Radius Plans Spin Out of Yukon Assets

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 requirements.

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.

ON BEHALF OF THE BOARD
     "Simon Ridgway"
Simon Ridgway, President & CEO

Investor relations:  Ralph Rushton / Erin Ostrom
Symbol: TSXV-RDU; OTCBB-RDUFF
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 release.

SOURCE Radius Gold Inc.