SolGold Regulatory News (SOLG)

26 August 2016

SolGold plc

("SolGold" or the "Company")

Maxit Capital - First Tranche Raising

Share Issue Details

Further to its previous market releases of 8 July, 1 August and 25 August 2016, the Board of SolGold Plc ("SolGold" or "Company"; AIM code: SOLG) is pleased to advise that the Company is today issuing a total of 268,819,004 new ordinary shares of 1p each ("Ordinary Shares") under a series of agreements for a total consideration of USD21,505,520 (GBP16,129,140) under the First Tranche of the overall raising arrangements negotiated with Maxit Capital LP (Maxit).

As indicated in the Company's previous announcements, Maxit had the right to include third parties in the raising and allotment process. Maxit duly invited SolGold's largest creditor (DGR Global Limited) and SolGold's management, project staff and the Company's IR firm to participate in the allotment to ensure the alignment of company and investor interests. Accordingly, the final agreements to issue new Ordinary Shares cover:

a) the raising of USD15,709,381 in cash proceeds for the allotment of new Ordinary Shares;

b) the conversion to equity of the Company for amounts owed to various parties, primarily SolGold's management and project employees;

c) the conversion by Maxit to equity of the Company, at their election, of their fee due under the First Tranche raising arrangements; and

d) the conversion to equity of the Company for USD4,389,000 of the debt funding provided by DGR Global Limited ("DGR Global") in accordance with the terms of the loan arrangements announced to the market on 1 July 2016.

All new Ordinary Shares will be issued at a price of USD$0.08 (approximately 6 pence) per share, as previously announced, and as outlined in further detail below.

Use of Proceeds

The proceeds from the capital raising will be used to continue to fund the Company's exploration of its flagship Cascabel Copper Gold Porphyry Project, for general working capital purposes and ongoing corporate costs. As previously announced, SolGold intends to contract additional drill rigs to expand exploration on the overall Cascabel concession whilst also continuing to work towards the delivery of a maiden resource at Alpala.

Investor Details

Maxit and a number of investors, subscribed for a total of 196,367,264 new Ordinary Shares for cash proceeds of USD15,709,381 (GBP11,782,036).

Under the terms of the loan facility agreement announced on 1 July 2016, and at the invitation of Maxit, DGR Global has elected to convert USD4,389,000 (GBP3,291,750) of the drawn facility into 54,862,500 new Ordinary Shares in the capital of the Company. The remaining draw down under the facility (approximately AUD50,000) will be repaid from the proceeds of the raising, and the facility will then be closed off.

Maxit have elected to convert the fee owing to them for the introduction of their cash investors (USD940,643 or GBP705,482) into 11,758,038 new Ordinary Shares in the Company.

The issue of new Ordinary Shares also includes the conversion of amounts owing to the management and project staff of the Company and the Company's IR firm on account of fees and remuneration due to them. A total of 5,831,202 new Ordinary Shares have been issued to management, project employees and the IR service provider to the Company for the equivalent of USD466,496 (GBP349,872).

DGR Global currently holds a 15.99% interest in the issued ordinary share capital of SolGold and is a related party to SolGold, as defined in the AIM Rules for Companies ("AIM Rules"). The terms of the loan facility agreement between DGR Global and SolGold, including the right to participate via debt conversion as part of SolGold's next capital raising, were announced to the market on 1 July 2016.

Brian Moller and Nicholas Mather are Directors of both SolGold and DGR Global. The loan conversion referred to above is a related party transaction as specified in Rule 13 of the AIM Rules. Accordingly, John Bovard and Robert Weinberg, being the independent Directors of SolGold for the purposes of Rule 13 of the AIM Rules consider, having consulted with the Company's nominated adviser, SP Angel Corporate Finance LLP, that the terms and conditions of the conversion of the loan by DGR Global are fair and reasonable insofar as the shareholders of the Company are concerned.

Application will be made for the admission of 268,819,004 new Ordinary Shares to trading on AIM ("Admission"). Admission is expected to occur on or around Friday 2 September 2016.

Commenting on the capital raising Executive Director Nick Mather said:

"We are very pleased to have Maxit and a number of its clients as shareholders, and now have the funds available to enable aggressive drill testing of the other seven priority targets in the Cascabel cluster, and the definition of a maiden resource at Alpala."

Holdings in Company

DGR Global has participated in the issue of new Ordinary Shares as outlined above. The interests of DGR Global currently, and following the debt conversion under its loan facility as outlined above, are as follows:

Fees Payable to Maxit

As outlined in the previous announcements, Maxit is entitled to a fee of 6% of the amount it raised under the First Tranche. As outlined above, Maxit have elected to convert their fee entitlement to 11,758,038 new ordinary shares in the Company. Maxit is also entitled to be issued with warrants over a further 11,758,038 ordinary shares in the Company, half exercisable at 14p and half exercisable at 28p. The warrants will have a 24 month exercise period from the time of their issue.

