ST GEORGE MINING LIMITED — Capital/Financing Update 2011

Oct 18, 2011

ASX / MEDIA RELEASE

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ST GEORGE MINING LIMITED 19 October 2011

ASX: SGQ ACN 139 308 973 Level 1, 115 Cambridge Street PO Box 1305, West Leederville WA 6007 www.stgeorgemining.com.au Phone +618 9322 6600 Facsimile +618 9322 6610 Email info@stgm.com.au John Prineas Executive Chairman Tim Hronsky Technical Director Marcus Michael Non-Executive Director and Company Secretary East Laverton Property: • Gold, Nickel and Copper Projects • Project Dragon (Nickel) Pine Creek Property: • Blue Thunder Gold Project • White Strike Uranium Project

LOYALTY OPTION PROGRAM

HIGHLIGHTS

• 1 for 2 non–renounceable entitlements issue of options at an issue price of 1 cent per option

• Ex date for entitlements is 2 November 2011

• Loyalty options have the same terms as, and will be listed together with, the existing options listed on ASX as SGQO

• OVERVIEW OF THE LOYALTY OPTIONS

Austral i an gold and nickel focused explorer, St Geor g e Mining Limited ( ASX: SGQ ) ( ‘St George Mining’ or the ‘Company’ ) is pl e ased to announce the lau n ch of the loyalty option program referred to in t he Company’s IPO Prospe c tus dated 16 August 2010.

Existin g shareholders will be offered the opportunity t o purchase one (1) new o p tion (“ Loyalty Option ”) for every two (2) shares h eld by them as at the record date of 8 November 2011 ( Record Date ) a t a price of 1 cent per Lo y alty Option (“ Loyalty Option Issue ”).

The key terms of the free options are:

• the exercise price of each Loyal t y Option shall be 20 cents each;

• the Company will apply to have the Loyalty Options quoted on the ASX, under th e code SGQO;

• the expiry date of each Loyalty O ption shall be 28 November 2014; and

• the Loyalty Options may be exercised at any time prior to expiry.

The Entitlements Issue will be made p ursuant to a prospectus which was lodged with ASIC today (the “ Prospectus ”).

Upon full subscription of the Entitle m ents Issue, 31,500,000 Loyalty Options will be issued. The total number of options on issue shall incre a se from 16,550,000 to 48,055,000.

The total amount to be raised upon is s ue of 31,500,000 Loyalty Options shall be $315, 0 00 (before costs). If all Loyalty Options are exercised, $6, 3 00,000 shall be raised by the Company.

SHORTFALL

The Directors reserve the right to plac e any shortfall under the Entitlements Issue wit h shareholders and prospective investors and to allocate a n y such shortfall in their absolute discretion .

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USE OF FUNDS

The funds being raised will be put towa r ds additional working capital for the Company.

TIMETABLE

The timetable for the Entitlements Issu e is set out below.

Lodgement of Prospectus and Appendixtrading), announcement of Loyalty OptioOptionholders3B with ASIC (after commencement ofn Issue and dispatch of letters to	19 October 2011
Notice sent to Shareholders	31 October 2011
Ex Date for entitlements	2 November 2011
Record Date for determining Shareholder entitlements	8 November 2011
Prospectus despatched to Shareholdersbeen completedand announcement that dispatch has	14November2011
Closing Date of Offer	5:00pm30N(WST) onovember2011
Securities quoted on a deferred settlement basis	1 December 2011
Notify ASX of under-subscriptions	5 December 2011
Despatch date/Loyalty Options enteredinto Shareholders’ security holdings	8 December 2011
Trading of Loyalty Options issued pursuato commence on ASXnt to the Loyalty Option Issue expected	9 December 2011

EXISTING OPTIONHOLDERS

Existing optionholders have no entitle m ent to participate in the Loyalty Option Issue program unless they exercise their existing options on or b efore the Record Date under the Loyalty Opt i on Issue, being 8 November 2011. The Company will iss u e a letter to existing optionholders to further e x plain their right to participate in the Loyalty Option Issue i f they exercise their options prior to the Record D a te.

For further information, please contact:

John Prineas

Executive Chairman St George Mining Limited (+61) 411 421 253 John.prineas@stgm.com.au

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