SGZ.L Regulatory News (SGZ)

27 January 2012

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

Exploration Progress at River Vein

Scotgold has received assay results for the first two NQ diamond drill holes into the gold-bearing River Vein Prospect which confirm the continuity of mineralization at depth.

Highlights include:

• RV01:

o 9.7g/t Au, 13.3g/t Ag, 0.6% Pb, 2.1% Znover 40cms (intersection width) - 60 metres below surface

o 3.5g/t Au, >200g/t Ag, 1.4%Pb, 100ppm Mo and 34g/t Te over 52 cms (intersection width) - 78 metres below surface

• RV02:

o 4.39g/t Au, >200g/t Ag, 1.8% Pb, 167ppm Mo, 43g/t Te over 40cms (intersection width) - 70 metres below surface

o Three other intersections > 100ppm Mo between 0.2 - 0.5m (intersection width)

In addition further rock chip sampling of the Prospect continues to define and expand the extent of gold and molybdenum mineralization.

Mapping shows a wide extent of molybdenum-bearing fractures, with rock chips of coarse-grained quartz-feldspar vein assaying up to 2.72% Mo.

Further rock chip sampling of the gold vein at surface confirms the high grade mineralization in this structure, with assays up to 74.58g/t Au and 20.6g/t Ag.

Results from two further holes, RV03 and RV04, are awaited.

Scotgold's Chief Executive Officer, Chris Sangster said, "Scotgold is encouraged by the results of these first two deep NQ diamond holes drilled at the River Vein Prospect. They indicate the continuity of the gold vein structures with depth whilst the geochemistry of the veins encountered hold a number of similarities with the Cononish Vein with high grades of silver and significant lead, zinc and tellurium values in addition to gold. Whilst these initial two holes were targeting the gold vein below the high grade gold rock chip samples taken in the river, they also intersected a number of the molybdenum bearing fractures with highly anomalous values."

BACKGROUND

The River Vein area is located five kilometres northwest of the Cononish gold and silver deposit and outside the boundaries of the Loch Lomond and the Trossachs National Park. (refer to Figure 1 available at www.scotgoldresources.com under ASX releases, area A is the subject of this announcement).

Outcrop is confined to rivers and burns due to extensive glacial till cover, in many places, deeper than 10 metres throughout Glen Orchy.

Initial mapping and outcrop sampling from Areas A, B and C within Glen Orchy was reported on 17th August 2010 ("High Gold and Silver Grades at Beinn Udlaidh") and identified narrow quartz sulphide veins in the area referred to as Area A, returning exceptionally high gold assays of 383.2 g/t Au with 90.7 g/t Ag, 321.5 g/t Au with 102 g/t Ag, and 197.3 g/t Au with 69.8 g/t Ag. A single sample on a separate mineralised fracture assayed 6,206ppm Mo.

Follow up sampling in Area A was reported on 8th February 2011 ("River Vein and Beinn Udlaidh Vein Exploration Update") with again encouraging high grade rock chip samples with peak values of 194.6 g/t Au with >200 g/t Ag and 103.2 g/t Au with 76.6 g/t Ag. Vein continuity on surface was confirmed as extending 50 metres across the river. A number of molybdenum bearing fractures were also identified with values encountered up to 1% Mo in rock chip samples.

RECENT WORK

Mapping and Rock Chip Sampling:

Further mapping and rock chip sampling was carried out in 2011 during a period of low water flow.

Detailed mapping during this time has revealed a significant number of additional molybdenum-bearing fractures with a predominant strike direction of 025° (refer to Figure 2 available at www.scotgoldresources.com under ASX release). In one area the coarse-grained quartz and feldspar vein shows a dense concentration of molybdenite crystals (refer to Figure 3 available at www.scotgoldresources.com under ASX release). Rock chip samples taken from this zone returned in excess of 1% Mo, with RV105 assaying 2.72% Mo and RV109 1.42% Mo.

Three rock chip samples further confirmed the high grade gold mineralization on the River Vein, the best result being RV101 (74.58g/t Au, 20.6g/t Ag, 0.55% Pb, >1.0% Zn). Figure 4 shows a photo of RV102 (25.27g/t Au, 11.7g/t Ag, 0.54% Pb, >1.0% Zn).

