AltynGold : Chief Executive Review

ALTYNGOLD PLC

Chief Executive Review

AltynGold Plc ("AltynGold" or the "Company"), the gold mining and development company, announces its unaudited results for the six months to 30 June 2021.

The financing raised in 2020 has been utilised to buy new underground mining equipment and improve the infrastructure at the mine. The resultant increase in production and improving grade as the orebody is being mined more efficiently is now translating into increased turnover and profitability for the Group. With the gold price at its current levels of around US$1,800oz, the Group has improved its turnover from the prior period June 2020 by more than 100%.

Highlights:

Mine development

• Transport decline No.1 was developed by 150 linear metres, on ore bodies 3-8 at 148masl, transport decline 2 by 144 linear metres, opening up reserves of 770,000 tons for extraction.
• Development of the shaft and tunneling amounted to 3,131 linear metres, (H12020:2,345 linear metres).
• Blast hole drilling amounted to 60,161 linear metres, (H1 2020: 22,500 linear metres).
• Ore was mined in the period principally from ore bodies 3-8 at 150 and the level of 178masl, and ore body 11 at the levels 131-174masl.
• Exploration drilling at Sekisovskoye amounted to 8,200 linear metres.
• Extensive maintenance and improvement works were carried out to maintain production safely and efficiently.
• Exploration work at Teren-Sai continued - 9,330 linear metres of exploratory drilling in Area No. 1, 3,860 core samples extracted in Area No.2.

Production

• Ore extracted in the period was 266,607t (H1 2020: 235,724t).
• The milled ore was 262,744t (H1 2020: 186,966t), in the current period, an increase of 41%.
• Average processed gold grade in the period was 1.88g/t (H1 2020: 1.53g/t).
• Gold recovery averaged 82.18% during the 6 month period (H1 2020: 79.79%).
• H1 2021 gold production from Sekisovskoye was 13,066oz, compared with H1 2020 of 6,990oz.

Financial

• The turnover has increased to US$23m (H1 2020: US$11.5m). The gold price achieved averaged US$1,832oz during the period (H1 2020 US$1,693oz).
• The Company made a gross profit of US$14.0m (H1 2020: gross profit of US$3.9m), with a net profit before taxation of US$9.3m (H1 2020: loss of US$1.2m).
• The total cash cost of production was US$766oz (H1 2020: US$963oz).
• Adjusted EBITDA achieved was positive at US$13.4m (H1: 2020: US$5.0m).
• Borrowings were reduced by US$2.4m in the period. Cash balances at 30 June 2021 were US$3.5m (H1 2020:

1

ALTYNGOLD PLC

Chief Executive Review

US$7.2m).

Aidar Assaubayev, CEO of AltynGold plc commented:

"The Board are pleased with the progress being made with turnover increasing by more than 100% to US$23m and operating profit moving up to US$11.2m from US$0.6m. The capital expenditure has boosted production and revenues and the full year results look promising. Progress at Teren-Sai is continuing, and the Company is in the process of compiling the documentation to renew the licence and to move Area No.2 into the next phase to calculate the reserves."

For further information please contact:

AltynGold plc

For further information please contact:

Rajinder Basra, CFO

[phone]

Information on the Company

AltynGold plc (LSE:ALTN) is an exploration and development company, which is listed on the main market segment of the London Stock Exchange. The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

To read more about AltynGold plc please visit our website www.altyngold.uk

2

ALTYNGOLD PLC

Chief Executive Review

H1 2021 Review

Mine development

Sekisovskoye

The input of significant capital equipment additions in 2020 and H1 2021 has enabled the Company to progress mining operations in all areas of mining operations. A significant acquisition in this regard was the purchase of the self-propelled tunnelling equipment.

The principal development milestones achieved in the period were:

• Tunnelling and shaft sinking of 3,131 linear metres, in the similar period last year it was 2,345 metres.
• Blast hole drilling of 60,161 linear metres (H1 2020: 22,500 metres).
• Exploration drilling was carried out and amounted to 8,200 linear metres
• Backfilling of voids was carried out in the period amounting to a volume of 38,177m.

During this period the Company has been concentrating on developing ore bodies 3-8 at horizons 150m-178m and ore body 11 at horizons 134m-174m. The transport decline No.2 was extended by 144 linear metres allowing the access of 640,000 tons of ore. Similarly transport decline No. 1 was extended by 150 linear metres opening up accessible reserves of 130,000 tons.

In order to continue to mine efficiently and safely the following capital/maintenance was carried out:

• A forced air facility was commissioned and built at elevation 355masl, this necessitated the installation of 17km of overhead 6Kv lines. The Korfmann ventilation equipment will allow safe and stable operations for a period up to 2029 in accordance with the mine operational plans.
• Various works were carried out to enable the efficient and safe working of the stoping, this included introducing a new system of stoping and obtaining an Ulba-150 charging unit to improve the quality of ore crushing.
• The mine operational procedures are constantly being updated to conform to current safe working practices, during the period an electronic accounting and explosive digitised log was introduced.

In summary the Company has been operating in line with its budgeted mining plan, the operations at the mine have complied with all current government guidelines in relation to COVID-19. There has been minimal disruption to the production at the mine and the procedures and operations employed by the Company have ensured that the employees have been working in a safe environment.

Teren-Sai

In the current six month period the Company has been concentrating its efforts on the exploration of two particular areas within the 198km area of the prospective site.

In relation to Area No.1, 233 exploratory pneumatic wells were drilled, resulting in 9,330 linear metres of drilling. From this 4,665 core samples were extracted. The area is currently being mapped to outline the morphology of the ore body and calculate the reserves at this site. The work is ongoing, but good progress was made in the period.

