First Mexican Gold Corp. TSX-V : FMG

Company ID [CVE:FMG] Last trade:CA$0.02 Trade time:16:00:00 EST Value change:▼0 (0%)

First Mexican Updates Exploration - Announces Private Placement

Vancouver, British Columbia, First Mexican Gold Corp. (the `Company` or `FMG`) (TSX-V: FMG, Frankfurt: 21M) is pleased to provide the following update on the Company’s exploration and corporate activities. Since the Company’s last update from August 17 exploration work has aimed to follow up on three geophysical targets at the Diana, Erica and Karen East zones while exploring further the strong potential already demonstrated at 5 other targeted areas: the Karen, Bailey, Linda, Luce and Katelyn zones.  Assay results and four more drill holes are still pending as part of this current phase of work with completion expected by end of January 2012.

To date, the highlight of this fieldwork has identified the Diana zone’s structure as extending an additional 500 metres to west for a total of 950 metres.  Observed over this length is a near vertical and much fractured brecciated structure from 30 to 40 metres in width. While the Company intends to further advance all of these targets and explore other known prospects, amid current difficult market conditions, management has chosen to resist closing a large equity offering in favour of minimizing dilution of its share structure to instead focus its near term efforts on developing the Diana zone where management is confident in the potential to prove up an economic bulk mineable low dilution gold silver deposit  provided continuity continues.
In consultation with P&E Engineering Mining Consultants of Brampton Ontario the Company has designed an infill drilling program consisting of 30 diamond drill holes to a depth of +/-125 metres along Diana’s eastern flank.  With intercepts from holes HDH 11-09 averaging .77 g/t gold and 105 g/t silver over 15.7 metres; HDH 11-10 averaging .47 g/t gold and 135 g/t silver over 29.12 metres, and HDH 11-11 averaging .42 g/t gold and 86 g/t silver over 49.45 metres, management believes this program as designed, with 50 metre spacing, has the potential to prove up resources in the Measured and Indicated category. This drilling work is scheduled to begin by mid-January and is expected to take from four to six months.

Other highlights to date:

Three holes remain to be drilled into the Karen zone to test both the vertical extent of the previously discovered high grade gold silver zone (2 holes) as well as one hole designed as a step out hole along strike.
At the Linda zone the surface sampling and geologic mapping necessary to target drilling below this very large leach cap has been completed.  The first of two holes designed and planned for the Linda zone are next in the drilling schedule and expected to begin in the coming weeks.

Jim Voisin, President & CEO remarks “In light of these tough market conditions for junior explorers at present, we are delighted to have confirmed the Diana zone’s structure over an additional 500 metres to the west.  We have designed this next drilling campaign at Diana zone on 50 metre spacing as we believe proving up continuity over Diana’s eastern flank in this manner can represent a large resource target.  Further, it has taken some time for the technical team to assess how best to approach drilling below this very large leach cap at the Linda zone so now we are very keen to see these results in the coming weeks.”

The company also plans a non-brokered private placement to raise proceeds of up to $300,000 through the sale of 2,500,000 units at 12 cents per unit.  Each unit is composed of one common share plus a half warrant, each whole warrant being exercisable at a price of 15 cents for a period of two years.  The financing is subject to regulatory approval.

The proceeds of the private placement will be used for exploration and general working capital.

John Archibald, P.Geo., a qualified person pursuant to NI 43-101, has reviewed and approved the technical disclosure of this press release on behalf of the Company.
First Mexican Gold Corp is an active explorer for precious metals in Mexico and holds an option to acquire 80% interest in the Guadalupe property package from (MIMSA) a wholly owned subsidiary of International Millennium Mining Corp (IMI-TSX-V).  The Company now controls a total of 15,112 hectares in this high potential exploration area.

On behalf of the Board of Directors,

Jim Voisin, President & CEO

For more information on First Mexican Gold please visit the Company’s website at or contact Bob Butcher, Corporate Communications, at 604 681 7265 or [email protected].

We seek safe harbour.

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 mineralization and geological merits of the Guadalupe property and other future plans, objectives or expectations of the Company 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 and delays, 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.  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.

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