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USGL - Open Letter to U.S. Gold shareholders
Wednesday September 6, 3:10 am ET


DENVER, COLORADO--(MARKET WIRE)--Sep 6, 2006 -- U.S. Gold (TSX:UXG.TO - News)(OTC BB:USGL.OB - News) -



Dear Fellow Shareholders,

This year, we were off to a fast start, with a big financing of US$75 million completed in February followed by a bold plan to consolidate a big chunk of the Cortez Trend in Nevada by the end of this summer. Then there was a great silence. Did everything stop? Nothing could be further from the truth!! We have made great progress advancing our objective of becoming the "Premier Exploration Company in Nevada"!

NEVADA CONSOLIDATION PROCEEDING

Our takeover bid process has suffered from delays but it has not been stopped and it will proceed as fast as permitted by American and Canadian Securities Regulators. These delays are primarily the result of faulty legal advice. This situation has been corrected.

ALL STAR EXPLORATION TEAM

It is our exploration efforts, under our president Ann Carpenter that has us very excited! First and foremost, Ann has assembled an All-Star Team of geologists to drive our exploration effort. Accomplished explorers with strong backgrounds in Nevada and its large gold discoveries.

Recently we hired Eric Saderholm from Newmont Mining as our VP of Project Development, Steven Brown from Nevada Pacific Gold as our Senior Geologist and Radu Conelea an independent consultant, who came over from Barrick Gold. We are thrilled to be attracting some of the top talent within Nevada to our Tonkin Springs project. Their willingness and excitement for the project is a true testament to the potential of Tonkin Springs.

CORTEZ HILLS DISCOVERY CHANGED EVERYTHING

Placer Dome (bought by Barrick Gold) found what many consider one of Nevada's most significant gold deposits when it discovered Cortez Hills in 2003. The geological similarities with Nevada's world famous Carlin Trend, which is the production base of Barrick Gold and Newmont Mining, challenged

firmly held beliefs that large deposits of this type do not exist in the Cortez Trend. Cortez Hills, including the area surrounding the discovery, has past production, current reserves and mineralized material totaling more than 30 million ounces and we are 10 miles away! This is a very prospective area to be looking for gold.

This spring we started our aggressive, US$30 million, two year exploration program at Tonkin Springs. Previous exploration had last occurred prior to the influential Cortez Hills discovery. A lot has happen since Cortez Hills, allowing geologists to better understanding the area and the required ingredients associated with large gold deposits in this part of the world.

LOWER PLATE AT TONKIN SPRINGS

New interpretations supported by age-dating, mapping, core drilling and fossil identification suggest that there is a much larger package of Lower Plate rock at Tonkin Springs, than was previously believed to exist (Figure 1 and 2).

Why is Lower Plate important to your share price? This is where major gold discoveries are made within Nevada's Carlin and Cortez Trends. The presence of Lower Plate rock near surface greatly improves the odds of making a discovery at Tonkin Springs!

We Are Excited about our Future!

Eric Saderholm is adamant, "I agree with others that are working on the U.S. Gold team that the projection of the Cortez linears (structures hosting Cortez Hills gold) run right at us. It is apparent to me that we have all the right ingredients for large discoveries and ounce additions. It's time to put it all together and take our best shots at success."

To see Figures 1,2 & 3 please click http://www.ccnmatthews.com/docs/gold906.pdf

INITIAL DRILL RESULTS

As part of our exploration program, drilling began in June and to date 19,000 ft. has been drilled of the 400,000 ft. drilling program proposed over two years with assay results having been received for approximately 5,000 ft. These initial results are for the first six holes completed beyond the perimeter of the previously identified 1.4 million ounces (33.1 million tons at 0.043 ounces per ton gold) of mineralized material, and represent extensions both laterally and to depth (Figure 3.) Highlights to date are listed in table 1. setting out the complete set of results:

Hole TS06C-01 0.044 opt (1.50 gpt) over 165 ft (50.3m)
Including 0.113 opt (3.65 gpt) over 40 ft (12.2m)

Hole TS06R-05 0.025 opt (0.95 gpt) over 120 ft (36.6m)

Hole TS06R-07 0.025 opt (0.95 gpt) over 30 ft (9.1m)


Table 1 - Drill Results

LEGEND
1 ounce per ton = 34.2857 grams per tonne CONF Confirmation
1 foot = 0.3048 meters LEXT Lateral Extension
DEXT Depth Extension
Ntarg New target

---------------------------------------------------------
---------------------------------------------------------
Gold Assay
-----------
Hole Ounces
per
No. Target Total Assay Interval Length ton
Area

Depth (in feet)(in feet)
---------------------------------------------------------
---------------------------------------------------------
TS06C-
North
01 Rooster 644 110 130 20 0.014
200 230 30 0.057

240 405 165 0.044

including 345 385 40 0.113

445 470 25 0.041
---------------------------------------------------------
TS06-
North
01B Rooster 640 15 25 10 0.014
260 320 60 0.019
340 380 40 0.047

