Trelawney Provides Update on Offer for Augen Gold Corp.

TORONTO, ONTARIO -- (Marketwire) -- 08/11/11 -- Trelawney Mining and Exploration Inc. ('Trelawney' or the 'Company') (TSX VENTURE: TRR)(FRANKFURT: RTW) today provided the following update with respect to its offer to acquire all of the outstanding common shares of Augen Gold Corp. ('Augen') (the 'Offer').

On August 5, 2011, Trelawney initiated discussions with David Mason, Augen's chief executive officer, regarding a potential negotiated transaction. Later that day, Trelawney provided Mr. Mason with written confirmation on a confidential basis that it was prepared to increase the implied value of the Offer provided certain conditions were met, including the execution and delivery of a definitive support agreement and the completion of satisfactory due diligence. Trelawney set a timeline for negotiating a revised offer under these terms that ended at 5:00pm (Toronto Time) on August 8, 2011.

In the afternoon of August 8, 2011, Augen responded with a letter from Robert Lamoureux, the chair of Augen's special committee of directors, indicating Augen was willing to consider entering into a support agreement pending 'confirmatory due diligence', which subsequent conversations with Augen revealed was, in fact, extraordinary, unconstructive and not 'market-typical'. Trelawney's attempts to resolve this impasse were unsuccessful. Augen allowed the window for negotiating this revised offer to close at 5:00pm that evening.

Today, Trelawney's original offer to acquire all of the outstanding common shares of Augen at an implied offer price of $0.32 per common share (based on the closing price of the common shares of Trelawney on the TSX Venture Exchange (the 'TSXV') on July 8, 2011) remains the only offer on the table for Augen. The Offer is set to expire on September 1, 2011, unless withdrawn or extended.

Greg Gibson, Trelawney's president and CEO, said, 'It is unfortunate that our efforts to arrive at a negotiated transaction and provide Augen shareholders with greater value were met with inexplicable resistance from Mr. Mason and the Augen Special Committee. We remain committed to this transaction, but it must be done under terms that are fair and reasonable for all parties. At this point, it appears the biggest obstacle to Augen shareholders receiving optimal value for their shares is the apparent entrenchment of the Augen Board. Augen shareholders deserve better.'

Clarification Regarding Lock-Up Agreements

On August 9, 2011, Trelawney announced that it had secured lock-up agreements supporting the Offer representing, in total, 53.7% of Augen's outstanding common shares. This percentage was based on the total number of outstanding Augen common shares publicly disclosed by Augen in its directors' circular that it issued in response to the Offer. Between the date of the directors' circular and August 10, 2011, approximately 16 million Augen warrants and options were exercised, increasing Augen's issued and outstanding common shares to 143,105,036. Under Trelawney's lock-up agreements, warrants exercised by parties to the lock-up agreements are subject to the lock-up agreement. Augen's calculations of shares under Trelawney's lock-up in Augen's press release of August 10, 2011 do not consider this. Trelawney has contacted Augen's transfer agent, Computershare Investor Services Inc., to request a current report on the number of outstanding Augen common shares. Trelawney will update the total percentage of Augen shareholders that have entered into lock-up agreements once it receives that confirmation.

The Offer Details

As previously disclosed, the Offer is to acquire all of the outstanding common shares of Augen at an implied offer price of $0.32 per common share (based on the closing price of the common shares of Trelawney on the TSX Venture Exchange (the 'TSXV') on July 8, 2011). Under the terms of the Offer, Augen shareholders will be entitled to receive 0.066 common shares of Trelawney (the 'Trelawney Shares') for each common share of Augen (the 'Augen Shares') held. The implied offer price represents a premium of approximately 40% relative to the volume-weighted average price of Augen Shares on the TSXV over the last 20 trading day period ended on July 8, 2011, the last trading day prior to Trelawney announcing its intention to make the Offer.

How to Tender Your Shares to the Offer

All questions regarding the Offer and how to tender Augen shares should be directed to Laurel Hill Advisory Group at 1-877-452-7184 (North American Toll Free) or 416-304-0211 (Banks, Brokers or Collect Calls). Shareholders who wish to accept the Offer may do so before the Expiry Time of 5:00 p.m. (Toronto Time) on September 1, 2011 unless the Offer is withdrawn or extended.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any securities of Trelawney or Augen. Such an offer may only be made pursuant to an offer and takeover bid circular filed with the securities regulatory authorities in Canada and pursuant to registration or qualification under the securities laws of any other such jurisdiction.

About Trelawney

Trelawney is a Canadian junior mining and exploration company with a focus on Archean gold deposits. The Company's current focus is directed towards the continued exploration and development of the Cote Lake Deposit, located in Chester Township 20 kilometres southwest of Gogama, Ontario.This press release contains only summary information about the Offer and does not constitute an offer to purchase any securities. Complete information about the Offer is available by referring to the offer to purchase and take-over bid circular filed with Canadian securities regulators. Certain statements contained in this press release concerning Trelawney's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates are forward-looking statements. The words 'believe', 'expect', 'intend', 'may', 'anticipate', 'will', 'would' and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are not based on historical facts, but rather on current expectations, assumptions and projections about future events. While Trelawney considers these factors and assumptions to be reasonable based on information currently available, they may be proven to be incorrect. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to any of the terms and conditions of the Offer not being satisfied; general economic conditions; dependence on key personnel; and variations in required capital expenditures. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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.

Contacts:

Media:

Longview Communications Inc.

David Ryan

416-649-8007


Longview Communications Inc.

Joel Shaffer

416-649-8006


Augen Shareholders:

Laurel Hill Advisory Group

1-877-452-7184 or 416-304-0211 (collect)
assistance@laurelhill.com