VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 4, 2011) - Prodigy Gold Incorporated (News - Market indicators) is pleased to announce the results from a NI 43-101 compliant Preliminary Economic Assessment (PEA) of its 100% owned Magino mine gold project in northern Ontario. The PEA, completed by CWA Engineers Inc., in a consortium including Snowden Mining Industry Consultants Inc. (Snowden) and Knight Piésold Canada, has established strong economics for the proposed open pit gold mining project at Magino. (All figures are in Canadian dollars except where noted).

Highlights of the PEA (base case using US$1,000/oz gold):

• Pre-tax Net Present Value (NPV) of $351 million at a 5% discount rate generating an Internal Rate of Return (IRR) of 49%; payback period is 1.8 years
• At a US$1,300/oz gold price, the project generates a pre-tax NPV of $691 million and an IRR of 80%
• Pre-tax cash flow from operations over the proposed Life of Mine (LOM) is estimated to be $796 million, net cash is projected to be $520 million LOM
• Start-up capital costs are estimated to be $242 million with an additional $34 million in sustaining capital
• Average annual gold production is estimated to be 166,500 ounces per year over a nine year operating life producing 1.50 million ounces of gold, recovery is estimated to be 95%
• Average LOM cash operating costs (exclusive of sustaining capital) are estimated to be US$496 (Cdn$521) per ounce
• During the first two years of proposed mine operations, the average grade processed will be 1.60 gpt gold
• Total minable resources of 41.8 million tonnes grading 1.18 gpt gold with a strip ratio of 2.8:1
• Ongoing in-fill drilling to date is targeted at increasing the gold resource by converting internal waste to resources; the PEA to be updated upon completion of the drilling

Brian Maher, President and CEO of Prodigy Gold stated: "The completion of the Magino mine PEA by the engineering consortium is a major milestone for Prodigy Gold, demonstrating the robust economics of our proposed open pit gold mine at Magino. With a projected mine life of nine years, cash costs of US$496 (Cdn$521) per ounce and rapid payback of capital, Magino is developing into one of the leading undeveloped gold projects in eastern Canada. The on-going in-fill drilling program, which is targeting gold mineralization within the proposed open pit, may enhance project economics as we convert internal waste into resources, simultaneously increasing contained ounces and lowering costs. We view this PEA as a first pass analysis and look forward to fine-tuning the operating and milling plan with a focus on lowering costs and increasing the resource base prior to completing a full feasibility study."

Project Assumptions and Parameters:

Magino Mine Resources

The Magino mine resources used in the PEA were previously reported in a Prodigy Gold press release dated February 28, 2011. The resource estimate, completed by Snowden, contained Indicated gold resources of 1,924,200 ounces grading 1.16 gpt gold (51.6 million tonnes) and 587,100 ounces of Inferred gold resources grading 1.04 gpt gold (17.5 million tonnes) using a 0.35 gpt cut off grade. The complete resource estimate table is included below:

Potentially open-pit minable resources were calculated by Snowden using Snowden's resource model (as reported in a press release dated February 28, 2011). This resource model as well as the cost parameters mentioned above, and an average pit wall slope assumption of 45° were used to develop an optimum final pit shell using Whittle 4D. After determining the optimal pit shell Snowden then used lower revenue factor shells to select appropriate push backs to assist in scheduling the operation. Snowden then developed a life of project schedule for the resource which utilizes an extensive low grade stockpile to increase the average mill feed grade, maximizing value in the early years of the project's life. The schedule developed supports an average mill feed rate of 15,000 tonnes per day, for about nine years. To support this mill feed, total material movement from the open pit peaks at about 62,500 tonnes per day in year three with a typical material movement requirement of about 55,000 tonnes per day of combined waste and process feed.

Using the final pit shell from Whittle, Snowden designed a conceptual final pit design as well as associated waste dumps, low grade stockpile, and ramps. Mining is assumed to be undertaken by a contractor. The financial analysis includes a mobilization allowance of $5 million for the contractor.

Mining and Production

The pit design, optimization and production schedule prepared by Snowden resulted in a potential production schedule containing 41.82 million tonnes grading 1.18 gpt gold. Total gold recovered over a nine year project life is 1.50 million ounces, averaging 166,500 ounces per year. The LOM average strip ratio is estimated to be less than 2.8 to 1. A summary of the annual mine production is outlined below.

To view summary of the annual mine production, please visit the following link: http://media3.marketwire.com/docs/PGOLD44.pdf

Processing Facility

The PEA contemplates using a conventional carbon-in-leach (CIL) processing facility operating at 15,000 tpd with 95% availability. The crushing consists of a three stage crushing plant and a fine ore stockpile. The fine ore will be reclaimed to feed two ball mills in parallel. Each ball mill will be in a closed circuit with cyclones.

The cyclone overflow from each ball mill will be fed to a train of leach tanks with sodium cyanide and carbon (carbon-in-leach process) for 48 hours to extract 95% of the contained gold. The loaded carbon will be washed and stripped in a hot caustic solution at an elevated temperature and pressure. The pregnant solution exiting from the stripping circuit will be cooled and pumped to a set of electrowinning cells where the gold will be plated out on steel wool. The gold laden steel wool will be smelted on site to produce dore.

