TSG.L Regulatory News (TSG)

Trans-Siberian Gold plc

Additional US$18 million Asacha loan facility

Shareholder US$2 million loan facility

Asacha project update

London: 1 November 2010 - Trans-Siberian Gold plc ("TSG" or "the Company") (TSG.L) reported on 29 September 2010 that, in addition to the $25 million Sberbank loan facility for the Asacha project in Kamchatka, Far East Russia, further funding of US$18 million was required to provide adequate financing for the Group until the Asacha mine is cash flow positive. TSG is pleased to report that that an agreement has now been signed with Sberbank for an additional four year US$18 million loan facility for the Asacha project and that first drawdown of the new facility is expected in the first half of November, after the loan's outstanding conditions, including finalisation of security, have been satisfied.

In order to prevent any delays in the completion of construction at Asacha while the outstanding conditions of the new Sberbank loan are satisfied, the Company's major shareholder UFG Asset Management (UFG) has also agreed to provide the Company with loan finance of up to US$2 million on commercial terms. All or part of the loan 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 may convert any part of the outstanding loan into TSG shares at the same time and price per share as that equity raising. UFG also has an option, subject to the requisite approval of TSG's shareholders, to convert any part of the outstanding loan 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.

Mine development and construction activity at Asacha have continued according to schedule. In September mine development and preparation works, by-product extraction and exploration works amounted to 138 metres and 1,500 m3 of mining (1,193 metres and 12,618 m3 in the first nine months of 2010). Ore mined in the first nine months of 2010 totalled almost 15,000 tonnes; including the adit ore and the ore mined in the previous periods the ore stockpile at the end of September 2010 consisted of more than 54,000 tonnes.

By 1 October 2010 assembly of metal parts for the plant building was complete.Covering of the plant building with sandwich wall panels and roofing is nearing completion. The first layer of roof panels is already installed and the roof's thermal protection (placing of a heat-insulating layer) has started. A specialist contractor is installing the major plant equipment. According to schedule, the installation of major technological equipment is anticipated to be completed in December. The ventilation equipment is now being installed. A contractor is expected to start work shortly on the installation of electrical equipment, automation systems and plant lighting.

As previously reported, work on the tailings storage facility was affected by exceptional summer rainbutis now being undertaken 24 hours a day, using additional equipment (and, during the night shift, machinery allocated to other objects during the day). Soil is currently being removed at around 5,000 m3 per day, with 125,000 m3 excavated in September. Contractors have already commenced the laying of the geomembrane.

Construction of the other infrastructure objects is proceeding, including the repair shops, sewage treatment facility, settling pond, fuel storage tanks, cyanide storage facility and intra-site networks for water, heat and power supply. The container gensets are installed at the site and construction of the power supply line at site has now commenced. The cyanide storage facility is expected to be commissioned by mid-November, whereafter, in accordance with Russian legislation, the special license for the purchase of cyanides will be obtainable.

An agreement has been signed, in the presence of the President of the Russian Federation Dmitry Medvedev, with Federal Hydro Generation Company (RusHydro) and RAO Energo Systems of the East in respect of the provision of the external electricity supply to Asacha from the projected additional generation facilities of the Mutnovskay Geothermal Station in Kamchatka. Pursuant to the agreement, RusHydro will provide the electricity as soon as the new generation facilities at Mutnovskay are ready and the respective grid power line and other necessary infrastructure objects are built by TSG. While the new facilities at Mutnovskay are under construction, Asacha will be able to get electricity from Mutnovskay's existing facilities.

Ends

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