Early Exercise of Share Purchase Warrants to Fund Mine Expansion and Mill Upgrades

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VANCOUVER, Feb. 4 /CNW/ - Yukon-Nevada Gold Corp. (Toronto Stock Exchange: YNG; Frankfurt Xetra
Exchange: NG6) Robert F. Baldock, the President and CEO of Yukon-Nevada Gold Corp.
(the "Company"), announces that the Company proposes to raise
additional working capital by offering an incentive for the early
exercise (the "Transaction") of eight series of unlisted outstanding
share purchase warrants of the Company (the "Warrants").


As an incentive to accept the exercise proposal, warrant holders are
being offered an 18% discount to the current exercise price. The
discount will compensate warrant holders for loss of leverage in their
investment, cost of financing the transaction and/or opportunity cost
if other investments are liquidated to fund the Transaction as well as
any resulting tax consequences.


Mr. Baldock states, "The proposed Transaction will assist in providing
the capital required to fund the Company's capital budget for 2011.
Exercise of the Warrants will go a long way toward cleaning up the
corporate capital structure and will provide much needed capital
towards the successful completion of our mine and mill refurbishment
plans and gold production expansion at Jerritt Canyon.


The Company requires immediate working capital to fund its business
plan. Primary use of proceeds will be towards (but not limited to):



Construction of new lined tailings storage facility as well as a
secondary water storage facility to be completed before winter 2011/12,


Upgrade to Digital Control Facility Monitoring System to improve plant
operating efficiencies by replacing the current pneumatic system,


Installation of additional quench tank and related items during the
2-week scheduled annual maintenance shutdown in May 2011,


Complete winterization of the plant including construction of a
containment building and installation of new ore drying equipment that
should be protected from climatic extremes,


Completion of remaining environmental obligations as outlined in the
Consent Decree with the Nevada Division of Environmental Protection to
keep our current compliance in good standing,


Obtain underground equipment necessary to commence operations at the
SSX/Steer underground gold mine and continue development of the
Starvation Canyon mine.



Mr. Baldock says, "We had record breaking bad weather at Jerritt Canyon
this winter that slowed and halted production at times. This has been
an unacceptable historic problem at this facility over the years and we
now intend to fix the problem once and for all by housing equipment
that never should have been out in the elements in the first place.
Fortunately we have enough spare capacity and stockpiled ore to make up
the lost production now that the weather is improving, and we still
intend to hit our previously stated gold production targets. This will
be a "good as new" all weather facility when we complete these
necessary upgrades."


He adds, "It is our intention to complete most of the necessary capital
projects in the 2011 calendar year so the Company can focus on growing
production at the milling facility and expansion of our
reserve/resource base through near-term acquisitions and organic
exploration. We have the only spare capacity for processing refractory
sulfide ore in the Nevada region and we see very little competition on
the horizon because of permitting challenges. It is essential that we
complete the upgrading of our fully permitted and operating facility so
we can take advantage of the vast supply of refractory ore available to
us in this positive gold environment."


The Company has eight series of unlisted Warrants outstanding, with
expiry dates ranging from April 24, 2011 to August 13, 2013, and
exercise prices ranging from $0.08 per share to $0.40 per share. The
Company proposes to reduce the exercise price of each series of
warrants by approximately 18% for a period of 30 days, after which the
exercise price shall revert to the original exercise price. If all of
the Warrants are exercised at their respective reduced exercise prices,
235,823,053 additional shares, being 34.262% of the Company's current
issued and outstanding shares, will be issued for gross proceeds to the
Company of $59,343,502.51.


The transaction is conditional upon acceptance by the TSX and, in
accordance with Section 607(e) of the TSX Company Manual, the obtaining
of disinterested shareholder approval. The Company proposes to seek
such disinterested shareholder approval at a meeting of shareholders
slated for March 8, 2011. The Company will make a further announcement
advising when the offer commences and the date the offer expires as
well as details for acceptance of the offer. The exercise price of any
Warrants not exercised on or before the 30-day exercise period will
revert to their original respective exercise prices.


