of Emgold and IMMC to ensure the Idaho-Maryland Mine Project is a socially and environmentally responsible project that will benefit the City, Nevada County, the local communities, and our shareholders.

IMMC has completed significant work on air quality modeling for the Project and alternatives to address the air quality impacts outlined in the Draft EIR. Modeling done by IMMC's air quality experts has significantly reduced oxides of nitrogen, reactive organic gases, and respirable particulate matter from previous estimates contained in the Draft EIR. IMMC's proposed measures taken to accomplish these reductions include, but are not limited to, use of a Traffic Management Plan (e.g., van-pooling and car-pooling) to reduce employee traffic trips and associated air emissions, use of low NOX burners for combustion of natural gas, use of emulsion explosives, use of higher tier engines for off road underground and surface equipment, and use of shaft hoisting instead of trucking for material handling of ore and development rock.

IMMC expects to submit revised Project Application documents to the City in April, 2011. Based on CEQA guidelines, after review of the project design modifications reflected in the Application documents, the City may determine that a Revised Draft EIR is required for the project and circulate it for public comment. Alternatively, the City may elect to proceed with preparation of the Final EIR. IMMC anticipates a Revised Draft EIR will be required and has been proceeding on this basis since mid-2009.

The Final EIR will be prepared by the City and its consultant. The Grass Valley Planning Commission will review the Final EIR and entitlements for the Project, make a determination if the documents are complete and adequate, and forward the package to the Grass Valley City Council. The City Council will be responsible for Certification of the Final EIR, approving the entitlements, and approving a Conditional Use Permit for the Project. It is anticipated that the Final EIR can be completed in 2011.

David Watkinson, President and CEO of Emgold stated, "Emgold is busy on a number of fronts with the Idaho-Maryland Project and our other exploration properties located in Nevada and British Columbia. Our main focus is the Idaho-Maryland Project, and we have made a number of improvements and ensured that input from the public is incorporated into the project changes. We are excited to start moving forward again in the public domain with the Idaho-Maryland Project in anticipation of completing the California Environmental Quality Act (CEQA) process to allow us to advance the development of the Idaho-Maryland Mine."

In addition, Watkinson also stated, "The Idaho-Maryland Project is expected to result in 400 permanent jobs the Grass Valley and Nevada County area. The unemployment rate for Nevada County currently stands at 11.2% (January 21, 2011 California EDD Report, Preliminary numbers for December, 2010). The Grass Valley Mining District was once a major gold mining district in the U.S., and the mines within a three mile radius of the Idaho-Maryland Project are reported to have produced over 13 million ounces of gold between roughly 1850 and 1956. The mines shut down in 1956 due to the fixed price of gold by the U.S. government at US$35.00 per ounce and rising labor and supply costs after WWII. Emgold management believes the Idaho-Maryland Project is a world class gold deposit, and its development will positively impact the local and state economies."

The Gold Mining Industry in California

The years 2007 and 2009 saw the reopening of New Gold Inc.'s Mesquite Mine and ATNA's Briggs Mine respectively, both located in California. Gold production in California, which had decreased from 553,000 ounces per year in 2000, has now rebounded from a low of 19,400 ounces per year in 2007 to 161,400 ounces per year in 2009 (See Table 1). Other advanced stage gold projects in the permitting process in California include Sutter Gold Mining Corporation's Lincoln Project and Golden Queen Mining Company's Soledad Mountain Project.