Total Voting Rights

The 268,819,004 new Ordinary Shares to be issued will rank pari passu with the existing Ordinary Shares. The rights attaching to the new Ordinary Shares, including as to voting, are the same as those of the existing Ordinary Shares. Following the issue of new Ordinary Shares, the total issued ordinary share capital of the Company consists of 1,222,716,605 Ordinary Shares each with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights in the Company following Admission of the new Ordinary Shares will be 1,222,716,605 and this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

By order of the Board

Karl Schlobohm

Company Secretary

Contacts:

Mr Nicholas Mather Tel: +61 (0) 7 3303 0665

SolGold Plc (Executive Director) +61 (0) 417 880 448

nmather@solgold.com.au 

Mr Karl Schlobohm Tel: +61 (0) 7 3303 0661

SolGold Plc (Company Secretary)

kschlobohm@solgold.com.au 

Mr Ewan Leggat / Richard Morrison Tel: +44 (0) 20 3470 0470

SP Angel Corporate Finance LLP (NOMAD and Broker)

Ewan.leggat@spangel.co.uk / richard.morrison@spangel.co.uk 

NOTES TO EDITORS

SolGold is a Brisbane, Australia based, AIM‐listed (SOLG) copper gold exploration and development company with assets in Ecuador, the Solomon Islands and Australia. The Company's primary objective is to discover and define world‐class copper‐gold deposits. SolGold's Board and Management Team have substantial vested interests in the success of Company, as well as strong track records in the areas of exploration, mine development, investment, finance and law. SolGold's experience is augmented by state of the art geophysical and modelling techniques and the guidance of Newmont trained porphyry expert Dr Steve Garwin.

Cascabel, the Company's world class flagship copper‐gold porphyry project, is located in North West Ecuador on the under‐explored northern section of the richly endowed Andean Copper Belt. SolGold owns 85% of Exploraciones Novomining S.A. ("ENSA") and approximately 11% of TSX‐V‐listed Cornerstone Capital Resources, which holds the remaining 15% of ENSA, the Ecuadorian registered company which holds 100% of the Cascabel concession.

To date SolGold has completed geological mapping, 25km2 of soil sampling, 14km2 and an additional 9km2 Induced Polarisation and Magnetotelluric "Orion" surveys over the Alpala cluster and Aguinaga targets respectively. By June 2016, the Company had also completed approximately 23,700m of drilling and expended a total of approximately US$33m on the program, corporate costs and investments into Cornerstone. Intense diamond drilling is planned for the next 12 months with four drilling rigs.

Cascabel is characterised by fourteen (14) identified targets, world class drilling intersections over 1km in length, and high copper and gold grades, as well as logistic advantages in location, elevation, water supply, proximity to roads, port and power services and a progressive legislative approach to resource development in Ecuador. To date, SolGold has only drill tested one of the 14 targets, being Alpala.

SolGold is planning a resource statement at Alpala (the most advanced target at Cascabel) during 2016. This has been delayed by the discovery of high-grade mineralisation in Hole 17 at Alpala, extending the immediate resource potential. Alpala is open at depth in the upper extensions, and to the north, north-east, south-west and south-east. The mineralised zone at Alpala and Moran is closely modelled by magnetic signatures and currently encompasses over 10Bt of magnetic rocks expected to be mineralised with copper and gold.

SolGold will drill test other key targets within the Cascabel concession at Aguinaga, Trivinio, Moran, Alpala Northwest, Hematite Hill, Alpala Southeast, Cristal, Parambas, Carmen Tandayama-America and Chinambicito. The Company is planning further metallurgical testing by the end of 2016, and completion of a conceptual early stage mine and plant design and a scoping study for an economic development at Cascabel. SolGold is investigating both high tonnage / low-medium grade open cut and underground block caving operations, and a high grade / low tonnage underground development.

Drill hole intercepts are calculated using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample. Copper equivalent grades are calculated using a gold conversion factor of 0.89, determined using copper price of US$2.20/pound and gold price of US$1350/ounce.

In Queensland, Australia the Company is evaluating the future exploration plans for the Mt Perry, Rannes and Normanby projects. Joint venture agreements are being investigated for a joint venture partner to commit funds and carry out exploration to earn an interest in the tenements.

SolGold retains interests in its original theatre of operations, the Solomon Islands in the South West Pacific, where the 100% owned, as yet undrilled, Kuma prospect exhibits surface geological characteristics which are traditionally indicative of a large metal rich copper gold intrusive porphyry system. SolGold intends in the future to apply intellectual property and experience developed in Ecuador to target additional world class copper gold porphyries at Kuma and other targets in Ecuador and Argentina.

SolGold is based in Brisbane, Queensland, Australia. The Company listed on London's AIM Market in 2006, under the AIM code 'SOLG' and currently has a total of 1,222,716,605 ordinary shares issued, 820,000 options exercisable at 50p, 5,030,000 options exercisable at 28p and 8,030,000 options exercisable at 14p.

CAUTIONARY NOTICE

The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.