Votes of the common shares held by holders of the Warrants and their
respective associates and affiliates will not be included for the
purposes of obtaining such disinterested shareholder approval. As a
result, the votes attached to 384,003,989 shares, representing the
total number of shares held by the holders of Warrants, and their
respective associates and affiliates, will be excluded from the vote in
regards of the required shareholder approval.


Graham Dickson, a director and the Chief Operating Officer of the
Company, currently holds, directly and indirectly, an aggregate of
2,396,000 (0.348%) common shares of the Company, and will be entitled
to participate in the early exercise of the Warrants. The maximum
number of shares that may be issued to Mr. Dickson upon exercise of the
Warrants is 100,000 shares, being 0.015% of the Company's current
issued and outstanding shares. Upon completion of the exercise of his
Warrants, Mr. Dickson would then hold 2,496,000 shares, being 0.363% of
the Company's then issued share capital, on a partially diluted basis,
or 0.270% on a fully diluted basis.


Jean-Edgar de Trentinian, a director of the Company, currently holds,
directly and indirectly through Orifer SA, an aggregate of 188,700,500
(27.416%) common shares of the Company, and will be entitled to
participate in the early exercise of the Warrants. The maximum number
of shares that may be issued to Mr. de Trentinian upon exercise of the
Warrants is 141,300,000 shares, being 20.529% of the Company's current
issued and outstanding shares. Upon completion of the exercise of his
Warrants, Mr. de Trentinian would then hold 330,000,500 shares, being
39.779% of the Company's then issued and outstanding share capital, on
a partially diluted basis, or 35.559% on a fully diluted basis.


Francois Marland, a director of the Company, currently holds 53,545,000
(7.779%) common shares of the Company, and will be entitled to
participate in the early exercise of the Warrants. The maximum number
of shares that may be issued to Mr. Marland upon exercise of the
Warrants is 27,500,000 shares, being 3.995% of the Company's current
issued and outstanding shares. Upon completion of the exercise of his
Warrants, Mr. Marland would then hold 81,045,000 shares, being 11.322%
of the Company's then issued share capital, on a partially diluted
basis, or 8.774% on a fully diluted basis.


Shaun Heinrichs, the Company's Chief Financial Officer, currently holds
260,000 (0.038%) common shares of the Company, and will be entitled to
participate in the early exercise of the Warrants. The maximum number
of shares that may be issued to Mr. Heinrichs upon exercise of the
Warrants is 150,000 shares, being 0.022% of the Company's current
issued and outstanding shares. Upon completion of the exercise of his
Warrants, Mr. Heinrichs would then hold 410,000 shares, being 0.060% of
the Company's then issued share capital, on a partially diluted basis,
or 0.044% on a fully diluted basis.


Sprott Asset Management as a Portfolio Manager ("Sprott"), an insider of
the Company, currently holds an aggregate of 99,481,834 (14.453%)
common shares of the Company, and will be entitled to participate in
the early exercise of the Warrants. The maximum number of shares that
may be issued to Sprott upon exercise of the Warrants is 35,000,000
shares, being 5.085% of the Company's current issued and outstanding
shares. Upon completion of the exercise of its Warrants, Sprott would
then hold 134,481,834 shares, being 18.593% of the Company's then
issued share capital, on a partially diluted basis, or 14.559% on a
fully diluted basis.


Yukon-Nevada Gold Corp. is a North American gold producer in the
business of discovering, developing and operating gold deposits. The
Company holds a diverse portfolio of gold, silver, zinc and copper
properties in the Yukon Territory and British Columbia in Canada and in
Nevada in the United States. The Company's focus has been on the
acquisition and development of late stage development and operating
properties with gold as the primary target. Continued growth will occur
by increasing or initiating production from the Company's existing
properties.


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The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.


WARNING: The Company relies upon litigation protection for
"forward-looking" statements.


This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities Act")
or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.




For further information:

Yukon-Nevada Gold Corp. Richard Moritz Senior Director, Institutional Investor Relations Tel: (604) 688-9427 Email: [email protected]

Nicole Sanches Investor Relations Manager Tel: (604) 688-9427 ext 224 Email: [email protected] >www.chfir.com

Axino AG Wolfgang Seybold President and CEO Tel: +49 711 25 35 92 40 Email: [email protected] http://www.axino.de/">www.axino.de/