SolGold Regulatory News (SOLG)

25 August 2016

SolGold plc

("SolGold" or the "Company")

Capital Raising Update

The Board of Directors of SolGold (AIM:SOLG) is pleased to provide the following update in relation to the capital raising initiatives being undertaken by the Company in conjunction with Maxit Capital LP (Maxit) as previously announced on 8 July 2016 and 1 August 2016.

First Tranche Arrangements - Maxit

Settlement of the First Tranche is expected on Friday 26 August 2016, with full details to be announced at that time. The First Tranche has been fully subscribed, and will include participation by Maxit Capital, third party investors, DGR Global Limited ("DGR Global") and company management.

DGR Global is participating via the conversion of the majority of its current indebtedness under the terms of the loan facility agreement announced on 1 July 2016. As outlined in that announcement, DGR Global had the option to convert all or part of its loan, including accrued interest, into equity of SolGold in the event that SolGold conducted an equity capital raising, at the same price as third party participants. Maxit has invited and welcomed the participation of DGR Global into the First Tranche arrangements.

Second Tranche Arrangements - Maxit

As outlined in the announcement of 1 August 2016, Maxit and SolGold have agreed that, following the closure of the First Tranche, Maxit would hold an option to lead a further equity raising of up to US$15 million (Second Tranche) at a price to be determined, with the amount able to be reduced at SolGold's election. As with the First Tranche, Maxit is entitled to include third parties in the placement of shares, subject to the approval of SolGold. In this regard, the Board is pleased to advise that demand for the Second Tranche has been strong from a number of major international mining and resource investment funds.

Arrangements for the Second Tranche are expected to be finalised on or about 10 October 2016, and are subject to shareholders approving the issue and allotment for Tranche 2 at a shareholder's meeting to be convened.

Third Party Corporate Interest

SolGold has entered into a number of Confidentiality Agreements with unassociated third party major international mining companies, and several of these have conducted detailed due diligence and project site reviews. SolGold is, as a result, in advanced negotiations for the potential participation of a major international gold mining company in SolGold's capital raising initiatives, and the Company hopes to be able to update the market further on these developments shortly.

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 953,897,601 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.