SolGold Regulatory News (SOLG)

30 August 2016

SolGold plc

("SolGold" or the "Company")

Block Caving Gold Mine Specialist Newcrest Mining Enters Conditional Agreement to Invest in 10% of SolGold

Highlights:

· Newcrest to subscribe for 135.708m shares in SolGold at US8 cents per share (6.07 pence for net proceeds of US$10.8m) subject to and conditional upon SolGold shareholder approval being obtained within 45 days.

· SolGold Board recommends the investment by Newcrest, subject to no superior proposal being received by SolGold prior to shareholder approval.

· DGR Global, a substantial shareholder of SolGold (with 16.9%), will irrevocably commit to vote in favour of the Newcrest investment, subject to no superior proposal being received by SolGold prior to shareholder approval.

· Shareholders associated with the private holdings of the CEO and Director Nicholas Mather will irrevocably commit to vote in favour of the investment by Newcrest.

· Newcrest to have anti-dilution rights in respect of all capital issues and top up rights to a maximum 10% of SolGold, provided Newcrest does not drop below a 5% shareholding level.

· Newcrest to have a right to appoint a Director to the SolGold Board provided Newcrest does not drop below a 10% shareholding level.

· Newcrest will support the recommendations of the Board of Directors in respect of SolGold Board composition.

· Newcrest will support the recommendations of any Independent Expert appointed by the SolGold Board in the case of shareholder approvals required in change of control transactions on the project, SolGold itself, and any capital change resolutions required in the ordinary course of business if supported by holders of 60% of SolGold shares voting or accepting for a minimum period of three years.

· SolGold will draw on Newcrest technical expertise in the forward programs at Cascabel.

The Board of SolGold (AIM: SOLG) is pleased to announce that it has entered a conditional Share Subscription Agreement (SSA) with Newcrest International and its parent, Newcrest Mining Limited, one of the world's preeminent gold mining companies and block cave mining operators. The SSA provides for the investment by Newcrest of US$10,868,592 for 135,857,401 new ordinary shares in SolGold, subject to SolGold shareholder approval, which is to be sought within 45 days.

The SolGold Board of Directors has unanimously approved the proposed transaction, and substantial shareholder DGR Global has also provided in-principle approval for the proposed transaction, both subject to there being no superior proposal being made to SolGold by an independent bona fide third party for in excess of 5% of the share capital of SolGold prior to SolGold shareholder approval being obtained. Other shareholders representing the private interests of CEO and Managing Director Mr Nicholas Mather have approved the transaction unconditionally.

Under the SSA, Newcrest will have, once unconditional, subject to holding more than 10% of the share capital of SolGold, a right (but not an obligation) to appoint a Director to the Board of SolGold, anti-dilution rights to maintain the position prior to any capital issues to a maximum of 10% of the undiluted share capital of SolGold, and a top up right to that level to be available for exercise every 6 months in the event that option exercises or any converted debt notes result in the issue of further shares or if there are issues of equity securities under employee or officer share or option schemes.

Newcrest have agreed for a period of three (3) years to follow the recommendations of any independent Expert appointed by the SolGold Board to opine in respect of any proposed change of control transactions in respect of the SolGold share capital or its assets, in circumstances where it is demonstrable that holders of 60% of SolGold shares voting at a meeting or lodging acceptances are supportive of the particular formal proposal. Newcrest have also agreed to support capital change resolutions put to SolGold shareholders affecting authorised capital limits and pre-emption waivers under the LSE AIM rules, in the event that 60% of the votes cast at a meeting of SolGold shareholders approve the same.

Newcrest will provide technical support and advice to SolGold at SolGold's request and at market rates.

Commenting on the SSA, the CEO of SolGold Mr Nicholas Mather said:

"We view this as a paradigm shift in SolGold's business, particularly in relation to Cascabel. The endorsement by Newcrest of the Alpala Deposit as defined to date and future potential at Cascabel, including the multitude of targets outlined to date is compelling.

We believe that Newcrest is one of the world's best gold and copper miners and their focus on best practice underground block cave mining at the "tier one" Cadia East copper gold porphyry mine in New South Wales, Australia, makes Newcrest a most suitable long term investor in SolGold as we focus on Cascabel. Newcrest has primarily been built on exploration expertise with the discovery of Cadia Ridgeway, Golpu in Papua New Guinea (co discovered with Harmony) and Gosowong in Indonesia, so they understand the importance of good exploration and that's been an important aspect of discussions. They like what we do and they understand it.

I want to offer my sincere thanks to all of the staff, consultants, contractors and families who have supported every aspect of the Cascabel Project exploration effort, together with the corporate and administrative effort in SolGold to date.

This company is a major in the making."

About Newcrest

Newcrest Mining Limited (ASX: NCM) is the largest dedicated gold producer listed on the Australian Stock Exchange with a market capitalisation of ~A$17 billion at the date of this announcement. Newcrest has an outstanding record in exploration and in developing high tonnage open cut and underground block cave mines and smaller high grade operations. Newcrest has a world class portfolio of operating copper gold mines at Cadia Valley in New South Wales and Telfer in Western Australia's Pilbara, gold mines at Lihir Island, Hidden Valley and Bonikro in Cote D'Ivoire and copper gold resources in the Golpu Porphyry project in Papua New Guinea.

For the 2016 financial year Newcrest reported a statutory profit of US$332m from the production of 2.439 million ounces of gold and 83kt of copper at an All In Sustaining Cost of $762 per ounce of gold.

Newcrest's Annual Resources and Ore Reserves Statement as at 31/12/15 announced on 15 February 2016 reported:

"Group Ore Reserves are estimated to contain 69 million ounces of gold, 11 million tonnes of copper and 46 million ounces of silver", and "Group Mineral Resources are estimated to contain 140 million ounces of gold, 20 million tonnes of copper and 120 million ounces of silver."

Readers are advised to read the entire statement.

Additional information in the Newcrest Annual Report for the financial year 2015, financial results for the full year to 30/6/16 announced on 15/8/16 and recent presentations can be found at www.newcrest.com.au 

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.

Following a comprehensive review of the geology and prospectivity of Ecuador, Solgold and its subsidiaries have also applied for additional exploration licences in Ecuador over a number of additional promising porphyry copper gold targets throughout the length of the Country

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.