SGZ.L Regulatory News (SGZ)

1 November 2010

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

SEPTEMBER 2010 QUARTERLY REPORT

GRAMPIAN GOLD PROJECT UPDATE

·; Beinn Udlaidh VEIN

·; High gold and silver results in AQ drilling, including:

- 11.1 g/t Au, 167g/t Ag over 1m

- 2.39 g/t Au, 139.6g/t Ag over 3.2m

·; High gold and silver results in rock chips, including:

- 6.53 g/t Au and >200g/t Ag and 5.21 g/t Au and >200 g/t Ag

·; RIVER VEIN AREA

·; Outcrop sampling in the River Orchy returns high gold and silver values, including:

- 383.8 g/t Au and 90.7 g/t Ag, 321.5 g/t Au and 102.4 g/t Ag and 197.3 g/t Au and 69.8 g/t Ag in a quartz vein (the 'River Vein'), and

- 171.8 g/t Au and 49.3 g/t Ag, 59.0 g/t Au and 9.8 g/t Ag and 1.9 g/t Au from other veins approximately one and two km upstream

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CONONISH GOLD AND SILVER PROJECT

·; Options to appeal and / or reapply being considered

GRAMPIAN GOLD PROJECT EXPLORATION UPDATE

BEINN UDLAIDH

Scotgold considers the veins systems at Beinn Udlaidh to be valid exploration targets. Over the period under review, an extensive mapping and rock chip sampling program in the Beinn Udlaidh area has now identified a number of high grade, narrow vein systems, in addition to a significant strike extension to the Beinn Udlaidh Vein.

It is noted that 85% of the area currently under license to Scotgold (including the Beinn Udlaidh prospects) is located outside the National Park.

Beinn Udlaidh vein

A rock chip sample taken by previous explorers from the Beinn Udlaidh vein to the north east of the drilled section of the vein returned 16.1 g/t gold and 2520 g/t silver.

As part of Scotgold's initial reconnaissance of the Beinn Udlaidh breccia vein, a confirmatory sample of 16.6 g/t gold, >200g/t silver and 449 g/t arsenic was returned as previously announced. Previous narrow diameter AQ drilling into the vein returned highly prospective values (see ASX release 29th September 2009) over the previously identified portion of the vein.

Further rock chip sampling and mapping on the vein structure has extended its strike extent to around 1900m with encouraging gold and silver grades (refer to figure 1 available at www.scotgoldresources.com under ASX releases). Selected rock chip sample values are shown in Appendix B.

Following rock chip sampling, four further AQ holes were drilled into various potential outcrop locations. Best drill intercepts on the vein include:

§ BUAQ100 - 11.1 g/t Au, 167g/t Ag over 1.0m

§ BUAQ101 - 2.39 g/t Au, 139.6g/t Ag over 3.2m

Two other holes (BUAQ102 and 103) did not intersect significant mineralisation and appear to have been collared in the hanging wall of the vein. Assay values for significant intersections are provided in Table 1 and drill statistics are shown in Appendix A.

Table 1: Significant drill intersections for AQ drilling at Beinn Udlaidh NE Vein extension

Scotgold has trenched the vein at a number of additional locations and will drill further AQ holes to test outcrop occurrences along the vein system.

River Vein Prospect Area

Detailed mapping and outcrop sampling in the River Orchy, following up previous explorers' rock chip sampling results at the River Vein Prospect area have returned exceptional values of 383.2 g/t Au, 321.5 g/t Au and 197.3 g/t Au in rock chip samples (refer to figure 2 available at www.scotgoldresources.com under ASX releases). High grade values were also recorded on some rock chip samples at two additional new veins located upstream of the River Vein, returning 171.8 g/t Au, 59.0 g/t Au and 1.89 g/t Au.

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

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.

Selected values are shown in Appendix B. 

Since 2009 Scotgold has been collaborating in a research project with Dr Robert Chapman of the University of Leeds, studying mineralogical signatures in placer gold grains from various localities in the rivers around Tyndrum. In 2009 sampling was extended to new areas of interest including the Glen Orchy area.

Dr Chapman has informed Scotgold that the grains of gold collected and studied from River Orchy tributaries showed two clear contributing signatures, both distinctive to the region by virtue of their anomalous bismuth signature and possibly not from an explosion breccia source. More sampling is required to further ascertain the nature of the local gold signature.

Regional

Rock chip sampling and AQ drilling continue at prospects in the Auch area and regionally and results are expected shortly.

CONONISH GOLD AND Silver project

On 11th August, the Company received a copy of the report from the Executive Director of Planning and Rural Development at the Loch Lomond and the Trossachs National Park to the National Parks Board recommending refusal of its application to build an underground mine to develop the Cononish gold and silver project.

On 18th August, at the meeting of the National Parks Board (the 'Board') at the Tyndrum Village Hall, the recommendation for refusal was upheld by the Board by a narrow majority of 12 to 10. The principal reasons for refusal were the landscape and visual impact of the Tailings Management Facility (TMF).

The Company was most surprised and disappointed at the decision given the apparent spirit in which previous discussions over the past three years had been held. Scotgold believes its application has considerable environmental advantages over the previously permitted application, and significant merit in the local, regional and national economic context.

The Company is considering its options to progress the project which include appealing to the Scottish Ministers and submitting an amended application. Any appeal would need to be made within three months of the decision date of 18th August.

Rights Issue

On 17th August, the Company announced a non renounceable rights issue to raise Aus$ 1M, the closing date of which is 3rd November 2010.

For further information please contact:

United Kingdom:

Australia:

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.

Appendix A: Statistics of AQ diamond drilling at Beinn Udlaidh Vein North East Extension

Appendix B: Selected recent rock chip sample results from Beinn Udlaidh