Desert Gold Letter to Shareholders


VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 26, 2012) -

Dear Desert Gold Shareholder:

On November 30, 2011, Desert Gold Ventures Inc. (TSX VENTURE:DAU.V - News) ("Desert Gold" or "we") completed the acquisition (the "Acquisition") of all of the outstanding shares of TransAfrika Belgique S.A. ("TransAfrika"), a private Belgian company which owns interests in three advanced exploration-stage gold deposits in central and western Africa through subsidiaries in Rwanda, Mali and Senegal.

The Acquisition has refocused the company into primarily developing its promising West African and Rwanda permits to proven resource status and develop those properties to mining operations, in a socially and environmentally responsible manner. The Company is very excited to have acquired such highly prospective gold properties, particularly in Mali and Rwanda, the latter having a 43-101 compliant(1) inferred mineral resource of 5,551,000 tons at a grade of 1.48 Au g/t for 265,000 oz of gold.

Desert Gold also continues to own a 50% interest in the Goldbanks Project located in Nevada, USA, under the terms of a joint venture agreement entered into with a wholly-owned subsidiary of Kinross Gold Corporation (TSX:K)(NYSE:KGC - News) which has a 43-101 compliant inferred resource of 28,310,000 tons at a grade of 0.57 Au g/t for 556,000 oz of gold.

In light of these recent developments, the Company would like to provide our shareholders with a brief update on Desert Gold, our current objectives as a company, and the leadership group in place to ensure that we achieve our goals.

Share Capital

Immediately prior to the Acquisition, Desert Gold had 19,118,370 common shares outstanding. As consideration for the Acquisition, Desert Gold issued a total of 20,000,000 common shares to TransAfrika Resources (Mauritius) Limited ("TransAfrika Mauritius") as ultimate parent company of TransAfrika, 10,000,000 of which are being distributed, by way of dividend, to the TransAfrika Mauritius shareholders pro rata to their shareholdings in TransAfrika Mauritius(2).

(1) SAMREC stands for the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves. As more particularly described in the technical reports filed with the TSX Venture Exchange and other regulatory authorities and available under Desert Gold's SEDAR profile at, the mineral resource categories of the SAMREC Code reported above reconcile with the same mineral resource categories in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards adopted by the CIM Council and incorporated into National Instrument 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.

(2) TransAfrika Mauritius is a widely-held private company that has raised over $40 million in financing since 2007 principally to fund the advancement of the TransAfrika material properties recently acquired by Desert Gold. TransAfrika Mauritius also owns interests in base metals properties in the DRC and Mauritania which did not form part of the Acquisition.

Desert Gold is required to issue a further 12,000,000 common shares (the "Performance Shares"), in the aggregate, to TransAfrika Mauritius and its shareholders in the event that within a two year period from closing of the Acquisition, Desert Gold publishes an NI 43-101-compliant resource calculation disclosing that the TransAfrika material properties contain at least an additional 1,000,000 ounces of gold or gold equivalent in the inferred mineral resource category.

In addition, concurrent with the Acquisition, Desert Gold raised $3.7 million through the issue of 4,949,665 units at a subscription price of $0.75 per unit (the "Financing"). Each unit consisted of one common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to subscribe for one additional common at an exercise price of $1.00 for a period of 24 months from closing of the Acquisition, provided that, in the event that the closing price of the Desert Gold common shares on the TSX Venture Exchange is greater than $1.50 for a period of 20 consecutive trading days at any time following closing of the Acquisition, Desert Gold may, at its option, accelerate the expiry date of the warrants by giving written notice to the holders thereof and in such case the warrants will expire on the date which is the earlier of: (i) the 30th day after the date on which such notice is given; and (ii) 24 months from closing of the Acquisition.

Overall, a total of 44,038,035 common shares, 2,474,832 warrants, 2,051,625 stock options, and 49,496 broker warrants (issued to MGI Securities Inc. as lead agent in connection with the Financing) are currently outstanding.

