Mr. Richard Moritz reports

YUKON-NEVADA GOLD CORP. PLANS TO ENTER INTO A PREPAID FORWARD GOLD PURCHASE AGREEMENT

Yukon-Nevada Gold Corp. is currently negotiating a forward gold purchase agreement with Deutsche Bank AG, London branch, a leading global provider of financial solutions. Subject to satisfaction of all closing conditions and internal approval requirements (including Deutsche Bank's credit committee), Deutsche Bank will finance a $120-million (U.S.) prepaid gold forward facility to Queenstake Resources USA Inc., a subsidiary of the company.

The facility is a forward contract currently structured to deliver 173,880 ounces of gold over a 48-month term. The schedule of gold payments is set forth as follows: during the first six months of the term, 1,000 ounces per month; for the next six months of the term, 2,000 ounces per month; and for the final 36 months of the term, 4,330 ounces per month. The 173,880 ounces of gold that have been committed under this gold facility represent approximately 5.1 per cent of the total gold resources at Queenstake's wholly owned Jerritt Canyon property in Nevada, United States. Subsequent to the receipt of the $120-million (U.S.) prepayment, the remainder of the purchase price for the gold will be paid to Queenstake upon completion of the monthly gold deliveries to Deutsche Bank and will be equal to the amount that the gold price exceeds $850 (U.S.) and up to a maximum gold price of $1,700 (U.S.).

Certain components within the agreement, such as gold pricing valuations, will be finalized at the time of prepayment, which is anticipated to occur around Aug. 12, 2011. As such, a subsequent news release regarding the agreement will be issued upon the date of prepayment with the minimum and maximum gold prices per ounce expressed. There is no interest payable to the Deutsche Bank during the term of the facility.

Robert Baldock, president and chief executive officer, states: "We are very pleased to be entering into this gold forward facility with Deutsche Bank, one of the world's most reputable leaders in the global commodities market. This gold loan facility will address all of our capital needs for the Jerritt Canyon winterization and other announced cap-ex programs which will enable us to achieve our production targets, increase profitability and create lasting value for our shareholders."

The repayment of the gold facility will be guaranteed by the company and various subsidiaries and will involve the registration of various charges against the company's assets in favour of Deutsche Bank. To enable the grant of the requisite security, approximately $26-million of the proceeds of the loan will be used to repay the senior secured notes issued to noteholders led by Sprott Asset Management LP in August, 2010. The remainder of the proceeds is to be used for the capital expenditures at the Jerritt Canyon property, including the winterization of the processing facility, construction of the tailings storage facility and development of the existing underground and open-pit mines in addition to further improvements to the gold production processes to enhance throughput at the mill.

As Deutsche Bank currently holds securities representing more than 10 per cent of the company's issued and outstanding voting securities (making it an insider of the company within the meaning of Toronto Stock Exchange policies and applicable securities regulations) and as the value of the transaction is greater than 10 per cent of the company's market capitalization (assuming a current market capitalization of approximately $423-million based on a share price of 45.5 cents), disinterested shareholder approval of the transaction is required pursuant to Section 501(c) of the TSX's company manual. The company expects to obtain the requisite shareholder approval by means of written consents from holders of more than 50 per cent of the company's voting securities (excluding those held by Deutsche Bank) pursuant to Section 604(d) of the TSX company manual.

We seek Safe Harbor.