SGZ.L Regulatory News (SGZ)

Scotgold Resources Limited

MARCH 2011 QUARTERLY REPORT

Cononish Gold and Silver Project

·; Proposed resubmission of planning application in next two months

·; Appeal against previous decision withdrawn

·; Scottish Enterprise Grant of up to £600,000 (c. A$1M)

Beinn Udlaidh and River Vein Area

·; High grade rock chips continue at River Vein including

o 194.6 g/t Au, >200g/t Ag,

o 103.2 g/t Au, 76.6 g/t Ag

·; Highly anomalous molybdenum values in narrow fractures with altered aplitic margins

o 7 samples from 20 above 0.1% Mo

Beinn Udlaidh Vein NE extension

·; High grade rock chips at NE extension including

o 73.3g/t Au, >200g/t Ag

o 17.7g/t Au, >200g/t Ag

·; Vein traced for 1900m on strike

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 veins 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

For further information please contact:

United Kingdom:

Australia:

Cononish Gold and Silver Project.

Planning update

Following the continued progress of discussions between the National Park Authority and Scotgold Resources Ltd ("Scotgold" or the "Company") in respect of the Cononish Gold and Silver project, the Company has decided to withdraw its appeal against the National Park Authority's refusal of planning permission and focus on reapplication.

In August 2010 Scotgold's application for planning permission for the establishment of a gold mine at Cononish was narrowly refused by Loch Lomond and the Trossachs National Park and the Company subsequently lodged an appeal against that refusal with the Department of Planning and Environmental Appeals in November 2010.

The key issues relating to the refusal were the potential landscape and visual impact of the proposed Tailings Management Facility. Scotgold has met with the Parks Authority on a number of occasions to discuss these issues.

During these discussions, Scotgold has focused on resolving these concerns and has sought additional independent input regarding restoration and landscape issues. The Company now believes that the proposed reduction in the scale of the Tailings Management Facility and clarification of the restoration techniques proposed by the Company has given the National Park Authority greater confidence that impacts can be mitigated satisfactorily.

Although there are other issues to be considered, Scotgold believes these can be successfully addressed in a revised application and intends to prepare and submit this within the next two months. The Company has now withdrawn the appeal against the National Park Authority's refusal.

Grant from Scottish Enterprise

The Company announced that it has accepted an offer of a Regional Selective Assistance (RSA) grant of up to A$ 1,000,000 (£600,000) in respect of the Cononish Gold and Silver project from Scottish Enterprise.

The grant is to assist in the establishment of the mine facilities and job creation and is conditional on Scotgold obtaining planning permission. It is payable retrospectively in instalments subject to certain capital expenditure and job creation milestones.

Scotgold also believe that there are wider national implications for a successful minerals operation at Cononish.. Minerals operations are recognised as significant potential drivers for growth in national economies, and it is also acknowledged by the British Geological Survey that Scotland is highly prospective but under-explored for minerals. Combined with its very low political and sovereign risk, these factors make Scotland a most attractive potential opportunity for investment in mineral activities.

Exploration Update

The Company continues to actively conduct exploration activities on its substantial land position outside the National Park (refer to Figure 1 available at www.scotgoldresources.com under ASX releases) in the Beinn Udlaidh and Auch project areas.

Grampian Gold Project - Beinn Udlaidh area

Scotgold considers the veins systems in the Beinn Udlaidh area to be valid exploration targets in their own right in addition to the already identified breccia pipe target (see Press Release 18 February 2010 - Beinn Udlaidh - Breccia Pipes - Exploration Target Confirmation).

An extensive mapping and rock chip sampling program has identified a number of high grade, narrow vein systems, in addition to a significant strike extension to the Beinn Udlaidh Vein.

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.

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.

Exploration in this area by Ennex International plc in the 1980s identified high grade boulders, up to 358.9 g/t Au, which are now thought to be linked to the identified veins. Lamprophyre sills and dykes have also been mapped in close proximity to these veins by Scotgold and previous explorers.

