True Gold Announces $23.5 Million Strategic Investment by Liberty Metals & Mining

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jul 18, 2013) - True Gold Mining Inc. (TSX VENTURE:TGM) ("True Gold" or the "Company") is pleased to announce that it has entered into a strategic investment agreement with Liberty Metals & Mining Holdings, LLC ("LMM") which, upon completion, will make LMM the Company's largest shareholder.

LMM, a subsidiary of Boston-based Liberty Mutual Insurance, will invest a total of $23,450,931 in True Gold through a combination of a non-brokered private placement of True Gold common shares ("Shares") and the sale of a 2% net smelter return royalty on the Company's interest in the Karma Gold Project (the "Royalty").

Pursuant to the agreement, LMM will purchase 52,755,248 Shares (the "Purchased Shares") at a price of $0.33 per Share for gross proceeds of approximately C$17.4 million ("the Placement"). The Purchased Shares will represent 19.95% of the outstanding Shares upon completion of the Placement.

In connection with the transaction, Christopher Noel Dunn, Managing Director of Liberty Metals & Mining, will be appointed to True Gold's board of directors and, following closing of the transaction, LMM will have the right to participate in certain future equity financings of True Gold to maintain its pro-rata equity ownership.

"LMM's investment comes at a pivotal time in the Karma Project's evolution," said Mark O'Dea, Executive Chairman, True Gold. "Their long-term investment strategy and financial strength are ideally suited for a company transitioning from exploration to an emerging developer. Upon completion of the feasibility study that is now underway, this funding will allow us to make deposits to secure longer lead time capital items, continue site preparation, and maintain our development schedule."

Mr. Dunn's appointment adds a respected voice in the mining and investment industries to True Gold's board. He has extensive experience in equity and debt financing, through leadership roles at Goldman Sachs, JP Morgan and Bear Stearns.

Summary terms of the transaction:

• Purchase of 52,755,248 Shares at a price of $0.33 per Share for gross proceeds of approximately $17.4 million
• Purchase of the Royalty for a purchase price of approximately $6.04 million. The Royalty is subject to the following repurchase options retained by True Gold:
  • 50% of the Royalty may be repurchased subsequent to the third anniversary of commencement of commercial production at fair market value
  • 50% of the Royalty may be repurchased on March 31, 2014 for approximately US$12.5 million
• LMM's right to nominate one individual to True Gold's Board of Directors as long as LMM's percentage equity ownership is at least 7.5%
• Participation right for LMM to maintain its pro-rata equity ownership, if LMM's percentage equity ownership is at least 7.5%

On closing of the Placement and Royalty transaction, True Gold will have approximately $38 million in working capital and no debt.

No finder's fees or commissions will be paid in connection with the transaction or sale of the Royalty. Proceeds of the transaction will be used primarily for expenditures related to the advancement of the Karma Gold Project¹, ongoing exploration, as well as for general administrative and corporate expenses.

The Purchased Shares will be subject to a four-month hold period from the closing date. The Placement is subject to certain conditions including, but not limited to, the approval of the TSX Venture Exchange.

The purchased Shares described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent registration or an applicable exemption from the registration requirements of such Act.

About True Gold

True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold exploration, development and production company, by focusing on projects with low costs, low technical risks and solid economics. The Company's board, management and technical teams have proven track records in gold exploration, development, operations and production worldwide.

Additional information about the Company and its activities may be found on the Company's website at www.truegoldmining.com and under the Company's profile at www.sedar.com.

ON BEHALF OF THE BOARD

Mark O'Dea, Executive Chairman

(1) The Company has not made a production decision and the Company's strategic plan to develop a stand-alone heap leach operation is subject to the results of its feasibility study, which is currently underway. Further, if and when the Company makes any production decision, it will disclose the basis of such decision in accordance with the requirements of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements made and information contained in this news release constitutes "forward-looking information" within the meaning of Canadian securities legislation. All statements in this release, other than statements of historical facts, including the expected completion of the Placement and related transactions, receipt of the conditional approval of the TSX Venture Exchange and the expected use of proceeds are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, a delay or failure to obtain necessary regulatory approvals for the Placement, unsuccessful exploration results, accidents or equipment breakdowns, the risk of undiscovered title defects or problems with surface access, labour disputes, the potential for delays in exploration and permitting activities, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk, unanticipated changes in key management personnel and general economic, market or business conditions. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Forward-looking information is based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of gold, that the Company will receive required permits and access to surface rights, that the Company can access financing, appropriate equipment and sufficient labour and that the political environment within Burkina Faso will continue to support the development of environmentally safe mining projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.