SGZ.L Regulatory News (SGZ)

31 January 2011

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

DECEMBER 2010 QUARTERLY REPORT

Cononish Gold and Silver Project

·; Positive on-going discussions with Parks Authority regarding re-submission

o Planning application notice submitted

·; Appeal lodged to 'preserve' position

Grampian Gold Project: River Vein area

·; High grades continue at River Vein area including

o A grab sample between veins, one metre apart, assayed 145.5 g/t Au and 28.5 g/t Ag

o High gold values in grab samples from narrow quartz veins including 134.5 g/t Au, 31.8 g/t Ag and 15.0 g/t Au and 7.7 g/t Ag

Grampian Gold Project: Auch area

·; AQ drilling including

o 25.5g/t Au 14.3g/t Ag over 1.0m

o 15.2g/t Au, 36.2g/t Ag over 2.1m

·; Rock chip outcrop samples on vein systems including

o 62.4g/t Au, >200g/t Ag and  20.7g/t Au, 164.7g/t Ag at Clach Bhadach

o 13.2g/t Au, 36.6g/t Ag at Creag Sheileach

o 23.4g/t Au, 29.6g/t Ag at Coire Ghabhalach

o 9.8g/t Au 80.4g/t Ag and 8.9g/t Au, >200g/t Ag, 47.1g/t Te at Beinn Odhar

·; Breccia pipe identified

Non renounceable rights issue raises A$ 1,019,665.

Placing to strategic investor raises A$ 968,000.

Cononish Gold and Silver Project.

In January 2010, subsequent to the extensive public and other consultation processes, the Company submitted its application for planning permission at Cononish. On 11th August 2010, the Parks Authority's Director of Planning recommended refusal of the application largely on landscape and visual impact issues and this refusal was upheld by a narrow margin of 12 to 10 at the National Parks Board meeting on 18th August 2010. An appeal against the refusal was lodged with the Scottish Ministers on 17th November and remains 'live' at present.

However, since 18th August, Scotgold directors have met on several occasions with senior representatives of the Parks Authority to discuss the issues surrounding their recommendation for refusal and the Company believes encouraging progress is now being made. The principal changes to the previous application would involve a reduction in the volume of the Tailings Management Facility, accompanied by some underground disposal of tailings, thereby facilitating a design which would have significantly less visual impact whilst accommodating development of the current resource at the same annual rate of production.

As a result of these positive discussions, on 22nd December 2010, the Company submitted a Planning Application Notice to the Parks Authority indicating its intention to re-apply for planning permission. The re-application process again involves the statutory 12 week period for Pre Application Consultation, prior to submission, subsequent to which it is likely a non binding processing agreement would be signed with the Parks Authority to indicate the likely decision date. The Company believes this could be early in Q3 2011.

Exploration Update

The Company continues to actively pursue exploration activities on its substantial land position outside the National Park (refer to Figure 1 available at www.scotgoldresources.com under ASX releases).

Beinn Udlaidh - River Vein Area

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 Trossachs National Park (refer to Figure 1 available at www.scotgoldresources.com under ASX releases).

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

Previous mapping and outcrop sampling from Areas A, B and C within Glen Orchy (see Press Release 17th August 2010 - High Gold and Silver Grades at Beinn Udlaidh) reported narrow quartz sulphide veins, trending approximately 300° with high gold grades and additionally in Area A, molybdenum mineralization in fractures with altered aplitic margins, trending approximately northeast - southwest (refer to Figure 2 available at www.scotgoldresources.com under ASX releases). These quartz sulphide veins returned 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, whilst a single sample on one of the mineralized aplite bearing fractures assayed in excess of 500 g/t Mo.

Recent sampling by Scotgold in Area B has confirmed the high grade nature of the gold mineralisation, including a grab sample between veins one metre apart, assaying 145.5 g/t Au and 28.5 g/t Ag. Other high gold values in grab samples from the narrow quartz veins in this area included 134.5 g/t Au, 31.8 g/t Ag and 15.0 g/t Au and 7.7 g/t Ag. (refer to Figure 3 available at www.scotgoldresources.com under ASX releases)

Selected results are shown in Appendix A

Further mapping of the high grade gold mineralization in the area to determine the orientation of any possible extensions under the adjoining glacial till cover, initial AQ drilling and possible geophysics and deeper drilling is planned.