3

ALTYNGOLD PLC

Chief Executive Review

With regards to Area no. 2 this is the most advanced project in the Teren-Sai block, with extensive drilling being undertaken in prior periods. The exploration program in this area is now complete with 15 core wells and 3,860 linear metres being drilled in the period, and 3,860 core samples being extracted. The reserves estimate is currently being calculated in accordance with the State Reserves Committee of Kazakhstan, once completed the analysis will be forwarded to the appropriate government department. This will enable the Company to start to move to the next phase of operations and plan for production from Area No. 2.

H1 2021 Operational Overview - Sekisovskoye

Underground mine		H1 2021	H1 2020
Ore extracted	tons	266,607	235,724
Gold grade	g/t	1.85	1.49
Silver grade	g/t	1.80	1.10

Mineral processing		H1 2021	H1 2020
Milling	tons	262,774	186,966
Gold grade	g/t	1.88	1.53
Silver grade	g/t	1.83	1.05
Gold recovery	%	82.18%	79.79%
Silver recovery	%	73.19%	72.88%
Gold produced	ounces	13,066	6,990
Silver produced	ounces	11,315	4,555

During the period there was a significant amount of planned repair and restoration work carried out at the processing plant. To the extent it related to an upgrade/major overhaul the costs were capitalised, these works were in addition to normal planned repairs absorbed into the costs for the period. The work included the replacement of essential components in one of the grinding mills, as well as significant upgrades to the electrolysis section of the plant. The management see the upgrades and renewal of equipment as key to moving production up to the next level.

An advance payment was made in July 2021 for the following equipment which is due to be delivered for installation in Q3 2021, regeneration heater, KMD fine crusher, shaker screens for the crushing and grading complex. It is anticipated the improvements will lead to uninterrupted and more efficient production in future periods.

The ore milled in the period saw an increase from the prior period of 41%, and further increases are expected as the upgrades and maintenance programs progress. Significantly the grade achieved of 1.88g/t is higher than the grade that was budgeted at 1.81g/t. The effect of the new equipment reducing the dilution is having the desired effect in increasing the grade, the grade is budgeted to increase as the mine moves down to the lower levels.

The upgrades are also feeding into the increased recovery rates which have moved up from 79.8% to 82%, the Company expects to maintain recovery at these enhanced levels.

There has been a significant increase in production and sales of gold dore, increasing from 6,990oz in June 2020 to in excess of 13,000oz in June 2021, for the full year to 31 December 2020 the total gold poured was 17,000oz. The Company is pleased with the progress that has been made.

H1 2021 Financial Review

The Company has reported a gross profit of US$14.0m for H1 2021, against US$3.9m for H1 2020, with turnover of US$23m (H1 2020 US$11.5m).

The Company has seen a significant increase in its margin as revenue grows with increasing production from higher grade

4

ALTYNGOLD PLC

Chief Executive Review

ore and a higher average gold price achieved of US$1,832 (H1 2020 US$1,693).

Sekisovskoye produced 13,066oz of gold in H1 2021 (H1 2020: 6,990oz). Gold sold during the period amounted to

12,560oz (H1 2020: 6,790oz).

The operating cash cost of production (cost of sales excluding depreciation and provisions) for the period was US$546/oz (H1 2020 US$828/oz). The total cash cost was US$766/oz as compared to US$963/oz in H1 2020. The directors monitor the cash cost closely and see it as a key indicator of the cost being incurred to extract the gold.

In terms of other costs there has been a significant increase in administrative costs these relate to three principal factors. An increase in travel expenses compared to the prior period. In the period to June 2020 there was restricted travel due to COVID-19. An increase in administrative salaries, a number of additional staff at higher skill levels and remuneration were employed by the Company. The third factor related to the use of specialist consultants and advisors that were utilised on special projects and for the provision of strategic advice to the Company. In total these accounted for US$1.3m of the total increase of US$1.9m.

In terms of finance costs there is a significant increase in the period from 2020 of US$0.9m to US$1.7m. The principal factor was due to a full period charges on the loans drawn down from Bank Center Credit and the balance of the Bond that was raised on the Kazakh Stock exchange which amounted to US$6.5m and was drawn down in June 2020.

The financial statements for June 2020 have been adjusted for the fair value of the share options granted on 30 June 2020 to Freedom Finance who were instrumental in raising the bonds on the Kazakh stock exchange, as disclosed in note 1. This has resulted in an additional charge in the 30 June 2020 income statement of US$2.4m and a corresponding credit of US$2.4m to the share based reserve. As the options were subsequently issued in October 2020 the share based reserve have since been credited to accumulated losses.

In terms of the financial position of the Company at 30 June 2021 the deferred tax asset has reduced with the Company moving into profit, resulting in a charge in the current period of US$0.5m. At June 2020 no adjustment was made to deferred tax as the impact of the acquisition of new equipment driving up production and profitability was not clear. During the period the Company has made substantial advance payments for equipment, parts and mining services increasing by US$2.6m from 31 December 2020.

Borrowings have reduced by US$ 2.4m overall from December 2020 due principally to the repayment of bonds in line with the agreed terms of repayment.

As of 30 June 2021, the Company had cash balances of US$3.5m. The Directors have assessed that with the current cash balances and cash forecast to be generated from operations sufficient cash will be available to meet its current budgeted medium term plans. The directors are forward looking and are aiming to develop further funding opportunities to grow the Company.

Aidar Assaubayev

Chief Executive Officer

3 September 2021

5