Union Gold Inc. Signs Definitive Agreement for RTO with Shoal Point Energy Ltd.

TORONTO, ONTARIO, Jul 22 (MARKET WIRE) --
Union Gold Inc. ("Union" or the "Company") (TSX VENTURE: UN) announces
the execution of an arm's length definitive agreement on June 25, 2008
(the "Definitive Agreement") with Shoal Point Energy Ltd. ("Shoal"), a
100% privately owned oil and gas exploration company. The Definitive
Agreement follows a letter of intent previously announced by Union on May
28, 2008.

The Definitive Agreement provides, among other things, for the (i)
reorganization of Union's share capital whereby Union will split its
common shares on a 2.5 new for one old basis, (ii) a share exchange with
the result that Union will acquire the issued and outstanding securities
of Shoal in exchange for equivalent securities of Union, with the result
being that the securityholders of Shoal will hold approximately 75% of
the outstanding securities of Union, and (iii) a requirement that Union
will change its name to Shoal Point Resources Ltd.

Following is an explanation of the basis for the 75/25 proportionate
ownership as between Union and Shoal in the resulting issuer Shoal Point
Resources Ltd.:

(A) Based on Union's issued and outstanding common shares as at May 28,
2008 of 4,939,500 (on a non-diluted basis), following the split, Union
will have approximately 12,348,750 post-split common shares outstanding.
In addition, Union has only 175,000 options to purchase 175,000 pre-split
common shares and no outstanding warrants.

(B) As at the date hereof, the issued and outstanding share capital of
Shoal consists of (i) 17,612,274 common shares, (ii) 4,365,000 options to
purchase up to 4,365,000 common shares, (iii) 1,268,748 common share
purchase warrants to purchase up to 1,268,748 common shares, (iv)
37,541,318 special warrants exercisable into 37,996,873 common shares and
common share purchase warrants to purchase up to 14,747,926 common
shares, (v) broker warrants to purchase up to 2,418,491 common shares,
and (vi) broker warrants to purchase up to 2,106,783 special warrants of
Shoal, which special warrants are exercisable into 2,187,267 common
shares and common share purchase warrants to purchase up to 1,093,633
common shares.

Copyright The Definitive Agreement provides that holders of securities of
Shoal, subject to dissent rights, will receive for each Shoal common
share, 0.66 of the post-split Union common shares. Thus, shareholders of
Shoal will receive collectively and on a fully diluted basis, a maximum
of 53,915,540 post-split Union common shares. The deemed price per share
of Union's post-split shares is estimated to be approximately $0.33.

(D) Assuming the exercise of outstanding special warrants of Shoal, Shoal
would have a minimum of 55,609,057 (not including the exercise of any
common share purchase warrants to be received upon exercise of those
special warrants). Taking into account the foregoing sentence, following
the exchange pursuant to the Definitive Agreement, former holders of
securities of Shoal would receive a minimum of 36,702,037 common shares
of the resulting issuer, which would represent approximately 75% of the
total issued and outstanding common shares of the resulting issuer on the
closing of the transaction. Union's 12,348,750 post-split common shares
would therefore, represent approximately 25% of the issued and
outstanding shares of the resulting issuer.

No individual and/or a corporation directly or indirectly beneficially
holds 10% or more, or otherwise controls or directs Shoal.

Subject to the terms and conditions of the Definitive Agreement, Union
will call a meeting of its shareholders to vote on the merger which
constitutes a reverse take-over (the "RTO") of Union pursuant to the
policies of the TSX Venture Exchange ("TSX-V") and will deliver a Notice
of a Special Meeting of Shareholders and an Information Circular to
shareholders, pursuant to which shareholders will be asked to vote upon
and approve the proposed merger transaction and related matters. Union
has secured expressions of support for the RTO from over 75% of its
shareholders (42.78% from disinterested shareholders). The Definitive
Agreement is subject to a condition precedent in favour of Union that
Shoal will also secure expressions of support from at least 55% of its
securityholders.

Since the execution of the Definitive Agreement, Union has loaned to
Shoal the amount of CDN$1,600,000. The loan to Shoal has been secured by
two Promissory Notes, which provide for the repayment of the loan on the
earlier of: (i) January 15, 2009, or (ii) on demand upon the termination
of the Definitive Agreement between the parties. Pursuant to the terms of
the Definitive Agreement, Shoal reserves the right to raise additional
funds provided that any financing in excess of $1,000,000 of Shoal's
securities requires the consent of Union. The proceeds of the loan are
used for operational expenses for the current drilling program on the
Shoal Point 2K39 well. The loan transaction is subject to TSXV approval
as part of the RTO.

