Patagonia Gold Regulatory News (PGD)

28 April 2011

Patagonia Gold plc

("Patagonia" or the "Company")

Placing to raise £5.25 million

Patagonia Gold plc, the South American mining exploration company focussed on the Santa Cruz province of Argentina, is pleased to announce the completion of an additional placing ("the Placing") of 12.5 million new ordinary shares of 1 pence each in the Company ("Placing Shares") at a price of 42 pence per ordinary share to raise £5.25 million (approximately US$8.5 million) before expenses. The Placing Shares were placed by the Company's broker, Matrix Corporate Capital LLP ("Matrix").

As announced by the company on 19 April 2011, the net proceeds from the original placing of £19 million will be used to finance an accelerated drill programme on the Company's flagship Cap-Oeste gold and silver project and also in parallel to commence the development and construction works for the high grade COSE gold and silver project.

As a result of this additional demand, these further funds will be used to contribute towards the capital expenditure for the COSE gold and silver project. The total sum raised in the two fundraisings is approximately US$39 million.

The Placing Shares will represent 1.7 per cent. of the further enlarged issued share capital of the Company and the Placing is conditional on admission of the Placing Shares to trading on AIM ("Admission").

The Placing Shares will rank pari passu in all respects with the existing ordinary shares of the Company. Application will be made for Admission and it is expected that Admission will become effective and dealings in the Placing Shares will commence at 8:00 a.m on 9 May 2011. Following the Placing, the Company will have 734,515,878 ordinary shares in issue. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Disclosure and Transparency Rules.

For further information:

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.

Matrix, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as proposed placing agent to the Company in relation to the Placing and is acting for no-one else in connection with the Placing or the Subscription and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Matrix nor for providing advice in connection with the Placing or any other matter referred to herein. Matrix has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Matrix for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

Apart from the responsibilities and liabilities, if any, which may be imposed on Matrix by the Financial Services and Markets Act 2000, Matrix accept no responsibility whatsoever for the contents of this announcement, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the New Ordinary Shares, the Placing or the Subscription. Matrix accordingly disclaim all and any liability (whether arising in tort, delict, under contract or otherwise, save as referred to above), which they might otherwise have in respect of this announcement or such statement.