Mr. Tom Meredith reports

LEXAM VG GOLD INC.: DRILLING CONTINUES TO EXPAND THE GOLD MINERALIZATION AT BUFFALO ANKERITE NORTH ZONE

Lexam VG Gold Inc. is providing encouraging exploration results from 14 new holes at the Buffalo Ankerite North zone project located in Timmins, Ont. Drill highlights include hole VBA-11-185 with 12.69 grams per tonne gold over 4.1 metres. The holes contained in this release were focused on expanding the Buffalo Ankerite North zone to depth and along strike. The results are consistent within the context of the Timmins mining district, where historical production at an average grade of 6.75 g/t gold has produced 70 million ounces of gold.

"These results are expanding the North zone mineralization. An update of the Buffalo Ankerite resource estimate is planned for the first quarter of 2012," stated Tom Meredith, president and chief executive officer.

Buffalo Ankerite North zone mineralization expanded along strike and at depth

The attached drilling information presents the results of the drilling that has been focused on expanding the mineralization along strike, predominately to depth, below 200 metres. The results to date continue to follow up on the positive North zone results that were released on June 9, 2011, and July 27, 2011. Drilling is continuing and continues to intersect multiple quartz-tourmaline breccia zones with further results pending.

      DRILL ASSAY HIGHLIGHTS                                                      
                                                                            
              From   Width      Au
Hole No.       (m)     (m)   (g/t)

VBA-11-172   503.3     3.7    5.58
incl                   1.5    9.31
VBA-11-178   184.7     6.6    3.77
incl                   2.1     8.0
             270.1     0.9   13.30
VBA-11-180   289.6    11.7    2.07
incl                   1.5    7.05
             307.4     1.5    7.11
VBA-11-185   559.0     4.1   12.69
VGP-11-122   278.3     2.4    6.24
VGP-11-123   240.3    13.1    3.15
incl                   5.3    6.78
incl                   1.1   17.60

Note: Intervals reported here are 
core lengths. True widths are not 
known at this time. All depths are
reported as downhole.                         

Testing the Buffalo Ankerite North zone on the Buffalo Ankerite property

The attached drill results table shows the results of the drilling that has been focused on expanding the resource on the Buffalo Ankerite property. The holes contain favourable assay results, including hole VBA-11-185 with 12.69 g/t gold over 4.1 metres.

Following up on the intersection of multiple quartz-tourmaline breccia zones, drilling is continuing on the North zone, with most holes intersecting at least one mineralized zone of grade greater than three g/t gold. The planned drilling will be spaced, with holes approximately 50 metres from the nearest hole. Drilling continues to expand the mineralization to depth.

Testing the Buffalo Ankerite North zone from the Paymaster property

The last four results in the attached table show drilling that was focused on expanding the Buffalo Ankerite North zone resource from the Paymaster property. The Buffalo Ankerite North zone was tested with holes VGP-11-112, 117, 122 and 123. All holes have intersected multiple quartz-tourmaline breccia zones with anomalous gold assays. The best hole was VGP-11-123, with 3.15 g/t gold over 13.1 metres, including 6.78 g/t gold over 5.3 metres. This drilling has increased the Buffalo Ankerite North zone area of mineralization to the north and to depth.

Exploration drill program

Three diamond drills are operating at the Buffalo Ankerite North and South zone projects:

1. One drill on the Aunor property is testing the Buffalo Ankerite South zone, west extension. These holes are following up on the positive results of hole VGA-11-04, which intercepted mineralization downhole at 662.8 metres to 679.6 metres that assayed 3.47 g/t gold over 16.8 metres, including 13.44 g/t over 2.2 metres (see press release of Sept. 27, 2011).
2. One drill on the Buffalo Ankerite property is testing the Buffalo Ankerite North zone, central area, following up on hole VGP-11-106 which intersected 23.85 g/t over 2.4 metres (see press release of June 9, 2011).
3. One drill on the Paymaster property is primarily testing the Buffalo Ankerite North zone, north area, following up on hole VGP-11-109, 5.18 g/t gold over 12.4 metres, and hole VGP-11-111, 17.63 g/t over three metres (see press release of July 28, 2011).

Buffalo Ankerite

Lexam VG Gold owns a 100-per-cent interest in the 1,063 acres of the Buffalo Ankerite property. During the period of 1926 to 1953 the Buffalo Ankerite mine produced 1,018,000 ounces of gold with an average recovered grade of 6.51 g/t.

Technical information

The information presented in this press release has been reviewed and approved by Kenneth Guy, PGeo, a consultant to Lexam VG and the qualified person responsible for the exploration program at the Paymaster property as defined by National Instrument 43-101. For further information about the Paymaster property see the technical report titled "Summary report on exploration and resource technical report on the Paymaster option" prepared by Mr. Guy and P.A. Bevan dated Dec. 20, 2010. The Paymaster report is available on SEDAR under Lexam VG Gold's profile.

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