PMI Gold Corporation - DRILL UPDATE - OBOTAN GOLD PROJECT, GHANA

TSX Venture Exchange: PMV	Issued & Outstanding: 284,014,088
Frankfurt: AOJMW7	Fully Diluted: 393,434,463

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

• 95.50 metres @ 2.16 g/t Au - including 12.26 metres @ 4.67 g/t Au
• Additional drilling has commenced with two rigs
• Proposed IPO in Australia on track for November 2010

VANCOUVER, Oct. 18 /CNW/ - PMI Gold Corporation (TSX.V:PMV) - the Company is pleased to announce the results from the remaining 22 of 65 diamond drill holes completed at our Obotan Gold Project in Ghana during May through the end of July 2010.  Initial results for the program were announced in our news release dated August 10, 2010.  The program consisted of a total of 10,877 metres, with 6,315 metres in 35 resource definition drill holes and 4,562 metres in 30 quality control (QC) drill holes. 

The results from these 22 drill holes were not included in the recent NI43-101 Obotan mineral resource estimate by Hellman and Schofield Pty Ltd of Australia, which stated: Indicated 3.06 million tonnes grading 1.59 g/t gold for 156,000 oz; Inferred 15.64 million tonnes grading 2.1 g/t gold for 1,053,000 oz; however they will be included with additional new drill results in the next resource estimate update expected in early 2011.

Based on the recent $5 million pre-IPO funding, drilling re-commenced at Obotan on October 1.  A minimum of 16,000 metres is currently planned, however this is expected to increase to 40,000 metres on completion of the IPO now targeted for mid November 2010.

Drilling was completed at the Nkran ('NKR'), Adubiaso ('ADP'), Asuadai ('ASP') and Abore ('ABP') deposits.

Table 1 - Significant Gold Intercepts (>10.00 g/t Au metres):

Drill Hole	From Metres	To Metres	Width Metres	Weighted Avg. Grade  g/t Au (uncut)
NKR10-014	212.00	228.39	16.39	4.31
including	212.00	220.78	8.78	5.33
including	225.23	228.39	3.16	7.07
including	227.55	228.39	0.84	12.09
NKR10-015	218.50	314.00	95.50	2.16
including	218.50	226.90	8.40	3.85
including	220.00	220.50	0.50	23.65
including	252.00	264.26	12.26	4.67
including	263.66	264.26	0.60	53.55
including	270.50	277.12	6.62	4.02
including	303.52	303.72	0.20	89.50
ABP10-020	113.00	124.00	11.00	1.73
ABP10-021	109.80	125.20	15.40	1.19
ABP10-025	152.00	153.00	1.00	14.05
ABP10-027	112.00	147.00	35.00	1.17
including	112.00	113.00	1.00	11.60
ABP10-028	144.00	158.00	14.00	1.19
ABP10-029	144.00	166.00	22.00	1.48
ABP10-031	108.79	109.50	0.71	24.39
ABP10-032	166.00	173.40	7.40	3.98
including	172.85	173.40	0.55	45.83
	189.00	192.30	3.30	6.10
including	189.00	190.00	1.00	11.03
ADP10-015	198.00	204.00	6.00	3.03
ASP10-020	104.00	109.00	5.00	5.46

Please see the following web links for the Drill Collar Data and Collar Plan map:

http://www.pmigoldcorp.com/i/maps/NR10-15DrillCollars.pdf
http://www.pmigoldcorp.com/i/maps/NR10-15DrillCollarPlan.jpg

This news release has been prepared by Douglas R. MacQuarrie, P.Geo.(B.C.), a Qualified Person as defined under National Instrument 43-101.  Field work was supervised by Donald Allen, MASc. P.Eng.(B.C.) and Paul Abbott MSc., Consulting Geologists. HQ, and NQ core was logged, sawn and sampled on site, with half samples sent to SGS Laboratory in Tarkwa, and analyzed for gold by fire assay-AA on a 50 gram sample charge.  Where visible gold was noted, on occasion both ½'s of the core were assayed to reduce sample bias after geological logging and photographing (please see http://www.pmigoldcorp.com/i/maps/NR10-10VGphotos.pdf for photos from the drill program).  Internal QC consisted of inserting both blanks and standards into the sample stream and multiple re-assays of selected anomalous samples. Where multiple assays were received for an interval, the final value reported was the average of all results for the interval. Results from the QC program suggest that the reported results are accurate. The data also suggests that diamond drilling may understate the gold grades relative to reverse circulation drilling, based on the larger sample sizes obtained with RC drilling. Intercepts were calculated with a minimum 1.0 g/t Au cut off at the beginning and the end of the intercept and allowing for no more than ten consecutive metres of less than 1.0 g/t Au internal dilution. Intercepts above 10.0 g/t Au metres are reported separately. Grade x Width intercepts of less than 10.0 g/t Au metres were not reported. True widths are estimated at from 50% to 90% of the stated core length.

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.

About PMI Gold

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 (NI43-101 mineral resource estimate of 604,000 ounces @3.66 g/t gold Indicated; 315,000 ounces @1.88 g/t gold Inferred, see SEDAR)  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.

%SEDAR: 00005434E

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