Dear Fellow VG Gold Shareholders,

We believe 2010 WILL BE A VERY IMPORTANT YEAR FOR OUR COMPANY! We will continue to look for ways to accelerate our exploration in order to become the next major success story in northern Ontario. Our goal is to deliver you a much higher share price. Never before has our company been better positioned to accomplish this objective. This letter is designed to provide you with an in-depth look at our exploration and the reason why we are very excited about the future of our company.

TIMMINS HAS BECOME ONE OF THE MOST ACTIVE AREAS FOR GOLD EXPLORATION in Canada and for good reason. The recent merger of Lake Shore Gold and West Timmins Mining has created a new exploration powerhouse with a reported 24 drills operating, multiple new discoveries and a $1.2 billion market capitalization. In addition, Goldcorp, the world's second largest gold company, just announced that their Timmins mines had their highest quarterly production in nearly three years. These are extremely positive developments for the Timmins area.

Our plan is to have two drills operating continuously on our Timmins gold projects over the next twelve months. THIS WILL BE THE LARGEST DRILL PROGRAM IN VG GOLD'S HISTORY. Below are three of the key reasons why VG Gold's management and geologists think we have an excellent chance at real exploration success.

1. Paymaster West Project

As many of you know, VG Gold is earning an interest in this project from Goldcorp. By car the PAYMASTER WEST PROJECT IS RIGHT BESIDE GOLDCORP'S 17 MILLION OUNCE DOME MINE. Dome is the second largest gold mine in Canadian history. Hollinger also in Timmins, with 19.3 million ounces of past production, is the largest situated 2 miles from VG Gold. The best place to find gold is next to a gold mine and VG Gold couldn't be better positioned!

Early results have been very encouraging. We continue to outline good grades down to a depth of 1,500 ft., such as 1,390.0 gpt (40.54 opt) over 0.9 m (3.0 ft) and 41.67 gpt (1.22 opt) over 1.8 m (5.9 ft). We are seeing potential for open pit and underground mining scenarios. Our understanding of the geology is improving every day and that is allowing us to better target our drilling. Drilling is ongoing at the project where we anticipate continuous news coming from Paymaster West through 2010.

The Company recenltly reviewed additional historical drilling at Paymaster and it shows what may be the start of a new higher grade exploration on strike from VG Gold's Fuller Property gold zones, at depth of 1,000 metres or 3,300 ft below surface.