SGZ.L Regulatory News (SGZ)

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

June 2012 Quarterly Report

Cononish Gold and Silver Project

Positive Development Study results

·; Robust project economics using base case gold price of US$1,100 with £23.4M (A$35.7M) pre tax free cashflow over life of mine, pre tax IRR of 24.8% and NPV10 of £10.8M (A$16.2M)

·; Project highly cash generative: at the then current spot (13/04/2012) gold prices of US$1,655/oz with £65.9M (A$100.7M) pre tax free cashflow over life of mine, pre tax IRR of 62.5%, NPV10 of £40.5M (A$61.9M)

Mining Lease granted by Crown

Pre development funding with RMB Australia Holdings Ltd concluded

Initial Infill drilling Results

·; High grade, true width intersections from first three infill holes :

o CF 12 01 - 13.95 g/t Au, 47.6g/t Ag over 2.0 m

o CF 12 02 - 14.21 g/t Au, 39.7g/t Ag over 2.4 m

o CF 12 03 - 27.21 g/t Au, 44.1g/t Ag over 3.3 m

·; Drilling on-going to further infill portions of Inferred Resource

Cononish Gold and Silver Project

Permitting

Planning permission for the Cononish Gold and silver project was granted on 25 October 2011 subject to agreeing a number of outstanding conditions and the conclusion of legal agreements. These were concluded on 13 February 2012 when the National Parks Authority issued the Decision Letter formally granting planning permission. Scotgold continues to work towards purifying the suspensive conditions attached to the Decision Letter.

Subsequent to the issue of the Decision Letter, and the expiry of the requisite judicial review period of three months, the Crown Estate confirmed the unconditional grant of the mining lease on 15th May 2012

Cononish Project Development Study

In December 2011, Scotgold commissioned Australian Mining Consultants UK Ltd ("AMC") to conduct the Cononish Project Development Study with input from Scotgold's processing, tailings and environmental consultants and the company. Results from the study were released on 17 April 2012.

A seven year life of mine is currently estimated inclusive of a one year pre production period and total recovered production to doré and concentrate over the project life is estimated to be 131,600 ounces of gold and 465,000 ounces of silver. Resources considered in the study are shown in Table 3 and include Inferred Resources.

A conventional gravity / flotation concentrator is planned which will treat 72,000 tpa. It is intended that about 25% of gold will be recovered by gravity for smelting on site to a doré bar with the balance of the gold reporting to a sulphide rich concentrate which will be treated through a third party facility remote from the site.

The overall recovery from the processing plant is predicted at 93% for Au and 90% for Ag to doré and concentrate and recovered production (to doré and concentrate) is estimated at 21,000 ounces of gold and 74,700 ounces of silver annually.

Preproduction project expenditure is estimated at £22.3M, with a further sustaining and deferred capital cost of £2.4M over the life of the project, including an overall 15% contingency allowance.

Overall operating costs (exclusive of smelter transport and royalty charges) amount to approximately £90 / t with an average operating cash cost1 (including smelter, transport and royalty charges) of US$575 / £360 / oz Au equivalent2.

Operating costs are estimated with an overall 16% contingency allowance.

The results from the study demonstrate a robust project at a base case gold price of $1,100 per ounce, with very attractive returns at current spot gold prices.

Key project financial parameters are shown in Table 1 below using a base case gold price of US$1100 / oz and the then current (NY close 13/4/2012) spot prices.

Note Silver price $20/oz

Table 1 Financial Highlights

At base case prices, the project generates £23.4M pre tax free cashflow with a pre tax Net Present Value10 of £10.6M and a pre tax internal rate of return (IRR) of 25.4%.

At the then current spot prices (16/04/2012), the project is highly cash generative with £65.9M pre tax free cashflow over the life of the project, a pre tax IRR above 60% and payback initial investment within 18 months of the commencement of production.

Base Case average operating costs1 are estimated to be US$575 per ounce Au equivalent2 after commissioning of the project.

Financing

The Company has concluded a pre development funding agreement with RMB Resources ("RMB") for a £1.18m financing (the "Facility"). The Facility provides funds to allow Scotgold to take the Cononish gold project through to its final development decision. In particular the Facility enables Scotgold to continue drilling at Cononish with a view to improving confidence in that part of the resource that will be mined in the early years of the mine life thereby enhancing the debt capacity of the project.

The Facility is a convertible loan structured as a secured corporate loan facility with share options which provides for RMB to acquire Scotgold shares at a cost equal to the value of the loan if all the options are exercised. The strike price for the RMB options is £0.045.

The Facility will be repaid on the earlier of the date that equity or debt funds are available or 31 December 2013. The annual interest rate for the Facility will be Libor plus 5%.

