African Gold Group, Inc. Closes $12,040,000 Financing

TORONTO, ONTARIO--(Marketwire - Dec. 17, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

AFRICAN GOLD GROUP, INC. (TSX VENTURE:AGG) ("AGG" or the "Company") is pleased to announce that it has closed its brokered private placement of 17,200,000 units ("Units") at a price of $0.70 per Unit for gross proceeds to the Company of $12,040,000 (the "Offering"). The Offering was underwritten by a syndicate led by TD Securities Inc. and including GMP Securities L.P. (the "Underwriters").

The net proceeds of the Offering will be used to fund the continuing exploration and development of the Company's Asankrangwa, Ghana holdings and its Kobada, Mali Gold Project.

Each Unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire an additional common share of the Company at a price of $1.00 until December 17, 2012. In the event that the closing sale price of the Company's common shares on the TSX Venture Exchange is greater than $1.40 per share for a period of 20 consecutive trading days at any time after closing of the Offering, the Company may accelerate the expiry date of the warrants by giving notice to the holders thereof and in such case the warrants will expire on the 30th day after the date on which such notice is given by the Company.

The Underwriters received a cash commission equal to 7.0% of the gross proceeds raised in the Offering and 1,204,000 compensation options (each a "Compensation Option"). Each Compensation Option entitles the holder thereof to purchase one common share of the Company at a price of $0.70 per common share until December 17, 2012.

All securities issued under the Offering are subject to a four month hold period in accordance with applicable Canadian securities laws. Closing of this Offering is subject to receipt of all necessary regulatory approvals including that of the TSX Venture Exchange.

This press release is not an offer of securities for sale in the United States. The common shares being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.

About African Gold Group, Inc.

African Gold Group, Inc., based in Toronto, Canada, is engaged in the identification, acquisition and exploration of prospective gold projects that are situated along significant gold trends within West Africa. To date, the Company controls a total of eleven gold concessions that are consolidated in five distinct standalone exploration projects, of which three projects are located in Ghana and the remaining two are located in Mali, West Africa.

Forward-looking Statements:

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the forward-looking statements relating to the closing of the Offering, the use of proceeds from the Offering, along with those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

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.
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