1st Quarter Results

NOVENTA LIMITED

("Noventa" or the "Company") 

Unaudited Condensed Consolidated Financial Statements

(including Management Discussion & Analysis)

for the 3 months ended 31 March 2011

9 May 2011

Chairman's Statement

In the first quarter of 2011, we achieved several significant milestones in the process of turning the Group around, stemming the losses and targeting profitability. During the quarter the Group recorded a loss for the period of $4.5 million on turnover of $0.6 million, which was in line with expectations. The results for the quarter are explained in detail in the Management Discussion & Analysis.

During the first quarter of 2011, the Board of Directors decided to raise up to $15.0 million by way of an issue of Convertible Redeemable 10% Preference Shares; this was felt to better meet the needs of the Group, as opposed to the alternative 5-year secured loan option that had been offered by a syndicate of two European development banks. The Annual General Meeting held on 4 March 2011 gave the authority for the issue; $11.9 million (before issue expenses) was raised in March, and the shares were issued and admitted to trading on London's Plus Quoted Exchange in early April. The Preference Shares are mandatorily redeemable on 11 April 2016, or from 11 October 2012 at the Company's option, unless converted into Ordinary Shares on a one-for-one basis at the holders' option. The Preference Shares were issued at a price of $4.218 per share, equivalent to a 25% premium to the Ordinary Shares at the time of issue.

In March, we commissioned the Interim Comminution Circuit ('ICC') at the Mine enabling us to process run-of-mine material, which contains a higher grade of tantalum pentoxide ('Ta2O5') than the tailings we have been processing for the past year. At the heart of the ICC is an enlarged grizzly, a new vertical shaft impact crusher and vibrating screen, together with modifications to the existing plant front end. We are now operating 24 hours per day, 7 days a week, except for planned maintenance. The combined effect of these improvements is to significantly increase our production capacity from the planned rate since recommencement of operations last year of 50,000 lbs per annum (a rate of 65,000 lbs per annum was actually achieved in Quarter 1-2011) to circa 200,000 lbs per annum or more. This will bring the operations of the Mine closer towards cash breakeven and we expect this to result in reduced losses from Quarter 2-2011, until the new processing plant is in use. The continued support of our investors and the progress to date is extremely encouraging.

We have scheduled the new plant to be fully operational by the end of 2011, and it is expected to be capable of an annual rate of production of circa 600,000 lbs or more, of which 470,000 lbs per annum are committed under off take agreements to the end of 2013. At this rate of production we expect the Group to be profitable and generate a positive cash flow. Once the new plant is commissioned, the existing plant, including the ICC, will be fully integrated into it to form a recirculation circuit.

The Environmental Impact Assessments ('EIA') for Marropino, Morrua and Mutala, and their associated environmental management plans, have now been approved by Mozambique's Ministry for the Environment and the Ministry of Mining ('MICOA' and 'MIREM', respectively) and are being implemented.

At the Marropino Concession, the evaluation of the two recently identified pegmatites (one of which extends from the current open pit to the North East, and the other, some 1.5 kilometres to the South East) as well as an earlier colluvial discovery is being completed, and the results will be available by the end of May. This will determine whether the life of the mine at Marropino will be extended.

During the first quarter of 2011, preliminary preparatory work was started at our Morrua mining concession, which contains a higher grade deposit than Marropino, to evaluate the metallurgy and access infrastructure and to develop a suitable mine plan. We are evaluating the possibility of bringing Morrua into production at the end of 2012 to take advantage of the sharply increased global spot prices for Ta2O5 that have resulted from increased demand at a time of constrained supply.

During the next quarter, we intend to complete further geological work at Mutala in order to update the NI 43-101 report on our mineral resources. Subject to the results of these studies, we may supplement the feed for the Marropino processing plant with a pre-concentrate from the Mutala concession.

In addition the Group plans to repeat the exploration of our mining concessions and exploration licenses by graduates from the University of Glasgow and undergraduates from Universidade Eduardo Mondale, Maputo, Mozambique.

We take our relationship with the local community very seriously. The medical clinic, situated in Marropino village, from which we draw the majority of our work force, was financed and constructed by Noventa at a relatively modest cost and opened on 2 November 2010. It now has two nurses provided by the Government, and continues to be supported by the Mine paramedic whose contribution to the health of the Mine staff and Marropino village has been outstanding. A program has been agreed with University of Glasgow, Scotland to provide a team of doctors for 6 weeks to improve the health of the village. The village primary school, also constructed and financed by the Group at modest cost, operates on two shifts and has increased its intake of pupils to 520. The Government has provided an additional teacher, increasing the number to five.

On 12th April 2011, Her Excellency Dr. Esperança Bias, the Minister for Mineral Resources for Mozambique, visited the Mine accompanied by Mozambique Television. The Minister publicly expressed her delight at the progress and improvements made at the Mine. The event was a significant endorsement of our relationship with the Mozambican authorities and our standing in the local community.

I would like to extend my thanks to the Management team and our employees for achieving excellent progress during this quarter, especially the commissioning of the ICC ahead of schedule and significant increase in the rate of production. Pat Lawless, who was CEO during this period, requires a special mention as his leadership made the ICC possible. He regrettably had to resign for personal family reasons to return to the UK, and we thank him for his leadership and effort. John Allan, a director and former CEO, who is currently running Project Restart, has assumed the role of CEO. I also wish to thank my fellow Directors and our advisors for their continued support, which is contributing to substantial progress on our path towards growth and profitability.

