Issue of Equity

Trans-Siberian Gold plc

Proposed equity conversion of US$5.2 million existing debt

Proposed placing to raise US$1.7 million

Asacha Project update

General Meeting

LONDON: 1 March 2010 - Trans-Siberian Gold plc ("TSG" or "the Company") (TSG.L) is pleased to announce proposals to strengthen its capital base and provide additional financial resources by converting US$5,209,133 of existing debt into up to 12,345,087 new TSG ordinary shares at 30.8 pence per share (the "Conversion") and by raising approximately £1.1 million, net of expenses, through a placing of 3,533,534 new ordinary shares also at 30.8 pence per share (the "Placing"), in each case conditional on the approval of the Company's shareholders at a General Meeting of the Company, to be held on 23 March 2010 (the "GM"). The number of new ordinary shares to be issued pursuant to the Conversion will be determined in accordance with the closing US dollar:pound sterling exchange rate on 22 March 2010, as more fully set out in a circular sent to shareholders on 26 February 2010 (the "Circular") together with the notice of the GM.

UFG loans

TSG reported on 29 May 2009 that, while negotiations continued with other potential sources of finance for the Asacha project, its major shareholder UFG Asset Management ("UFG") had agreed to provide the Company with bridging finance of up to US$3 million on commercial terms, repayable in two equal tranches, the first on the earlier of the first anniversary of the commencement of gold production at Asacha and 30 September 2011, and the second on the earlier of the second anniversary of first gold production and 30 September 2012.

The Company also reported that UFG had an option, subject to the requisite approval of TSG's shareholders, to convert any part of the outstanding loan into TSG ordinary shares at a price equivalent to the volume weighted average price of the Company's shares for the period of 60 business days prior to notice of such conversion.

TSG reported on 19 October 2009 the first drawdown of a three year US$25 million loan facility for the Asacha project from a Russian bank (the "Asacha Facility"). Negotiations continued during fourth quarter 2009 with a second Russian bank, which had indicated more favourable terms over the three year term of the facility, with a potential interest saving, net of arranger fees, of approximately US$1 million. However, this bank required an interest prepayment of approximately US$846,000 during the construction period of the project.

The Company considered that, as the terms offered by the second Russian bank were more favourable, it was in the best interests of TSG to refinance the initial borrowing. In order to facilitate the refinancing of the Asacha Facility and to provide funds for the interest prepayment required by the second bank, on 2 December 2009 UFG agreed to provide the Company with bridging finance of a further US$3.5 million on commercial terms. It was agreed that all or part of the loan could be repaid by TSG without penalty at any time before the scheduled repayment, which was to be in two equal tranches, on the same dates as the earlier UFG loan. It was also agreed that the second UFG loan could be converted into TSG shares on the same basis as the first UFG loan as described above.

The Company drew down the US$3.5 million facility from UFG on 8 December 2009 and, following the completion of the refinancing of the Asacha Facility, repaid US$2.5 million to UFG on 30 December 2009.

On 25 February 2010 UFG notified the Company that it wished to exercise the conversion option in respect of the outstanding amounts of the two UFG loans.

AGA Debt

In connection with the Subscription Agreement between TSG and AngloGold Ashanti Limited ("AGA") dated 30 June 2004, AGA agreed to provide specialist technical consultancy services to the Company for a three year period on commercial terms. The services included staff secondments, as well as provision of mining, metallurgical and exploration expertise. TSG and AGA have now agreed the outstanding amount due to AGA in respect of the consultancy services at US$744,567 and, as part of the settlement, that this amount, less US$32,693 costs incurred by TSG on behalf of AGA, being US$711,874 net, should bear interest on commercial terms with effect from 1 January 2009.

AGA Option Exercise and Placing

The Subscription Agreement also included an anti-dilution provision, whereby, on each occasion that TSG issues new ordinary shares, AGA has the option to maintain its interest in TSG at the same percentage as its shareholding immediately prior to such issue. Whenever AGA elects not to exercise this option, the maximum interest which it may maintain on any future issue of new ordinary shares by the Company is adjusted accordingly.

AGA has notified the Company that, if the proposed conversion of the UFG Loans is completed, it wishes to exercise its option to maintain its current 29.74% shareholding and is also willing to subscribe for additional new ordinary shares so that its total subscription for new ordinary shares shall be on a proportionate basis to UFG. The Company and AGA have agreed that this shall be achieved in part through the conversion of TSG's indebtedness to AGA, as described above, into new ordinary shares, on the same basis as the conversion of the UFG loans, with the remaining part by means of a placing of new ordinary shares (the latter being the "Placing Shares").

Conversion of the UFG loans and AGA debt

Subject to shareholder approval at the GM, the UFG loans and the AGA indebtedness will be converted into new TSG ordinary shares by applying the closing US dollar:pound sterling exchange rate on 22 March 2010 and a conversion price of 30.8p, based on the volume weighted average closing price of TSG's shares for the 60 trading days up to and including 24 February 2010. As elaborated in the Circular, the Conversion will result in the issue of up to 12,345,087 new ordinary shares in the Company (the "Conversion Shares"), of which 10,348,803 shares will be issued to UFG and 1,996,284 shares to AGA respectively, in consideration of the release of the Company's indebtedness to UFG and AGA described above.

