Positive drilling results pave way for resource upgrade at Obotan Gold Project

VANCOUVER, May 24, 2011 /CNW/ --
/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO
U.S. NEWS AGENCIES/

TSX Venture Exchange: PMV


Australian Securities Exchange: PVM


Frankfurt: PN3N.F

Highlights

    --  Positive drilling results from resource extension and in-fill
        drilling at the key Nkran deposit at PMI's flagship Obotan Gold
        Project in Ghana
    --  Broad intersections from the latest seven diamond holes
        including(1):
    --  125m @ 2.18g/t Au from 271m, including:
  o 8.0m @ 19.01g/t Au from 271m
  o 18.0m @ 3.12g/t Au from 346m
    --  118m @ 2.43g/t Au from 386m, including:
  o 23.0m @ 3.66g/t Au from 405m
  o 16.0m @ 2.91g/t Au from 488m
    --  52m @ 3.37g/t Au from 201m, including:
  o 9.0m @ 4.36g/t Au from 201m
  o 16.0m @ 7.74g/t Au from 214m
    --  18.7m @ 2.33g/t Au from 280m, including:
  o 7.0m @ 5.51g/t Au from 280m
    --  Broad widths of high-grade gold mineralisation intersected
        within approximately 150m below the base of the previously
        mined Nkran open pit
    --  24,000m completed of a 40,000m extensional and in-fill drilling
        programme at Obotan
    --  Three drill rigs currently operating at Obotan

VANCOUVER, May 24, 2011 /CNW/ - PMI Gold Corporation (TSXV: PMV) (ASX:
PVM) is pleased to report positive drilling results from its Obotan
Gold Project in Ghana which will help underpin a resource upgrade in
the September Quarter of 2011 and subsequent completion of the
pre-feasibility study.

The results stem from the latest seven holes drilled at the key Nkran
deposit at Obotan and come from a depth of up to 150m below the
existing open pit.

They strongly support PMI's goal of delineating an Indicated Resource
down to approximately 350m below the surface. This is 200m below the
historical Resolute Resources pit, which produced approximately
590,000oz to a vertical depth of 150m below the surface.

The results suggest that the internal integrity of the deposit continues
down dip. Broad spaced drilling below 350m indicates that the deposit
continues to extend below circa 450m, the level tested by the deepest
holes completed to date.

The drilling is focused on delineating all potential open pit resources
and ultimately to determine the potential for continued mining down the
plunge of the deposit.

Better intercepts from these seven holes are summarized below. A full
list of intersections from the seven holes is provided in Table 1:

    --  NKR11-036: 125.0m @ 2.18g/t Au from 271m

                    Including:   8.0m @ 19.01g/t Au from 271m

                                 18.0m @ 3.12g/t Au from 346m

    --  NKR11-038: 118.0m @ 2.43g/t Au from 386m

                    Including:  4.0m @ 9.82g/t Au from 394m

                                23.0m @ 3.66g/t Au from 405m

                                2.0m @ 11.60/g/t Au from 445m

                                5.0m @ 5.56/g/t Au from 477m

                                16.0m @ 2.91g/t Au from 488m

    --  NKR11-041: 26.5m @ 1.48g/t Au from 350.4m

                    Including:  5.0m @ 3.34g/t Au from 350.4m

                                3.0m @ 5.11g/t Au from 374m

    --  NKR11-042: 7.0m @ 2.47g/t Au from 301m
    --  NKR11-043: 52.0m @ 3.37g/t Au from 201.0m

                    Including:  9.0m @ 4.36g/t Au from 201m

                                16.0m @ 7.74g/t Au from 214m

                                18.7m @ 2.33g/t Au from 280m

                    Including:  7.0m @ 5.51g/t Au from 280m

Note: True widths are approximately 60% to 70% of the length of the
stated intersection lengths. A full list of intersections from the
drilling is provided in Table 1 attached, together with drill hole
collar locations shown on Figure 2 attached.

Six holes intersected multiple zones of mineralisation from the parallel
Western and Eastern Lodes and the broad, central stockwork zone (see Figure 3). The incidence of visible gold was observed within a number of
mineralised intersections which is a common feature of the Obotan
mineralisation.

The Obotan Project comprises four known deposits - the larger Nkran
deposit and the smaller satellite deposits at Abore, Adubiaso and
Asuadi (see Figure 1), unlike the other Obotan deposits, Asuadi has not previously been
mined.

Obotan was mined by Resolute before closing in 2002 after producing a
total of 730,000oz at an average grade of 2.2 g/t gold when the gold
price averaged approximately US$350/oz.

PMI has completed 56 resource extension drill holes since the start of
the drilling at Nkran in 2010 with 25 drill holes have been previously
reported to date, in addition to these latest seven drill holes. Due to
laboratory delays, the results from another 24 holes are still pending.
PMI has been advised that this backlog is being addressed and data flow
is beginning to improve.

