SAVANNAH GOLDFIELDS LIMITED — Capital/Financing Update 2011

Mar 21, 2011

AGATE CREEK GOLD RESOURCE INCREASED by 11% TO 514,000 ounces

AGATE CREEK GOLD PROJECT

ASX ANNOUNCEMENT

22 March 2011 ASX CODE RSN

DIRECTORS & KEY MANAGEMENT

Stephen Bizzell - Chairman Rick Anthon - Non-Executive Director David Vincent - Non-Executive Director Kevin Grice - Chief Financial Officer & Acting Chief Executive Officer Paul Marshall - Company Secretary Scott Hall - Exploration Manager

PRINCIPAL & REGISTERED OFFICE

Renison Consolidated Mines NL Level 5, 60 Edward Street BRISBANE QLD 4000 GPO Box 5268 BRISBANE QLD 4001

• Following the recent drilling program, the Mineral Resource at the Agate Creek epithermal gold project in North Queensland has been increased to a combined Indicated and Inferred Mineral Resource of 17 million tonnes at 0.94 g/t gold for 514,000 ounces at a 0.3 g/t gold cut-off grade. This is an 11% increase from the previous estimate of 14.8 million tonnes at 0.98 g/t gold for 462,000 ounces at a 0.3 g/t gold cutoff.

• A revised estimate was also calculated at a 0.5 g/t cut-off, with a combined Indicated and Inferred Mineral Resource of 9.47 million tonnes at 1.36g/t gold for 414,000 ounces of gold.

• Estimation of the Mineral Resource was updated and undertaken independently by Golder Associates Pty Ltd using computer block modelling and Multiple Indicator Kriging techniques and is based upon 480 exploration drill holes, and geological interpretations provided by Renison.

• Further mineralisation is expected to be discovered near the existing resources which include targets which remain untested from the last drilling programme at Sherwood, new targets generated from the last programme, and recent mapping at Sherwood West, which indicate additional deeper targets.

• Upcoming exploration will also investigate many prospective regional targets.

ACN:	003 049 714
Phone:	(07) 3303 0630
Fax: Email:	(07) 3303 0601 admin@rcm.com.au
Website:	www.rcm.com.au

• An RC drilling program is expected to commence in early June to test these additional targets with the aim of a further increase in the Mineral Resource.

• A feasibility study for the commencement of mining will be progressed over the coming year.

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AGATE CREEK GOLD PROJECT – INCREASED RESOURCE

An updated Mineral Resource estimate has been completed on the Agate Creek epithermal gold project in North Queensland based upon a total of 480 exploration drill holes which were compiled and interpreted by Renison including 76 drill holes that had been completed since the last Mineral Resource estimate was undertaken. Independent consultants Golder Associates Pty Ltd were engaged to update the mineral resource estimate using computer block modelling and Multiple Indicator Kriging techniques.

A combined Indicated and Inferred Mineral Resource of 17 million tonnes at 0.94 g/t gold for 514,000 ounces at a 0.3 g/t gold cut-off grade has been estimated. This is an 11% increase from the previous estimate of 14.8 million tonnes at 0.98 g/t gold for 462,000 ounces at a 0.3 g/t gold cut-off.

At a 0.5 g/t gold cut-off, a combined Indicated and Inferred Resource of 9.47 million tonnes at 1.36g/t gold for 414,000 ounces has been estimated.

The break down of the current estimate is shown below. Resource estimates were undertaken for the Sherwood, Sherwood West and Sherwood South deposits and were completed using Multiple Indicator Kriging, with a top grade cut of 40 g/t gold. Wireframes based on geological interpretation by Renison were used to restrict the geometries of the estimate and consequently the resource estimate. The current estimate, using Multiple Indicator Kriging, is a recoverable resource estimate that is adjusted to account for a selective mining option and includes an allowance for mine dilution.

Increase in the gold Mineral Resource can be attributed predominantly to continued extensions in the Sherwood West structure and its interaction with the Zig-Zag fault structure.

