Consolidated Nevada Goldfields Corporation Completes US$65 Million Mexican Acquisition and US$20 Million Financing.

DENVER--(BUSINESS WIRE)--Oct. 11, 1996--Consolidated Nevada Goldfields Corporation ("CNGC") and Grupo Real del Monte S.A. de C.V. ("GRDM") announced today that CNGC has completed the acquisition of certain of the subsidiaries of the Mexican mining company GRDM and the sale of Cdn.$27,000,000 worth of special warrants.

Four operating mines have been acquired by CNGC as a result.

The acquisition increases CNGC's proven/probable, mineable reserves six-fold to 1.2 million gold equivalent ounces of precious metals comprised of: 589,000 ounces of gold and 47 million ounces of silver. Also, included are 31 million pounds of copper; and 4 million tonnes of barite. In addition, the acquisition brings the Company a twelve-fold increase in its total geologic resource of precious metals to approximately 4.4 million gold equivalent ounces and over 250,000 acres of prolific exploration ground. The Company's production is projected to immediately double.

In a related transaction, CNGC completed a private placement of 22,493,570 special warrants of CNGC at a price of Cdn.$1.20 to a Canadian underwriting group. Total proceeds raised were Cdn.$26,992,284. The special warrants are exercisable into separable units, without payment of additional consideration, each unit consisting of one common share of CNGC and one-half common share purchase warrant. Each whole purchase warrant will entitle the holder to purchase one common share of CNGC at an exercise price of Cdn$1.30 at any time up to and including the first anniversary of today's closing.

The net proceeds of the offering will be used to fund the proposed operational improvements to the Pachuca silver mine in Mexico and for general working capital purposes.

In connection with the acquisition, CNGC issued 26,363,968 common shares to GRDM and 25,926,123 common shares to certain shareholders of GRDM for an aggregate of 52,290,091 shares of common stock. In addition, CNGC granted GRDM a 12% net profits royalty on the acquired GRDM subsidiaries up to a maximum of US$5 million. In connection with the special warrants transaction, Grupo Acerero del Norte, S.A. de C.V. ("GAN"), the controlling shareholder of GRDM, acquired 3,761,000 special warrants. The special warrants entitle GAN to 3,761,000 common shares and 1,880,500 common share purchase warrants. In total, GRDM and its affiliates, through the acquisition and the special warrants transaction have acquired or are entitled to acquire, for investment purposes, 57,931,591 common shares of CNGC.

As part of the acquisition, CNGC's Board of Directors will be increased from eight to twelve. The new Board of Directors will be comprised of Mr. Xavier D. Autrey, Mr. Alonso Ancira, Mr. Adolfo Autrey and Mr. Manuel Ancira, all of Mexico City, Mexico, Mr. Wendell W. Robinson of Cleveland, Ohio, Mr. Christopher J. Lalor of Perth, Australia, Mr. James D. Bishop of Saddle River, New Jersey, Mr. William J. Braithwaite, Mr. Peter Marrone and Mr. Richard Lawler of Toronto, Canada, Mr. Richard C. Atkinson of Vancouver, Canada and Mr. Geoffrey Hoyl of Denver, Colorado. The Board wishes to express its deep appreciation to outgoing directors, Mr. Peter K. Lalor and Ms. Marlene E. Conway for their dedicated service to the Company.

Consolidated Nevada Goldfields Corporation is a gold, silver, copper and barite mining company which operates the Pachuca, Baztan, Magistral del Oro and Barita de Sonora mines in Mexico and the Nixon Fork and Aurora mines in the United States. The Company's common shares trade on The Toronto Stock Exchange under the symbol KNV, on NASDAQ under the symbol KNVCF and on the Stuttgart Exchange in Germany under the symbol CNV-SG.

CONTACT: Consolidated Nevada Goldfields Corp.

Geoffrey Hoyl, 303/296-3200 (President and CEO)