Developing GOLD Assets in
North America

Ely Gold Announces Re-pricing of Private Placement and Updates to Preliminary Economic Assessment on Centennial Gold Project

May 27, 2010

Ely Gold & Minerals Inc. (the "Company") has re-priced the proposed $4,000,000 private placement which was the subject of its April 26, 2010 news release from $0.50 to $0.25 due to current market conditions. Accordingly, the Company will be making an application to the TSX Venture Exchange for a further 30 day extension of the time within which to file final materials respecting the private placement, The Offering will now consist of up to 16,000,000 units (the "Units") at the price of $0.25 per Unit, for gross proceeds of up to $4,000,000 (the "Offering"). The Units will be comprised of one common share and one-half of one share purchase warrant. One whole Warrant will entitle the holder to purchase one common share for a period of two years at the price of $0.40 per share; provided that if at any time after four months after closing the Company's shares have a closing price equal to or higher than Cdn.$0.60 per Share for twenty (20) consecutive trading days, the Corporation may give notice to the holders of Warrants, by news release and letter sent to the most recent addresses of the holders on the Company's records, that the Warrants will expire at 4:30 p.m. (Vancouver time) on that date which is 10 days after the date of such news release.

The Offering remains subject to Exchange acceptance. All securities issued pursuant to the Offering will be subject to a four-month hold period from the closing date. The Company may, in appropriate circumstances, pay finder's fees comprising cash and/or securities in connection with the Offering.

Proceeds from the offering will be used to advance the mine permitting process, to generate a plan of operations for exploration activities on the Company's Mount Hamilton gold project and for general corporate expenses.

The Company also announces that it has received updates on a NI 43-101 compliant Preliminary Economic Assessment ("PEA") from SRK Consulting U.S. Inc. ("SRK") for the Centennial deposit on the Mt. Hamilton property, located 65 kilometers west of Ely, in White Pine County, Nevada.

The original PEA done by SRK, dated May 13, 2009, is being updated to reflect changes to the underlying property agreements and NSR buydown that was announced by the Company on May 3, 2010. Highlights from SRK's updated PEA include:

  • Average production of 36,400 ounces of gold and 224,400 ounces of silver per year over an 8 year mine life at an operating cost of US$450 per ounce of gold (unchanged from the May 13, 2009 PEA).
  • Capital cost of US$46.95 million, using a 25% contingency and including all owners' costs.
  • Pre-tax net present value (NPV) of US$64.53 million at a 5% discount rate with a 33.1% internal rate of return and payback over 2.1 years, using an average gold price of US$900 per ounce of gold and US$15 of silver.

A revision of the preliminary economic assessment will be available on the SEDAR website within 45 days and will also include a new US$900 per ounce of gold base case for pit optimization and the results of new metallurgical tests being evaluated by SRK. The NI 43-101 mineral resource estimate for the Centennial deposit was prepared by SRK Consulting U.S. Inc., an independent consulting firm. Allan V. Moran, R.G, C.P.G. and J.B. Pennington C.P.G. are the qualified persons as described under NI 43-101 responsible for the Centennial deposit resource estimate.

The technical information contained in this news release, has been reviewed, approved, and deemed relevant by Stephen Kenwood P. Geo., a qualified person as defined under National Instrument 43-101.

On Behalf of the Board of Directors

Signed "Stephen Kenwood"

Stephen Kenwood

For further information, please contact Ely Gold & Minerals Inc. at 604-488-1104.

E-mail: [email protected]; Website: www.elygoldandminerals.com

Neither 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 may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.