News Column

True Gold Secures Up to US$120 Million Financing From Franco-Nevada and Sandstorm to Fully Fund Karma Project Construction

August 11, 2014

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 11, 2014) - True Gold Mining Inc. (TSX VENTURE:TGM) -

Highlights:

-- US$120-million financing commits funds to construct Karma without need for additional equity -- Funding provides True Gold with the flexibility to deliver base case outlined in the Karma Project Feasibility Study(1) and scale up quickly, with the goal of becoming a high-margin, mid-tier gold producer -- Significant construction to begin next month, with first gold pour anticipated by the end of 2015 -- Agreement is a strong endorsement of Karma and the project's long-term growth potential from two leading royalty and streaming companies -- Funding package provides capital at more favourable terms than traditional project financing -- True Gold now ranks among a select group of emerging producers worldwide with a permitted, fully funded project



True Gold Mining Inc. ("True Gold" or the "Company") has entered into a US$100-million stream agreement (the "Agreement") with Franco-Nevada Corporation ("Franco-Nevada") (TSX:FNV)(NYSE:FNV) and Sandstorm Gold Inc. ("Sandstorm") (TSX:SSL)(NYSE MKT:SAND). Based on our current Feasibility Study, the Agreement is anticipated to provide sufficient funding to complete the construction of the Karma Project ("Karma" or the "Project") in Burkina Faso, West Africa.

The US$100M Agreement requires True Gold to purchase and deliver 100,000 ounces of gold over five years, and thereafter 6.5% of equivalent production at Karma. In addition, True Gold holds the sole option to increase funding by up to US$20-million ("Increase Option") during the next 18 months. If the Increase Option is exercised in full, True Gold would deliver an additional 30,000 ounces of gold on a fixed payment schedule.

"It is a pleasure to welcome Franco-Nevada and Sandstorm and their high-calibre management teams as our newest partners on the Karma Project," said Mark O'Dea, Executive Chairman of True Gold. "Their participation provides a strong endorsement of the project and the quality of our team. We feel this is a highly attractive funding package that is well aligned with our development plans and we look forward to working together."

"I would also like to thank our cornerstone investors, Liberty Metals and Mining and Teck Resources, for their leadership roles in supporting the advancement of Karma over the past year. Since May 2013, during one of the toughest financing environments in recent history, True Gold has arranged approximately $200 million in funding," said Mr. O'Dea.

"We are pleased to be partnering with both True Gold and Sandstorm in supporting the development of Karma, a robust project with low capital and operating costs on a property that has excellent exploration potential," said Paul Brink, Senior Vice President, Business Development of Franco-Nevada. "True Gold has assembled an excellent operational team to build and operate Karma, in one of the fastest growing gold jurisdictions in the world today."

With permits secured to build the mine envisioned in the Feasibility Study and development fully funded, True Gold's Board of Directors has approved a construction decision and is targeting first gold pour for the end of 2015. Karma will be the seventh mine built in Burkina Faso within the past five years. KEY TRANSACTION TERMS -- Franco-Nevada and Sandstorm (the "Syndicate") will provide True Gold with US$100 million in funding, currently split 75% for Franco-Nevada and 25% for Sandstorm. -- Over a period of five years, starting March 31, 2016 (the "Delivery Period"), True Gold shall purchase and deliver to the Syndicate an aggregate of 20,000 ounces of gold each year, for a total of 100,000 ounces of gold. During the Delivery Period, the Syndicate will pay True Gold 20% of the spot price of gold ("Ongoing Payment") for each ounce purchased and delivered by True Gold. -- Following the Delivery Period, True Gold shall purchase and deliver to the Syndicate an amount of refined gold equal to 6.5% of the equivalent amount of gold produced at Karma for the life of the Project in exchange for Ongoing Payments. -- The Increase Option is repayable in eight quarterly deliveries totalling up to 30,000 ounces of gold based on the pro-rata portion of the amount drawn thereunder, starting 18 months from when the first tranche of the Increase Option is drawn down.



Having flexibility in Karma's development plan was a critical factor in determining the best project finance package and partner for True Gold. The Company believes strongly in the organic growth potential of the Karma Property and the high likelihood of additional production from the discovery of new resources. As such, True Gold took careful consideration in selecting a project finance package that was cost effective and aligned well with the Company's growth strategy and timeline.