Three diamond drill rigs are presently operating. One rig will remain at
Nkran to continue the resource expansion programme and two drilling
rigs have been relocated, one at each of the satellite deposits,
Adubiaso and Asuadi.  This is aimed at delineating the potential for
shallower occurrences of oxide gold mineralisation which could provide
earlier cash flow opportunities

The recently completed drill holes at Nkran are part of a broader
ongoing circa 40,000m drilling campaign designed to upgrade and expand
the current gold resource inventory at Obotan.  The Obotan drilling
programme will be used for a new resource estimate currently scheduled
for completion at the end of the September Quarter and will underpin a
technical and economic study to be completed by the end of 2011.

'PMI is making steady progress in the transition from gold explorer to
producer,' Managing Director Collin Ellison said. 'These latest
drilling results highlight the potential to grow the resource inventory
at Obotan.  Work is advancing on the pre-feasibility study with a team
of world-class experts are being assembled to ensure the Company
maximizes its opportunities.'

As part of the geological appraisal of the Nkran deposit, suitable sites
will be identified to drill metallurgical holes for a future
metallurgical test work programme and geotechnical holes for a
geotechnical programme.

Geological studies have commenced on Nkran and are providing valuable
additional information to improve the understanding of the deposit and
in particular the controls on the mineralisation and the directions for
resource extensions.

PMI also plans to test for deeper, down-plunge extensions of the
mineralisation below the limit of the current resource, greater than
450 metres below the surface (greater than 300 metres below the base of
the open pit).

On behalf of the Board,


'Collin Ellison'


Managing Director & CEO

  1. Indicated Resource of 3.06 million tonnes grading 1.59 g/t gold
     for 156,000 oz; Inferred Resource of 15.64 million tonnes grading
     2.1 g/t gold for 1,053,000 oz., as reported in the December 8,
     2010 technical report prepared by Hellman & Schofield Pty. Ltd.,
     available at www.sedar.com.
  2. Measured Resource of 0.66 million tonnes grading 5.30 g/t gold for
     112,000oz; Indicated Resource of 0.66 million tonnes grading
     5.65g/t gold for 121,000oz; Inferred Resource of 0.67 million
     tonnes grading 5.31 g/t gold for 115,000oz., as reported in the
     December 3, 2010 technical report prepared by SEMS Exploration
     Services Ltd., available at
     www.sedar.com.

Scientific and technical information contained in this news release has
been reviewed and approved by Collin Ellison, C.Eng. a 'qualified
person' as defined under National Instrument 43-101. Field work was
supervised by Donald Allen, MASc. P.Eng. (B.C.) and Paul Abbott MSc.
Consulting Geologists. HQ and NQ core was logged, sawn and sampled on
site, with half samples sent to SGS Laboratory in Tarkwa, and analyzed
for gold by fire assay-AA on a 50 gram sample charge or by screened
metallics AA finish.  Internal QC consisted of inserting both blanks
and standards into the sample stream and multiple re-assays of selected
anomalous samples. Where multiple assays were received for an interval,
the final value reported was the screened metallic assay if available,
or in lieu of that the average of the other results for the interval.
Results from the QC programme suggest that the reported results are
accurate. Intercepts were calculated with a minimum 1.0 g/t Au cut off
at the beginning and the end of the intercept and allowing for no more
than ten consecutive metres of less than 0.5 g/t Au internal dilution.
Intercepts above 10.0 g/t Au metres are reported separately. Grade x
Width intercepts of less than 10.0 g/t Au metres were not reported.
True widths are estimated at from 60% to 70% of the stated core length.

The information in this announcement that relates to Exploration
Results, Mineral Resources or Ore Reserves is based on information
compiled by Donald Allen, who is a Member or Fellow of the Association
of Professional Engineers of BC, a 'Recognised Overseas Professional
Organisation' (ROPO) included in a list promulgated by the ASX from
time to time. Donald Allen is employed by PMI Gold Corporation. Donald
Allen has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the 'Australasian Code for Reporting
Exploration Results, Mineral Resources and Ore Reserves'.  Donald Allen
consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.

