Radius Plans Spin Out of Yukon Assets

May 27, 2011

VANCOUVER, May 27, 2011 /PRNewswire/ – Radius Gold Inc. (TSX-V: RDU) is pleased
to announce that the Board of Directors of the Company has unanimously
approved a spin out transaction (the “Spin Out”) whereby Radius will
transfer all of its Yukon and Alaskan property assets and $1.0 million
in cash to a new company (“Newco”) in return for Newco shares and
warrants, the majority of which will then be distributed to Radius
shareholders by way of a plan of arrangement.  The implementation of
the Spin Out is subject to, among other things, Radius shareholder
approval, court approval and TSX Venture Exchange (“Exchange”)
approval, including Exchange approval of the listing of the common
shares of Newco on the Exchange.

The objective of the Spin Out is to maximize shareholder value by
allowing the market to independently value geographically separate
property portfolios. The Spin Out will result in two strategically
positioned companies, one focused on Latin America and the other
focused on the Yukon.

Asset Split

Radius will retain ownership of all Latin American property and royalty
interests, including the HB Project and geothermal licences in
Guatemala, and its Nicaraguan portfolio currently under option to
B2Gold Corp., plus shares owned in other companies acquired in relation
to the Latin American properties.  Newco will hold all of the staked
and optioned properties of Radius located in the Yukon and Alaska,
including the Sixty Mile district and Rackla Belt properties, and
shares owned in other companies acquired pursuant to existing Yukon
option agreements.

Spin Out Terms

The Spin Out will result in Radius shareholders receiving Newco common
shares and warrants based on the number of Radius shares held. Radius
will retain an approximately 19.9% ownership interest in Newco.  An
application will be made to have the Newco warrants listed on the
Exchange and listing will be subject to meeting the Exchange listing

Radius shareholder approval will be sought at a shareholders’ meeting
expected to be held in the fall of 2011. An Information Circular
containing full details of the Spin Out will be sent to Radius
shareholders prior to the meeting.

Simon Ridgway, the Chief Executive Officer of Radius, stated:  “The
management and Board of Directors of Radius believe that the proposed
separation of assets should facilitate independent financing and
exploration strategies, resulting in an excellent opportunity for
shareholders to maximize the value of their Radius holdings.”

About Radius

Radius has been exploring for gold in Latin America for nearly a decade,
and has assembled interests in a portfolio of promising gold projects
throughout the region, including carried stakes in two small-scale
developing gold projects in Guatemala and Nicaragua.  Radius also has a
number of 100% owned exploration plays, including the HB property in
Guatemala and several properties in the Rackla Belt and Sixty Mile
placer gold district in the Yukon.

     “Simon Ridgway”
Simon Ridgway, President & CEO

Investor relations:  Ralph Rushton / Erin Ostrom
Shares Issued: 79.9-million

Forward-Looking Statement

Information set forth in this news release may involve forward-looking
statements under applicable securities laws. Forward-looking statements
are statements that relate to future, not past, events. In this
context, forward-looking statements often address expected future
business and financial performance, and often contain words such as
“anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”,
statements that an action or event “may”, “might”, “could”, “should”,
or “will” be taken or occur, or other similar expressions. All
statements, other than statements of historical fact, included herein
including, without limitation, statements about the expected benefits
of the proposed Spin Out, the completion of the Spin Out, the receipt
of shareholder and regulatory approvals for the Spin Out and statements
regarding Newco, are forward looking statements. By their nature,
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or other future events, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors
and risks include, among others, the receipt of the necessary
shareholder and regulatory approvals for the Spin Out, risks associated
with mineral exploration, fluctuations in commodity price, economic
conditions and title matters. Forward-looking statements are made based
on management’s beliefs, estimates and opinions on the date that
statements are made and the Company undertakes no obligation to update
forward-looking statements if these beliefs, estimates and opinions or
other circumstances should change, except as required by applicable
securities laws. Investors are cautioned against attributing undue
certainty to forward-looking statements.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts
responsibility for the adequacy or accuracy of this relea

SOURCE Radius Gold Inc.

Source: newswire

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