http://online.hemscottir.com/ir/vgm/ir.jsp?page=news-item&item=1147973891260561

29th August 2012

Vatukoula Gold Mines plc.

("Vatukoula" or "the Company")

Strategic Investor Xintai commits to invest £10.3 million in an equity financing at a substantial premium to the market

Vatukoula Gold Mines Plc. (AIM:VGM), the AIM listed gold producer and explorer, is pleased to announce that it has entered into an agreement with Shengen Xintai International Mine Industry Group Co. Ltd. ("Xintai") where Xintai has agreed to invest £10.3 million for the issue of 20 million new ordinary shares, at a premium of approximately 60% over the share price as at 28 August 2012.

The financing will be completed in two tranches via the issue of a £3,195,900 convertible loan ("Loan Note") and the issue of 13,812,374 new ordinary shares in the Company at a price of 51.65 pence per share ("Placing") to raise £7,134,091. The Loan Note will automatically convert to 6,187,626 ordinary shares upon closing of the Placing, such that Xintai will invest a total of £10.3 million to acquire a total of 20 million new ordinary shares.

The Loan Note, which bears a coupon of 5% per annum and has a term of one year, is expected to be completed on or around August 31, 2012. The Placing is anticipated to be completed within three days of receipt of Chinese Foreign Exchange State Approval for the transfer of funds, which is expected to occur in late September.