Eric F. Kohn TD

Chairman

For further information please contact:

Eric F. Kohn TD

Chairman

Noventa Limited

+41 22 8500560

+41 79 5030150

www.noventa.net

Nick Harriss/Emily Staples

Religare Capital Markets (Nomad)

+44 20 7444 0800

Daniel BriggsReligare Capital Markets (Joint Broker)+44 20 7444 0500

Andrew Chubb

Cannacord Genuity (Joint Broker)

+44 20 7050 6500

Cautionary note regarding forward looking statements

This document contains "forward-looking information" which may include, but is not limited to, statements with respect to the future financial or operating performance of Noventa Limited ('Noventa' or 'the Company'), its subsidiaries (together 'the Group'), affiliated companies, joint ventures, its projects, the future price of Ta2O5 and morganite, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and resource estimates, the timing and amount of estimated future production, revenues, margins, costs of production, estimates of initial capital, sustaining capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, foreign exchange risks, governmental regulation of mining operations and exploration operations, timing and receipt of approvals, consents and permits under applicable mineral legislation, environmental risks, title disputes or claims, limitations of insurance coverage and regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases, or may be identified by statements to the effect that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and a variety of material factors, many of which are beyond the Company's control which may cause the actual results, performance or achievements of Noventa, its subsidiaries, affiliated companies and/or joint ventures to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers are cautioned that forward-looking statements may not be appropriate for other purposes than outlined in this document. Such factors include, among others, future prices of Ta2O5 and morganite; general business, economic, competitive, political and social uncertainties; the actual results of current exploration and development activities; conclusions of economic evaluations and studies; fluctuations in the value of the U.S. dollar or the pound sterling relative to the local currencies in the jurisdictions of the Company's key projects; changes in project parameters as plans continue to be refined; possible variations of ore grade or projected recovery rates; accidents, labour disputes or slow downs and other risks of the mining industry; climatic conditions; political instability, insurrection or war, civil unrest or armed assault; labour force availability and turnover; delays in obtaining financing or governmental approvals or in the completion of exploration and development activities; as well as those factors discussed in the section entitled "Risk assessment" of the Management discussion & analysis. The reader is also cautioned that the foregoing list of factors is not exhausted of the factors that may affect the Company's forward-looking statements.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this document and, except as required by applicable law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Cautionary note regarding technical information

Technical information in this quarterly report and financial statements is summarised or extracted from the report entitled 'Technical report on the Marropino project and associated properties, Zambezia Province, Mozambique', prepared by Scott Wilson Roscoe Postle Associates Inc on 27 September 2010 (the 'Scott Wilson 2010 report'). Information of a scientific or technical nature contained in this publication arising since the date of the Scott Wilson 2010 report is provided by Noventa management and has been prepared under the supervision of Donald Hains, of Scott Wilson Roscoe Postle Associates Inc., who is a "qualified person" in accordance with National Instrument 43-101 - Standards of disclosure for Mineral Projects ('NI 43-101').

Readers are cautioned not to rely solely on the summary of such information contained in this quarterly report and financial statements, but should read the Scott Wilson 2010 report (which is available at www.noventa.net) and any future amendments to such report. Readers are also directed to the cautionary notices and disclaimers contained therein.

Management discussion & analysis

This Management discussion and analysis ('MD&A') has been prepared as of 9 May 2011 and should be read in conjunction with the Group's condensed consolidated financial statements and notes thereto for the three month period ended 31 March 2011 ('Quarter 1-2011') and the audited financial statements and notes thereto for the year ended 31 December 2010 (available from www.noventa.net). Additional information relating to Noventa, including Noventa´s annual information form, is available on SEDAR (System for Electronic Document Analysis and Retrieval) at www.sedar.com.

Except where otherwise noted, amounts are presented in this MD&A in United States Dollars.

Listing details

Noventa is a Jersey company with Ordinary Shares quoted on the AIM Market ('AIM') of the London Stock Exchange under symbol NVTA, listed on the Toronto Stock Exchange ('TSX') under symbol NTA and quoted on the PLUS Quoted Market ('PLUS') operated by PLUS Markets plc under symbol NV. On the TSX, Noventa has Designated Foreign Issuer status. The Company's Convertible Redeemable Preference Shares are traded on PLUS.

Principal activities

Noventa's principal activity is the production of tantalum concentrate, which is priced by reference to the amount of contained Ta2O5. Tantalum is a rare heavy metal that is widely used in electronic capacitors, turbine blades, medical applications, optical applications, industrial cutting tools and in other industries.

The wholly owned Mozambican subsidiary of Noventa, Highland African Mining Company Limitada, has mining concessions at Marropino, Morrua and Mutala in the Zambezia province of Mozambique and exploration licences over various adjacent areas. The current mining operations are at the Marropino Mine. The Marropino Mine commenced production from the primary hard rock deposit at Marropino during Quarter 1-2011. The Marropino Mine is now producing at the rate of 200,000 lbs per annum of contained Ta2O5. The Directors are planning a full production capacity in excess of 600,000 lbs per annum of contained Ta2O5 when the new plant is completed in Quarter 4-2011.

In addition to tantalum, the Marropino ore body also contains a pink beryl gemstone commonly known as morganite. The morganite is associated with the quartz waste in the ore body and is extracted only as and when encountered.

Strategic plan and outlook

On 10 June 2010 (updated 22 December 2010) the Board of Directors of Noventa (the 'Board') approved a three year strategic plan (the 'Plan') designed to optimise the profitability, cash generation and sustainability of the Group, enhancing value for shareholders.

