US Gold Mexico Exploration Update

US GOLD CORPORATION - (TSX: UXG)(AMEX: UXG)(FRANKFURT: US8) announces a positive conclusion to phase one drilling at the Palmarito Project. Drilling intersected 4.07 ounces per ton (opt) silver over 80 ft. (139.67 grams per tonne (gpt) silver over 24.4 meters), including 6.38 opt silver over 30 ft. (218.67 gpt silver over 9.1 meters).

Palmarito is located 7.5 miles (12 km) southwest of US Gold's Magistral Mine and is accessible by well maintained roads (Figure 1). Palmarito was one of Sinaloa State's most significant silver producers with total production of approximately 18 million silver equivalent ounces(i) when mining by third parties ceased in 1950.

The goal of our exploration program was to test the potential below the previously defined mineralization and to follow up on results reported in March that returned 9.32 opt silver over 44.9 ft (319.6 gpt silver over 13.7 meters).

Reverse circulation drilling successfully extended the vertical depth of the mineralization by approximately 40%. These results show that the mineralization extends down 580.0 ft (176.8 meters) below surface and over a strike length of approximately 2,625 ft (800 meters). The mineralization at Palmarito is structurally controlled and dips to the northeast (Figure 2). Highlights from the most recent drilling included:

(i) Gold/Silver Ratio 1:50