Patagonia Gold plc provided an update on the current production at the Company's Lomada de Leiva mine. The Lomada Mine is located approximately 40 kilometres south-east of the town of Perito Moreno in the Province of Santa Cruz, and is within the Group's La Paloma property block, covering over 44 square kilometres. Production for the Lomada Mine up to the end of October 2015 has totalled 16,526 ounces with the total forecast production for 2016 now estimated at 21,542 ounces compared with the plan for the year of 31,000 ounces. Poor machine availability is the single most important factor which has impacted the performance of the mining operation with spare parts availability and importation restrictions and delays making it extremely difficult to keep a sufficiently high fleet available. This combined with the need to complete a major cut back has led to a significant shortfall in ore production. The heap leach pad and metallurgical performance have achieved forecast recoveries and no major or unforeseen operational difficulties have been experienced in this sector of the operation in the year to date. In addition to lower than forecast production for the year, the cash costs were impacted by a higher than anticipated inflation and a lower than forecast actual exchange rate.

The outlook for November and December 2015 and first quarter 2016 is positive and the Company expects the Lomada Mine to achieve forecast production of 5000 ounces in November and December and 9,000 ounces for first quarter 2016. Stripping ratios in the main pit have decreased to approximately 2.5:1 and machine availability is improving along with additional hire equipment being mobilized. A pit extension is due to commence in April 2016 in order to extend mine life as exploration efforts continue near mine and on the Lomada block with the objective of replenishing existing resources.