True Gold spent the past year reviewing and negotiating over a dozen term sheets from traditional and alternative funding sources. The Franco-Nevada/Sandstorm funding package demonstrated the strongest solution in terms of cost of capital, operational flexibility, alignment of business interests and long-term partnership benefits, which the Company believes will provide maximum benefits to our shareholders.

The Agreement covers the 856-square-kilometre Karma project area. Supplemental permits for Kao and Nami are expected to be in place to allow for initial draws on the deposit in September 2014.

DEVELOPMENT HIGHLIGHTS AND PROGRESS UPDATE

In a short period, True Gold has advanced and significantly de-risked the Karma Project. Since January 2014, the Company has been implementing and executing on the Karma Project Feasibility Study to stay on-track for first gold pour in 2015. To date, the Company has completed the following milestones:

-- Assembled our development team on-site; -- Constructed the water reservoir, which is currently filled to capacity with 1.3 million m3 of water; -- Ordered and put deposits on the mining fleet for delivery to site in late November/early December; -- Secured Karma exploitation permit; -- Discovered, drilled-off and announced additional inferred resources of 1,662,000 ounces of gold (47.8Mt at 1.08 g/t Au)(2), not included in the Feasibility Study; and -- Completed detailed engineering and construction-level design work.



We are currently negotiating long-term consumables contracts. A scoping study of the North Kao deposit is also underway, in addition to ongoing exploration focused on regional targets and the recently discovered northern extension to the Nami deposit. Upcoming milestones include:

-- Construction of major mining infrastructure will begin in earnest in September 2014, and is expected to be completed in Q3, 2015. -- Procurement process is underway, and will continue until Q3, 2015. -- Ore from the Rambo deposit will be placed on the leach pad in Q4, 2015. -- First gold pour is expected by the end of 2015. -- First full year of production expected in 2016, with production of more than 150,000 ounces of gold projected.



CONFERENCE CALL DETAILS

True Gold will host a conference call on August 12, 2014 at 8:00am (Pacific)/11:00am (Eastern) to discuss the financing. The call will be hosted by True Gold executives Mark O'Dea, Executive Chairman; Dwayne Melrose, President and CEO; and Alex Holmes, Vice President, Business Development. Mr. O'Dea, Mr. Melrose, and Mr. Holmes will be available to respond to questions following a brief presentation. An operator will direct participants to the call.

Date: August 12, 2014

Time: 8:00 am (Pacific)/ 11:00 am (Eastern)

Access to the conference call may be obtained by dialing the following numbers:

Participant Dial-in Numbers:

-- Toronto: 416-340-8527 -- Toll-free North America: 800-766-6630 -- Toll-free international: (dial country code) 800-2787-2090 -- International (not toll-free): 416-340-8527



An audio replay of the call will be available after the call by dialing 905-694-9451 (Toronto), 800-408-3053 (Toll-Free North America) or 800-3366-3052 (International Toll Free) and entering the passcode 8934556. The audio replay will be available until August 26, 2014.

(1) See Technical Report, entitled "Updated Resource Estimate and Feasibility Study on the Karma Gold Project," prepared by P&E Mining Consultants Inc. dated effective December 17, 2013, a copy of which is available under the Company's profile on SEDAR at www.sedar.com.

(2) See Technical report, entitled "Updated Resource Estimate on the Karma Gold Project, Burkina Faso, West Africa", dated effective March 13, 2014, a copy of which is available under the Company's profile on SEDAR at www.sedar.com. The North Kao mineral resource estimate was completed by Yungang Wu, P.Geo., of P&E Mining Consultants Inc. (P&E), an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. The resource model was constructed internally, by Christopher Lee, M.Sc., P.Geo., the Company's Chief Geoscientist, then delivered to P&E Mining Consultants for estimation.

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

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to True Gold within the meaning of applicable securities laws, including statements with respect to the potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future gold prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resource estimates, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of True Gold and there is no assurance they will prove to be correct.

Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including but not limited to, risks related to the interpretation of results at the Karma Project, reliance on technical information provided by third parties as related to the Karma Project; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; possible claims against the Company; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, the potential for delays in exploration and permitting activities, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk as well as those factors discussed in the Annual Information Form of the Company dated April 30, 2014 in the section entitled "Risk Factors", under True Gold's SEDAR profile at www.sedar.com.

Although True Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. True Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.

FOR FURTHER INFORMATION PLEASE CONTACT: Vancouver Office: 604-801-5020 info@truegoldmining.com Investor inquiries: Blaine Monaghan 604-801-5020 bmonaghan@truegoldmining.comwww.truegoldmining.com Source: True Gold Mining Inc.


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