The Facility has been arranged by RMB and will be provided by RMB Australia Holdings Limited. RMB's investment committee approved the Facility subject to the satisfactory completion of legal due diligence which was concluded on 27 July 2012.

In addition to the Facility agreement, Scotgold has agreed to mandate RMB to arrange a gold pre payment facility to fund the development of the Cononish gold project. Scotgold has also agreed to mandate LN Metals International Ltd to market the gold-in-pyrite concentrate which will be produced at Cononish to end consumers.

Infill Program Phase 1- initial results

Scotgold commenced infill drilling at Cononish in January 2012. . This program is designed to increase the debt capacity for the Project by demonstrating with increased certainty the presence and continuity in the high grade ore in the section that will be the first to be mined. The current holes reported represent the first three holes from an eight hole initial program of 1,020 metres. Results from the remaining 5 holes are awaited.

Holes CF 12-01, CF 12-02, CF 12-03 were drilled into the western section of the resource close to Indicated portion of the Resource associated with the West Raise. Hole Con 10 05, in a similar location, was drilled in 2010.

Drilling results, including that for Hole Con 10 05 which was announced on 05/02/2010, are shown in Figure 1 (available at www.scotgoldresources.com under ASX releases) and Table 2 below. Drill statistics are shown in Appendix 1.

Table 2 - Infill Drilling Results

* 2010 Hole previously reported

A further phase (Phase 2) comprising 5 holes (approximately 500m) to be drilled to the west of the Indicated resource has recently commenced and a subsequent phase (Phase 3) of 5 holes (800m) above the East Raise is being investigated (see Figure 1 available at www.scotgoldresources.com under ASX releases).

Subsequent to drilling, the results will be incorporated into a revised Resource Estimate and the 'Cononish Project Development Plan' will be updated It is anticipated a final production decision will be made in January 2013, with a start of development on the project in March 2013.

EXPLORATION UPDATE

The Company continues to actively pursue exploration activities on its substantial land position of some 3,200km2 in the south west Grampians of Scotland.

Grampian Gold Project

Regional fieldwork including ongoing stream sediment sampling continued over the Inverliever, Cononish, Glen Orchy and Glen Lyon licence areas.

An initial phase of AQ drilling was carried out at the Inverchorachan prospect near Loch Fyne and results are awaited.

Four further holes were drilled at the Sron Garbh 'magmatic' Cu / Ni / PGE / Au prospect and results are awaited.

For further information please contact:

United Kingdom:

Australia:

Notes:

1. Average operating cash cost is calculated from total operating (non capital) costs (including smelter, transport, royalty costs) divided by recovered Au equivalent ozs - see Note 2

2. Au equivalent ozs. Gold equivalent ozs are calculated: Recovered gold ozs + (Recovered silver ounces / 55) where the number 55 represents the ratio of base gold price used to silver price used. This ratio was calculated using base case prices of US$1100/oz Au and US$20 / oz Ag

3. Exchange rate GBP£1 = AUS$1.5279

4. NPV10 represents the pre tax Net Present Value calculated at a 10% discount rate.

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 Drill statistics

Background

About Scotgold

Scotgold Resources Ltd is a mining exploration and development company listed on the Australian Securities Exchange (ASX) and the AIM market of the London Stock Exchange (AIM). The Company's principal asset is the Cononish gold and silver project situated near Tyndrum in the Scottish Grampians.

The current resource for the project, estimated in accordance with the JORC code, stands at 163,000 ozs Au and 596,000 ozs Ag in the Measured, Indicated and Inferred categories (estimated using a 3.5g/t cut off) (see Table 3 below for breakdown).

Planning approval for the development of an underground mine at Cononish has been granted and Australian Mining Consultants (UK) Ltd has completed a development study which demonstrates that the project is commercially attractive with a cash operating cost of around US$575/oz.

The Company also holds Crown exploration licences over some 3200 km2 covering the highly prospective Dalradian terrain across the south west Grampians.

Table 3:

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 1,000 t or 1,000 oz. Grade rounded to the nearest 0.1 g/t Au. The Inferred Resource grade is reported with a grade range to indicate the likely upside due to the information effect.

Scotgold Note: Incorporating the grade range, the Inferred Mineral Resource is estimated to lie between 100,000 oz Au and 160,000 oz Au. It should be noted that any upside may not exist or it may only be present in a portion of the resource.

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 1,000 t or 1,000 oz.

Competent Persons Statement:

The Information in this report that relates to Mineral Resources is based on resource estimates compiled by EurGeol Dr S C Dominy FAusIMM (CP), FGS (CGeol), FIMMM (CEng), FAIG (RPGeo), Executive Consultant with Snowden based in the Ballarat, Australia 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.

Scotgold Resources