TGL.L Regulatory News (TGL)

Touchstone Gold Limited (AIM:TGL) ("Touchstone" or the "Company")

Issue of equity due to accelerated sales

and CQCL option agreement

London, 15 May 2015 - Touchstone (AIM:TGL), the AIM listed investment company today announces that it has placed 75,000,000 common shares of no par value in the Company (the "Placing Shares") at 0.6 pence per share with a number of existing and new investors to raise £450,000 (the "Placing"). Peterhouse Corporate Finance has undertaken the Placing.

The proceeds of the Placing will fund the continued growth and development of portfolio company GOS Systems ("GOS") including enhancement of its international product, development of the sales pipeline and further development of an integrated secure mobile communications platform. This is necessary due to a greater than expected increase in the customer base, in particular outside of the United Kingdom. In addition proceeds will be used to meet Company head office costs.

Touchstone and GOS are encouraged by the sales and new customer acquisition opportunities in the near term GOS sales pipeline. In particular the Company notes that projected sales of the newly enhanced tactical intelligence platform for international clients are now expected by management to form a greater percentage of Company revenue in this financial year than previously expected.

In addition, the Company intends to use part of the proceeds to exercise an option to invest in unquoted new ordinary shares in Cambridge Quantum Computing Limited ("CQCL") (the "Option") (http://cambridgequantum.com). CQCL develops tools for the commercialisation of quantum computers by understanding quantum protocols and also quantum algorithms. As quantum devices become more prevalent, the focus of CQCL's activity will be the development of algorithms and source code. CQCL is a pre-revenue business incorporated in July 2014 and founded by a team working on the project since April 2013.

The Option was granted to TGL in November 2014 for providing professional services regarding several CQCL business development initiatives. The Option allows the Company to invest £200,000 at a price per share that will be 20% below the price per share paid by CQCL's expected institutional and other investors in a financing that is currently anticipated to occur in 2015. Based on the expected valuation of CQCL at the time of the forthcoming financing, Touchstone's resultant holding in CQCL is not expected to represent a significant percentage of CQCL's issued share capital. CQCL is currently controlled by its majority shareholder and director Ilyas Khan, who is also interested in approximately 9.84 per cent. (pre-Placing) of the issued share capital of Touchstone, as previously disclosed.

Investors are reminded that on 30 June 2014, following the Company's annual general meeting ("AGM"), the Company announced the adoption of the investing policy and that the Company would be required to implement the investing policy within the next 12 months. The Company has to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its investing policy within 12 months of the AGM failing which, the Company's Ordinary Shares will then be suspended from trading on AIM. If the Company's investing policy has not been implemented to the satisfaction of the London Stock Exchange within 18 months of the AGM then the admission to trading on AIM of the Company's Ordinary Shares will be cancelled and the Directors will convene a general meeting of the shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to shareholders.

The Placing Shares will rank pari passu with the existing common shares and application will be made for the Placing Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and dealings in the Placing Shares will commence by 8.00 a.m. on 26 May 2015.

Following Admission of the Placing Shares, the Company's issued share capital will consist of 680,982,800 common shares with voting rights. This number 680,982,800 may be used by shareholders, following the Placing, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

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