Mineral & Financial Investments Regulatory News (MAFL)

31 January 2011

ATHOL GOLD LIMITED (AIM: AHG)

("AHG" or the "Company")

Placing and Loan Note Agreement

The Board of Athol Gold, the gold and precious metals focused investment company, is pleased to announce, following further demand from institutional investors, that it has raised an additional £739,875, before expenses. Of the total amount raised, £589,875 is being raised by way of a placing of 71,069,277 new ordinary shares of 0.25p at a price of 0.83p pence per share ("Placing Price"), and £150,000 is being raised via the issuance of new convertible loan notes (the "Loan Notes"). The Loan Notes do not carry a coupon, are redeemable in December 2012 and are convertible at any time, at the discretion of the note holder, into new ordinary shares at 0.83p per share ("Conversion Price"). On full conversion of the Loan Notes, the note holder would receive 18,072,289 new ordinary shares of 0.25p in the Company.

The Placing and Conversion Prices represent a 35 per cent. premium to the Company's unadjusted* net asset value ("NAV") of 0.617p a share - as announced on 26 January 2011 (*unadjusted for the subsequent issuance of shares relating to performance fees).

As previously stated, Athol Gold's investment strategy is to invest in gold and precious metal companies quoted on stock exchanges in the UK, Canada and Australia. The new monies will be used to further exploit investment prospects that present themselves as the Company focuses on value opportunities.

On Admission, the placing shares will rank pari passu with the existing ordinary shares of 0.25p each ("Ordinary Shares") in the Company. Application has been made for admission of the Placing Shares to trading on AIM. Admission is expected to occur on 4 February 2011.

Issuance of convertible loan notes

Because the Company has insufficient headroom to complete the fund raise and to pay the performance fee due to t1ps Investment Management (IoM) Limited ("TIM") for the use of the services of Tom Winnifrith as Athol's Chief Investment Officer, TIM has agreed that it will receive its fee in the form of new convertible loan notes in lieu of the issue of 32,901,200 new ordinary shares announced on 26 January 2011. As such, AHG has issued £329,012 worth of new convertible loan notes to TIM (the "TIM Loan Notes"). The TIM Loan Notes do not carry a coupon, are redeemable in December 2012 and are convertible at any time, at the discretion of the note holder, into new Ordinary Shares at 1p per share ("TIM Conversion Price"). On full conversion of the TIM Loan Notes, TIM would receive 32,901,200 new ordinary shares of 0.25p in the Company.

The TIM Conversion Price represents a 62 per cent. premium to the Company's unadjusted* net asset value ("NAV") of 0.617p a share - as announced on 26 January 2011 (*unadjusted for the subsequent issuance of shares relating to performance fees).

General Meeting

In order to increase the Company's authorised share capital to allow conversion of the loan notes the Company intends to convene a GM in the near future, at which appropriate resolutions will be put to shareholders for approval.

Total Voting Rights

Following admission, the Company's enlarged issued share capital will comprise 517,354,143 ordinary shares with one voting right per share. The total number of voting rights in the Company is therefore 517,354,143.

This figure of 517,354,143 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA'sDisclosure and Transparency Rules.

Tom Winnifrith, the Chief Investment Officer of Athol Gold commented: "The 180 per cent. increase in NAV during the last three months, as announced on 26 January is a clear indicator of our recent strong performance. The ability to raise cash at a non dilutive price will allow us to exploit the value propositions emerging in the gold mining sector due to the temporary sell off of gold stocks, and we look forward to updating the market with further developments in due course."

Enquiries:

 T1ps Investment Management (IoM) Ltd Tom Winnifrith +44 1624 676848

Strand Hanson Limited

James Harris / Angela Peace/ Rory Chichester

+44 207 409 3494

Bishopsgate Communications

Nick Rome / Laura Stevens

+44 207 562 3350