Properties

Patagonia Gold is currently focusing primarily on exploration in the Santa Cruz province of Argentina through its 90%-owned Argentinean subsidiary Patagonia Gold S.A.

(“PGSA”). The Company considers Santa Cruz to be a mining-friendly province and the province has active mining and petroleum industries. The volcanic plateau of the Deseado massif of Santa Cruz is six million hectares in area and hosts several mines, including Cerro Vanguardia, Mina Martha, Manantial Espejo and San Jose Huevos Verdes, as well as various advanced projects such as Cerro Negro and Cerro Moro. As a consequence, Santa Cruz benefits from existing infrastructure and a workforce that understands exploration and mining. In addition, these projects are predominantly low sulphidation epithermal, “bonanza” vein style gold-silver deposits and their brecciated equivalent. This geological trait is the main target for exploration in this region.

The Company holds a number of advanced exploration projects in Santa Cruz and is concentrating exploration efforts on three distinct property blocks, being the El Tranquilo, La Manchuria and La Paloma property blocks, all of which are held through PGSA.

Since the acquisition of the properties under the Barrick Agreement in 2007, Patagonia has rapidly grown through successful exploration and development. As at October 31, 2011, the Company had delineated four NI 43-101-compliant gold resources on the Cap-Oeste, COSE, La Manchuria and Lomada projects.