475 490 15 0.019
505 520 15 0.016

560 575 15 0.050
---------------------------------------------------------
TS06R-
North
02 Rooster 1030 135 145 10 0.013
---------------------------------------------------------
TS06R-
North
05 Rooster 1295 470 490 20 0.021
525 540 15 0.024

600 720 120 0.028

775 790 15 0.032
---------------------------------------------------------
TS06R-
North
06 Rooster 500 145 155 10 0.014
220 245 25 0.018
320 330 10 0.015
400 415 15 0.016
---------------------------------------------------------
TS06R-
07 TSP-1 1140 210 220 10 0.033

280 310 30 0.025

350 365 15 0.052
495 510 15 0.014
720 735 15 0.019

---------------------------------------------------------

---------------------------------------------------------
---------------------------------------------------------


---------------------------------------
---------------------------------------
Gold Assay Purpose &
----------
Hole Grams Results
per
No. Length tonne
(in
metres)
---------------------------------------
---------------------------------------
TS06C-
01 6.096 0.485 CONF/DEXT
9.144 1.955 Twin of

50.292 1.502 previously
drilled 400-ft
hole; extends
12.192 3.853 mineralization
70 feet to depth
7.62 1.403
---------------------------------------
TS06-
01B 3.048 0.476 DEXT
18.288 0.646 In the
12.192 1.594 immediate area
of TS06C-01;
4.572 0.624 extends
4.572 0.563 mineralization
175 feet to
4.572 1.724 depth
---------------------------------------
TS06R-
02 3.048 0.424 LEXT/Ntarg
Intersected two
new
mineralized
features more
than 1000 feet
east of TS06C-
01
---------------------------------------
TS06R-
05 6.096 0.721 LEXT/DEXT
4.572 0.823 Extended
mineralization
0.946 in TS06C-01
200 feet
4.572 1.095 northeast
---------------------------------------
TS06R-
06 3.048 0.459 LEXT
7.63 0.617 Extended
3.048 0.519 mineralization
in TS06C-01
264 feet
4.572 0.541 southwest
---------------------------------------
TS06R-
07 3.048 1.128 DEXT

9.144 0.867 Discontinuous
4.572 1.78 mineralization
4.572 0.469 encountered to
a depth 550
4.572 0.653 feet; previously
untested area
---------------------------------------


---------------------------------------
---------------------------------------
EXPLORATION CONTINUES TO ACCELERATE

Moving forward through the remainder of 2006 and into 2007 we will be increasing the number of drill rigs, testing for extensions of the known mineralized zones, including high-grade feeder systems to depth. We are setting up for an aggressive drill program that will continue throughout the winter months.

TSX LISTING

On August 30, 2006 we took the first step to enhance your share liquidity by listing U.S. Gold on the TSX (Toronto Stock Exchange) under the symbol UXG. We hope this will make U.S. Gold more attractive to investors, while it lowers our cost of capital.

This is an exciting time for U.S. Gold investors! With the team, capital and assets coming into alignment I believe we are giving ourselves a great chance at success.

Best Regards,

Rob McEwen,
Chairman and CEO
U.S. Gold Corporation
Qualified Person

This news release has been prepared under the guidance of Steve Brown, Senior Geologist and Project Manager, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company at its Tonkin Springs property. All samples were analyzed by ALS Chemex of Winnemucca, Nevada.

All assays are uncut, with analysis conducted by ALS Chemex utilizing a 30 gram fire assay change with an AA finish. Sample length is by geologic boundary with a maximum 5 ft. length and core recovery averages 95-98%. Quality assurance/quality control is assured by inserting standards and blanks every 40th sample and chuck assays sent to second lab every 20th sample.

Certain statements contained herein and subsequent oral statements made by and on behalf of the Company may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are identified by words such as "intends," "anticipates," "believes," "expects" and "hopes" and include, without limitation, statements regarding the Company's plan of business operations, potential contractual arrangements, receipt of working capital, anticipated revenues and related expenditures. Factors that could cause actual results to differ materially include, among others, those set forth in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005 and those set forth in the registrations statements referenced above, under the caption "Risk Factors." Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Except as otherwise required by applicable securities statutes or regulations, the Company disclaims any intent or obligation to update publicly these forward looking statements, whether as a result of new information, future events or otherwise.



Contact:
Contacts:
U.S. Gold Corporation
William F. Pass
Vice President and Chief Financial Officer
[phone]
[phone] (FAX)
[e-mail]
2201 Kipling Street, Suite 100, Lakewood, Colorado 80215

U.S. Gold Corporation
Ian Ball
Investor Relations
[phone] or Toll Free: [phone]
[phone] (FAX)
[e-mail]
99 George Street, 3rd Floor, Toronto, Ontario M5A 2N4



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Source: U.S. Gold Corporation