Ms. Mihaela Iancu reports

LEXAM ANNOUNCES UPDATE ON THE PRELIMINARY ECONOMIC ASSESSMENT

Lexam VG Gold Inc.'s preliminary economic assessment (PEA), commenced earlier this year, will be extended into 2014, due to a re-evaluation of the parameters necessitated by the decline in the price of gold (Au) since the initiation of the PEA and the earlier completion of this year's resource estimates. This will result in a PEA that reflects the current environment and will allow Lexam to better assess the potential of its assets moving forward.

The PEA is designed to assess the open-pit economic potential of Lexam's gold projects, which include Buffalo Ankerite, Davidson Tisdale, Fuller and Paymaster properties. The study was commenced using parameters that include the following:

• Gold price of $1,400 (U.S.) per ounce;
• Exchange rate of $1.02 (U.S.) to $1.02 (Canadian);
• Toll mill scenario.

This initial price of gold was derived from a range of values based on a consensus from a variety of sources (banks and major producers). The price of gold presently is considerably lower than the price used at the commencement of the PEA (August, 2013) ($1,400 (U.S.), versus less than $1,200 (U.S.)).

The resource estimates used an approximate 30-month trailing average gold price of $1,600 (U.S.) per ounce and an exchange rate of $1 (U.S.) to $1 (Canadian), which resulted in a cut-off grade calculation of 0.51 gram per tonne Au for open-pit mineral resources.

As the price of gold is presently considerably lower than the price used in the company's studies conducted earlier in 2013, management decided that in order to align to the current realities of the gold mining industry, the PEA will need to reflect the recent movement of the price of gold to below $1,200 (U.S.) per ounce.

With these new parameters in mind, Lexam has concluded that the PEA is in need of updating to reflect the present realty. This will involve updating the cut-off grade constraining the open-pit shells to be used in the PEA.

The PEA is being undertaken by RPA Inc., of Toronto, Canada, and it will maintain its focus on the open-pit gold projects from Buffalo Ankerite, Davidson Tisdale, Fuller and Paymaster properties, with parameters adjusted from the mineral resource estimate presented in the National Instrument 43-101-compliant technical report dated June 20, 2013 (available on SEDAR, and on the company's website).

Qualified person

Kenneth W. Guy, PGeo, a consultant to Lexam, is the qualified person who supervised the preparation of the technical data in this news release.

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