The Conversion Shares, when issued, will represent approximately 12.25% of TSG's enlarged issued share capital. The Conversion Shares to be issued to AGA are in addition to the Placing Shares to be issued to AGA.

Proposed Placing

The proposed Placing to raise approximately £1.1 million (net of expenses) involves a placing, conditional on the approval by TSG's shareholders at the GM, by Seymour Pierce Limited of 3,533,534 new ordinary shares with AGA. These funds will be utilised for general corporate purposes.

The Placing price of 30.8 pence per share has been calculated on the same basis as the conversion price described above.

The Placing Shares, when issued and fully paid, will represent approximately 3.51% of TSG's enlarged issued share capital.

Effect of the Conversion and the Placing

The new ordinary shares to be issued pursuant to the Conversion and the Placing will represent up to 15.76% of the Company's enlarged issued share capital. As a result of the Conversion and the Placing, UFG's and AGA's respective interests will increase to approximately 53.70% and 30.54% of the Company's shares.

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 continues to be 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.

Asacha

Progress has continued at the Asacha Project. During 2009 more than 1,000 metres of mine development and preparation works were completed, in total about 2,100 metres since 2008. 5,445 tonnes of preproduction ore was mined in 2009, with a further 2,333 tonnes in January 2010. At the end of that month 41,851 tonnes of ore were ready for processing. Underground activities included steel arching, electrical works, the installation of pumping equipment and piping to deliver compressed air and water.

The concrete foundations for the plant building were finished in October 2009, with 31% of the foundations for plant equipment completed by the end of January 2010. In November 2009, assembly of the metal framework of the plant building commenced and lighting of the plant site was arranged with 126 metres of cables laid and 20 lamps installed. Work is continuing with two shifts employed. By the end of January 2010 44% of the metal parts were ready.

At the tailings storage facility, in spite of severe climatic conditions, site soil excavation has continued through the winter, with 23,600 cubic metres excavated and transported to the waste heap in January 2010. Work also continues on the foundations for the mechanical repair shops and terracing of the fuel storage facility.

The total capital cost of the Asacha Project to the start of production is now estimated at US$107.4 million, net of US$14.4 million VAT recoveries, compared to the September 2009 estimate of US$106.1 million. The total project cost includes pre-commissioning mining costs of US$5.1 million, other pre-operating expenditure of US$28.8 million, "first fill" equipment spares and consumables of US$1.1 million and contingency of US$3.3 million. The revised capital projection includes a US$1.5 million increase in the contingency provision and assumes a stronger Russian rouble in accordance with official state projections (RUR33.9:US$1 instead of RUR35:US$1).

US$86.9 million, net of US$6.2 million VAT recovered, has been spent up to the end of December 2009. A further US$20.5 million, net of US$8.2 million additional VAT recoveries, is forecast to be spent prior to the start of production.

US$17.7 million of capital expenditure, including contingency of US$2.1 million, will be incurred after the commencement of production, compared to the September 2009 estimate of US$7.7 million. The increase in post start up capital expenditure includes US$7 million for the completion of the power line in 2011 and an increase in the contingency provision.

Production of gold is now expected to commence in the first quarter of 2011.

Rodnikova

No geologic exploration was undertaken in 2009. The Russian State Commission for Reserves's comments and recommendations in respect of the Techno-Economic Study of Deposit Development Conditions (a pre-feasibility study) submitted in June 2009 were received in August 2009. The pre-feasibility study will be revised and resubmitted during 2010. The final Report on Reserves is also being developed by Zarevo's geologists, with expected submission by September 2010.

General Meeting

Shareholders' approval is being sought at the GM for an increase in the Directors' authorities to allot shares and to disapply statutory pre-emption rights in relation to the Conversion and Placing. Shareholders' approval is also being sought for amendments to the rules of the Employee Share Option Scheme relating to the commencement of the period within which options may be exercised.

Related Party Transactions

The Conversion and the Placing, as they relate to UFG and AGA, are defined as related party transactions under the AIM Rules. The Directors, other than Messrs Fenner and Ryan (who are connected to UFG), having been so advised by Seymour Pierce Limited, the Company's nominated adviser, consider the terms of the Conversion to be fair and reasonable insofar as the Shareholders are concerned.

The Directors, having been so advised by Seymour Pierce Limited, consider the terms of the Placing to be fair and reasonable insofar as the Shareholders are concerned.

Ends

Contacts:

TSG

Simon Olsen +44 (0) 1480 811871

Seymour Pierce

Mark Percy +44 (0) 20 7107 8000

Copies of the Circular are available at the offices of Seymour Pierce Limited (20 Old Bailey, London EC4M 7EN) upon request. Copies of the Circular are also available from TSG's website in accordance with Rule 26 of the AIM Rules for Companies, http:www.trans-siberiangold.com