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29 September 2009                                                                                                                            AIM: VGM

Vatukoula Gold Mines plc

('VGM' or 'the Company')

Canadian Zinc Corporation ('Canadian Zinc' or 'CZN') Option Exercised

The Company has today been informed by Canadian Zinc Corporation ('CZN') that it has exercised its conditional right to acquire further ordinary shares of 0.1p each in VGM ('Further Share Option') as approved by VGM shareholders on the 10 June 2009. CZN has agreed with the Company to subscribe for 156 million new shares at a price calculated from 95% of the volume weighted average price of the Company's Ordinary Shares for the 5 trading days prior to exercise of the option, being 1.282 pence per share. 

This Further Share Option was conditional upon the exercise of a call option by Viso Gero Global Inc ('Viso Gero') over 200 million shares in VGM held by CZN ('Call Option'). The Company has been informed by CZN that the Call Option has been exercised in full. 

The exercise of the Further Share Option will provide the Company with net proceeds of £2.0 million

Background

The Further Share Option was approved by VGM shareholders at the Extraordinary General Meeting held on 10 June 2009 which granted CZN a right to acquire up to 250,000,000 further ordinary shares in the Company in order to maintain its equity stake in VGM. The Further Share Option was conditional on the Call Option previously granted by CZN over 200,000,000 ordinary shares in the Company, held by CZN, being exercised. 

The Call Option is in favour of Viso Gero and was exercisable until 9 January 2010 in whole or in part at a purchase price of 1 pence per share in the Company. 

Following the subscription for new shares, CZN's shareholding in VGM will comprise 503,669,022 shares, representing 17.4 per cent. of the Company's issued share capital following exercise of the Further Share Option.  

Application will be made for the new shares to be admitted to trading on AIM, with admission expected to take place on or around 5 October 2009. The total number of ordinary shares in issue following the admission of these new shares to trading on AIM will be 2,892,371,027 ordinary shares of 0.1p each.

Enquiries:

Vatukoula Gold Mines plc
David Paxton	+ 44 20 7016 7861
Kiran Morzaria
W.H. Ireland Limited - Nomad & Joint Broker
David Porter/James Joyce	+ 44 20 7220 1666
Religare Hichens, Harrison & Co plc - Joint Broker
Daniel Briggs	+ 44 20 7382 7776
Colin Rowbury	+ 44 20 7382 7771
Bishopsgate Communications
Nick Rome	+44 20 7562 3350

Notes to Editors

The Company acquired the Vatukoula Gold Mine in April 2008 and has since re-established gold mining operations. The mine has operated for over 75 years and over that time has produced approximately 6.9 million ounces of gold. Current planning is to restore mine operations at a rate of 100,000 ounces per year. The mine has a Proven and Probable Reserve of 858,000 ounces of gold and a Measured, Indicated and Inferred resource of 5.15 million of ounces gold. These current reserves and resources provide for a mine life at the current rate of production of approximately over 40 years. The Company has no forward gold sales.

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