The stripped carbon will be reactivated and returned to the CIL circuit. The residual cyanide in the tailings from the leach will be destroyed using sulphur dioxide, copper sulphate and lime before the tailings are pumped to the storage area. The supernatant from the tailings will be reclaimed and re-used in the process plant.

Operating Costs

Operating cash costs, excluding sustaining capital, over LOM are projected to average US$496/oz (Cdn$521). Costs are summarized below:

Capital Cost Estimates

The PEA is based upon capital pricing as of the first quarter of 2011. The level of accuracy of the capital cost estimate is ± 40% for this PEA. Pre-production capital costs are estimated at $242 million. Because mining is assumed to be undertaken by a contractor, the mining fleet capital is limited to $5 million for the contractor mobilization. Sustaining capital, principally staged additions to the capacity of the tailings pond, is estimated to be $34 million. The cost breakdown for pre-production capital expenditures, assuming contract mining, is shown below.

Financial Analysis

The financial analysis for the Base Case evaluation utilizing a gold price of US$ 1,000 per ounce indicates a pre-tax NPV at a 5% discount rate of $351 million with an IRR of 49% and a payback period of 1.8 years. On an after tax basis, the NPV at a 5% discount rate is $259 million with an IRR of 41% at a gold price of US$1000 per ounce. The project generates an undiscounted pre-tax cash flow from operations of $796 million over the LOM. The table below outlines NPV and IRR at a variety of gold prices and discount rates (DR) on a pre-tax basis.

Note on Mineral Resources

Mineral resources that are not mineral reserves do not have demonstrated economic viability. This assessment is preliminary in nature as it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable to them to be categorized as mineral reserves. At this time there is no certainty that the preliminary assessment and economics will be realized.

Qualified Persons for the PEA

The PEA was prepared by leading independent industry consultants, all Qualified Persons (QP) under National Instrument 43-101. The QPs have reviewed and approved the content of this news release. The following consultants and QPs participated in the PEA:

• CWA Engineers Inc, under the direction of Frank Yu, P. Eng. Mr. Frank Yu is the Technical Director, Mining of CWA Engineers Inc. He supervised and reviewed the process design and infrastructure update requirement, capital and mill operating cost estimate and financial analysis of this project.
• Snowden Mining Industry Consultants Inc., under the direction of Anthony Finch, MAusIMM. Mr. Anthony Finch is the Divisional Manager Mining Engineering and Principal Consultant at Snowden Mining Industry Consultants Inc. He supervised and reviewed all the mining design aspects of this project.
• Knight Piésold Canada, under the direction of Daniel Y. Yang, P. Eng. Mr. Daniel Yang is a Senior Engineer of Knight Piésold Canada. He supervised and reviewed the tailings storage facility for this project.

A NI 43-101 compliant technical report will be filed on SEDAR within 45 days of the date of this press release.

About Prodigy Gold: Prodigy Gold Inc. (News - Market indicators) is currently evaluating the development of the Magino mine gold project in Ontario as an open-pit mining opportunity with the potential for deeper, higher grade gold production. The Magino project contains Indicated gold resources of 1,924,200 ounces grading 1.16 gpt gold (51.6 million tonnes), and 587,100 ounces of Inferred gold resources grading 1.04 gpt gold (17.5 million tonnes) (please see Prodigy press release dated February 28, 2011). A Preliminary Economic Assessment (PEA) of the project shows a pre-tax NPV of $351million and an IRR of 49% using a 5% discount rate (please see Prodigy press release dated April 4, 2011). The proposed operation would have an average annual gold output of over 166,000 ounces a year during a nine year project life. Total gold production is estimated to be 1.50 million ounces at cash costs of approximately US$496 (Cdn$521) per ounce. A full feasibility study for the proposed open pit mining project is scheduled for early 2012. Bringing the Magino mine project through the feasibility process and towards production, coupled with the exploration potential of our Beardmore-Geraldton exploration properties, are the catalysts to growing Prodigy Gold and building substantial value for Prodigy shareholders: Today's Discovery, Tomorrow's Future.

All scientific and technical information in this news release, except as noted above, has been reviewed and approved by Tom Pollock, P.Geo., Prodigy Gold's Vice President – Exploration, who is a qualified person under the definitions established by National Instrument 43-101. Drill core at Magino is boxed, covered, and sealed at the drill rig and moved to the Prodigy logging and sample preparation facilities by Prodigy Gold personnel. The core is then split down the centre using a typical table fed circular rock saw normally at one metre intervals. One half of the core is sent for assay to ALS Chemex, 2090 Riverside Dr., Timmins, ON, P4R 0A2, while the other half is returned to the core box and stored at Prodigy's sampling facility in a secure, fenced off, area. Prodigy QA/QC procedures include the regular use of blanks, standards and duplicate samples in addition to sending 10% of the samples off to a second lab for check assays. Samples assaying > 3.0 gpt gold are automatically re-assayed by the metallic screen method. Drill holes are directed as much as possible perpendicular to the strike and dip of the mineralization at Magino.

On behalf of the Board of Directors

Brian J. Maher, President and Chief Executive Officer

This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the Magino mine property and other future plans, objectives or expectations of Prodigy Gold Incorporated (the "Company") are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.