13th March 2009

Peninsular Gold Limited 

('Peninsular Gold' or the 'Company')

(AIM: PGL)

Interim Results (unaudited) Six Months to 31st December 2008

• First gold pour has taken place

• Convertible Loan Notes redeemed at US$3 million discount

CHAIRMAN'S STATEMENT

Dear Shareholders,

The six months to 31 December, 2008 reflected a key stage of Peninsular's ('PGL') development as we completed the construction of the new Carbon-In-Leach plant ('Plant') at Raub and began the commissioning process. In the short period since the end of December we have continued to press ahead on a number of fronts, with perhaps the most noteworthy being the first gold pour from the Plant on 18 February 2009 , marking our transition from being an explorer to a gold producer.

As the Plant's operations bed in and production ramps up towards expected levels over the coming months the Company is well positioned to benefit from any continuing strength in the gold price.

Convertible Loan Notes Buy Back

In addition to the significance of getting into production, the last few weeks have seen us able to close a key deal to buy back the outstanding US$20 million of 10.5% convertible loan notes ('Notes') for only US$17 million and the issuance of 10,000,000 one for one warrants exercisable at 30 pence each. I believe this transaction represents excellent value for shareholders, as it realises both a saving of US$3 million and significantly reduces the dilutive potential of the Notes. The Notes may have converted, if exercised, into approximately 32.5 million shares at a price of 30 pence each.

Financial Results and New Finance Facilities

The loss for the 6 months to 31 December, 2008 was £671,699 (six months loss to 31 December, 2007 £944,489).

The Notes were repurchased principally via a funding facility of RM54 million (equivalent to approximately £10.8 million) from a local financial institution, Bank Kerjasama Rakyat Malaysia Berhad ('Bank'), at a lower cost (currently 8.25% vs. 10.5% fixed) with potential for further savings should Malaysian funding rates decrease further. The Bank has also provided a RM15 million (equivalent to approximately £3 million) facility to Raub Australian Gold Mining Sdn. Bhd. ('RAGM') for working capital purposes.

Exploration Plans

Exploration and drilling at the Raub site has to date focused on the oxide zone with a maximum depth drilled of approximately 100 metres. The next phase of intended exploration at Raub will be a combination of reverse circulation and diamond drilling, focusing on the potential of the deeper (+100m) fresh ore within the main body of the deposit. The deposit runs north to south on the western side of the Raub project area and dips to the east. We remain confident in the potential for significant (+1 million ounces) additional resources going to depth at Raub.

Exploration in the Tersang project area is also planned to recommence later this year and will expand on the previous programmes and also target some of the high grade shoots of mineralisation identified.

Strategy and Outlook

PGL is making clear progress in its strategy to become a significant regional gold producer, with production having started at Raub and plans for the expansion of the Plant currently in hand. We also expect to add to our resource inventory as the next phase of exploration programmes commence over the coming months.

Peninsular has benefited from excellent team work from its highly committed staff, who have worked hard to develop the business and bring us into production via the new Plant. As part of our ongoing development we will be finalising and implementing a share based incentive scheme to both reward staff and ensure strong alignment with shareholders interests.

We are also continuing to recruit and train new staff from the local workforce as we build up to full capacity at Raub. We expect to make a growing contribution to the local economy at a time when other industries are contracting due to financial pressures and the collapse in some commodity prices over the last year.

As this seminal year for PGL progresses I look forward to updating the market on our progress.

Dato' Sri Andrew Tai Yeow Kam

Chairman and Chief Executive

Consolidated Balance Sheet (Unaudited)

at 31st December 2008

(Expressed in United Kingdom Sterling)

Consolidated Income Statement (Unaudited)

for the Period From 1st July 2008 to 31st December 2008

(Expressed in United Kingdom Sterling)

Consolidated Statement Of Changes in Equity (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

(Expressed in United Kingdom Sterling)

Consolidated Statement of Cash Flows (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

(Expressed in United Kingdom Sterling)

Consolidated Statement of Cash Flows (Unaudited) (continued)

For the Period From 1st July 2008 to 31st December 2008

(Expressed in United Kingdom Sterling)

Notes to the Financial Statements (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

• Accounting Policies

These financial statements for the period from 1st July 2008 to 31st December 2008 have been prepared in accordance with International Accounting Standard 34 which applies to interim financial statements.

