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African Gold Uses Private Placement Proceedings to Explore its Gold Projects

AFRICAN GOLD GROUP, INC. (TSX VENTURE:AGG) has announced that its brokered private placement of up to $12 million of units at a price of $0.70 per Unit has been fully-subscribed.

The Offering will consist of 17,200,000 Units for gross proceeds to the Company of $12,040,000. The Offering will be underwritten by a syndicate led by TD Securities Inc. and including GMP Securities L.P. (the "Underwriters").

The net proceeds of the Offering will be used to fund the continuing exploration and development of the Company's Kobada, Mali Gold Project and its Asankrangwa, Ghana holdings.

Each Unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant shall entitle the holder to acquire an additional common share of the Company at a price of $1.00 during the period ending 24 months following the closing of the Offering. In the event that the closing sale price of the Company's common shares on the TSX Venture Exchange is greater than $1.40 per share for a period of 20 consecutive trading days at any time after closing of the Offering, the Company may accelerate the expiry date of the warrants by giving notice to the holders thereof and in such case the warrants will expire on the 30th day after the date on which such notice is given by the Company.

All securities issued under the Offering will be subject to a four month hold period in accordance with applicable Canadian securities laws.

Closing of this Offering is expected to occur on or about December 17, 2010 and is subject to receipt of all necessary regulatory approvals including that of the TSX Venture Exchange.

Source: AFRICAN GOLD GROUP, INC.

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