ELECTRA GOLD ANNOUNCES AGREEMENT TO DEVELOP THE MINERAL POTENTIAL OF APPLE BAY CLAIMS WITH QUATSINO FIRST NATION

Electra Gold Ltd. (the “Company”) has entered into a Mining Participation and Royalty Agreement with the Quatsino First Nation of North Vancouver Island to develop the industrial mineral potential of the Apple Bay and other mineral claims that Electra Gold recently purchased near Port Hardy, British Columbia.

The Agreement calls for the Company to pay to the Quatsino First Nation a royalty of $1.00 for each metric tonne of production from the mineral claims, half of which royalty is a deferred payment until production from the Claims exceeds 200,000 tonnes per year. In addition, the Company has agreed to provide the services of a Community Development Consultant and to utilize the First Nation training capabilities so as to employ Quatsino First Nation members. The parties have agreed to negotiate in good faith respecting a royalty in the event the Company discovers non-industrial minerals of commercial value.

This Agreement marks one of the first of its kind between a First Nation and a mining company where a royalty is paid on the minerals extracted from the land within a First Nation's Traditional Territory in the province of British Columbia.  The members of the Quatsino First Nation will benefit from this Agreement.  “I am pleased with the direction that Electra Gold has taken,” said Chief Tom Nelson.  “Electra Gold has set the benchmark for other corporations that want to do business with the Quatsino First Nation.”

“I am delighted that we were able to reach this landmark agreement” said Doug Stelling, Electra Gold Chairman and CEO. "Because Electra is dedicated to ethical principles and providing value to our shareholders, we knew that a co-operative partnership with the Quatsino was essential for the success of the project.  This agreement exemplifies Electra's long term commitment to the spiritual, environmental, social and economic sustainability of the community and the land", Mr. Stelling said.

The Company's Apple Bay mineral claims cover approximately 11,250 hectares (approximately 45 square miles) at the northern tip of Vancouver Island and have been under development for chalky geyserite and kaolinite deposits. The Apple Bay mineral claims are located within the Quatsino Traditional Territory.

Electra Gold Ltd. is a Vancouver, British Columbia industrial mineral mining company dedicated to preserving the environment.

On behalf of the board of Directors

 “DOUGLAS STELLING”

Chairman  & Chief Executive Officer

The agreement is subject to regulatory approval.

For further information, please see website at www.electragoldltd.com or Douglas Stelling at 604.647.2227.

The TSX Venture exchange does not accept responsibility for the adequacy or accuracy of this release.