Value Microcaps Junior Miners

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Auriga Gold AiA.v

Updated POSITIVE PEA for both open pit and underground.
Very good IRR. Very low capex. :)
More drill results soon to expand resource.
---------------------------------------------ds

Good Morning,

Auriga Gold Corp. (AIA:TSXV) is pleased to announce the positive combined open pit and underground PEA for the Maverick Gold Project, near Flin Flon, Manitoba, released today at 6:00 a EST. Please see the attached release.

Dr. Richard Sutcliffe, Auriga Gold’s President and CEO commented, “We are pleased with the updated PEA on a proposed open pit and underground mining operation. The combined mine plan is the result of a substantial amount of mine engineering and evaluation and provides the Company with the opportunity to refurbish the existing mill, confirm its performance and significantly expand the mine life. Cash flow from the combined operation results in payback within 20 months and a pre-tax NPV with an 8% discount of $79.6 million. This is a significant improvement to the positive open pit PEA released in October. We will continue to explore and develop known gold mineralization at the Puffy Lake and Nokomis deposits with the intent of further extending the Maverick Gold mine life.”

Highlights:

· A total of approximately 2,039,000 tonnes of mill feed would be produced from five open pits and the underground mine and processed at the to-be-refurbished existing mill at a rate of 750 tpd. The project would operate for 7.5 years and produce a total of about 348,000 oz Au for sale. The existing mill and infrastructure would be refurbished concurrently with the development of the initial open pit.

· The Base Case is based on a gold price of US$1,400/Au oz (at Dec 31/11 the 12 and 24 month trailing averages were US$1,568/oz and US$1,396/oz respectively). The projected pre-tax NPV(8%) is $79.6M; pre-tax IRR is 84%; with pre-tax payback reached in 20 months of processing. It is projected that 50,000 tonnes of mill feed would be processed during mill ramp-up in the pre-production year.

· The capital costs amount to $18.1M and include a 20% capital cost contingency. The projected life of mine sustaining capital costs including closure costs amount to $26.6M.

· The projected average production cash cost is $950/oz Au. This cost includes $873/oz Au for operating costs and $77/oz Au for sustaining capital costs.

If you have any questions, please call.

Kind Regards,
Alison