sale of it’s strategic chinese assets

Sale of it’s Strategic Chinese assets

HIGHLIGHTS

Dragon Mountain Gold Limited (“DMG” or “the Company”) is pleased to announce that it’smajority owned subsidiary, Warrior Advance Pty Ltd (“Warrior”) has entered into a
conditional agreement to sell 100% of the issued shares in its subsidiary that holds the LixianGold Project in China to ZiJin Mining Group Co Ltd (“Zijin”) for consideration of AUD$175,000,000 (“Transaction”). It is expected that DMG’s share of the consideration will be approximately $150,000,000.

Zijin has recognised the quality and size of the Lixian Gold Project and it gives the ability to
consolidate the ground holdings and make a much larger mining operation that will compliment the mining operation and growth that exist within Zijin.

About Zijin

Zijin is a Shanghai and Hong Kong listed public company with a market capitalisation of more than $US12 billion and extensive interests across a broad range of commodities, including gold, copper, zinc, lead, tungsten and iron ore.

Transaction Details

The Company and Warrior have entered into a conditional agreement to sell 100% of the issued shares in Long Province Resources Limited, a Hong Kong incorporated company, to Zijin and its subsidiary for a cash consideration of $175,000,000.

The consideration is payable on Completion of the Transaction.
The transaction is conditional on the following:
a) Approval from shareholders of the Company;
b) Effective approval from the Australian regulatory authorities, including the Australian
Foreign Investment Review Board, and the ASX Limited;
c) Effective approval from the government of the Peoples Republic of China or its
authorised relevant department; and
d) Warranties provided by the Company are true and accurate in all respects on and as
of Completion with the same force and effect as though made on and as of Completion.

The Conditions of the Transaction must be met before 12:00pm WST no later than 4 January
2012, or such other agreed date.
DMG’s Chairman, Mr Robert Gardner commented:

This sale of the Lixian Gold Project is an exciting step in the future of DMG. There are a number of steps required prior to Completion and the board will keep shareholders informed as these progress.
The sale, when completed, would leave DMG in a very strong cash position.

The proceeds of the sale would allow the Company to actively pursue other investment opportunities in
the resources industry. The directors will also consider other capital management alternatives with
respect to the proceeds.

I would like to thank all parties who have been involved in the development of the Lixian Gold Project
to date.

Yours sincerely