The core development aspects of the Plan are:

·; to upgrade the Marropino process plant capacity to more than 600,000 lbs of contained Ta2O5 per annum during 2011 (refer to the section of the MD&A titled 'Process plant upgrade');

·; to upgrade the capability and infrastructure of the Marropino plant to handle material from the Group's Mutala, Morrua and other surrounding sites during 2011 and 2012 (refer to the section of the MD&A titled 'Process plant upgrade');

·; to bring Morrua into production by 2012, and work towards bringing Mutala into production as soon as practicable, but no later than 2015, leveraging off the infrastructure at Marropino in both cases (refer to the section of the MD&A titled 'Mineral resources, exploration sites and geological outlook'); and

·; to complete further geological exploration on the mining concessions and exploration licences held by the Group to assess the existence of economic tantalum deposits, or other materials (refer to the section of the MD&A titled 'Mineral resources, exploration sites and geological outlook').

The Board is satisfied with the progress against the Plan to date.

Mineral resources, exploration sites and geological outlook

The Group holds mining concessions and mining licences in the Alto Ligonha Pegmatite Belt of Zambezia Province in Mozambique at Marropino, Morrua (including Gilé), Mutala, and Ginama. The most geologically well understood properties are Marropino and Morrua.

On 27 September 2010, the mineral resources of the Group were estimated by Scott Wilson Roscoe Postle Associates Inc. for the purposes of their NI 43-101 report (the 'Scott Wilson 2010 report') which was a pre-requisite for the Company's listing on the TSX in December 2010. The Scott Wilson 2010 report was limited to a review of the Mineral Resources at Marropino and Morrua. The results were:

Notes:

1. CIM definitions were followed for Mineral Resources

2. Mineral Resources are estimated at cutoff grades of 150 ppm Ta2O5

3. Mineral Resources for Marropino are estimated using a base price of $60.32/lb Ta2O5 and for Morrua using a price of $45.50/lb Ta2O5

4. A minimum mining thickness of 2 meters was used

5. Includes 1.69 MM t @ 470 ppm Ta2O5 in-situ ore and 1.43 MM t @ 300 ppm Ta2O5 stockpiled oversize material

The Group is currently exploiting the Marropino deposit (the 'Marropino Ore Body'), which may be supplemented by satellite resources at Marropino - see below. During Quarter 1-2011, the Group has initiated preliminary work at Morrua to assess the feasibility of bringing Morrua into production during 2012 to take advantage of the rising market price for tantalum concentrate. This assessment will determine whether Morrua will be developed using a standalone processing plant, or whether pre-concentrate produced at Morrua will be transported to Marropino for final concentration. In Quarter 2-2011 the Group intends to complete further geological work at Mutala with an updated NI 43-101 report. Subject to the completion of these studies at Mutala, the Group intends to supplement the feed for Marropino with a pre-concentrate from Mutala.

In addition to the Marropino, Morrua and Mutala concessions, the Group has various sites with significant exploration potential at Ginama, Gilé (near Morrua), and the satellite pegmatites and surficial deposits at Marropino. Of particular interest are the sites surrounding the Marropino pegmatite due to the significant impact that these sites may have on the Marropino life of mine.

Of the Marropino surficial deposits, the Marropino South deposit lying two kilometres South East of the Marropino Mine and measuring approximately one kilometre square is potentially of significant interest. During Quarter 3-2010, samples from three pits at Marropino South were independently assayed and reported Ta2O5 grades of 2,697 ppm, 3,836 ppm and 7,577 ppm. These compare to an average 223 ppm for the Marropino Ore Body. The Company is currently working on a detailed evaluation of the Marropino South site to define the extent and quality of the Marropino South deposit. A programme of dense pit sampling was completed in Quarter 1-2011; bulk samples of about 200 Kg were extracted from the pit walls and the material has been processed through a small (pilot scale) processing plant to produce concentrate for further analysis at an independent laboratory. Samples were dispatched in mid-April 2011 and the results are expected in Quarter 2-2011.

Exploration work at Marropino South has shown that this surficial deposit results from the erosion of a 700m long pegmatite outcrop, covering an estimated area of about 7.4 hectares (the 'Marropino South Pegmatite'). The width and depth of the pegmatite and the grade of the tantalite mineralisation contained therein and its distribution within the pegmatite have not yet been defined. Noventa is undertaking exploration work on the Marropino South Pegmatite. Fifteen trenches were completed in Quarter 1-2011; the excavated material has been sent for analysis at an independent laboratory. Drilling commenced on the pegmatite subsequent to the Quarter end on 4 April 2011, with six holes completed in April 2011. The samples are being analysed at an independent laboratory. The results from the exploration programme are anticipated to be available during Quarter 2-2011.

On-going geological studies undertaken by the Company identified that the Marropino Ore Body extends for an estimated further 550m to the North East with a width of between 60m and 80m (the 'Marropino Extension'). This extension of the Marropino Ore body is particularly hard to distinguish; half of the area is covered with tailings dump material from the mine, the rest is covered with bush and deeply weathered material. Despite this, it has been possible to trace this North East extension by outcrops along a 2m - 3m deep drainage channel on the site and by artisanal mining works on the flanks of the pegmatite. The extent of the tantalite mineralisation and the distribution and grade of tantalite in relation to the known zones of the main pegmatite is being tested by a diamond drilling programme which was undertaken in Quarter 1-2011. Nine holes were drilled; the samples are being analysed at an independent laboratory with results expected in early Quarter 2-2011. If the Marropino Extension becomes viable it will be necessary to relocate the existing tailing dams, which would result in an unforeseen and unbudgeted capital expenditure. The assessment of the viability of the Marropino Extension will result from the comparison of the additional capital expenditure to the expected profits from exploiting the deposit.

