TSG.L Regulatory News (TSG)

Trans-Siberian Gold plc

Exercise of conversion options in respect of US$4.8 million existing debt

LONDON: 31 January 2012 - Trans-Siberian Gold plc ("TSG" or "the Company") (TSG.L) reports that it has been notified by the Company's major shareholders UFG Asset Management ("UFG") and AngloGold Ashanti Limited ("AGA") that UFG and AGA each wish to exercise their respective options to convert a portion of the outstanding balances of several loan facilities provided to TSG into ordinary shares in the Company ("Shares").

TSG reported on 29 September 2011 that UFG and AGA had agreed to provide the Company with short term loan finance of US$5 million and U$3 million respectively, on commercial terms, each loan being repayable 180 days after drawdown, and that UFG and AGA each had an option, subject to the requisite approval of TSG's shareholders, to convert any part of the outstanding loans into Shares at a price equivalent to the volume weighted average closing price of the Shares during the 60 trading days prior to notice of such conversion.

The current aggregate balance of the UFG loan facilities is US$5.1 million including accrued interest. The aggregate balance of the two facilities in respect of which conversion notices have been received is US$3.1 million including accrued interest.

The current balance of the AGA loan facility is US$3.1 million including accrued interest, of which, pursuant to AGA's conversion notice, US$1.7 million is to be converted into Shares.

The two UFG loans and US$1.7 million outstanding under the AGA loan, including further interest accrued, will be converted into new Shares by applying the closing US dollar:pound sterling exchange rate on the business day immediately preceding the date of the conversion and a conversion price of 69.94p, in the case of the UFG loans, and 69.98p, in the case of the AGA loan. The conversion prices represent the volume weighted average closing price of the Shares for the 60 trading days up to and including 25 January 2012 and 27 January 2012, being the trading days prior to the respective notices of conversion. Assuming an exchange rate of US$1.57:£1, the above described conversion prices and conversion on 1 February 2012, the conversion would result in the issue of approximately 2,818,525 new Shares to UFG and approximately 1,584,452 new Shares to AGA as consideration for the release of the Company's indebtedness to UFG and AGA under the three loan facilities described above.

This issue of new shares falls within the authority of TSG's directors to issue shares on a non pre-emptive basis as approved by shareholders on 8 November 2011.

Based on the above assumptions, the new Shares, when issued, will represent approximately 4.05% of TSG's enlarged issued share capital and the respective interests of UFG and AGA will increase from 54.94% to approximately 55.30% and from 30.90% to approximately 31.11% of the Company's total issued share capital.

As reported on 1 February 2008, the Company is not subject to The City Code on Takeovers and Mergers. The Company's principal place of business is not in the UK and a majority of its Directors are based outside the UK. Therefore, the Company is deemed to be outside the jurisdiction of the Code and will not be subject to the Code while its management and control remain outside the UK.

Conversion of the UFG and AGA loan facilities are deemed to be related party transactions in accordance with the AIM Rules due to UFG and AGA being substantial shareholders of the Company.

The Directors, other than Messrs Fenner and Ryan (who are connected to UFG), having consulted with Seymour Pierce Limited, the Company's nominated adviser, consider the terms of the UFG conversion to be fair and reasonable insofar as TSG's shareholders are concerned.

The Directors, having consulted with Seymour Pierce Limited, the Company's nominated adviser, also consider the terms of the AGA conversion to be fair and reasonable insofar as TSG's shareholders are concerned.

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