ACC's Proposed Debt Conversion Price is Inadequate, Augen Gold Special Committee Concludes


    Shares outstanding: 24,925,685

    TORONTO, March 4 /CNW/ - Augen Gold Corp. ("Augen Gold") (TSX-V: AUJ)
announced today that a Special Committee appointed by Augen Gold's Board of
Directors has provided its interim report to the Board, in which the Special
Committee concluded that the proposed conversion price of $0.125 per common
share of Augen Gold for the conversion of advances made by Augen Gold's
largest shareholder is inadequate.

    Background

    The Special Committee was appointed to deal with a requisition (the
"Requisition") made by a shareholder, Augen Capital Corp. ("ACC"), for a
special shareholders meeting (the "Meeting"), and related matters. ACC's
Requisition requested that the Board of Directors call a shareholder meeting
(a) to approve the issuance of common shares of Augen Gold to ACC at an issue
price of $0.125 per common share, in "full satisfaction of the outstanding
debt owed" by Augen Gold to ACC; and (b) to remove all current directors of
Augen Gold and replace them with other individuals. Augen Gold's directors did
not call the Meeting. ACC has purported to call the meeting to be held on
March 13, 2009.
    ACC's Proxy Circular dated February 13, 2009 now indicates that it is
only the members of the Special Committee who are proposed to be removed. The
members of the Special Committee are Mr. James Stephenson and Mr. Joseph
Leeder, the only Board members not connected with ACC. The Board of Directors
is currently comprised of Mr. David Mason, Mr. Stephenson and Mr. Leeder.
    The Special Committee obtained technical and financial advice from Watts
Griffis and McOuat, Consulting Geologists and Engineers, in relation to the
adequacy, from a financial point of view, of the proposed conversion price of
$0.125 per common share. The Special Committee also retained Bennett Jones LLP
as its legal advisor.

    Proposed Conversion is Sufficient to Give ACC Effective Control of Augen
Gold

    The proposed "shares for debt conversion", if approved by the
shareholders and the TSX-V, would provide ACC with approximately 9 million
additional common shares, and would increase ACC's holdings to approximately
38% of the Corporation's outstanding common shares, sufficient to give ACC
effective control of Augen Gold.

    Conclusions and Findings of the Special CommitteeThe Special Committee's conclusions and findings include the following:

    (a)    in view of the Corporation's circumstances, a shares-for-debt
           conversion in relation to certain financial advances made by ACC
           to Augen Gold at an appropriate price would be in Augen Gold's
           best interests;

    (b)    ACC's proposed conversion price of 12.5 cents per common share is
           inadequate, from a financial point of view, and is not in the best
           interests of the shareholders of Augen Gold other than ACC;

    (c)    a conversion price in the range of 15 cents to 18 cents per share
           would be adequate, from a financial point of view;

    (d)    ACC is not entitled to call and hold the Meeting under the
           relevant provisions of the Business Corporations Act (Ontario)
           because the primary purpose of ACC's proposal to effect the shares
           for debt conversion at 12.5 cents per common share is to enforce a
           personal claim or redress a personal grievance of ACC against
           Augen Gold;

    (e)    The Special Committee disagrees with significant aspects of ACC's
           Proxy Circular and finds that that certain statements made by ACC
           are inaccurate and misleading, in particular personal attacks made
           by ACC against Mr. Stephenson and Mr. Leeder;

    (f)    In all of the circumstances, including the anticipated costs to
           the Corporation, the Special Committee finds that it is not in the
           best interests of the Corporation to seek an injunction to prevent
           the Meeting scheduled for March 13, 2009 or to incur the cost of
           preparing and mailing a circular to shareholders.Augen Gold is not soliciting proxies in respect of the Meeting and
nothing in this news release should be regarded as a solicitation or request
for a proxy, or a request to execute or not to execute a proxy or revoke a
proxy, or a recommendation as to how shareholders of Augen Gold should vote at
the Meeting.
    The Special Committee obtained an opinion from Watts Griffis and McOuat
Limited that concluded that the conversion of debt to shares at a price of
$0.125 as contemplated is inadequate, from a financial point of view, to Augen
Gold and that that a conversion made at a price in the range of $0.15 to $0.18
per share would be fair, from a financial point of view, to Augen Gold. This
opinion is subject to the terms and conditions set out in the written opinion
of Watts Griffis and McOuat Limited.
    The Special Committee also observed that despite written requests on
January 9 and January 28, 2009, ACC provided the Special Committee with no
basis to support a conversion price of 12.5 cents per common share other than
market trading prices of Augen Gold's common shares during the autumn of 2008.
    Finally, the Special Committee concluded that, given the refusal by ACC
and by Augen Gold management to comply with a payment direction of the Special
Committee dated February 20, 2009 and the express terms of the Board's
unanimous resolution appointing the Special Committee, the Special Committee
must take legal action to cause Augen Gold to pay the fees of the professional
advisors engaged to assist the Special Committee in carrying out its mandate.

    About Augen Gold

    Augen Gold is a gold exploration company with 24,042 hectares of mining
claims over a 45-kilometre length located in Swayze Greenstone Belt, including
the formerly producing Jerome Gold Mine and directly adjacent to the Young
Shannon gold deposit. The Company's objective is to aggressively explore the
Jerome mine in order to determine the gold potential along strike on the
contiguous mining claims, and to continue to expand its property portfolio
with highly prospective mineral assets.

    For more information on Augen Gold, visit our website at www.augengold.ca
    The Company's documents may be accessed at www.sedar.com.



For further information: James Stephenson, Director, Augen Gold Corp.,
Tel: (416) 219-9791