Placing and Subscription

Patagonia Gold plc

("Patagonia" or the "Company")

Placing and Subscription to raise £13m

Patagonia Gold plc, the South American mining exploration company focussed on the Santa Cruz province of Argentina, is pleased to announce the completion of a placing ("the Placing") of 80,000,000 new ordinary shares of 1 pence each in the Company ("Placing Shares") and a subscription ("the Subscription") of 1,250,000 new ordinary shares of 1 pence each in the Company (together the "New Ordinary Shares") each at a price of 16 pence per ordinary share to raise £13 million before expenses. The Placing Shares were placed by the Company's broker, Matrix Corporate Capital LLP ("Matrix"), with new and existing shareholders of the Company at a discount of approximately 6% to the closing midmarket share price of 17 pence on Friday 30 April, the last business day prior to this announcement.

The net proceeds of the Placing and Subscription will be used to advance the Company's exploration and development projects in Patagonia, to commence work on a trial heap leach operation at the Lomada de Leiva gold project and for general working capital purposes. On 16 April 2010 the Company announced that the State Secretariat of Mining of the Province of Santa Cruz, Argentina, issued the necessary permit for the proposed trial heap leach operation.

New Ordinary Shares were subscribed for by William Humphries, Carlos Miguens and Gonzalo Tanoira, each a Director of the Company, and their discloseable interests are as set out below.

The New Ordinary Shares will represent 12.04 per cent. of the enlarged issued share capital of the Company and the Placing and Subscription are conditional on admission of the New Ordinary Shares to trading on AIM ("Admission").

The New Ordinary Shares will rank pari passu in all respects with the existing ordinary shares of the Company. Application will be made for Admission and it is expected that Admission will become effective and dealings in the New Ordinary Shares will commence at 8:00 a.m. on Monday 10 May 2010. Following the Placing and Subscription, the Company will have 675,102,783 ordinary shares in issue.

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The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.

Matrix, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as proposed placing agent to the Company in relation to the Placing and is acting for no-one else in connection with the Placing or the Subscription and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Matrix nor for providing advice in connection with the Placing or any other matter referred to herein. Matrix has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Matrix for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

Apart from the responsibilities and liabilities, if any, which may be imposed on Matrix by the Financial Services and Markets Act 2000, Matrix accept no responsibility whatsoever for the contents of this announcement, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the New Ordinary Shares, the Placing or the Subscription. Matrix accordingly disclaim all and any liability (whether arising in tort, delict, under contract or otherwise, save as referred to above), which they might otherwise have in respect of this announcement or such statement.