Previous mapping and outcrop sampling by Scotgold in from Areas A, B and C within Glen Orchy (refer to Figure 2 available at www.scotgoldresources.com under ASX releases) 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. 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. High grade values were also recorded from rock chip samples at two additional new veins located upstream of the River Vein at Area B, including 171.8 g/t Au, 59.0 g/t Au and 1.89 g/t Au (see Press Release 16 August 2010 HighGold and Silver Grades at Beinn Udlaidh).

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.

Further sampling by Scotgold in 2010 over Area B 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 (see Press Release 26 October 2010 High Grades continue at River Vein Prospect).

Subsequent detailed mapping and sampling over a portion of Area A (see Press Release 9 February 2011 River Vein and Beinn Udlaidh Vein Areas Exploration Update)has further defined the quartz sulphide vein rich in gold as well as several aplitic fracture zones, rich in molybdenum (refer to Figure 3 available at www.scotgoldresources.com under ASX releases).

A total of 27 rock chip samples were collected from separate areas in order to trace the gold bearing vein across the river as well as to test the extent and grade of the molybdenum mineralisation across the zone.

The gold bearing vein has now been traced from its discovery location, northwest, across the river to the bank for a distance of 30 metres, where it disappears under several meters of glacial till. The seven samples on the gold vein returned 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.

The narrow molybdenum bearing fractures are currently only exposed in the river bed before disappearing under glacial till. They trend approximately northeast - southwest and are spaced at 1 - 5 metre intervals. The aplitic margins containing the molybdenum mineralisation vary from 1cm to 20cms wide. Seven samples (from twenty) of the aplitic fractures reported values of molybdenum in excess 500g/t (the upper calibration limit of the assay method used (ICP - MA/UT)) and were submitted for re-assay at a higher upper calibration limit - all seven samples returned in excess of 1000 ppm (0.1%) Mo.

Scotgold is further researching a possible genetic model for gold and molybdenum occurrences in order to guide future exploration in the area.

Future exploration is planned and likely to include further mapping of the high grade gold and molybdenum mineralisation 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 NQ drilling.

Beinn Udlaidh Vein - North East Extension

Ennex sampling in the Allt Ghamhnain area returned an outcrop sample of 11.7 g/t Au with 2.6 g/t Ag from a white quartz sulphide vein and a boulder upstream ran 21.75 g/t Au just below another barren quartz vein.

Initial sampling in 2009 by Scotgold to follow-up the Ennex sampling located the quartz sulphide vein outcrop and samples returned values of 47.58 g/t Au with >200 g/t Ag and 46.28 g/t Au with >200 g/t Ag.

Recent rock chip sampling as further follow up to these on the vein returned samples of 73.2 g/t Au with >200 g/t Ag and 17.7 g/t Au with >200 g/t Ag.

The results confirm the extension to the Beinn Udlaidh vein which is now traced for over 1900 metres and the vein represents a significant target for further exploration (refer to Figure 4 available at www.scotgoldresources.com under ASX releases).

Further trenching and AQ drilling and possible geophysics and deeper drilling are planned for 2011.

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).

After an initial follow up verification sampling program conducted in 2009, Scotgold has conducted further field reconnaissance mapping ,follow-up outcrop sampling and initial AQ drilling in the area (see Press Release 20 January 2011 Exploration Update - Auch Project Area).

During this program, three new prospects have been identified at Clach Bhadach, Leitir Tharsuinn and the Auch Breccia pipe (refer to Figure 5 available at www.scotgoldresources.com under ASX releases).

Selected results include:

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

·; Creag Sheileach - 13.2g/t gold, 36.6g/t silver

·; 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

 As follow up, ten small diameter (AQ) holes were drilled into the vein structures at Coire Ghabhalach and Creag Sheileach and 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 fieldwork has also identified a breccia pipe in the Auch project area which returned a single highly anomalous gold value. A ground based magnetic survey over the mapped pipe structure was conducted by Aurum Exploration Services. The survey identified two significant magnetic anomalies coincident or close to mapped pipe structures which warrant further follow up.

A series of AQ drill holes are planned in the Auch project area to further test possible mineralization at these prospects.

Corporate Activities

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.

Chris Sangster

Managing Director

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.