SGZ.L Regulatory News (SGZ)

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

INTERIM FINANCIAL REPORT

31 DECEMBER 2012

DIRECTORS' REPORT

Your directors submit the financial report of the Group for the half-year ended 31 December 2012. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

DIRECTORS

The following persons were Directors of Scotgold Resources Limited during the half year and up to the date of this report unless otherwise stated:

REVIEW OF OPERATIONS

The Company's strategy in Scotland continues to focus on advancing the 100% owned Cononish Gold and Silver Project to production whilst continuing to explore its large, highly prospective land position around Cononish and elsewhere in Scotland. The Company's land position under Crown option currently extends to some 4,200km2.

It is noted that surface access rights to these areas need to be negotiated separately from those granted by the Crown.

Background

Scotgold Resources Limited (ASX:SGZ) was established in 2007 and listed on the ASX in January 2008 after raising $A4.9M through an IPO, with the objective of advancing the Cononish Gold and Silver Project in Scotland's Grampian Highlands to a production decision and to explore the highly prospective tenements comprising the Grampian Gold Project for additional deposits. The Company's shares were also admitted to trading on the AIM market (AIM:SGZ) of the London Stock Exchange in February 2010.

Scotgold continues to focus on the development of the Cononish Gold and Silver Project and has identified resources (estimated in accordance with the JORC Code) in the Measured, Indicated and Inferred categories of 169,200 oz of gold and 631,300oz of silver (at 3.5g/t gold cut-off) - see below for breakdown, whilst conducting initial exploration activities over its other prospective option areas.

Cononish Gold and Silver Project

Scotgold commenced an infill drilling program at Cononish in January 2012. The drilling program was aimed at converting inferred resources to indicated resources in that part of the resource that will be mined in the early years of its mine life, thereby enhancing the debt capacity of the project.

A total of thirteen holes were drilled from January 2012 to September 2012 into the western portion of the Inferred Resource.

A further five holes have been completed in the eastern portion of the Inferred resource and results are awaited.

Results for the western section of the program are shown in Table 1 and Figure 1 below.

Table 1 - Infill drilling results (2012) - West Raise Area

Drill statistics are shown in Appendix A

Figure 1: An illustration showing the location of the drilling Results >3g/t for 2010 - 2012 drilling program can be found on Scotgold's website at www.scotgoldresources.com under ASX announcements.

Cononish Revised Mineral Resource Estimate

The results from various in-fill drilling programs carried out by Scotgold between 2009 and 2012 have been incorporated into a revised Resource Estimate.

The Resource Estimate, reported in accordance with The JORC 2004 Code, was compiled by Dr Simon Dominy of Snowden Mining Industry Consultants Pty Ltd (Snowden).

Table 2 and Table 3 below show the revised Mineral Resource estimate compiled by Snowden.

Table 2: Cononish Main Vein Gold Mineral Resources (reported at a 3.5 g/t Au cut-off).

Reported using the 2004 JORC Code (JORC, 2004). Tonnages and contained ounces rounded to the nearest 100 t or 100 oz. Grade rounded to the nearest 0.1 g/t Au. The Inferred Resource grade is reported with a grade range to indicate the possible upside due to the information effect.

Scotgold Note: Incorporating the grade range, the Inferred Mineral Resource is estimated to lie between 85,000 oz Au and 127,000 oz Au. It should be noted that any upside may not exist or it may only be present in a portion of the resource.

Table 3: Cononish Main Vein Silver Mineral Resources (reported at a 3.5 g/t Au cut-off).

Reported using the 2004 JORC Code (JORC, 2004). Tonnages and contained ounces rounded to the nearest 100 t or 100 oz.

Measured and Indicated Resources have increased to 82,600 ozs Au from 55,000ozs Au - an increase of 27,600 ozs Au (50%) - all in the Indicated category from the corresponding Inferred Resource blocks.

The total resource including Measured, Indicated and Inferred categories now stands at 169,200ozs Au and 631,300ozs Ag in 460,000t - a slight increase from 163,000 ozs Au and 596,000 ozs Ag in 437,000t estimated in 2009.

Cononish Project Development Study

The updated Mineral Resource Estimate will form the basis for the revised mining plan and updated Cononish Project Development Study to be completed under the auspices of Australian Mining Consultants UK Ltd (AMC). The Company will then be in a position to determine the debt capacity of the project.

The study commenced in December 2012 and is due for completion shortly.