Operations Overview

The Group has operated from a single mine in Marropino, Mozambique since 2003. The productivity and profitability of operations have been significantly lower than expectation since production began, with failure to achieve a profit in any year of operation. The continuing operating losses at the Marropino Mine led to it being placed in care and maintenance in May 2009. The Marropino Mine recommenced operations in April 2010 with a deliberately modest restart using tailings material.

During Quarter 1-2011 the Group has focussed on the following key areas:

·; Production ramp up (from 50,000 lbs to 200,000 lbs of contained Ta2O5 per annum); this has involved the construction of an interim comminution circuit ('ICC'), moving to 24/7 operations and the resumption of mining from the Marropino open pit;

·; Finalising the detailed design stage for the new process plant at Marropino and signing the engineering design agreement;

·; Progress on the procurement and construction phases of the new process plant at Marropino;

·; Starting the preliminary work to assess the feasibility of bringing Morrua into production during 2012;

·; Progress on the Group's geological exploration projects in accordance with the Plan;

·; Completing the Environmental Impact Assessments and associated Environmental Management and Monitoring Plans for Marropino, Morrua and Mutala. These are now complete; and

·; Obtaining the funding necessary for the construction of the new process plant at Marropino.

The initial phase of the reconstruction and expansion of Marropino, from April 2010 to March 2011, proved the viability of the production process at the Marropino Mine, with the modifications introduced by the current Management team. The second phase was completed during Quarter 1-2011 with the construction of the ICC for the current Marropino process plant, the procurement and commissioning of the necessary mobile equipment for mining the Marropino pit and the gradual increase in headcount to allow 24 hours per day, seven days a week operations at Marropino. After final testing, the ICC was commissioned on 5 April 2011. The ICC, by allowing the Group to process run of mine material from the Marropino pit at average grades of 223 ppm (compared to 118 ppm contained in the tailings), has permitted an increase in the rate of production to 200,000 lbs of contained Ta2O5 per annum, bringing the Group closer to cash break even at the Marropino Mine. The ICC will remain in place until the new process plant is completed in Quarter 4-2011, after which it will be reconfigured to form the new plant's recirculation circuit, contributing to full production target of circa 600,000 lbs or more of contained Ta2O5 per annum.

In February 2011 the Group signed an engineering design agreement with Paradigm Project Management ('PPM') of Johannesburg, South Africa, for the new Marropino process plant. This finalised the detailed design stage of the new plant, with a full set of design drawings, specifications and supporting documentation delivered during February through to April 2011.

During Quarter 1-2011 the Group accelerated the procurement of equipment for the new process plant at Marropino with $8,500,000 expended or committed for equipment (excluding engineering and other services) by 31 March 2011. The civil works contractor was selected during Quarter 1-2011 and has mobilised to Marropino subsequent to the end of Quarter 1-2011.

The Group has commenced the preliminary assessment of the feasibility of bringing Morrua into production during 2012 to take advantage of the current tantalum concentrate price.

In Half 2-2010 the Group identified three potentially significant tantalum deposits on the Marropino concession which could have a significant impact on the Plan by significantly increasing the life of mine at Marropino. In accordance with the Plan, updated in December 2010, the Group has advanced the exploration of these sites being the Marropino South surficial deposit, the Marropino South Pegmatite and the Marropino Extension Pegmatite. During Quarter 1-2011 the Group completed an exploratory drilling programme of nine holes on the Marropino Extension Pegmatite. On 4 April 2011 subsequent to the Quarter end, a programme of six drill holes on the Marropino South Pegmatite commenced following trenching which was completed in Quarter 1-2011. At the Marropino South surficial deposit the Group has completed a programme of dense pitting; the excavated material has been processed through a small (pilot scale) processing plant to produce concentrate for further analysis. Samples are being tested at independent laboratories to determine the tantalite mineralisation and its grade and distribution in these deposits and results are expected in Quarter 2-2011.

In Quarter 1-2011 the Group updated the Environmental Impact Assessment for Marropino and finalised new assessments for Morrua and Mutala. This work is now complete.

Funding for operations and the Marropino process plant upgrade has been raised through phased shareholder investments, in accordance with the Plan. During the Quarter the Board of Directors decided to raise up to $15m by way of an issue of 10% Convertible Redeemable £1 Preference Shares. The Annual General Meeting held on 5 March 2011 gave authority for the issue; $11.9m (before expenses) was raised in March and the shares were issued and admitted to trading on PLUS in early April. On 1 April 2011 the Group received further investment of approximately $1,049,000 before issue expenses from the issue of Ordinary Shares under the Company's agreement with Compagnie Internationale de Participations Bancaires et Financieres SA ('CIPAF') which represents the final tranche of investment subscribed by CIPAF in September 2010.

Change in Directors

Mr K Chung resigned as a Non-executive Director of the Company on 11 April 2011.

Mr I D Benning was appointed as a Non-executive Director of the Company on 13 April 2011.

Prof L G Berglund was appointed as a Non-executive Director of the Company on 13 April 2011.

Mr P Lawless resigned as Chief Executive Officer and Director of the Company on 5 May 2011.

