Production Guidance and Resource Update

3 November 2017

Patagonia Gold Plc

("Patagonia Gold" or the "Company")

Production Guidance and Resource Update

Patagonia Gold Plc, the mining company with gold and silver projects in the southern Patagonia region of Argentina, Chile and Uruguay, announces an update of the Cap-Oeste resource model and forecast production update for the Cap-Oeste heap leach operation.

Summary

· Total production for 2017 is estimated to be 30,950 oz AuEq (2016: 25,800 oz AuEq, 2015: 21,521 oz AuEq)

─ Production at Cap-Oeste for the year expected to be 24,850 oz AuEq, significantly lower than previous guidance due to delays in getting the agglomeration circuit installed

─ Recovery issues at Cap-Oeste now resolved and overall recovery ramping up to design

─ Production at Lomada is expected to reach 6,100 oz Au for the year, significantly higher than forecast for the year

· Update resource model of Cap-Oeste shows contained ounces of COSE style (high grade) cyanide leachable mineralisation double to 295,000 oz AuEq

Production guidance

After a series of significant setbacks, the Cap-Oeste heap leach pad is now producing from a fully commissioned agglomeration plant, with the recovery issues having been resolved. The first pass leaching of fully agglomerated product over a period of 14 days, resulted in a recovery of 62% which is in line with testwork results and expectations for this length of leaching and the Company remains confident that gold recovery of 80% will be achieved on completion of the full leaching cycle. Agglomeration of the ore continues on a daily basis with throughput now exceeding 3,000 tonnes per day from a 12 hour shift, with 85,000 tonnes of agglomerated ore having now been loaded onto the pads as at the end of October 2017.

As a result of the previously announced recovery issues experienced at Cap-Oeste, production for 2017 has been materially impacted and the Company now expects production from the Cap-Oeste heap leach operations to be 24,850 oz AuEq for 2017 full year, with 10,100 oz AuEq for the final quarter of 2017. The Company expects to provide production guidance for 2018 during Q1 2018.

Lomada continues to perform well with production exceeding expectations with production for 2017 expected to be 6,100 oz Au. Leaching at Lomada will continue for as long as it remains commercially viable.

Cap-Oeste resource update

Current pit operations have now advanced to a level where high grade COSE style hypogene mineralisation has been exposed, enabling the Company to confirm the shoot's dimensions and style of mineralisation and grade below the current pit. A subsequent reinterpretation of the deeper drilling and mineralisation intersected below the current pit, has led to a material increase in the tonnage and contained Au and Ag of this non refractory style of mineralisation (which falls within the COSE style mineralisation).

An updated JORC compliant resource model has been completed by CUBE Consulting to report on the ore below the current pit and shows a material increase in the COSE type mineralisation, which can be treated via cyanide leaching, in the Cap-Oeste resource (Measured and Indicated) which is now approximately 295,000 oz AuEq at an average grade of approximately 19.40 g/t AuEq.

The current pit, which is expected to be completed in March 2018, as at the end of August 2017, still contains 578,347t @ 3.32 g/t Au and 131 g/t Ag for 61,875 oz Au and 2.44 Moz Ag for a total AuEq contained oz of 96,994 oz and has not been included in the updated JORC Code Compliant resource.

The tables below set out the JORC Code Compliant resource below the current pit.

Table 1: JORC Code Compliant Gross Resource for Cap-Oeste below the current pit - October 2017

Table 2: JORC Code Compliant Net Resource for Cap-Oeste below the current pit attributable to the Company - October 2017

Notes:

(1) AuEq values are calculated at a ratio of 69:1 Ag to Au.

(2) COSE style mineralisation with free milling cyanide recoverable Au and Ag.

(3) Fresh refractory sulphide mineralisation.

(4) Cap-Oeste is 100% owned by Patagonia Gold S.A. ("PGSA"), which is the operator of Cap-Oeste. The Company is interested in 90% of PGSA, with the remaining 10% being held by Santa Cruz government's wholly-owned mining company, Fomento Minero de Santa Cruz Sociedad del Estado. The net attributable resource, shows the 90% of the Cap-Oeste resource which is attributable to the Company.

(5) Resources were calculated on a block model of 0.5 g/t AuEq and at US$1,250 Au and US$18 Ag per oz.

Glossary of technical terms

Matthew Boyes, (BSC. Geology, Fellow AusIMM) Chief Operating Officer for the Company and a qualified person as defined in Canadian National Instrument 43-101, has reviewed and verified all scientific or technical mining disclosure contained in this announcement.

- Ends -

About Patagonia Gold

Patagonia Gold Plc is a mining company that seeks to grow shareholder value through exploration, development and production of gold and silver projects in the southern Patagonia region of Argentina. The Company is primarily focused on three projects: the flagship Cap-Oeste project, the La Manchuria project and the Lomada heap leach project. Patagonia Gold, indirectly through its subsidiaries or under option agreements, has mineral rights to over 220 properties in several provinces of Argentina, Chile and Uruguay and is one of the largest landholders in the province of Santa Cruz.

For more information, please contact:

Christopher van Tienhoven, Chief Executive Officer

Patagonia Gold Plc

Tel: +54 11 5278 6950

Angela Hallett and Richard Tulloch

Strand Hanson Limited (Nominated Adviser and Broker)

Tel: +44 (0)20 7409 3494

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").