Majestic Gold building new mill at Song Jiagou 2010-09-24 01:27 ET - News Release Mr.

Rod Husband reports MAJESTIC GOLD PROVIDES CORPORATE UPDATE Majestic Gold Corp.

is providing shareholders with an update on corporate activities. Milestones achieved 2010 year to date: • Increase of resources to 24.9 million tonnes at 1.25 grams per tonne gold (1,002,694 ounces Au) indicated and 28.1 million tonnes at 1.883 g/t (1,703,174 ounces Au) inferred; • Agreement to acquire remaining 40-per-cent interest in Song Jiagou mining project (agreed, approved and closed); • Continued mining operations since January total 4,265 ounces of gold with an average sale price of $1,170 (U.S.) per ounce (revenues of about $5-million) to Aug.

31, 2010; • Transfer of mining licence to joint venture company and revised corporate structure approved by Chinese government; • Second installment of 15 million renminbi (approximately $2.1-million) from sale of Sawayaerdun received in China. The company has continued to focus its efforts on the development of the Song Jiagou mining property, increasing tonnage in excess of 138 per cent and a 112-per-cent increase in contained gold, as well as a 15-per-cent increase in tonnage in the inferred category and a 228-per-cent increase in contained gold. In addition, the company received TSX Venture Exchange approval to proceed with the agreement to increase its interest in Yantai Zhongia Mining Enterprise from 54 per cent to 94 per cent.

The company recently completed the issuance of the shares to the vendors. Pursuant to the same agreement, the company has received all required approvals for the transfer of the mining licence to Yantai and the revisions to the corporate structure.

This is a very significant milestone as it allows for Yantai to officially mine, process and sell gold within China. Further to its agreement to acquire the remaining interest in the project, the company and its mining contractor have been operating test mining at an average rate of over 1,150 tonnes per day since January, 2010, at Song Jiagou.

As of Aug.

31 of this year, the company has produced 4,265 ounces of gold with an average sale price of $1,170 (U.S.) per ounce. With initial production under way at Song Jiagou, the company and its mining contractor partner have been developing plans to increase the size of the processing facilities, including a mill, tailings storage facility, new tailings line, and water and power supply, in anticipation of increasing production to approximately 7,500 tonnes per day. The new mill is designed to produce 6,000 tonnes per day in addition to the existing capacity.

Simultaneously, the company is building new tailings storage facilities capable of containing the current resources as well as providing additional capacity for future expansion.

Construction of the mills and concentrator has moved ahead with breakneck speed -- 40 per cent of the steel and concrete form has been completed within the period of 2.5 months. With revenues to date of over $5-million (U.S.) and well-advanced mine expansion plans, the company will move its engineering studies forward as quickly as possible in order to maintain the shortest timelines possible to fully develop Song Jiagou. In addition to the developments at Song Jiagou, the company has received the second instalment from the sale of its Sawayaerdun project (see news release in Stockwatch of Sept.

18, 2009).

The company continues to work with its legal counsel to close the joint venture company according to Chinese regulations and requirements in order to repatriate the proceeds. The geological and technical information contained in this news release has been reviewed and approved by Michael Hibbitts, PGeo, who is a qualified person under the definitions established by National Instrument 43-101. We seek Safe Harbor.
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