Board and Management


Name, Municipality of                                                       

Residence, Position with                                                    

Desert Gold                   Selected Biographical Information             


Roeland van Kerckhoven        Mr. van Kerckhoven has spent more than 29     

(Bryanston, South Africa)     years of his career with the Anglo American   

President, Chief Executive    group of companies, serving for the last 15   

Officer and Director          years as CFO and business development director

                              of Anglo Platinum until he retired in March   

                              2007.At various times during his career at    

                              Anglo Platinum, he also headed the;           

                              exploration, legal, corporate finance,        

                              investor relations and corporate              

                              communications portfolios. Since joining      

                              TransAfrika Mauritius in 2008 as President and

                              Chief Executive Officer, he has overseen the  

                              discovery and evaluation of a portfolio of    

                              assets and has been actively involved in      

                              negotiations with African governments and     

                              joint venture partners. He earned both his MBL

                              and B.Comm degrees from the University of     

                              South Africa.                                 


Theo Christodoulou            Mr. Christodoulou worked at                   

(Johannesburg, South Africa)  PricewaterhouseCoopers for nearly 5 years,    

Director                      after which he joined Deutsche Bank. He worked

                              for the bank for 11 years, which included 5   

                              years as Director (and head of Metals and     

                              Mining in South Africa). Mr. Christodoulou    

                              then founded the corporate finance company, AC

                              Squared Solutions in 2010. He has extensive   

                              experience in advising on mining initiatives, 

                              project finance planning and management, M&A, 

                              IPO's and BEE structuring across Africa. Mr.  

                              Christodoulou holds an MBA from Duke          



Louw van Schalkwyk            Mr. Schalkwyk started his career as an        

(Northern Cape, South         exploration geologist with Gold Fields of     

Africa)                       South Africa Limited in 1984 and was promoted 

Vice-President, Exploration,  to senior geologist. In 1992 he moved to      

Director                      consulting and contracting geology, working on

                              gold and base metal exploration for various   

                              major and junior exploration and mining       

                              companies in sub-Saharan Africa. These include

                              Rio Tinto Plc, Anglo American, Iscor Limited  

                              and Pangea Minerals Ltd. His ability to       

                              integrate geology with applied exploration    

                              techniques led to the discovery of the Gams   

                              East Zinc deposit while working as project    

                              manager for Anglo American. Mr. Schalkwyk     

                              obtained a BSc Geology (Hons) degree from the 

                              University of Stellenbosch in 1984.           


Jared Scharf                  Mr. Scharf has been serving as CFO of Desert  

(Ontario, Canada)             Gold since 2009. Mr. Scharf's background is in

Chief Financial Officer,      private investment and management consulting  

Secretary                     in the areas of corporate finance and         

                              financial accounting. Over the last 7 years   

                              Mr. Scharf has focused much of his time on the

                              acquisition and development of mining and     

                              alternative energy projects in Africa and     

                              North and Central America. Mr. Scharf is also 

                              a Director of EasyMed Services Inc., a        

                              publicly-traded Canadian healthcare technology

                              company. Mr. Scharf holds an Honors Commerce  

                              degree in Finance from the Telfer School of   

                              Management at the University of Ottawa as well

                              as a Bachelors of Administration also from the

                              University of Ottawa.                         


Mohd Ayub Khan                Mr. Khan brings over 19 years of experience in

(Geneva, Switzerland)         operations, public markets and finance to the 

Non-Executive Chairman of     Resulting Issuer. Over the last 19 years he   

the Board of Directors        has been involved in acquiring, restructuring 

                              and financing public companies. His experience

                              in public markets includes acquisitions of    

                              companies in Europe and South America. Mr.    

                              Khan is a professional Asset Manager currently

                              based in Geneva, Switzerland and travels      

                              extensively in order to oversee his company's 

                              considerable business interests. Mr. Khan     

                              holds a B.Sc. in Business Administration and  

                              Finance from Ball State University of Muncie, 

                              Indiana, U.S.A.                               


Thomas R. Tough               Mr. Tough has more than 40 years experience as

(British Columbia, Canada)    a self-employed consulting Professional       

Director                      Engineer in 40 different countries, in both   

                              the western and eastern hemispheres. In the   

                              course of his career he has been involved in  

                              many capacities of the mining industry. He has

                              held numerous directorships and officer       

                              positions in public and private companies,    

                              including the role of President, CEO and      

                              Director of Desert Sun Mining Corp. for 18    

                              years. In April 2006, Yamana Gold Inc.        

