PMI GOLD CLOSES PRIVATE PLACEMENT FOR $5 MILLION

2:1 SHARE CONSOLIDATION DETERMINED

News Release # 10-14	TSX Venture Exchange: PMV	Issued & Outstanding: 284,014,088
October 12, 2010	Frankfurt: AOJMW7	Fully Diluted:                    393,434,463

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES

VANCOUVER, Oct. 12 /CNW/ - PMI Gold Corporation (TSX.V: PMV): the Company is pleased to announce that further to its news release dated September 20, 2010, it has received TSX Venture Exchange approval for, and closed, the private placement of 27,777,778 common shares at a price of $0.18 per share to raise gross proceeds of $5,000,000.

All of the shares are subject to a hold period and may not be traded in Canada until February 13, 2011, except as otherwise permitted by applicable Canadian securities laws and the TSX Venture Exchange.  Hartleys Limited of Perth, Western Australia received a fee of $198,059.28 and 4,000,000 non-transferable warrants, each exercisable for one share at a price of $0.25 per share for a two year period.

The Company has been advised that Macquarie Bank Limited, of Level 1, No. 1 Martin Place, Sydney, New South Wales, 2000, Australia, has acquired 18,877,910 common shares of the Company in this placement.  The shares were purchased for investment purposes.  After giving effect to this acquisition, Macquarie Bank Limited will beneficially own 52,211,243 common shares and 3,900,000 warrants, representing 19.5% of the issued and outstanding common shares of the company on a partially diluted basis.

Further to the planned IPO and co-listing of PMI Gold in Australia, the Company has determined that a 2:1 share consolidation will satisfy the listing requirements with respect to the exercise price and number of currently outstanding PMI Gold warrants and options.  Based on this determination, and the written irrevocable consents of more than 51% of the currently issued shares approving the proposed consolidation, the Company will proceed to seek regulatory approval.  On completion of the consolidation, the shares will continue to trade under the same name and symbol, but with a new CUSIP number.  Further information will be provided as and when available.

On behalf of the Board,

"Douglas R. MacQuarrie"

President & CEO

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.

This news release contains forward-looking statements which involve known and unknown risks, delays and uncertainties not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or expectations implied by these forward-looking statements.  We Seek Safe Harbour.

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About PMI Gold

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Mining analysts have recently stated that West Africa will soon become the World's second largest gold producing region after China, with Ghana by far the largest gold producer in West Africa. PMI Gold controls four previous operating mines on 85 kilometres of Ghana's major gold belts all located near the centre of near 200 million ounces of historical gold production and current resources. Our Kubi Gold Project adjoins the 60 million ounce AngloGold Ashanti Obuasi mine, the largest underground mine in West Africa with a 113 year, continuous mining history. At Obotan, where previous mining yielded 730,000 ounces of gold at a grade of 2.2 g/t, we recently announced a maiden +1 million ounce gold Mineral Resource estimate, and the commencement of an aggressive drilling campaign.

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For further information:

Douglas MacQuarrie, President & CEO

Telephone: [phone]     Toll-Free:  1 [phone]     Facsimile:  1 [phone]

or for European Investors: Florian Riedl-Riedenstein: Tel: [phone], e-mail: [email protected]

Or visit the PMI Gold Corporation website at www.pmigoldcorp.com