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Universal Gold Mining Corp. Releases Investor Update and Objectives Report

^{Published on 2010-10-19 05:40:47 - Market Wire}
 

VANCOUVER, B.C.--([ BUSINESS WIRE ])--Universal Gold Mining Corp. (OTCBB: UGDM) ([ universalgoldmining.net ]) ("Universal Gold" or "the Company") announced today an investor update and objectives report.

Universal Goldas strategy is to pursue gold exploration and development opportunities in underexplored frontier territories. Universal Gold believes that value can be delivered to investors through being an early investor into highly prospective regions that have had little attention historically from some of the larger mining companies. To date, the Company has been focused on two areas which it believes could hold significant value for its investors a" Colombia and India.

Universal Gold has initially focused on Colombia a" in June 2010 the Company earned a 25% interest in the Toldafria project through investing $2.3 million, and it has the right to earn up to an additional 25% interest through the expenditure of an additional aggregate of $5.7 million in 2011 and 2012. For further information regarding the Toldafria project, please see Amendment No. 1 to the Companya™s Current Report on Form 8-K/A filed with the SEC on June 22, 2010 - and the Companya™s Current Reports on Forms 8-K filed with the SEC on August 19, 2010 - and September 17, 2010 a" at [ 8-K Filings ]. The regional geology of the Toldafria project appears extremely promising - it is located south of Colombian Goldfields' Maramato prospect and north of Anglo Gold Ashantia™s La Colosa project, the latter of which reported over 12.0 million oz of inferred resource last year.

An independent NI 43-101 compliant report has already concluded that the Toldafria property holds an inferred gold resource of 614,000 ounces. Core Value Mining & Exploration Co. (aCVMEa), the operator of the Toldafria property, is continuing the underground channel sampling program, and the metallurgical results to date have been described by the Companya™s management as atruly outstandinga [ (Sept 17, 2010 press release) ]. Analysis of the assay results from two batches of samples amounting to a total of approximately 450 samples is now being completed and the Company is expecting to announce the results of this analysis in the next two weeks. These assay results, along with the results from the other samples, will eventually contribute to an update of the NI 43-101 compliant report, and the Company expects that the estimated inferred resource will increase a" the Company plans to complete this updated report before the end of the year.

In addition to ongoing sampling on the existing property, Universal Gold continues to work to expand the size of its Colombian project through negotiations to acquire adjacent properties as well as apply for available license areas immediately surrounding the Toldafria project. Although there can be no assurance that any such negotiations or applications will be successful, the Company is pleased with its progress on this front.

The Companya™s management believes that the Indian greenstone belts offer one of the largest and most under-developed gold exploration opportunities in the world. As such, over June and July 2010, the Company entered into various agreements that gave it the option to obtain up to approximately 25% of the then outstanding capital stock of Kolar Gold Plc. (aKolar Golda). Universal Gold believes Kolar Gold could provide a unique opportunity to deliver exploration capital to some of the most exciting license areas in the Indian greenstone belt region. The Company continues to complete due diligence on this opportunity and is eager to obtain access to this region. For further information regarding the Companya™s interest in Kolar Gold, please see the Companya™s Current Reports on Forms 8-K filed with the SEC on July 6, 2010, and August 26, 2010 a" [ 8-K Filings ].

The Company is also pleased to announce that on September 20, 2010, and October 14, 2010 it successfully completed closings of its second private placement offering (the aOfferinga) of common stock resulting in total gross proceeds of $1,225,000. Commencing on October 8, 2010, the Company began using the proceeds from the Offering primarily to fund expenses in investigating potential acquisition candidates. Among other things, the Company expects such expenses to include the costs of its due diligence efforts and earnest money and/or option payments with respect to mineral properties in which the Company may consider acquiring an interest. For further details, please see the Companya™s Current Report on Form 8-K filed with the SEC on October 14, 2010 a" [ 8-K Filings ].

Forward Looking Statements:

Certain statements in this news release are forward-looking statements, which are subject to certain risks and uncertainties. Words such as "expects,a "intends,a "plans,a "may,a "could,a "should,a "anticipates,a "likely,a "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management. There can be no assurance that the Toldafria prospect will be successfully acquired by CVME and any property interests therein earned by or, if earned, received by the Company. There can be no assurance as to how long the Offering proceeds will sustain the Companya™s efforts in investigating potential acquisition candidates or whether such efforts will ultimately result in the Company consummating any acquisition on terms favorable to the Company, or at all. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the company, including, but not limited to, the Company's ability to identify corporate acquisition and/or joint venture opportunities, to establish the technical and managerial infrastructure and to raise the required capital to take advantage of, and successfully participate in, any such opportunities, future economic conditions, political stability and metals prices. Additional information on risks and other factors that may affect the business and financial results of the Company can be found in filings of the company with the U.S. Securities and Exchange Commission. Except as otherwise required by law, the Company disclaims any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this news release to reflect any change in the Companya™s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.