SGZ.L Regulatory News (SGZ)

Scotgold Resources Limited ("Scotgold" or the "Company")

High Gold and Silver Grades in Veins at Beinn Udlaidh in Scotland

Scotgold Resources Limited ("Scotgold" or the "Company") (ASX: SGZ, AIM: SGZ) is pleased to provide a progress report on the Company's continuing exploration for gold and silver in the Beinn Udlaidh area, five kilometers northwest of the Cononish gold and silver deposit (which is currently awaiting planning approval) and outside the boundaries of the Loch Lomond and Trossachs National Park.

RIVER VEIN AREA

·; Outcrop sampling in the River Orchy near where coarse gold has been panned previously has returned exceptionally high gold and silver values, including:

- 383.8 g/t Au and 90.7 g/t Ag, 321.5 g/t Au and 102.4 g/t Ag and 197.3 g/t Au and 69.8 g/t Ag in a quartz vein ('the 'River Vein'), and

- 171.8 g/t Au and 49.3 g/t Ag, 59.0 g/t Au and 9.8 g/t Ag and 1.9 g/t Au from other veins some one and two km upstream

·; Supports historical sampling in same area where boulders grading 359 g/t Au and 101 g/t Au were recorded

·; Indicates potential for narrow vein deposits which could be stand-alone operations in their own right

BEINN UDLAIDH VEIN EXTENSION

·; High gold and silver results in AQ drilling, including:

- 11.1 g/t Au, 167g/t Ag over 1m

- 2.39 g/t Au, 139.6g/t Ag over 3.2m

·; High gold and silver results in recently sampled rock chips, including:

- 6.53 g/t Au and >200g/t Ag and 5.21 g/t Au and >200 g/t Ag

·; Drilling and rock chip samples confirm continuity of vein a further 900m eastwards (total 1900m to date)

Scotgold's Chief Executive Officer, Chris Sangster said: "The results continue to highlight the potential of the Beinn Udlaidh area to host high grade, narrow vein gold and silver deposits, in addition to the lower grade breccia systems which are the main focus of Scotgold's current exploration program. Any such high grade deposits could be stand-alone operations in their own right."

BACKGROUND

Scotgold first announced the identification of significant breccia-hosted gold-silver mineralisation at Beinn Udlaidh in association with a lamprophyre field on 29 September 2009 and subsequently announced an Exploration Target of between 0.57 and 5.7Mt at 1 - 2g/t Au associated with the breccia pipes at Beinn Udlaidh (see ASX release 18 February 2010).

Scotgold intensified its fieldwork at Beinn Udlaidh in March this year. In addition to the breccia pipe targets, Scotgold considers the veins systems at Beinn Udlaidh to be valid exploration targets in their own right. An extensive mapping and rock chip sampling program in the Beinn Udlaidh area has now identified a number of high grade, narrow vein systems, in addition to a significant strike extension to the Beinn Udlaidh Vein. (A map showing location plan of breccia pipes, lamprophyres and veins at Beinn Udlaidh can be found at www.scotgoldresources.com, under ASX announcements).

River Vein Prospect Area

Detailed mapping and outcrop sampling in the River Orchy to follow up previous explorers' rock chip sampling results at the River Vein Prospect area have returned exceptional values of 383.2 g/t Au, 321.5 g/t Au and 197.3 g/t Au in rock chip samples.  High grade values were also recorded on some rock chip samples at two additional new veins located upstream of the River vein, returning 171.8 g/t Au, 59.0 g/t Au and 1.89 g/t Au.

Previous exploration in this area by Ennex International plc in the 1980s identified high grade boulders, up to 358.9 g/t Au, and which are now thought to be linked to these veins and further work will be undertaken to discover their strike extents. Lamprophyre sills and dykes have also been mapped in close proximity to these veins.

The veins trend at 3000 - 3200 and are perpendicular to the normal Caledonide trend (2200 - 2400). Observed vein widths are between 10cms and 65cms and exhibit typical pinch and swell characteristics. The veins occur individually and in groups.

Significant rock chip sample values (11 from the 16 samples taken) are shown in Appendix B. 

Since 2009 Scotgold has been collaborating in a research project with Dr Robert Chapman of the University of Leeds, studying mineralogical signatures in placer gold grains from various localities in the rivers around Tyndrum. In 2009 sampling was extended to new areas of interest including the Glen Orchy area.

Dr Chapman has informed Scotgold that the grains of gold collected and studied from a River Orchy tributary showed two clear contributing signatures, both distinctive to the region by virtue of their anomalous bismuth signature and possibly not from an explosion breccia source. More sampling is required to further ascertain the nature of the local gold signature. (An illustration showing rock chip sampling results from the River Vein Prospect area at Beinn Udlaidh in relation to mapping of breccia pipes, veins and lamprophyre intrusions and previous rock chip sampling can be found on the Company's website www.scotgoldresources.com, under ASX announcements.)

Beinn Udlaidh Vein North East Extension.

A rock chip sample taken by previous explorers from the Beinn Udlaidh vein to the north east of the drilled section of the vein returned 16.1 g/t gold and 2520 g/t silver. As part of Scotgold's initial reconnaissance of the Beinn Udlaidh breccia vein, a confirmatory sample of 16.6 g/t gold, >200g/t silver and 449 g/t arsenic was returned as previously announced. Previous narrow diameter AQ drilling into the vein returned highly prospective values (see ASX release 29 September 2009) over the previously identified portion of the vein.

Further rock chip sampling and mapping on the vein structure by Scotgold has extended its strike extent to around 1900m with encouraging gold and silver grades. Significant rock chip sample values (5 from the 16 samples taken) are shown in Appendix B.

Following rock chip sampling, four further AQ holes were drilled into various potential outcrop locations. Best drill intercepts on the vein include:

§ BUAQ100 - 11.1 g/t Au, 167g/t Ag over 1.0m

§ BUAQ101 - 2.39 g/t Au, 139.6g/t Ag over 3.2m

Two other holes (BUAQ102 and 103) did not intersect significant mineralisation and appear to have been collared in the hanging wall of the vein. Assay values for significant intersections are provided in Table 1 and drill statistics are shown in Appendix A.

Table 1: Significant drill intersections for AQ drilling at Beinn Udlaidh NE Vein extension

Scotgold plans to follow up the high grade intersections with further drilling but will wait upon the results of an airborne magnetic survey to be carried out, which the Company expects to be early next year.

Scotgold is still awaiting results of exploration within the breccias pipe field, including NQ and AQ drill results, geophysical trials and detailed lithological sampling. A location plan of breccia vein north-eastern extension at Beinn Udlaidh showing significant previous and recent (highlighted) AQ drill intersections and rock chips can be found on the Company's website www.scotgoldresources.com, under ASX announcements.

Chris Sangster

Managing Director

For further information please contact:

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Note for Editors

Competent Persons Statement:

The information in this report that relates to Exploration Results is based on information compiled by Mr David Catterall. Pr Sci Nat, who is a member of the South African Council for Natural Scientific Professions. Mr Catterall is employed as a consultant to Scotgold Resources Ltd. Mr Catterall has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Catterall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements:

This release includes certain "forward looking statements." All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties.

There can be no assurances that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.

Appendix A: Statistics of AQ diamond drilling at Beinn Udlaidh Vein North East Extension

Appendix B: Selected recent rock chip sample results from Beinn Udlaidh