Citadel Gold Mines Inc. announces redemption of preferred shares

    (CGM.H: NEX Exchange)

    TORONTO, Jan. 10 /CNW/ - Citadel Gold Mines Inc. announces that today it
has completed a redemption of 1,215,261 of its outstanding First Preferred
Shares, Series II (the "Redemption"), which shares were, directly and
indirectly, owned by Dr. Bernard Sherman, a principal shareholder of Company.
    The aggregate redemption purchase price of $13,112,670 paid to
Dr. Sherman was funded by a cash payment of $220,000 (the "Cash Payment") and
the proceeds of a $12,892,670 demand loan payable to the Company by Apotex
Inc., which loan was called by the Company and repaid by Apotex today.
    The Cash Payment was funded by a portion of a $270,000 payment, received
by the Company today from Wawa GP Inc. (the "Restoration Reimbursement"),
representing reimbursement of site restoration costs incurred by Citadel in
respect of Citabar Limited Partnership's Surluga mining property near Wawa
Ontario, which property was previously managed by Citadel in its former
capacity as the general partner of Citabar. The balance of the Restoration
Reimbursement has been used by the Company to repay the outstanding $50,000
loan payable to Dr. Sherman, in accordance with the terms of the July 1, 2006
sale by the Company to Dr. Sherman of the general partnership in Citabar.
    Dr. Sherman controls, directly and indirectly, approximately 55% of the
outstanding common shares of the Company.

    The NEX Exchange has neither approved nor disapproved of the information
    contained herein. The statements used in this press release may contain
    forward-looking statements that may involve a number of risks and
    uncertainties. Actual events or results could differ materially from the
    Company's forward-looking statements and expectations.

For further information:

For further information: John Sadowski, President, Citadel Gold Mines
Inc., Telephone: (416) 675-8379

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