Asacha Update

RNS Number:6820Y
Trans-Siberian Gold PLC
21 February 2006



                            Trans-Siberian Gold plc

              TSG to go ahead with Asacha - work ongoing at Veduga

LONDON: 21 February 2006 - Trans Siberian Gold plc ("TSG" or "the Company")
(TSG.L) is pleased to announce that, subject to completion of financing
arrangements, the Company is to proceed with the development of the Asacha gold
mine in Kamchatka, Far East Russia.

Following the appointment of Mr Jonathan Best as Chief Executive Officer in
November 2005, TSG has undertaken an in-depth financial and technical review of
both the Asacha and Veduga projects. The directors have agreed to move ahead as
quickly as practicable with development at Asacha and, subject to completion of
project financing, expect to start underground development in August this year,
with plant construction starting in September. It is expected that plant
commissioning will commence in December 2007 with first gold production in early
2008.

The total capital and pre-production costs of the Asacha project are estimated
at US$90 million (including recoverable VAT of US$11 million), of which $22
million has already been spent, leaving US$68 million to be funded through
project finance and equity or an equity linked instrument. Talks with Standard
Bank Plc together with the European Bank for Reconstruction and Development on
project financing are ongoing and Anglogold Ashanti Ltd, a 29.8% shareholder in
TSG, has agreed to participate in this funding to maintain its shareholding.

It is anticipated that project finance can be arranged by May 2006 and
consequently development of the Asacha mine will then begin in earnest. The
project finance is subject to fulfilment of certain technical conditions and to
receiving certain regulatory approvals, permits and an extension to the
production condition in the Asacha license.  Every effort will be made to
complete all outstanding items to meet the May 2006 target.

Asacha mine

Work at Asacha has continued on engineering studies, site preparation and in
completing construction of the access road, while discussions with banks and
lending agencies on project finance have been ongoing.

The current mineral resource contains 534,493 oz of gold equivalent (in gold and
silver credits) in the measured and indicated categories (80%) and 131,653 oz
in the inferred category (20%) for a total of 666,146 oz (20.7 tonne) contained
gold equivalent. There is potential to increase this resource as exploration
results to date have revealed further mineralization in two parallel structures
to, and in one structure below, the current main Asacha orebody. The operational
plan includes an exploration programme in order to bring this mineralization
into the mineral resources and ultimately into a mineable ore reserve.

The current plan allows for ore extraction by underground mining methods only,
but a study has now been completed which indicates that it is technically
feasible to open pit the top portion of the orebody. Work will continue in this
area as extraction of the upper portion of the orebody should increase the
mineable ore reserves and improve the safety and economics of the project.

On the basis of current resources with an average recovered grade of 15.1 grams/
tonne and planned ore production of 200,000 tonnes a year, Asacha will have a
mine life of approximately 6.5 years, producing some 608,000 ounces of gold and
1.1 million ounces of silver at an average total cash cost of US$200 per ounce.
After the start of production there will be further capital expenditure totaling
US$12 million over the life of mine. Gold production is expected to be 30,000
ounces in 2008 and then approximately 100,000 oz per annum over the subsequent 5
years before tailing off towards the end of the current planned life of the
operation.

There is also potential for Rodnikova, TSG's other project in Kamchatka some 65
kilometres north of Asacha, to provide additional ore for the Asacha mill. TSG
will begin exploration at Rodnikova in 2006 to increase the size of the historic
resource.

Veduga

TSG has also completed a preliminary review of its Veduga project in central
Siberia after an initial pre-feasibility scoping study indicated that
construction of a complex metallurgical plant to produce gold metal at the site
was not economically viable due primarily to the high energy costs.
Nevertheless, the Company believes there is considerable value at Veduga and, as
a result, has been examining a number of alternative processing and other
options. These have included the production of flotation concentrates to be
transported to plants in the Urals, Kazakhstan and/or China which have the
technical capability to treat such material.

Further recent study has indicated that in the short term the option of
concentrating the sulphide ore and shipping it to a smelter may be a viable
treatment route for a first phase development of the project. Additional
flotation and concentrate test-work and economic analyses are underway and are
expected to be completed during the next 6 months. In addition, if this
processing route is pursued then the approximately 1.5 million tonnes of oxide
ore could be treated at the same time. In parallel with this TSG is actively
pursuing its exploration programme with a view to increasing the overall
mineable mineral resource from the existing 2.8 million ounces of which 1.9
million are measured and indicated.

In the longer term, development will depend on the results of additional
flotation test-work, utilizing a biological-oxidation process which has
indicated that further optimisation may be possible. This could improve the
economics of this relatively higher capital cost and power consuming processing
route. This second phase development route is also encouraging in light of the
recent announcement regarding the completion of the Boguchanskaya hydro-electric
power station which should allow for the provision of grid power to Veduga in
2009.

Ten boreholes were drilled in the Powerline (LEP) Prospect totaling 1,621.0 m.
at the end of 2005. The holes hit a 'buried' gently dipping body of gold-bearing
quartz-sericite metasomatic mineralization. A 20-50 m wide metasomatic zone can
be traced for 150 m along strike at 100-130 m depth from the surface.
Mineralized intervals 10-20 m in width were revealed in the drill holes.
Gold-bearing metasomatics are located near the plane of the Maloveduginsky
thrust, which is the main governing structure within the Greater Licence Area.
This favorable geology and structure is indicative that the orebody is not
closed off and that extensions to the orebody are still probable.

Work is continuing on a structural interpretation of the Veduga ore system
including the development of a 3D model. All the ore zones recognised so far
within the Veduga mining licence have been identified from surface exposure.
Initial results from the structural modelling have been encouraging and there
appears considerable scope for the identification of 'buried' ore zone similar
to the one identified within the Greater Licence Area at LEP.

Bogunay

Diamond drilling at the Bogunay gold prospect commenced in December 2005, and as
of January 27th a total of six holes had been completed for some 750m. The
drilling is in follow up to our trenching programme completed during the summer.
Trench results have been encouraging, with some significant gold assays. Whilst
the assay results of the diamond drilling are still awaited, all six holes have
intersected a zone of mineralisation consistent with that previously found in
trenching.

New significant shareholder

It was recently announced that Russia's UFG Asset Management had formed a
Private Equity Fund. On 16 February the Company was advised that UFG Private
Equity Fund ILP had acquired 25% of the Company's issued shares.

Commenting on the Board's decision, Jonathan Best, CEO, said:

"We have undertaken a detailed review of the Company's position and are
confident that we are now well placed to go forward with the development of
Asacha as quickly as possible while we consider further the options available to
us at Veduga.

"We are optimistic that it will be possible to produce gold from Veduga on an
economic basis, although we have yet to define the optimum method.

"Asacha, although on current reserves a short-life mine, will be profitable
because of its high grade. An updated reserve/resource statement taking into
account recent drilling and a higher gold price should give additional ounces
and we anticipate that we will be able to further extend the mine life through
an exploration programme within the Asacha license area and at nearby
Rodnikova."

On the new significant shareholder he said "It is encouraging to have a large
Russian investor and we look forward to meeting with them in the near future"

                                     -ends-

Contacts:

Jonathan Best (Managing Director, TSG) +44 1223 265761

Chris Howard (Collins Stewart)         +44 20 7523 8314

Keith Irons (Bankside)                 +44 20 7367 8873
Oliver Winters (Bankside)              +44 20 7367 8874



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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