GORILLA GOLD MINES LTD — Capital/Financing Update 2011

Mar 3, 2011

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Company Announcement

Mintails Limited – Company Update on Operations

4 March 2011: Mintails Limited (ASX: MLI) (“the Company or “Mintails”) Mintails is pleased to announce that during the last 3 months the company stabilized the gold production from its Mogale Gold1 Sand Operation (“Gold 1”), and is now achieving budget. The Quarterly Report for December 2010 recorded the company’s focus to concentrate its mining operation on processing its higher grade resources.

Consequently, Gold1 is currently operated as a focussed sand milling operation, augmented by high grade screened material sourced from resources under the company’s control. This revised processing focus set a short-term objective for the company, namely, increased cashflow from production. For the month of December 2010, the company produced 1770 ounces which represented a significant increase from the average production levels of the previous months. This increased production level was sustained during the production months of January – 1700 ounces, and February, being a 4 day shorter production cycle – 1750 ounces. During February, the Mogale operations produced a record gold bar of 15,34 kilograms (493 ounces) for a 7-day production period. The production successes achieved at Mogale consequently resulted in a positive cashflow contribution from operations for three consecutive months. At these levels of production, the company is cashflow positive, positioning it to pursue its further objectives of increased production.

The December 2010 Quarterly Report also indicated the intention of the company to undertake a capital raising to generate additional production capacity from its sand resources. During December 2010, the company commenced with the first stage of this capital raising through the issuing of Convertible Notes to the value of AUD2 million. These notes together with accrued interest can be converted to equity at a conversion price of AUD .11 cents by 30 June 2011. The proceeds raised were substantially applied towards stabilizing the production from its existing sand operation at Gold 1, the results of which are recorded above.

The company has negotiated with the holders of the Convertible Notes, a second stage capital raising by way of further Convertible Notes, to be issued imminently and so expand the mining capacity of its sand resources and further augment the production capacity of the Gold1 circuit.

The company has now identified the equipment and service providers to commence the sand milling upgrade and is confident that the upgrade can be completed within a 3-month period from commencement. Through this upgrade the company is targeting a further increase in production of approximately 15%, attributable to the combined production capacity of the existing and upgraded sand milling circuit. The sand milling upgrade project is seen as an intermediate “quick-win” for the company, in that both from a timing perspective, and a modest capital requirement perspective, the company can materially strengthen the positive operating margin, whilst it continues to progress its objective of the recommissioning of Gold2.

The company will also raise ZAR 15 Million (approximately AUD$2.1 million) through the completion of the second stage Convertible Note, which is to be issued. Capital raised will be applied towards the completion of a refurbishment program of its milling capacity ZAR 4.5 million (approximately AUD$.625 million), the construction of mining capacity at the currently unmined resource of the North Sand Dump ZAR 5 million (approximately AUD$.69 million), together with the refurbishment of associated plant infrastructure, to facilitate the processing of the North Sand resource. The balance will be applied towards the stocking of critical spare parts and the settlement of historic plant and equipment costs associated with Gold2.

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T he combin e d face value of the Conv e rtible Notes issued in December 201 0 , and the current Conver t ible Note immin e ntly to be i s sued for Z A R 15 milli o n (approxim a tely AUD$ 2 .1 million), i s approxim a tely A UD$3.9 million which c o uld be settl e d at the ele c tion of the C onvertible N ote holders by the com p any issuing appr o ximately 42 m illion new shares. In th e event of the conversion o f the initial C onvertible N o tes t o the value o f AUD2 million to equity , the Conver t ible Note ho l ders will vest a right to s u bscribe for n ew s hares in Mi n tails for a fu r ther amount of up to AU D 2 million at a subscriptio n price of AU D .11 cents o n or before 31 D e cember 201 1 . The company is conf i dent that th e current inv e stment in its milling capa c ity, not only sec u res a bigge r operating margin, but wi l l entrench t h e strategic value of its pl a nt and ena b ling infrastructur e to further at t ract hard ro c k opportuniti e s. To this e x tent the co m pany is plea s ed to anno u nce t hat the 3 m o nth pilot pro j ect to proce s s the hard r o ck material f rom Central Rand Gold o n a joint ven t ure basis, will c o mmence by the compan y expecting t o receive th e first deliver i es of virgin o re from Ce n tral Rand Gold b y 10 March 2 0 11.

T he company is please d to announ c e that the e xternal eval u ation proce s s to establish the opti m um processing r e quirements f or Gold2, is in its final sta g es, and the internal findi n gs of the co m pany to dat e , is materially validated by the review of e xternal independent exp e rts. The c o mpany is e x pecting the f inal report on the recommissi o ning parame t ers of Gold2 by end March 2011.

T he compan y will assess its funding o p tions for the recommissio n ing of Gold 2 which could include a Ri g hts Issue, subst a ntially underwritten by th e existing C o nvertible No t e holders. T he option to convert exi s ting Convertible Notes to equity and th e associated further subscription option vested w ith the current Convertible N ote holders will be inc o rporated in the assess m ent of the f unding requirements for the recommissio n ing of Gold 2 . Full deta i ls regarding the timing o f the recom m issioning o f Gold2, and the intended capital raising will be commu n icated to sh a reholders lat e r.

T he compan y remains co n fident that t h e production successes o f the last thr e e months h a ve establish e d a s ound platfo r m to unlock the immens e potential o f its plant a n d equipmen t infrastructu r e at the Mo g ale Plant Compl e x. The foc u s on continued growth in revenue from expande d production will be pursued t hrough the immediate u p grade of th e North Sand Project; the proposed re c ommissioni n g of Gold2, and t he evaluation of interest by third-parties to combi n e hard rock mining opp o rtunities wit h the milling and processing i n frastructure a t the Mogal e complex.

On behalf of the Board

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Dick van der Walt

About Mintails Limited

Mintails Limited (ASX Code : M LI) is an Aus t ralian listed co m pany with management and operations in S outh Africa. Mi n tails p rocesses and r e covers gold an d proposes to re c over uranium fr o m surface tailings resources which are present o n the West and East Rand of South Africa’s historic W itwatersrand Ba s in. To find out m ore, visit Mintails at: www.min t ails.com

Or contact: Dick van der Walt - CEO Telephone: + 2 7 (12) 346 4 4 06 Fax: +27 (12) 346 4409