Forest Gate Acquiring Iron Property in Abitibi Region of Quebec

CALGARY, Alberta, October 3, 2011 /CNW Telbec/ - Forest Gate Energy Inc. (TSXV: FGE) reports that its mineral group is in the process of acquiring an iron bearing-property in the Abitibi region of Quebec, approximately 160 kilometres southeast of Val d'Or and 145 kilometres south of the Pershing Iron property.

The property known as Cuff Lake has a non-43-101-compliant historical "open pit mineable reserve of 20,071,000 tons of magnetite ore grading 17.4% soluble iron" (source: Expo Iron Ltd. report, December 13, 1971) and an additional potential resource of approximately 180 million tonnes of similar quality magnetite-rich mineralization (source: Fenton Scott 2010 internal reports) that was geologically inferred on the basis of widely separated holes and magnetometer data.

Forest Gate Energy emphasizes that they have made no effort yet to reclassify the historic estimates of resources as current resources. These estimates therefore should not be treated as current resource estimates nor should they be relied upon. Furthermore, because no recent work has been done to evaluate the economics of the deposit, there is no guarantee that the quoted historic ¡°reserve¡± figure is potentially economic. Economic studies done in 1970 do not mean the mineralized iron deposit would be found to be economic today.

Historical reports on the property have estimated a wide range of total potential tonnage of iron mineralization that varies from 110 million tons (short) to 268 million tons depending on depth and width used to calculate the volume for each deposit. An extensive drilling program will be required to verify these calculations. In accordance with NI 43-10, Sec 2.3 (2), the reader is cautioned that the estimate of the potential quantity and grade for the deposit is conceptual in nature and that there has not been sufficient exploration in this instance to define a mineral resource nor is there certainty that further exploration will delineate the target as a mineral resource.

The historical reports indicated that iron rich bands form several magnetite-rich locations each varying from 1.5 to 2 kilometres (5,000 - 6,500 feet) in length, 61metres (200 feet) to 152 metres (500 feet) in width, with an average 91metres (300 feet), and having down dip extensions greater than 250 metres. The magnetite-rich bands trend approximately east-west and dip at 45o to 55 o toward the north.

The mineralized iron-bearing land package consists of 150 contiguous mining claims and extends in an east-west direction over a distance of 16 kilometres (10 miles).

Metallurgical testing by Expo Iron Ltd (internal report August 1, 1970) indicated that the iron-bearing mineralized rock crushed to minus ten mesh and treated on a dry magnetic drum would retain 34.7% of the ground material, 99.1% of which was magnetite and which assayed 44.2% soluble iron. These concentrates continued to contain high sulphur (3.74%).

"Beneficiation tests conducted at Aerofall Mills Limited in Clarkson, Ontario, using 53-ton representative bulk sample, have adequately demonstrated the ability to produce a coarse, dry, pre-concentrate by autogenous grinding and low-intensity magnetic separation techniques." Finer grinding to minus 150 mesh produced magnetic concentrate having higher grades (64% soluble iron).

"Grade of these pre-concentrates was 63-64% soluble iron. Tests to produce superconcentrates were followed at Lakefield Research Laboratory in Lakefield, Ontario. Re-grinding to 70-75% minus 325 mesh and wet magnetic separation resulted in the production of superconcentrates grading 70.76% soluble iron, 0.96% silica, 0.50% sulphur, 0.008% phosphorus, 0.008% titanium and 0.20% manganese."

Forest Gate Energy Inc. has not undertaken any recent metallurgical tests to verify the quoted metallurgical results. All metallurgical results quoted above are historic in nature and taken from an Expo Iron Ltd report dated August 1, 1970

The historic 1971 Assessment Report for Expo Iron Ltd states that 17, 048 feet of diamond drilling had been completed on the property. The iron mineralization is covered by approximately 10 metres of overburden making it amenable to open pit mining methods.

Historically quoted resources at Cuff Lake were based on a review of historical work reports that used data drawn from surface sampling, diamond drilling, ground and airborne magnetometer surveys. Forest Gate has not completed any work on the property.

In consideration of the acquisition, Forest Gate will pay the vendor $50,000 in cash at closing, which is expected be no later than October 31, 2011. Forest Gate will pay the vendor an additional $50,000 12 months from now on October 31, 2012. As well, the vendor will hold a 2% Net Smelter Royalty; one percent of this royalty can be purchased by Forest Gate for $3 million. Forest Gate will also have a Right of First Refusal in the event the royalty holder elects to sell the remaining one percent royalty.

"The Cuff Lake project which is approximately 150 kilometres south-southwest of the Pershing iron showing is a highly complimentary acquisition for Forest Gate," said Michael Judson, President of Forest Gate. "The successful development of the Cuff Lake iron project will enhance the overall economics of developing Pershing iron in the heartland of Quebec."

"Iron ore projects in Abitibi Region of Quebec will benefit greatly from the existence of well-established infrastructure and proximity to existing railroads. As an example, a rail line operated by CN runs through Senneterre (40 kilometres north-northwest from Pershing) and connects directly to the deep-water port at Quebec City. This greatly differentiates the capital costs of our prospects from those located in more remote locations," said Judson.

Closing of the transaction is scheduled to take place on or before October 31, 2011. A finder's fee in the amount of $10,000 ($4000 in cash and $6000 in Forest Gate common shares at $0.06) will be paid to a consultant upon closing.

Technical information in this news release was prepared in accordance with Canadian regulatory requirements as set out in National Instrument 43-101 and has been reviewed by Edward Procyshyn, Geo, who is the qualified person as defined by NI 43-101.

About Forest Gate Energy
Forest Gate Energy Inc. is a publicly listed oil and gas exploration and production, and non-energy resource company trading on the TSX Venture Exchange under the symbol FGE. The Company is seeking to increase shareholder value through participation and development of energy and other resources in Canada and internationally.

For more information please contact:

Robert Kramberger,
V-P, Investor Relations
1-866-666-3040
rkramberger@forestgate.ca
www.forestgate.ca