Grampian Gold Project Auch Area

The Auch Project Area is situated 10km north east of the Cononish Gold and Silver Project and lies outside the boundaries of the Loch Lomond and Trossachs National Park (refer to Figure 1 available at www.scotgoldresources.com under ASX releases)

Previous explorers had identified a number of high grade boulders and outcrops at four locations (Coire Ghabhalach, Creag Sheileach, Beinn Odhar and Crom Allt) within the project area (see ASX release 20th July 2009 : Exceptionally high gold grades found in Scotland) which warranted further follow up, though at that time, no further work was conducted.

After an initial follow up verification sampling program conducted in 2009, Scotgold has conducted further field reconnaissance mapping and follow-up outcrop sampling on these prospects.

During this program, three new prospects have been identified at Clach Bhadach, Leitir Tharsuinn and the Auch Breccia pipe.

(Selected results are shown in Figure 4 available at www.scotgoldresources.com under ASX releases)

Ten small diameter (AQ) holes drilled into two vein structures at Auch have returned encouraging gold and silver values, including:

·; Coire Ghabhalach - 2.1 metres averaging 15.2g/t gold, 36.1g/t silver

·; Creag Sheileach - 1.0 metres averaging 25.5g/t gold and 14.3g/t silver

Recent follow up outcrop rockchip sampling from vein systems located by fieldwork continue to return high grade gold and silver over significant strike lengths including:

·; Coire Ghabhalach - 23.4g/t gold, 29.6g/t silver

·; Creag Sheileach - 13.2g/t gold, 36.6g/t silver (previously reported)

·; Clach Bhadach - 62.4g/t gold, >200g/t silver

·; Beinn Odhar - Beinn Odhar vein - 2.1g/t gold, 13.4g/t silver

·; Beinn Odhar - Coire Thon vein - 9.8g/t gold, 80.4g/t silver

·; Beinn Odhar - Coire Thon vein - 8.9g/t gold, >200g/t silver, 47 g/t tellurium

Selected rockchip results are given in Appendix B and drill statistics in Appendix C. Results for the Leitir Tharsuinn vein are awaited.

Scotgold recently accessed a PhD thesis completed in 1970 on the structural geology of the Auch Estate which noted three 'breccia' type occurrences. Reconnaissance of two of the reported breccias indicated the occurrences to be porphyritic microgranites, possibly associated with the gold mineralizing event.

On investigation, the third represents a large explosion breccia, possibly similar to the mineralized pipes encountered at Beinn Udlaidh. This occurrence appears to consist of two rounded pipe-like breccias approximately 10000m² in extent, and occur in close association with lamprophyre.

Thirty two rockchip samples were taken across the exposed extremities of the breccia and a single sample returned a highly anomalous gold value of 1.7g/t Au.

Aurum Exploration Services conducted a ground based magnetic and EM survey over the breccia and towards a large regional silicified fault zone to the east. The results clearly indicate two strong magnetic anomalies coincident with the shape of the mapped breccia pipes.

A series of AQ drill holes are planned in 2011 to further test possible mineralization in the pipe structure.

Corporate activities

On 16 September 2010, the Company announced a non-renounceable rights issue of shares on the basis of one Share for every four Shares held at the record date of 28 September 2010 at an issue price of A$0.035 per Share together with one free attaching Option for every two shares subscribed for, exercisable at A$0.08 and expiring on 30 April 2012. The rights issue closed oversubscribed on 3 November 2010.

On 11 November 2010, the Company allotted 29,133,284 shares to raise a total of A$1,019,665 and 14,566,586 free attaching options were issued in accordance with the offer.

Subsequent events

On 19 January 2011, the Company advised that it has raised £616,250 (A$986,000) through the placement of 14.5 million ordinary fully-paid shares in the Company (the "Placing Shares"), at a consideration of £0.0425 (A$0.068) per share. The Placing Shares were issued together with one free attaching option for every two Placing Shares subscribed for. The options are exercisable at a price of A$0.08 per share and expire on 30 April 2012.

The Placing Shares were placed with Kenglo One Limited ("Kenglo") an investment company incorporated in Jersey, Channel Islands specialising in natural resources. Kenglo already has significant holdings in Galantas Gold Corporation which operates a gold mine in Northern Ireland and TomCo. Energy Plc an unlisted company which holds substantial oil shale leases in Utah.

Following the placing Kenglo has an interest in 14,500,000 shares representing 9% of the Company's enlarged share capital.

Chris Sangster

Managing Director

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 A: Selected rock chip results from River Vein Area

Appendix B: Selected rock chip results from Auch Project Area

Appendix C: Drill statistics