Exploration Update

The Company continues to actively pursue exploration activities on its substantial land position. It is noted that 85% of the area currently under Crown option to Scotgold is located outside the Loch Lomond and the Trossachs National Park.

Grampian Gold Project

Regional fieldwork including ongoing stream sediment sampling continued over the Inverliever, Cononish - Glen Orchy, Glen Lyon, Knapdale and Ochils option areas. A total of 915 samples have been taken to date and analysis of results received will be interpreted on completion of the program.

Further follow-up field visits have been conducted on prospective areas in the Knapdale and Glen Lyon licence areas.

FINANCING

On 4 December 2012 the Company announced that it had raised approximately £475,000 through a placing and direct subscriptions with the Company of, in aggregate, 15,316,110 new ordinary shares (the "New Shares") at a price of 3.1 pence per share (A$0.0475).

As part of the Fundraising, the subscribers and placees have been issued with one option for each New Share ("Options") comprising a total of 15,316,110 Options. The Options are unquoted and are exercisable into ordinary shares in the Company on a one-for-one basis at a price of 4.5 pence per ordinary share at any time before 7 May 2014.

Also as part of the fundraising, the Company has mandated RMB Resources, a division of FirstRand Bank Limited (London Branch) to arrange for the existing £1.18 million corporate facility that was provided by RMB Australia Holdings Limited and was announced on 2 July 2012, to be increased by £320,000. The extension to the loan facility is subject to final credit approval.

Competent Persons' Statements:

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.

The Information in this report that relates to Mineral Resources and Exploration Results is based on information compiled by EurGeol Dr S C Dominy FAusIMM (CP), FGS (CGeol), MAIG, General Manager (UK) and Executive Consultant with Snowden based in the London, England Office. Dr. Dominy has sufficient experience that is relevant to the style of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore reserves. Dr Dominy consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Appendix A - Drill Statistics

AUDITOR'S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 9 and forms part of this directors' report for the half-year ended 31 December 2012.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3) of the Corporations Act 2001.

...............................................................

Chris Sangster

Managing Director

Dated Scotland 15 March 2013

¶

AUDITOR'S INDEPENDENCE DECLARATION

As lead auditor for the review of the financial report of Scotgold Resources Limited for the half-year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

b) any applicable code of professional conduct in relation to the review.

Perth, Western Australia M OHM

15 March 2013 Partner, HLB Mann Judd

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

The accompanying notes form part of these financial statements.

Scotgold Resources Limited

¶

CONDENSED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

The accompanying notes form part of these financial statements.

Scotgold Resources Limited

¶CONDENSED STATEMENT OF

CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

 Consolidated

The accompanying notes form part of these financial statements.

Scotgold Resources Limited

¶CONDENSED STATEMENT OF CASH FLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

The accompanying notes form part of these financial statements.

Scotgold Resources Limited

¶NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These interim consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 'Interim Financial Reporting', Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board ('AASB'). Compliance with AASB 134 ensures compliance with IAS 34 'Interim Financial Reporting'.

This condensed half-year report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the group as in the full financial report.

It is recommended that the financial statements be read in conjunction with the annual financial report for the year ended 30 June 2012 and any public announcements made by Scotgold Resources Limited and its subsidiaries during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

Basis of preparation

The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted.

For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period.

Reporting Basis and Conventions

The financial report has been prepared on the basis of accounting principles applicable to a going concern, which assumes the commercial realisation of the future potential of the company's and consolidated entity's assets and the discharge of their liabilities in the normal course of business.

The consolidated entity had a working capital deficiency of $835,961 as at 31 December 2012 and a net loss after income tax benefit of $1,616,419 and a net cash outflow from operating and investing activities of $1,205,321 for the half year period then ended. Included within the working capital deficiency is interest-bearing bank debt of $1,831,631 which is repayable on the earlier of 31 December 2013 or the completion of any capital raising (in a single tranche or in combination with other related capital raisings) of £2,000,000 or more (equivalent to $3,114,280 as at 31 December 2012).

Notwithstanding the above financial conditions, the Board considers that the company is a going concern and recognises that additional funding is required to ensure that the company can continue to fund its and the consolidated entity's operations and further develop their mineral exploration and evaluation assets and to repay the maturing bank debt of $1,831,631 during the twelve month period from the date of this financial report. Such additional funding can be derived from either one or a combination of the following:

- The placement of securities under the ASX Listing Rule 7.1 or otherwise;

- An excluded offer pursuant to the Corporations Act 2001; or

- The sale of assets.