The same accounting policies and methods of computation are followed in these interim financial statements as were used in the preparation of the financial statements for the year ended 30th June 2008. A copy of those accounts is available on www.peninsulargold.com 

Assets under construction refer to the construction works in progress for the Carbon-In-Leach Plant.  In September 2008, RAGM completed the building of its new Carbon-In-Leach Plant and commissioning has begun at its Raub gold project in Pahang, Malaysia.

Leasehold land refers to a piece of land owned by SEREM on which mining certificate MC511 relates to.

Notes to the Financial Statements (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

The directors are of the view that there will be sufficient future revenues from the extraction of gold to offset the mining development expenditure capitalised in the financial statements.

A fixed deposit with a licensed bank has not been included in Cash and Cash Equivalents as it has a maturity exceeding three months.

Notes to the Financial Statements (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

The US$20 million of convertible loan notes are convertible into new ordinary shares of no par value in the capital of the Company at a price of 30 pence per share on or after 22nd August 2007. The foreign exchange rate for conversion is fixed at GBP1.00 : US$2.05.

Maturity of the notes is 5 years from the date of the Initial Issue (26th July 2007) and the coupon rate is 10.50% per annum net, payable semi annually. The loan notes are secured by share pledges over subsidiaries and debentures (fixed and floating charges) and guarantees from subsidiaries. On or after the 3rd anniversary of the Initial Issue, the Company has the right to redeem the loan notes at a redemption price as well as the right to require the holder(s) of the loan notes to convert the loan notes into new ordinary shares in the capital of the Company in the event that the Company's share price is above the conversion price at that time by a certain level.

Notes to the Financial Statements (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

An additional 4,000,000 ordinary shares were issued on 21st October 2008 at 25p per share. The net proceeds of the share issue (after deducting issue costs) was £980,770.

Assets and liabilities of foreign consolidated subsidiaries are translated into United Kingdom Sterling at the rate of exchange ruling at the balance sheet date. 

Revenue and expenses are translated at the average exchange rates for the period. All resulting translation differences are included in a translation reserve in equity.

The closing rates used in the translation of foreign currency monetary assets and liabilities are as follows:

Notes to the Financial Statements (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

The calculation of loss per share is based on the loss for the period after taxation and on the weighted average number of shares in issue during the period as below:- 

The redeemable preference shares are non-dilutive.

11. Segmental information

Repurchase of Convertible Loan Notes and New Financing Facilities

• On 16th February, 2009 the Company announced that it had entered into an agreement to repurchase for cancellation the entire issue of its US$20 million, 10.5% convertible loan notes ('Notes'), issued in 2007, for a cost of US$17 million and the issue of 10 million one for one warrants. On 24th February, 2009 the transaction to repurchase and cancel the Notes was settled and all securities given in relation to the Notes were released.

• The Company's wholly owned subsidiary Raub Australian Gold Mining Sdn. Bhd. ('RAGM') has secured funding from a local Malaysian financial institution, Bank Kerjasama Rakyat Malaysia Berhad ('Bank') of Ringgit Malaysia 54 million (equivalent to £10.8 million) to assist in the repurchase of the Notes.

• RAGM has also obtained a Ringgit Malaysia 15 million (equivalent to £3 million) facility for working capital purposes from the Bank.

Further details of the Notes repurchase and the new facilities from the Bank are contained in the announcement made on 16th February, 2009.

Notes to the Financial Statements (Unaudited)

For the Period From 1st July 2008 to 31st December 2008

12.    Post Balance Sheet Events (continued)

First Gold Pour at Raub

-Ends-

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