TGL.L Regulatory News (TGL)

31 August 2011

Touchstone Gold

Exploration Update

Three new areas identified, existing areas of mineralization confirmed

Touchstone Gold Limited ("Touchstone" or the "Company") (AIM: TGL) is pleased to announce an exploration update on its Rio Pescado Project located in Antioquia Department, Colombia.

Highlights

·; Three new mineralization areas identified and existing mineralization areas confirmed

·; Known mineralization area approximately doubled

·; Prospecting work to identify additional mineralization areas has commenced

·; Drilling has commenced on previously identified zones, with initial results expected in October

·; Permitting commencing for new mineralization zones

Following the success of its early exploration programmes, Touchstone has continued to explore the Rio Pescado property to expand its resource potential. Since the beginning of July, an aggressive multiphase ground-exploration programme has been undertaken consisting of regional stream sediment sampling, deep auger soil sampling, prospecting and ground geophysics. In addition, geological mapping and re-logging of previous drill core have been completed.

As a result of this exploration programme, three new areas have been identified, approximately doubling the Company's mineralized area. The prospective new zones, Taquel South, Taquel Central, and Taquel North (See Fig 1 : http://www.rns-pdf.londonstockexchange.com/rns/2774N_1-2011-8-30.pdf ) demonstrate many of the same characteristics as the previously identified Pepas, North Pepas, and Filodehambre areas. One of the three new zones, Taquel South has received preliminary results from the prospecting programme, indicating grades of up to 8.6 g/t Au.

Touchstone Gold is continuing its focussed programme of prospecting work to identify additional new zones whilst concurrently beginning the process to secure the appropriate permits for the newly discovered zones, which have occurred outside of the previously known areas of mineralization.

David Wiley, CEO of Touchstone commented: "These early exploration results are extremely encouraging as we pursue our long-term strategy to create a significant gold exploration and development group. We were very excited to kick-start the expanded exploration activity in July, and the results that we are now seeing confirm that the Rio Pescado project contains significant areas of gold mineralization. With the target areas having been expanded so dramatically, our focus is now on the implementation of a methodical drilling schedule."

Further Information

Stream Sediment Sampling:

An extensive stream sediment sampling programme has been carried out on the property. A total of 118 samples were obtained. All samples were analysed by ACME Analytical Labs of Vancouver, BC, Canada and subject to a 36 element ICP-MS analysis. Analytical results from the survey ranged from a background of 5ppb gold to a high of 2,800 ppb gold (2.8g/t Au). The survey successfully identified creek drainages which contained areas of known mineralization and also identified several other creek drainages with no known historic showings. Follow up prospecting in these newly identified drainage areas has resulted in the discovery of quartz float, the source of which has yet to be determined. Historically there has been extremely close correlation between the occurrence of quartz float and gold mineralization.

Soil Sampling:

To date, 1,391 soil samples have been collected from the property on a grid extending approximately 3,600 meters north-south and 2,000 meters east-west. Samples were collected on grid lines spaced 100 meters apart with soil samples taken every 50 meters along these lines. All samples were collected at a pre-determined depth using a hand auger. Samples were analysed utilizing ACME Analytical Labs of Vancouver BC., Canada and were subject to a 36 element ICP-MS analysis. Analytical results varied from background to a high of 760 ppb Au. The results have confirmed the areas of previously known mineralization and additionally, have outlined a number of anomalous areas that warrant further investigation. The most significant of these areas are as follows:

- Taquel South: Gold in soil anomalous zone coincident with an area of scattered quartz float boulders. The anomaly measures approximately 1,000m long by 300m wide and is open to the north and south and requires additional infill sampling.

- Taquel Central: Gold in soil anomalous zone coincident with an area of scattered quartz float boulders. The anomaly measures approximately 800m long by 200m wide.

- Taquel North: Gold in soil anomalous zone measuring 800m long by 150m wide. Coincident with an area characterized by abundant alluvial gold mining.

Touchstone notes that the Taquel area not only increases the total target areas with known mineralization, but also provides early confirmation of the highly prospective nature of the Rio Pescado area beyond the limited areas drilled so far.

Prospecting:

Prospecting of the Rio Pescado project area has been limited to the western portion of the property due to currently limited access. To date, 60 rock grab samples have been collected from quartz float and sub crop on the property including the area underlain by the Taqual South gold soil geochemical anomaly. Preliminary results from the prospecting program in the Taqual South area has been very encouraging with values up to 8.6 g/t gold being obtained from subcrop.

Ground Geophysics:

To date, approximately 68 line kilometres of pole-pole Induced Polarization (IP) and detailed Magnetic/VLF surveys have been completed on 100 meter spaced lines. The IP survey was conducted by ARCE Geophysics of Lima Peru and the Magnetics and VLF survey was performed by SJ Geophysics of Vancouver B.C. Preliminary results from the IP survey identified the known mineralized structures and identified other anomalies, some of which are coincident with the anomalous gold in soil geochemistry in the newly identified zones. Preliminary results from the ground Magnetic/VLF survey identified a number of prominent north-south structures which are bisected by northeast and northwest trending structures. These trends are consistent with the dominant gold mineralizing trends in the Segovia-Remedios Gold District.

Permits:

As a result of the recent exploration successes outside of those areas of known mineralization, Touchstone is currently in the process of applying for both water permits and environmental permits to allow for drilling of these newly identified targets. These new zones have resulted in a significant increase in the number of targets that will be drilled in the coming months.

Funding:

As a result of the Company's placing of ordinary shares to raise £10m in June of this year, Touchstone currently has the necessary funding in place to progress its multi-faceted exploration programme.

Mr. John Nicholson, P.Geo has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules. Mr. Nicholson is chief geologist of the Company and is a Fellow of the Royal Geographical Society, has a B.Sc. from the University of British Columbia, and has been an accredited member of the Association of Professional Engineers and Geoscientists since 1992. Mr. Nicholson is supervising the work programmes on the Rio Pescado Project.

For further information please contact:

Touchstone Gold

David Wiley Tel. +1 647 260 1247

Chief Executive Officer

Collins Stewart Europe Limited

John Prior Tel. +44 20 7523 8350

Seb Jones Tel. +44 20 7523 8350

Merlin

Ian Middleton Tel. +44 20 7726 8400

Anca Spiridon Tel. +44 20 7726 8400

About Touchstone Gold

Touchstone is a gold exploration company and the 100% owner of the Rio Pescado Project in Colombia, comprising four concessions over a total area of 39km(2) in the highly prospective Segovia Gold Belt. With a philosophy of creating value by the systematic exploration and development of the Group's existing assets as well as the acquisition of suitable exploration and development mineral projects, the Group's long-term intention is to build a significant gold exploration and production company.