Accordingly, the Directors believe the Company will obtain sufficient funding to enable it and the consolidated entity to continue as going concerns and that it is appropriate to adopt the going concern basis of accounting in the preparation of the financial report.

However, the existence of the above financial conditions indicate a material uncertainty which may cast significant doubt upon the company's ability to continue as a going concern and therefore whether it will realise it assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Significant accounting judgements and key estimates

The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

Except as described below, in preparing the interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report for the year ended 30 June 2012.

Adoption of new and revised Accounting Standards

In the half-year ended 31 December 2012, the Directors have reviewed all of the new and revised Standards and interpretations issued by the AASB that are relevant to the Group's operations and effective for annual reporting periods beginning on or after 1 July 2012.

It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Groups'a business and, therefore, no change is necessary to Group accounting policies.

The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2012. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group's business and, therefore, no change is necessary to Group accounting policies.

¶

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent upon the successful development and commercial exploitation or sale of the respective areas.

Movements in ordinary share capital of the Company were as follows:

Movements in options were as follows:

(1) Exercisable at £0.045 on or before 24 July 2015

(2) Exercisable at £0.045 on or before 7 June 2014

(3) Exercisable at £0.031 on or before 7 December 2015

NOTE 4 - CONTINGENT LIABILITIES

The Company has entered into a donations agreement with the Strathfillan Community Development Trust ("SCDT") pursuant to which the Company will work with SCDT to provide additional facilities and opportunities for the community served by SCDT and provide funding in respect of the same of up to £350,000. This liability is contingent upon starting the development as defined under the Planning Conditions and Decision letter.

Scotgold Resources Limited and its controlled entities have no other known material contingent liabilities as at 31 December 2012.

NOTE 5 - SEGMENT INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Scotgold Resources Limited.

NOTE 6 - INTEREST BEARING LOAN

During the period, the entity drew down £1,180,000 of debt funding from RMB Resources, a division of FirstRand Bank Limited, to further progress it's mineral exploration projects towards the development stage.

Repayment of the debt is the earlier of:

(i) 31 December 2013;

(ii) the date any capital raising of £2,000,000 or more is completed (either as a single tranche raising or a series of related capital raisings) and funds from that capital raising are received; and

(iii) the date on which financial accommodation is arranged for or available to the entity for the purpose of funding the development of the project.

Interest accrues daily on the outstanding balance at a rate equivalent to LIBOR plus a margin of 5%.

In addition, 26,222,222 options, with an exercise price of £0.045, were issued to the financier under the terms of the agreement (refer note 3) as a borrowing cost. These options have been valued under the Black-Scholes model and the expense of $785,000 is included in the loss for the year.

This was in lieu of cash payments relating to the establishment costs of the financing facility.

AASB2 Share Based Payments requires these share options to be valued in accordance with the Standard. Accordingly, due to the number of share options issued and the volatility of the underlying share price these share options have been valued at $0.03 per share option, and a total expense to the Company of $785,000.

This value is a non-cash expense to the Company and reflects the value of the share options under AASB2 Share Based Payments, and not necessarily the commercial realistic value of the share options in an arms length transaction.

¶

DIRECTORS' DECLARATION

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

In the opinion of the directors of Scotgold Resources Limited ("the company"):

1) The attached financial statements and notes thereto are in accordance with the Corporations Act 2001 including:

(a) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

(b) giving a true and fair view of the Group's financial position as at 31 December 2012 and of its performance for the half-year then ended; and

2) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of the Corporations Act 2001.

...............................................................

Chris Sangster

Managing Director

Dated Scotland 15 March 2013¶

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of Scotgold Resources Limited

Report on the Condensed Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Scotgold Resources Limited ("the company"), which comprises the condensed statement of financial position as at 31 December 2012, the condensed statement of comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors' responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Matters relating to the electronic presentation of the reviewed half-year financial report

This review report relates to the half-year financial report of the consolidated entity for the half-year ended 31 December 2012 included on the company's website. The company's directors are responsible for the integrity of the company's website. We have not been engaged to report on the integrity of this website. The review report refers only to the half-year financial report identified above. It does not provide an opinion on any other information which may have been hyperlinked to/from the half-year financial report. If users of the half-year financial report are concerned with the inherent risks arising from publication on a website they are advised to refer to the hard copy of the reviewed half-year financial report to confirm the information contained in this website version of the half-year financial report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Scotgold Resources Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

HLB MANN JUDD

Chartered Accountants

Perth, Western Australia M OHM

15 March 2013 Partner