Results are shown in Table 1 below and sample location is shown in Figure 2 (available at www.scotgoldresources.com under ASX release).

Table 1 - River Vein Area A additional rock chip samples (A map of the River Vein prospect is available at www.scotgoldresources.com under ASX release, showing latest mapping and rock chip sampling results).

NQ Diamond Drilling:

In order to further quantify the extent and grade of both the gold vein and molybdenite fractures, a program of four diamond drill holes was laid out, two targeting the gold vein and two targeting the molybdenum fractures. Drill statistics are shown in Appendix 1.

A total of 800m drilling was completed and significant results from the initial two holes are shown in Table 2 below. The best were results were:

RV01: 9.7g/t Au, 13.3g/t Ag, 0.6% Pb, 2.1% Zn over 40cms (intersection width) - 70 metres below surface; and 3.5g/t Au, >200g/t Ag, 1.4%Pb, 100ppm Mo and 34g/t Te over 52 cms (intersection width) - 88 metres below surface

RV02: 4.39g/t Au, >200g/t Ag, 1.8% Pb, 167ppm Mo, 43g/t Te over 40cms (intersection width) - 87 metres below surface

The drilling results indicate at least two possible gold and silver bearing structures. Geochemical characteristics are similar to the Cononish gold/silver vein, with high silver values and elevated levels of lead, zinc and tellurium.

The intersection widths, while narrow, demonstrate continuity of the River Vein structure sampled on surface. The host sequences are a mixture of psammites and semi-pelites which appear more favourable for vein formation and continuity in other Dalradian gold occurrences.

Four narrow molybdenum fractures with values exceeding 0.01% Mo were also intersected in the second hole, RV02. Results from RV03 and RV04 which targeted the molybdenum fractures are awaited.

Note - widths are intersection widths

Table 2 - Results from RV01 and RV02

FURTHER WORK

The results are highly encouraging and warrant further work when weather conditions improve.

Future exploration is likely to include further mapping of the high grade gold and molybdenum mineralization in the area to determine the orientation of any possible extensions under the adjoining glacial till cover, possible geophysics, shallow AQ drilling, and further deeper NQ drilling.

For further information please contact:

United Kingdom:

Australia:

Competent Person's 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 1

Notes to Editors

1 Scotgold Resources

·; Scotgold Resources is a mining exploration and development company listed on the Australian Securities Exchange in January 2008 and the AIM market of the London Stock Exchange in the UK in February 2010.

·; The Company was formed with its sole focus on exploring for gold and silver in Scotland, with the already identified Cononish Gold and Silver Project as its core asset. Once in production, the Project will be Scotland's first commercial gold mine.

·; Scotgold acquired the Cononish Gold and Silver Project in 2007 and has been working towards bringing the project to production in conjunction with its ongoing exploration efforts at Cononish and in the south west Grampians.

·; In April 2011 Scotgold announced that it had accepted an offer of a Regional Selective Assistance (RSA) grant from economic development agency, Scottish Enterprise, of up to £600,000 for the establishment of mine facilities and job creation, conditional on the firm obtaining planning permission.

·; In July 2011 Scotgold submitted its reapplication for planning permission, which was granted in October 2011 subject to finalizing conditions and various legal agreements which it expects to conclude shortly

2. Cononish Gold and Silver Project

·; The Cononish Gold and Silver project consists of the establishment of a small underground mining operation with associated processing facilities and infrastructure. In production, it is estimated the mine would produce around 20,000ozs of gold and 80,000 ozs of silver annually.

·; A scoping study on the Cononish Project completed by Australian Mining Consultants Ltd (AMC) in mid 2009 indicated positive returns using a gold price of US$ 720 / oz (GBP£450 /oz). At the current gold price of around US$ 1800 / oz (GBP £1100 / oz), the Project has the potential to generate significant cashflows for the Company. Based on this 2009 study, at a gold price of US$ 1270 / oz (GBP£800 / oz), the Project would generate around US$ 87 million (GBP £55 million) free cashflow over its lifetime. Scotgold is in the process of updating this study prior to a production decision.