Production

Production in Quarter 1-2011 was 16,125 lbs of contained Ta2O5, representing an annual rate of production of 65,000 lbs of contained Ta2O5, principally from the reprocessing of tailings. The average recovery rate of the contained Ta2O5 during the Quarter was in excess of 51%. The commissioning of the ICC subsequent to the period end, in April 2011, has significantly increased production at Marropino to an annual equivalent rate of 200,000 lbs of contained Ta2O5. The increase in production from the ICC reflects the processing of the higher grade run of mine material, averaging 223 ppm compared to the tailings which average 118 ppm.

In February 2011, the Group recommenced mining the pit at Marropino to provide stockpile material for the ICC. At 31 March 2011, the Group had approximately 53,500 tonnes in stockpile at an average 210 ppm, representing approximately 15 days feed for the ICC. Mining the pit prior to the full commissioning of the upgraded process plant at Marropino in Quarter 4-2011 will also allow the Group to establish grade control in the pit and ensure that employees have the necessary skills and training. These measures together significantly reduce the risk of the ramp-up by stabilising the supply side of the process, allowing the commissioning team to concentrate on the work-up of the new process plant when completed.

Sales contracts

There have been no changes to the Group's off-take agreements in the Quarter. The Group has two off-take agreements for the majority of the Group's tantalum concentrate at profitable fixed forward prices. One of these contracts was signed in 2007 and amended in 2010, and the other was signed in 2010 at market related prices at that time.

Delivery chain

Tantalum concentrate is currently shipped directly to the Group's customers from the Mozambican ports of Quelimane (320 km from the Marropino Mine) and Nacala (600 km from the Marropino Mine). The Group is exploring further shipping routes from Maputo, Mozambique, and Durban, The Republic of South Africa to provide alternative shipping schedules. This will provide greater shipping flexibility and improve delivery times to the Group's customers.

Supply chain

Due to the remote location of the Marropino Mine in Mozambique, and the relative reliance on The Republic of South Africa for the procurement of spares and equipment, the Group continues to focus on the procurement and logistics process within the operating subsidiaries to ensure that parts, consumables and equipment are available in a timely manner, without tying up unnecessary working capital. Improvements are being implemented to enhance the integration of the warehousing function at the Marropino Mine and the procurement and logistics functions. The Group is also negotiating terms for consignment stock holdings at Marropino with major suppliers. The Group anticipates that cost savings will be delivered from the improvements through reduced transport costs and stock holding levels while ensuring that the Marropino Mine has the necessary spares, equipment and consumables to operate without interruption.

Infrastructure

The Group has established the appropriate infrastructure to support the current operations at the Marropino Mine.

The Marropino Mine is connected to the national electricity grid which provides a reliable power supply. This is supplemented by diesel generators which are adequate for current back up needs.

Water is at present sourced on site from boreholes and the natural lake and dams on the Marropino site providing a cost effective and reliable supply, but this is subject to receiving sufficient precipitation during the rainy season. During Quarter 1-2011 and subsequent to the Quarter end, the Group has been developing the hydro-geological plan to ensure that sufficient water for the new process plant is available from these sources in the most cost effective manner, or if necessary by a pipeline from a river approximately 9 km from the mine, which would be an unbudgeted item of capital expenditure. The final recommendations are expected in Quarter 2-2011.

During 2010 the Group completed an optimisation project of the existing buildings and facilities at the Marropino Mine, centralising the stores into one building, relocating the workshop and dry processing plant to more appropriate locations for production purposes, refurbishing and expanding the accommodation at the Marropino Mine in order to provide appropriate conditions for employees and visitors to the site and the construction of the new laboratory building. Further accommodation has been made available during Quarter 1-2011 through the extension of current accommodation facilities. The Group has also improved local sourcing of food products, with established relationships now in place to provide a reliable supply to the Mine. The Government of Mozambique has approved the construction of an airstrip at Marropino which the Directors anticipate will be finalised by the end of 2011.

Process plant upgrade

The Marropino Mine has made losses in every year of operation by the Group due to a combination of factors, including the incorrect design initially of the processing plant and the lack of a comminution circuit. These failings adversely affected the ability of the processing plant to recover the Ta2O5 contained in the ore. In order to make the Marropino Mine a cash generative operation, the Group is upgrading the Marropino process plant in two stages to allow the Group to ramp up production before commissioning the fully upgraded plant. The estimated expenditure on the upgrade is $31.4 million for both stages.

The initial upgrade included the construction of an ICC for the current process plant at Marropino which was completed during Quarter 1-2011 and commissioned on 5 April 2011. In combination with the acquisition in the Quarter of mobile equipment permitting mining of the Marropino pit, the Group is now able to process run of mine material from the primary hard rock deposit at Marropino. With operations on a 24/7 basis, the Group anticipates sustainable production at an annual equivalent rate of 200,000 lbs of contained Ta2O5, an increase from 50,000 lbs while the Group was processing tailings material on a single shift. This initial upgrade will bring the Group close to cash flow break-even at the Marropino Mine.

The second stage involves the construction of the new process plant at Marropino. This new plant will utilise the ICC and the current process plant as a re-circulation circuit to improve recovery rates of Ta2O5. The Directors have planned the upgraded plant to provide in excess of 600,000 lbs of contained Ta2O5 per annum at a production cost which is profitable based on current off-take agreements.

The principal stages of the process plant upgrade are engineering and design, procurement of equipment and construction and commissioning.