Shoal was incorporated in December 2006 in the province of Alberta for
the purpose of oil and gas exploration, with its principal geographic
focus in eastern Canada. Shoal has signed joint venture and "farm-in"
agreements with several partners to earn an interest in lands in the
region.

Western Newfoundland:

In western Newfoundland, Shoal has earned 45.5% of approximately 100,000
acres within Exploration License 1070 in Port au Port Bay, which encloses
the Shoal Point Prospect. In addition, Shoal has an option to earn 18% of
the remainder of Exploration License 1070 by paying 25.7% of the cost of
a well within that area.

Shoal is the operator of Exploration License 1070 and is currently
drilling the first earning test well, known as Shoal Point 2K39. The main
hole being drilled below intermediate casing at 2,750 meters, and will
test dolomitized reservoirs within the middle Ordovician St. George's
Group on the structure; it is expected to have completed operations by
mid- to late July, 2008.

The Port au Port Peninsula and the nearby offshore was established as a
potential area of commercial hydrocarbon development with the discovery
in 1995 of oil and gas in the Hunt PCP Port au Port #1 well, which flowed
over 2,400 boe per day from cavernous, dolomitized reservoir. In
addition, other zones in the well combined to flow several thousand
barrels per day of formation water, demonstrating the presence of
excellent quality reservoir.

Shoal and its partners will release further information on the 2K39 well
upon further assessment of the drilling.

New Brunswick

Shoal has earned a 28% non-operated interest in the South Stoney Creek
Lands (approximately 40,000 acres) located in the Moncton Sub-basin of
New Brunswick, which is a well established oil and gas producing area.
Shoal also has the right to earn an additional 12% over this block by
meeting certain funding levels in the next test well, slated for Q3/Q4
2008. This area lies within 15 km of the city of Moncton, linked to the
Maritimes and Northeastern Pipeline, which delivers gas to the
northeastern United States.

Shoal is in the process of preparing updated and revised National
Instrument 51-101 compliant engineering and technical reports with
respect to its Newfoundland and New Brunswick properties. Details with
respect to these reports will be released by a subsequent press release.

Shoal is also in the process of finalizing its 2007 year-end financial
statements and first fiscal quarter interim financial statements. Details
with respect to its 2007 year-end financial statements and subsequent
first fiscal quarter interim financial statements will be released by a
subsequent press release.

Union was incorporated on September 5, 1991 under the Business
Corporations Act (Alberta). Effective February 27, 1993, Union commenced
active operations after a successful merger with Union Mining Corporation
("Union Mining"), which involved a share exchange on a one for one basis
and the winding up of Union Mining. Since its merger with Union Mining,
the Company has been involved in mineral exploration and exploratory
drilling in New Brunswick primarily focused on the identification of
precious and base metals.

The combined entity will continue to assess the value of these projects
within the overall mandate of maximizing shareholder value within an era
of high commodity prices.

Upon completion of the proposed RTO, the directors and senior officers of
the resulting issuer are expected to include Jeff Becker, the current
President, CEO and a director of Union, and three nominees from Shoal.

Jeffrey Becker, age 63, has a BA from the University of Manitoba and an
LLB from the University of British Columbia. He practiced law in
Abbotsford, BC for 17 years in partnership and as a sole practitioner. He
has been involved in land development and for over 20 years has been
involved in the mining exploration business and is the Chief Executive
Officer and director of several public companies.

Information about the three nominee directors from Shoal will be released
by separate press release prior to the mailing of the joint information
circular of Union and Shoal to its securityholders.

The trading of the Union common shares are currently halted and will
remain so until receipt by the TSX-V of all requisite documentation in
connection with this proposed RTO.

Completion of the RTO is subject to a number of conditions, including
TSX-V acceptance and disinterested shareholder approval. The RTO cannot
close until the required shareholder approval is obtained. There can be
no assurance that the RTO will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management
information circular to be prepared in connection with the RTO, any
information released or received with respect to this RTO may not be
accurate or complete and should not be relied upon. Trading in the
securities of Union should be considered highly speculative.

The
TSX-V has in no way passed upon the merits of the proposed RTO and has
neither approved nor disapproved the contents of this press release.

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

Contacts:
The Becker Group
Jeffrey Becker
President and CEO
(416) 364-0042 or 1-800-442-0824
(416) 364-2630 (FAX)
Email: thebeckergroup@bellnet.ca

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