The current resource estimates are set out in the tables below at a 0.3 g/t gold cut-off grade.

0.3 G/T CUT-OFF
	TOTAL			SHERWOOD			SHERWOOD SOUTH			SHERWOOD WEST
Resource Classification	Mt	Gold g/t	Gold ‘000 oz	Mt	Gold g/t	Gold ‘000oz	Mt	Gold g/t	Gold ‘000oz	Mt	Gold g/t	Gold ‘000Oz
Indicated	10.65	0.98	336	5.42	1.04	181	0		0	5.23	0.92	155
Inferred	6.36	0.88	180	2.61	0.91	76	0.43	1.05	15	3.32	0.83	89
Total	17.01	0.94	514	8.03	1.00	258	0.43	1.05	15	8.55	0.89	245

Grade and tonnage rounded to two decimal places. Ounces calculated after rounding and reported to nearest 1000 ounces.

Estimates were also undertaken at a 0.5 g/t gold cut-off and are presented below.

0.5 G/T CUT-OFF
	TOTAL			SHERWOOD			SHERWOOD SOUTH			SHERWOOD WEST
Resource Classification	Mt	Gold g/t	Gold ‘000 oz	Mt	Gold g/t	Gold ‘000oz	Mt	Gold g/t	Gold ‘000oz	Mt	Gold g/t	Gold ‘000Oz
Indicated	5.95	1.42	272	3.01	1.53	148	0		0	2.94	1.31	124
Inferred	3.52	1.26	143	1.38	1.36	60	0.30	1.34	13	1.84	1.17	69
Total	9.47	1.36	414	4.39	1.47	207	0.30	1.34	13	4.78	1.25	192

Grade and tonnage rounded to two decimal places. Ounces calculated after rounding and reported to nearest 1000 ounces.

New financial modelling based on conceptual mining studies will be undertaken over the next six months. Previous financial modelling based upon a $AUD750 per ounce gold price (the current spot gold price is approximately A$1400 ounce), indicates that the 0.3 g/t gold grade cut-off could provide a significant margin above the variable cost component of processing ore via a CIP processing plant, and the 0.5 g/t gold grade cut-off should maintain a healthy profit margin above the total capital and operating cost of CIP processing at a 1 to 1.5 million tonne per annum processing rate.

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Metallurgical test work to date has shown the ore to be very amenable to CIP processing with high recoveries at moderate grinds and low reagent consumptions.

POTENTIAL FOR FURTHER INCREASED RESOURCES

Drill targets, which remained untested at the end of the recent drilling programme due to reduced depth capabilities of the drill rig on site, provide significant potential for additional resources to be delineated in the Sherwood area with further drilling, together with the previously reported deeper and regional targets.

The re-interpretation and updated mapping of the Nottingham structure will also be a priority target when drilling recommences. This structure has significant potential.

Planning has been undertaken for the upcoming drilling program at Agate Creek, following cessation of the North Queensland wet season. A programme, targeted to commence in mid May / early June will include drill testing of some of the prospects generated from the recent regional rock chip and mapping programme. The upcoming drilling programme is aimed to increase the current gold resource base and potentially increase the scope of the project.

Additional exploration targets at Agate Creek also include deeper underground mining targets with higher grade epithermal “bonanza” style mineralisation along feeder structures to the Sherwood mineralisation and regional targets. These could both potentially add to the resource base and help support the feasibility of the development of an open pit mine based on the Sherwood resources.

For and on behalf of the Board

JPK Marshall Company Secretary

For further information contact: Kevin Grice or Stephen Bizzell Phone: (07) 3303 0630 Fax: (07) 3303 0601 E-Mail: admin@rcm.com.au Website: www.rcm.com.au

Competent Persons Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Scott Hall who is a member of the Australian Institute of Mining and Metallurgy. Mr Hall is a full-time employee of Renison Consolidated Mines NL and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Hall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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