Engineering and design: In April 2010, the Group engaged PPM as the engineering consultant for the Marropino Mine plant upgrade project. PPM, employees of the Group and expert independent consultants have contributed to the design of the new plant which will process all material to achieve higher recovery and efficiency. Their work has been supported by two independent studies commissioned by the Group from Mintek and The University of Glasgow into the liberation process and separation technique of the ore body at Marropino, which show that a three size fraction separation within the band of 1mm is necessary to optimise recovery through gravity separation across different spiral banks and shaking tables. The test work and design for the new plant was completed in 2010 with the full set of design drawings, specifications and supporting documentation delivered in February 2011. The terms of the engineering design agreement with PPM were also finalised in February 2011.

Procurement: During Quarter 1-2011 the Group accelerated the procurement phase of the project, with $5,630,000 capital expenditure incurred during Quarter 1-2011 (including equipment for the ICC and the mobile fleet) and a further $5,560,000 committed at 31 March 2011. Total expenditure on the process plant upgrade during 2010 and Quarter 1-2011 was $9,130,000.

Construction and commissioning: The civil engineering contractor was selected during Quarter 1-2011 with work commencing on site in April 2011.

In order to reduce the overall risk of the project, the Group is in advanced negotiations for project insurance with our brokers, Aon, which the Directors anticipate will be finalised in Quarter 2-2011.

The majority of the remainder of the capital expenditure for the upgrade project is expected to be disbursed during Quarter 2-2011.

Health and Safety

The Group is committed to maintaining a safe working environment at the Marropino Mine both in terms of the working policies and practices adopted and the operating environment at Marropino.

Policies and practices

Commitment starts through leadership on the shop floor and the continuous drive to institutionalise best practices from safety systems in mining and environmental management. The provision of appropriate protective clothing and equipment to all employees and maintaining a culture of awareness of health and safety risks has driven the safety culture forward. This is embedded in the working culture at the Marropino Mine, with daily Health and Safety update meetings, weekly Health and Safety topics highlighted to employees through posters and notices at the mine site and a continued focus by management and supervisors on Health and Safety related issues. During Quarter 1-2011 the Group had three vehicle incidents and two Lost Time Incidents ('LTI's). All injuries were minor in nature but from which lessons have been learnt to further strengthen the Group's safety culture.

Operating environment

The Group activities result in significant deposits of oversize material and tailings at Marropino which pose risks of subsidence. The Group manages the risks associated with the creation of these deposits through monitoring of the stability of the oversize dumps and the structural effectiveness of the tailings dam walls. As at the date of this report, these are considered effective based on recent inspections and pose limited risk of serious injury or death. None of the accommodation facilities are in areas that could be affected by these deposits.

Non-Financial Resources

The Group's non-financial resources consist of the Group's human resources, infrastructure, systems, technologies and processes and community relationships. The Group also has other non-financial resources in its mineral resources and exploration sites which are discussed in the section of this MD&A titled 'Mineral resources, exploration sites and geological outlook'.

Human resources

Key recruitments during Quarter 1-2011 included Mr Declan Sheeran as the Group Exploration Geologist and Mr Ivan Machava as the Group Financial Controller.

The Group always gives preference to Mozambican nationals, or Portuguese speaking individuals if Mozambican nationals are not available. This approach has proved invaluable to maintaining good working relationships with the Mozambican authorities, and the local community in the area in which the Marropino Mine is situated. It also promotes the economic and social development of Mozambique, and the participation of the workforce at the Marropino Mine in the overall development of the operations. The benefits of this approach are seen in the excellent results achieved by the Marropino Mine since it recommenced production in April 2010.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort would be made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

The Directors believe that the human resources in the Group are appropriate for the current and projected level of activity in the Group, both at the Marropino Mine, and in the administrative support functions.

Systems, technologies and processes

The Group completed a review of all systems and processes throughout the Group in 2010, and identified areas for improvement. A new Enterprise Resource Planning system was installed in 2010 allowing a common platform for the Group operations at Marropino, Maputo and Johannesburg. This system provides an appropriate stock management platform for the Group's spares and consumables. Once integrated with the Group maintenance system, which is planned in Quarter 2-2011, this will provide a streamlined and efficient maintenance planning, stock control, and financial reporting system.

Community relationships

The Marropino Mine is situated in a remote location in Mozambique. The operations of the mine provide much needed direct employment to the region, direct local economic benefits through local procurement, and indirect economic benefits from the increased economic activity in the region. These benefits, coupled with the Group's focus on employment of Mozambican nationals wherever possible, provide a basis for strong community relationships.

The Group additionally contributes directly to the local community, undertaking projects for the improvement of living conditions in Marropino and the surrounding areas. Examples include the construction of the medical clinic in Marropino which was officially inaugurated on 2 November 2010 and the completion of new water bore holes in Marropino and the surrounding area in December 2010. The Group contributes to the maintenance of the road infrastructure around the Marropino Mine.

Initiatives have also been agreed with the villagers at Marropino to produce fresh produce for the Marropino Mine. The Marropino Mine has established a cash fund from which local producers can draw down funds for the construction of facilities to support this local produce.

An additional initiative is underway to promote health in the Marropino community through the development of a University of Glasgow, United Kingdom, and Universidade Eduardo Mondlane, Maputo, Mozambique joint project; this will result in the mutual exchange of medical doctors and students, and the provision of enhanced medical care through the Group sponsored clinic at Marropino during Quarter 3-2011. The initiative is in early development but could, if successful, lead to a fruitful long term partnership.

Within the wider context of the ethical and transparent development of mining in Mozambique, the Group is a committed supporter and participant in the World Bank sponsored Extractive Industries Transparency Initiative ('EITI').

The Directors believe that the community relationships at Marropino, and with the regional government of Zambezia Province in Mozambique based in Quelimane, are good and provide an appropriate level of stability for the current and projected level of activity at Marropino, Morrua and Mutala.