                              purchased Desert Sun and its producing gold   

                              mine in Brazil. In 2003 Mr. Tough also joined 

                              the boards of TSX listed Potash One Inc.,     

                              where he also served as President and CEO, and

                              TSXV listed Maxtech Ventures Inc., where he   

                              still serves as President & CEO. Since 2008 he

                              has served on the board of Aroway Minerals    

                              Inc. and in 2010 he became President, CEO and 

                              a director of Firebird Resources Inc., both   

                              listed on the TSXV. He is a member of the     

                              Association of Professional Engineers and     

                              Geoscientists of British Columbia and holds a 

                              B.Sc. in Geology from the University of       

                              British Columbia.                             


Sonny Janda                   He is the President & CEO of Grand Peak       

(British Columbia, Canada)    Capital Corp., a TSXV listed company that     

Director                      invests in public and private corporations. He

                              also serves on the board of Maxtech Ventures  

                              Inc., Lucky Minerals Inc. and EasyMed Services

                              Inc. He holds a bachelor's degree in Economics

                              from Simon Fraser University in Vancouver, BC.


Exploration Programs

Desert Gold is in the process of carrying out a $5 million exploration program in respect of the Rwanda and Mali properties, as recommended by Coffey International Limited, authors of the independent technical reports (the "Technical Reports") filed with the TSX Venture Exchange and other regulatory authorities and available in their entirety under Desert Gold's SEDAR profile at

Coffey International Limited is a specialist professional services consultancy with expertise in geosciences, international development, and project management. Coffey is listed on the Australian Securities Exchange (ASX:COF.AX - News).

Set forth below, for your reference, are excerpts from the Technical Reports summarizing the proposed 2012 work programs at the Rwanda and Mali projects:


Work completed by TransAfrika on its Rwanda permits thus far has been largely focused on the Byumba Project with soil sampling surveys carried out on the Rusizi and Nyamugali Projects. The recommended exploration priority is to increase and improve the mineral resource for the Byumba Project.

The total budget required for Rwanda is USD 3,200,000 as presented in Table 1 below. At the completion of the diamond drilling a decision will be taken on commencing a Scoping Study based on the drill results returned.


                                   Table 1                                  

                     Bumba, Nyamugali and Rusizi Project                    

                  Estimated Exploration Budget. (USD '000s)                 


Item                                                                   Total


Drilling                                                              $1,929


Logistics and equipment                                                 $239


Consulting and salaries                                                 $430


Laboratories                                                            $227


Kigali and Johannesburg office                                          $375


TOTAL                                                                 $3,200


The scheduling of the exploration is presented in Table 2 and the associated costing in Table 3.

Coffey Mining considers the exploration rationale to be appropriate for this stage of the projects. Additional funding may be required at a later stage.


                                   Table 2                                  

                  Summary of Work Schedules by Permit Area                  


               Q3              Q4             Q1             Q2             

Permit         2011            2011           2012           2012           


Rusizi         Limited work                                                 



Byumba         Establishment,  Diamond        Diamond        Modelling and  

               rig             drilling, soil drilling,      resource       

               mobilization,   sampling       Metallurgical  estimate       

               construct drill                test work                     


               Diamond drilling                                             


Nyamugali                                     Target         Public liaison,

                                              generation     Mapping        



                                   Table 3                                  

    Summary of the proposed Spending of the Exploration Budget for Rwanda   



                                 Q3         Q4         Q1      Q2           

Permit                         2011       2011       2012    2012      Total


Corporate RSA &                                                             

 Mali/Senegal              $112,500   $112,500   $112,500 $37,500   $375,000


Logistics & Equipment       $75,200    $75,800    $76,800 $11,600   $239,400


Field Teams & Technical                                                     

 Consulting                $112,600   $133,600   $148,600 $35,000   $429,800


Drilling & Geophysical                                                      

 Contractors               $226,400   $928,800   $774,000      $0 $1,929,200


Laboratories                $30,200    $95,200    $98,800  $2,500   $226,700


Total                      $556,900 $1,345,900 $1,210,700 $86,600 $3,200,100



Farabantourou Permit

Farabantourou has an initial budget estimated to the end of Q2 2012 (Table 1). Geological mapping should be carried out over the entire permit area with emphasis on structural geology. Once the structure is better understood, drill results from all known prospects should be reinterpreted. The soil-sampling grid should be extended to cover the entire permit area.

