PMI Gold Corporation - Drill Update - Obotan Gold Project, Ghana

VANCOUVER, October 18, 2010 -

    TSX Venture Exchange: PMV   Issued & Outstanding: 284,014,088
    Frankfurt: AOJMW7           Fully Diluted: 393,434,463

- This News Release is not for Distribution in the United States
or to U.S. News Agencies

- 95.50 Metres @ 2.16 g/t Au - Including 12.26 Metres @ 4.67 g/t Au

- Additional Drilling has Commenced With Two Rigs

- Proposed IPO in Australia on Track for November 2010

PMI Gold Corporation (TSX.V:PMV) - the Company is pleased to announce the
results from the remaining 22 of 65 diamond drill holes completed at our
Obotan Gold Project in Ghana during May through the end of July 2010. Initial
results for the program were announced in our news release dated August 10,
2010. The program consisted of a total of 10,877 metres, with 6,315 metres in
35 resource definition drill holes and 4,562 metres in 30 quality control
(QC) drill holes.

The results from these 22 drill holes were not included in the recent
NI43-101 Obotan mineral resource estimate by Hellman and Schofield Pty Ltd of
Australia, which stated: Indicated 3.06 million tonnes grading 1.59 g/t gold
for 156,000 oz; Inferred 15.64 million tonnes grading 2.1 g/t gold for
1,053,000 oz; however they will be included with additional new drill results
in the next resource estimate update expected in early 2011.

Based on the recent CDN$5 million pre-IPO funding, drilling re-commenced
at Obotan on October 1. A minimum of 16,000 metres is currently planned,
however this is expected to increase to 40,000 metres on completion of the
IPO now targeted for mid November 2010.

Drilling was completed at the Nkran ('NKR'), Adubiaso ('ADP'), Asuadai
('ASP') and Abore ('ABP') deposits.

    Table 1 - Significant Gold Intercepts (>10.00 g/t Au metres):

    Drill Hole  From Metres  To Metres   Width   Weighted Avg. Grade
                                        Metres      g/t Au (uncut)

    NKR10-014      212.00      228.39    16.39          4.31
    including      212.00      220.78     8.78          5.33
    including      225.23      228.39     3.16          7.07
    including      227.55      228.39     0.84         12.09
    NKR10-015      218.50      314.00    95.50          2.16
    including      218.50      226.90     8.40          3.85
    including      220.00      220.50     0.50         23.65
    including      252.00      264.26    12.26          4.67
    including      263.66      264.26     0.60         53.55
    including      270.50      277.12     6.62          4.02
    including      303.52      303.72     0.20         89.50
    ABP10-020      113.00      124.00    11.00          1.73
    ABP10-021      109.80      125.20    15.40          1.19
    ABP10-025      152.00      153.00     1.00         14.05
    ABP10-027      112.00      147.00    35.00          1.17
    including      112.00      113.00     1.00         11.60
    ABP10-028      144.00      158.00    14.00          1.19
    ABP10-029      144.00      166.00    22.00          1.48
    ABP10-031      108.79      109.50     0.71         24.39
    ABP10-032      166.00      173.40     7.40          3.98
    including      172.85      173.40     0.55         45.83
                   189.00      192.30     3.30          6.10
    including      189.00      190.00     1.00         11.03
    ADP10-015      198.00      204.00     6.00          3.03
    ASP10-020      104.00      109.00     5.00          5.46

Please see the following web links for the Drill Collar Data and Collar
Plan map:

www.pmigoldcorp.com/i/maps/NR10-15DrillCollars.pdf

www.pmigoldcorp.com/i/maps/NR10-15DrillCollarPlan.jpg

This news release has been prepared by Douglas R. MacQuarrie,
P.Geo.(B.C.), a Qualified Person as defined under National Instrument 43-101.
Field work was supervised by Donald Allen, MASc. P.Eng.(B.C.) and Paul Abbott
MSc., Consulting Geologists. HQ, and NQ core was logged, sawn and sampled on
site, with half samples sent to SGS Laboratory in Tarkwa, and analyzed for
gold by fire assay-AA on a 50 gram sample charge. Where visible gold was
noted, on occasion both 1/2's of the core were assayed to reduce sample bias
after geological logging and photographing (please see
www.pmigoldcorp.com/i/maps/NR10-10VGphotos.pdf for photos from the
drill program). Internal QC consisted of inserting both blanks and standards
into the sample stream and multiple re-assays of selected anomalous samples.
Where multiple assays were received for an interval, the final value reported
was the average of all results for the interval. Results from the QC program
suggest that the reported results are accurate. The data also suggests that
diamond drilling may understate the gold grades relative to reverse
circulation drilling, based on the larger sample sizes obtained with RC
drilling. Intercepts were calculated with a minimum 1.0 g/t Au cut off at the
beginning and the end of the intercept and allowing for no more than ten
consecutive metres of less than 1.0 g/t Au internal dilution. Intercepts
above 10.0 g/t Au metres are reported separately. Grade x Width intercepts of
less than 10.0 g/t Au metres were not reported. True widths are estimated at
from 50% to 90% of the stated core length.

On behalf of the Board,

"Douglas R. MacQuarrie"

President & CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

This news release contains forward-looking statements which involve known
and unknown risks, delays and uncertainties not under the Company's control
which may cause actual results, performance or achievements of the Company
to be materially different from the results, performance or expectations
implied by these forward-looking statements. We Seek Safe Harbour.

About PMI Gold

Mining analysts have recently stated that West Africa will soon become
the World's second largest gold producing region after China, with Ghana by
far the largest gold producer in West Africa. PMI Gold controls four previous
operating mines on 85 kilometres of Ghana's major gold belts all located near
the centre of near 200 million ounces of historical gold production and
current resources. Our Kubi Gold Project (NI43-101 mineral resource estimate
of 604,000 ounces @3.66 g/t gold Indicated; 315,000 ounces @1.88 g/t gold
Inferred, see SEDAR) adjoins the 60 million ounce AngloGold Ashanti Obuasi
mine, the largest underground mine in West Africa with a 113 year, continuous
mining history. At Obotan, where previous mining yielded 730,000 ounces of
gold at a grade of 2.2 g/t, we recently announced a maiden +1 million ounce
gold mineral resource estimate, and the commencement of an aggressive
drilling campaign.

    %SEDAR: 00005434E

    For further information:

    Douglas MacQuarrie, President & CEO
    Telephone: +1-604-682-8089 Toll-Free: +1-888-682-8089
    Facsimile: +1-604-682-8094 

    or for European Investors: 

    Florian Riedl-Riedenstein: Tel: +43-2774-28814, e-mail: frram@aon.at

    Or visit the PMI Gold Corporation website at www.pmigoldcorp.com

For further information: Douglas MacQuarrie, President & CEO, Telephone: +1-604-682-8089, Toll-Free: +1-888-682-8089, Facsimile: +1-604-682-8094; or for European Investors: Florian Riedl-Riedenstein: Tel: +43-2774-28814, e-mail: frram at aon.at