TSG.L Regulatory News (TSG)

Trans-Siberian Gold plc

Asacha project update

US$4.33 million shareholder loan facilities

London: 19 April 2011 - Trans-Siberian Gold plc ("TSG" or "the Company") (TSG.L)reports on the progress of construction at the Asacha site.

In February 2011 a second shift was arranged at the mine to ensure the mining of high-grade ore by the time of plant commencement by the end of July 2011. 260 metres and more than 2,660 m3 of mine development were completed in February and 281 metres and more than 3,100 m3 in March. The ore stockpile at 31 March 2011 comprised more than 64,000 tonnes.

By the beginning of April 2011, the plant building's panel walls and multi-layer roofing with thermal insulation had been completed and its inside concrete walls, concrete flooring and ventilation system were close to completion. Construction of the coarse ore bin and conveyor gallery has commenced and the technological piping and construction of the heating system are also in progress.

Although thick snow caused earth works and geomembrane laying activities at the tailings storage facility to slow, we expect that the facility will be operational when the processing plant is launched by the end of July 2011.

The thermally insulated repairs shop building is ready, including the concrete floor and equipment foundations, except for completion of its supply systems which can be set up later. Construction of water, heat supply and sewage networks at the site is in progress. Heat recovery units have been installed at the diesel generators site and electric wiring works are under way.

Following obtaining the license and commissioning of the cyanide storage facility in February 2011, the contract for cyanide purchasing has been signed.

The total capital cost of the Asacha project prior to commencement of production is now estimated at US$129.3 million, net of US$10.2 million VAT recoveries, compared to the 2 March 2011 estimate of US$128.5 million (net of US$10.2 million VAT recoveries). The total project cost includes pre-commissioning mining and plant costs of US$3.9 million, other pre-operating expenditure of US$37.1 million, "first fill" equipment spares and consumables of US$1.0 million and contingency of US$0.5 million.

Actual expenditure on the project up to 28 February 2011 amounted to US$115 million, net of US$8.7 million VAT recovered. The remaining costs prior to the commencement of production are estimated at US$14.3 million, net of further VAT recoveries of US$1.5 million, comprising:

A further US$27.5 million of capital expenditure is expected to be incurred after the commencement of production (including US$6.3 million on mine development, US$5.1 million on the plant, tailings storage and solid waste landfill, US$11.6 million for the completion of the external power line and US$4.5 million contingency).

Following the US$4 million increase in the pre start up capital cost of the Asacha project reported on 2 March 2011, the Company's major shareholders UFG Asset Management (UFG) and AngloGold Ashanti (AGA) have agreed to provide the Company with loan finance, of US$2 million and US$2.33 million respectively, on commercial terms. As with the existing US$2 million UFG loan facility reported on 1 November 2010, all or part of the loans may be repaid by TSG without penalty at any time before the scheduled repayment in two equal tranches, on the fourth and fifth anniversaries of the commencement of gold production at Asacha.

If the Company raises equity during the term of the loan, UFG and AGA may convert any part of their outstanding loans into TSG shares at the same time and price per share as that equity raising. UFG and AGA also have an option, subject to the requisite approval of TSG's shareholders, to convert any part of their outstanding loans into TSG shares at a price equivalent to the volume weighted average price of TSG's shares for the period of 60 business days prior to notice of such conversion.

As UFG is a substantial shareholder in the Company, and pursuant to AIM Rule 13, the UFG loan is deemed to be a related party transaction. The Company's Board (except for Florian Fenner, Dmitry Khilov and Charles Ryan who are connected to UFG) consider, having consulted with TSG's Nominated Adviser, Seymour Pierce Limited, that the terms of the UFG loan are fair and reasonable insofar as the shareholders of TSG are concerned. On the basis of this advice the Board has approved the UFG loan.

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