Brazilian Gold Signs Definitive Agreement on the Ouro Mil Gold Project

VANCOUVER, Sept. 7 /CNW/ - Brazilian Gold Corporation ("Brazilian Gold" or "Company") is pleased to announce they have signed a Definitive Agreement with Dourave Exploration and Mining Inc. ("Dourave") whereby Brazilian Gold has the option to earn up to a 70% interest in the Ouro Mil Gold Project ("Ouro Mil" or "Project") by making staged cash payments and project expenditures over a four year period. The cash payments to Dourave in the first year of the option agreement are US$150,000 on signing and US$500,000 in project expenditures (Table 1). Cash payments are due on the anniversary date of each year after signing.

    
    Table 1: Schedule of cash payments and work expenditures.

    -------------------------------------------------------------------------
                                    Year     Cash Payment   Work Expenditure
                                                 (US$)           (US$)
    -------------------------------------------------------------------------
                                   Year 1      $100,000         $500,000
    First Option (55% interest)  --------------------------------------------
                                   Year 2      $100,000       $1,000,000
    -------------------------------------------------------------------------
                                   Year 3      $150,000       $1,500,000
    Second Option (15% interest) --------------------------------------------
                                   Year 4      $200,000       $2,000,000
    -------------------------------------------------------------------------
    

Brazilian Gold on fulfilling the terms of the First Option has 90 days to notify Dourave in writing on whether it elects to exercise the Second Option and earn an additional 15% in the Project for a total interest of 70% or to immediately form a Joint Venture. If Brazilian Gold elects to form a Joint Venture after fulfilling the terms of the First Option or after fulfilling the terms of the Second Option, Project expenditures going forward will be shared between Brazilian Gold and Dourave based on their pro-rata share ownership in the Joint Venture.

Ouro Mil is located within the Tapajos Mineral Province (TMP) of northern Brazil where Brazilian Gold is exploring a number of grassroots to advance stage gold projects. Details of the Project were previously described in News Release 9/10 (June 21, 2010), which is available on the Company website (www.braziliangold.ca) or on SEDAR.

In anticipation of signing the Definitive Agreement, Dourave has re-habilitated road access, constructed new camp facilities, extended the existing geochemical coverage to the east and surveyed a grid in preparation for an induced polarization (IP) survey. The IP survey (25 km) is planned to start the first week of October and will cover a 1.4 kilometre by 1 kilometre gold in soil anomaly. Geophysical targets identified from this work will be drill tested in the later part of 2010 or early in 2011.

Maues Project

The Company has reviewed the results from their recently completed exploration and drill program (2,503 m in 14 holes) on the Rosa de Maio property, one of four properties that comprise the Maues Project. Given the negative results, the Company has decided not to continue with the option agreement and has informed the project vendor.

About Brazilian Gold Corporation

Brazilian Gold Corporation is a Canadian based public company with a focus on acquisition, exploration and development of mineral properties in the Tapajos region of Northern Brazil. The Company has approximately Cdn$10 million in cash, which will be used to explore their four gold projects (Boa Vista, São Jorge, Jamanxim, Peixoto and Ouro Mil) in Brazil. Brazilian Gold also owns a 75% interest in the Rea Uranium Project in northeastern Alberta, which is currently being explored by AREVA.

Some statements in this news release contain forward-looking information, including without limitation statements as to planned expenditures and exploration programs. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs.

Neither Toronto Stock Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Venture Exchange) accepts responsibility for the adequacy or the accuracy of this news release.

For further information: Brazilian Gold Corporation, Alvin Jackson, Chairman and Chief Executive Officer, Tel: [phone]; Investor Relations, Tom Hart, Tel: [phone]