Markets and competition

Tantalum is a rare specialty metal that has become crucial for the electronics industry and other technologies such as the following:

With electronic devices becoming smaller, lighter, with more processing power, tantalum usage is increasing. Global tantalum demand is expected to grow at a cumulative annual growth rate of 6% per annum reaching 7 Mlbs of Ta2O5per annum by 2012 (Global Capital Magazine, October 2008). Global supply has fallen behind global demand and is expected to continue lagging for the foreseeable future.

Four developments have made the supply problem critical:

1 Suspended Production:

• Tantalum Mining Corporation of Canada Limited ('TANCO'), the captive producer for Cabot Corporation Inc., whose production facility we believe to be in care and maintenance.

Global Advanced Metals ('GAM') (Formerly Talison Tantalum) suspended production in 2008 at the Wodgina and Greenbushes underground mine in South Western Australia due to falling world prices.

2 Drained Inventories:

• The United States Defense Logistics Agency, the second largest supplier of tantalum during 2001 to 2007 (500,000+ lb per annum), exhausted its captive supply and stopped sales. It has now announced that it intends to rebuild stocks creating demand pressure.

3 Recycling Difficulties:

• Recycling has become more difficult due to the smaller size of electronic components.

4 Restrictions on Product from Conflict Regions:

• Increasing international sanctions on conflict minerals - for example, The Democratic Republic of Congo.

• The conflicts minerals clause of the US Financial Reform Bill (Dodd-Frank) which came into effect on 1 April 2011 requiring publicly listed companies on US exchanges to disclose in public accounts whether their products contain elements sourced from conflict areas.

In this context, the market is characterised by supply shortage from ethical producers, which is placing upwards pressure on spot prices of tantalum concentrate. Since 1 January 2010 to the date of this report, the reported price per pound of contained Ta2O5 has increased from $37 to $130. While GAM announced in January 2011 that it will now recommence mining at Wodgina with processing at Greenbushes of circa 700,000 lbs contained Ta2O5 per annum, the market still has excess demand and the Directors expect that prices will continue to rise.

Although the spot price has shown significant increases in 2010 and subsequently, supply prices are normally set by way of long-term off-take deals between miners and processors. During 2010 Noventa renegotiated, or entered into off-take agreements with major customers, that capitalise on the increasing tantalum  concentrate price (refer to the section of this MD&A titled 'Sales contracts') and provide a stable price for economic production once the Marropino Mine upgrade is completed. As an applicant member of the Electronics Industry Citizenship Coalition ('EICC'), an organisation dedicated to ensuring worker safety and fairness, environmental responsibility and business efficiency in the electronics industry, Noventa is one of the few suppliers which can provide tantalum concentrate to these customers.

The Directors believe that the Group is in a strong position in this market to expand operations on a profitable and sustainable basis.

Risk assessment

The following table summarises the principal risks and uncertainties faced by the Group, and the actions taken to mitigate these risks:

Financial Overview

The following table provides selected unaudited quarterly financial information for the nine most recent fiscal quarters to 31 March 2011, prepared under International Financial Reporting Standards ('IFRS') and presented in thousands of United States Dollars, except per share amounts:

(1) Comparative amounts adjusted for the 20:1 share consolidation of the Company's Ordinary Shares completed on 11 March 2011.

Quarter 1-2011 results overview

It is not meaningful to compare the trading performance in Quarter 1-2011 during which the Marropino Mine was in operation to Quarter 1-2010 when the Marropino Mine was in care and maintenance. The financial section of this MD&A focuses on the current reporting period, events subsequent to the reporting period end, and management's future intentions. Where relevant, comparisons to Quarter 1-2010 and Quarter 4-2010 are made.

During Quarter 1-2011, the Group reported a Gross loss of $1,956,000 (Quarter 1-2010: Gross profit of $347,000) on tantalum concentrate sales of $604,000 (Quarter 1-2010: Morganite sales of $1,000,000). The Group recognised revenue on two shipments of tantalum concentrate produced at the Marropino Mine in Quarter 1-2011. A third shipment was completed immediately subsequent to the Quarter end. Tantalum concentrate revenue for Quarter 1-2011 is relatively low reflecting the production design constraints on the current processing plant which limit the volumes that can be fed to the plant and the relatively low grade of the tailings which are being processed (118 ppm compared with the Marropino Mine pit average grade of 223 ppm).

Production volumes had not reached a break-even level in Quarter 1-2011 and Cost of sales for the Quarter is greater than revenue due to the impact of fixed and semi fixed costs of operating the Marropino Mine on the per lb production cost of the contained Ta2O5. These costs have increased per lb of contained Ta2O5 in Quarter 1-2011 compared to Quarter 4-2010 due to the additional staff, explosives and diesel costs incurred in creating stockpiles of run of mine material from the main pit at Marropino for the ICC from which no output volume has been obtained in Quarter 1-2011. The Group anticipates that production volumes will increase significantly in Quarter 2-2011 due to the ability of the Group to process the run of mine material from the Marropino pit through the ICC and that the Marropino Mine will approach cash break-even.

Recurring administrative expenses for Quarter 1-2011 were $1,236,000. Additional one off expenditure of $859,000 (refer to the section of this MD&A titled 'Administrative expenditure') was incurred in the Quarter.

The Group expensed $116,000 of preliminary costs incurred in respect of the arrangement of debt facilities (including due diligence) from two European Development Banks. These facilities are no longer required due to the placing of the Convertible Redeemable Preference Shares (refer to the section of the MD&A titled 'Funds raised').