All geological, geophysical and geochemical data should be integrated at the end of phase 1 and drill targets prioritized. Should the assessment be positive a drilling budget should be compiled to allow for drilling to start in Q4 2012. The nature of the drill program will be determined by Phase I exploration results.

The following phased exploration program is proposed:

Phase 1: Prioritization of areas for resource drilling, Phase I will include site establishment, geological mapping, soil sampling, integration of geology IP data and soil sampling data, trenching and pitting over selected areas and drill planning.

The budget to completion of phase 1 is USD $576,100 (table 1)

Phase 2: Exploration drilling. This phase was not budgeted.

Phase 3: Resource drilling. This phase was not budgeted.


                                   Table 1                                  

               Summary of Budget for Farabantourou Permit Area              



                                      Q3       Q4       Q1       Q2         

Permit                              2011     2011     2012     2012    Total


Corporate RSA & Mali/Senegal     $67,500  $67,500  $67,500  $67,500 $270,000


Logistics & Equipment            $57,000  $30,300  $30,300  $10,800 $128,400


Field Teams & Technical                                                     

 Consulting                      $36,400  $36,400  $36,400  $28,500 $137,700


Laboratories                     $15,500  $15,500   $9,000       $0  $40,000


Total                           $176,400 $149,700 $143,200 $106,800 $576,100


Loulo-Est and Segala-Ouest Permit

Loulo-Est and Segala-Ouest have a combined budget estimated to the end of Q2 2012 (Table 2). TransAfrika have applied to the Malian Government and were successful in getting the two permits combined and they are considered one project. The following phased work program is recommended:

Phase 1: Prioritization of areas for resource drilling. This will include:

--  Soil sampling should be extended to cover the whole of Segala-Ouest.

    Soil sampling results should be reprocessed using geostatistical

    estimation methods to identify gold anomalies and trends as this appears

    to give better results than simpler contour methods. 

--  Geological mapping of the permits 

--  IP surveys 

--  Pitting and trenching 

--  Target generation. While various targets have been identified, this has

    not been done on a fully integrated geological model for the area. A

    fully integrated geological interpretation needs to be undertaken so

    that the geology can be better understood and targets for follow-up

    surface surveys can be better delineated. 

--  Drill program planning. 

The budget allows for USD $690,100 to complete this phase (Table 2).

Phase 2: Exploration drilling. The nature of the drilling depends on the results of from Phase 1, hence this phase was not budgeted.

Phase 3: Resource drilling. The nature of the drilling depends on the results of from the previous phases. This phase was not budgeted.


                                   Table 2                                  

             Summary of Budget for Loulo-Est, Segala-Ouest Area             



                                      Q3       Q4       Q1       Q2         

                                    2011     2011     2012     2012    Total


Corporate RSA & Mali             $67,500  $67,500  $67,500  $67,500 $270,000


Logistics & Equipment            $57,000  $30,300  $55,300  $10,800 $153,400


Field Teams & Technical                                                     

 Consulting                      $36,400  $36,400 $126,400  $28,500 $227,700


Laboratories                     $15,000  $15,000   $9,000       $0  $39,000


Total                           $175,900 $149,200 $258,200 $106,800 $690,100


In light of challenging financial market conditions, Desert Gold is delighted to have completed the Acquisition TransAfrika and the subsequent Financing. The Company is committed to expanding and further proving the significant potential of the TransAfrika mineral properties for the benefit of our shareholders. To this end, the Company anticipates raising $10 million of additional funding during the first half of this year to pursue the drilling program on Farabantourou, our most prospective property in Mali. All the while, the Company will continue its drilling program in Rwanda where we look to significantly increase the current resource estimate in the short to medium term. At current levels, management feels that the Company's share price is undervalued and we will be undertaking a sustained marketing and investor awareness campaign to increase exposure in the investor community. To our shareholders, we thank you for your continued support as we look to meet our corporate milestones with the aim of building a world-class gold company.

Sincerely yours,

Roeland van Kerckhoven, President and CEO

For further information concerning Desert Gold and the TransAfrika material properties, please refer to Desert Gold's SEDAR profile at

Roeland van Kerckhoven
Desert Gold Ventures Inc.
President and CEO
604-408-9301 (FAX)

Jared Scharf
Desert Gold Ventures Inc.
604-408-9301 (FAX)

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