Cautionary Note Regarding Forward-looking Statements


This news release includes certain forward-looking statements or
information.  All statements other than statements of historical fact included in this release, including,
without limitation, statements relating to the potential mineralisation
and geological merits of the Obotan and Kubi projects and the plans,
objectives or expectations of the Company with respect to the
advancement of these projects and completion of scoping and
pre-feasibility studies, are forward-looking statements that involve
various risks and uncertainties.  There can be no assurance that such
statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such
statements.  Important factors that could cause actual results to
differ materially from the Company's plans or expectations include
risks relating to the actual results of current exploration activities;
fluctuating gold prices; possibility of equipment breakdowns, delays
and availability; exploration cost overruns; availability of capital
and financing; general economic, market or business conditions;
regulatory changes; timeliness of government or regulatory approvals;
and other risks detailed herein and from time to time in the filings
made by the Company with securities regulators, including in the
section entitled 'Risk Factors' in the Company's Annual Information
Form dated December 8, 2010.  In particular, statements relating to the
Company's plans to complete a pre-feasibility study on the Obotan
project by the end of 2011 are subject to various factors, including
positive results from ongoing exploration; expansion and upgrading of
existing mineral resources (which are currently primarily in the
inferred resource category); and completion of favourable geotechnical
drilling programmes, metallurgical test work, mine plan engineering,
environmental and community relations assessments, and preliminary
economic assessments.  Due to the uncertainty which may attach to
inferred mineral resources, it cannot be assumed that all or any part
of the inferred mineral resources at Obotan will be upgraded to
indicated or measured mineral resources as a result of continued
exploration. 

The Company expressly disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise except as otherwise required by
applicable securities legislation.

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.

Table 1 - Gold Intercepts (>5.00 g/t Au metres - uncut grade values):

 _____________________________________________________
|Drill Hole|From  | To   |Intersection |Weighted Avg. |
|          |Metres|Metres|Length Metres| Grade g/t Au |
|          |      |      |             |   (uncut)    |
|__________|______|______|_____________|______________|
|NKR11-036 |271.00|396.00|       125.00|          2.18|
|__________|______|______|_____________|______________|
| including|271.00|279.00|         8.00|         19.01|
|__________|______|______|_____________|______________|
| including|284.00|286.00|         2.00|          3.09|
|__________|______|______|_____________|______________|
| including|294.70|302.00|         7.30|          1.07|
|__________|______|______|_____________|______________|
| including|346.00|364.00|        18.00|          3.12|
|__________|______|______|_____________|______________|
| including|388.00|396.00|         8.00|          1.28|
|__________|______|______|_____________|______________|
|          |449.00|462.00|        13.00|          1.18|
|__________|______|______|_____________|______________|
|          |478.00|489.00|         9.00|          1.17|
|__________|______|______|_____________|______________|
|NKR11-038 |386.00|504.00|       118.00|          2.43|
|__________|______|______|_____________|______________|
| including|394.00|398.00|         4.00|          9.82|
|__________|______|______|_____________|______________|
| including|405.00|428.00|        23.00|          3.66|
|__________|______|______|_____________|______________|
| including|405.00|411.00|         6.00|          8.50|
|__________|______|______|_____________|______________|
| including|445.00|447.00|         2.00|         11.60|
|__________|______|______|_____________|______________|
| including|458.00|461.00|         3.00|          2.66|
|__________|______|______|_____________|______________|
| including|464.00|470.00|         6.00|          3.92|
|__________|______|______|_____________|______________|
| including|477.00|482.00|         5.00|          5.56|
|__________|______|______|_____________|______________|
| including|488.00|504.00|        16.00|          2.91|
|__________|______|______|_____________|______________|
|NKR11-041 |226.50|243.00|        16.50|          1.64|
|__________|______|______|_____________|______________|
| including|240.00|243.00|         3.00|          4.61|
|__________|______|______|_____________|______________|
|          |350.45|377.00|        26.55|          1.48|
|__________|______|______|_____________|______________|
| including|350.45|355.50|         5.05|          3.34|
|__________|______|______|_____________|______________|
| including|374.00|377.00|         3.00|          5.11|
|__________|______|______|_____________|______________|
|NKR11-042 |268.00|271.00|         3.00|          2.94|
|__________|______|______|_____________|______________|
|          |301.00|308.00|         7.00|          2.47|
|__________|______|______|_____________|______________|
|NKR11-043 |201.00|253.00|        52.00|          3.37|
|__________|______|______|_____________|______________|
| including|201.00|210.00|         9.00|          4.36|
|__________|______|______|_____________|______________|
| including|214.00|230.00|        16.00|          7.74|
|__________|______|______|_____________|______________|
|          |280.00|298.72|        18.72|          2.33|
|__________|______|______|_____________|______________|
| including|280.00|287.00|         7.00|          5.51|
|__________|______|______|_____________|______________|
|NKR11-044 |259.00|273.00|        14.00|          1.19|
|__________|______|______|_____________|______________|
| including|270.00|273.00|         3.00|          2.90|
|__________|______|______|_____________|______________|
|NKR11-051 |      |      |             |         **NSR|
|__________|______|______|_____________|______________|

**NSR - no significant results

Please visit our website for property details including drill hole
locations and cross section diagram

(________________________ )

(1) Note: a full list of drilling results from all seven holes for which
assays have been received is provided in Table 1.

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