Mr. Mike England reports

SKY GOLD FINANCING

Sky Gold Corp. has arranged a non-brokered private placement of up to 20 million units at a price of 10 cents per unit for aggregate gross proceeds of $2-million.

Each unit will comprise one common share and one-half of one transferable common share purchase warrant of the company. Each whole warrant will entitle the subscriber to purchase one warrant share for a 24-month period after the closing date at an exercise price of 15 cents per share. The warrants issued with the units sold will be subject to an acceleration provision. After four months have elapsed from closing, if Sky's shares trade above 35 cents for 10 consecutive trading days, the company has the option to provide notice to the warrantholders that their warrants will expire if they are not exercised within 30 days.

The company intends to rely on the investment dealer prospectus exemption, among other prospectus exemptions, with respect to the private placement. As such, the issuer confirms that there is no material fact or material change about Sky Gold that has not been generally disclosed.

Proceeds raised from the offering will be used for general working capital, and to further the company's newly expanded Mustang property and Virginia property, located in central Newfoundland.

Finders' fees may be payable on the private placement, subject to the policies of the TSX Venture Exchange.

This offering is subject to TSX Venture Exchange acceptance.

About Sky Gold Corp.

Sky Gold is a junior mineral exploration company engaged in acquiring and advancing mineral properties in Canada and the United States. In addition to the company's Newfoundland properties, the company also owns the Evening Star property, located 12 kilometres southeast of Hawthorne, Nev., which is prospective for gold mineralization and CRD (carbonate replacement deposit) base and precious (silver and gold) mineralization.