At the Company's Annual General Meeting on 4 March 2011, the shareholders approved the creation of a new class of share capital, being Preference Shares, and the consolidation of the Company's Ordinary Shares at the ratio of 20:1.

During Quarter 1-2011 the Group raised $11,904,000 before expenses from the placing of 2,822,290 Convertible Redeemable Preference Shares. The funds raised were received in April 2011 once all conditions precedent had been met and are recorded in Quarter 2-2011. A further $1,049,000 was received subsequent to the Quarter end from the final tranche of the subscription made by CIPAF in September 2010. 447,503 Ordinary Shares were issued in Quarter 1-2011 on the exercise of warrants and share options.

The funds are being used to finance working capital and the phased capital inflows required for the process plant upgrade programme (refer to the section of this MD&A titled 'Process plant upgrade').

During Quarter 1-2011 the Group accelerated the procurement stage of the Marropino process plant upgrade, with $6,836,000 spent on acquiring property, plant and equipment including the ICC, deposits on equipment for the new process plant and engineering design fees. At 31 March 2011 the Group was committed to further capital expenditure of $5,600,000.

Revenue

During Quarter 1-2011 the Group completed two shipments of tantalum concentrate realising revenue of $604,000 (Quarter 1-2010: no shipments). A third shipment was delayed due to shipping schedules and was completed immediately after the Quarter end with the associated revenue recorded in Quarter 2-2011. The Group is exploring alternative shipping ports in Mozambique and the Republic of South Africa to provide greater flexibility on shipping schedules to avoid delays in dispatch of tantalum concentrate to its customers.

Production rose during Quarter 1-2011 to an annual equivalent rate of 64,500 lbs of contained Ta2O5 from 50,000 lbs per annum in Quarter 4-2010. The increase reflects the positive contribution of the second shift at Marropino. The commissioning of the ICC on 5 April 2011 and mining of the main pit at Marropino will allow the Group to increase the annual production rate of contained Ta2O5 to 200,000 lbs per annum during Quarter 2-2011.

During Quarter 1-2010, the Group reached agreement with LJ International Limited for the sale of consignment stock held by Goldleaves Trading Limited and Miranda Gems (HK) under the Morganite Joint Venture Agreement between the Group, and these parties. The Morganite Joint Venture Agreement has been terminated, with revenue of $1,000,000 recorded for the sale of the consignment stock.

Gross (loss) / profit

The Gross loss (Revenue less Cost of sales which includes direct operating costs of the Marropino Mine irrespective of whether it is producing tantalum concentrate) was $1,956,000 in Quarter 1-2011. The Gross loss in Quarter 1-2011 arises due to the relatively low production and sales volumes, reflecting the design constraints on the current processing plant which limit the volumes that can be fed to the plant and the relatively low grade of the tailings which were processed in Quarter 1-2011 (118 ppm compared with the Marropino Mine pit average grade of 223 ppm). Due to the low volumes, fixed and semi-fixed costs per lb of contained Ta2O5 recovered exceed the realisable revenue. On a quarterly basis, the gross loss increased by $1,298,000 compared to Quarter 4-2010. Quarter 4-2010 included an exceptional credit of $303,000 for the recognition of the net realisable value of spares and consumables previously written off. Once this item is adjusted for, the underlying increase in Gross loss is $995,000 reflecting increased staff costs with the full complement of staff now on site for mining the pit at Marropino and increased diesel and explosives costs associated with mining the pit at Marropino and the creation of stockpiled material for processing through the ICC in Quarter 2-2011. These costs are not currently absorbed to inventory because further processing costs, at current volumes, exceed the recoverable revenue per lb of Ta2O5. Additionally, one off expenditure was incurred in refurbishing parts of the current process plant to cope with the more abrasive run of mine material from the pit that will be processed in Quarter 2-2011. With the commissioning of the ICC on 5 April 2011 and processing of run of mine material from the Marropino pit, it is anticipated that the Gross loss will reduce significantly towards break even.

The Gross profit in Quarter 1-2010 arose due to the sale of $1,000,000 of morganite, which had no attributable cost of sale (morganite recovery arises as a by-product of the tantalum concentrate production and accordingly no costs of production are attributed to it) in a quarter when the Marropino Mine was in care and maintenance with low sustaining operating costs only.

Administrative expenses

Underlying administrative expenses for Quarter 1-2011 were $1,236,000, reflecting an increase on Quarter 4-2010 of $100,000 due to the increase in activity in the Group.

During Quarter 1-2011 the Group incurred expenditure of a significant nature for the following items:

·; $166,000 for annual discretionary bonuses for key management personnel, $51,000 of which was paid in Ordinary Shares of the Company. The discretionary bonuses include a $100,000 bonus paid in cash to the Chairman, Mr E F Kohn TD and $40,000 bonus paid in Ordinary Shares to the CEO, Mr P Lawless;

·; $20,000 sign-on bonus paid wholly in Ordinary Shares;

·; $175,000 of costs incurred on the TSX Listing of the Company;

·; $20,000 of costs incurred on the admission of the Company to the PLUS Quoted Market in anticipation of the admission to trading of the Company's Ordinary Shares and Convertible Redeemable Preference Shares in April 2011;

·; $371,000 of legal costs, including costs with respect to the claim against SRK Consulting (South Africa) Limited, revisions to the Company Articles of Association for the creation of the new class of Preference Shares, costs incurred with respect to the Share consolidation of the Company's Ordinary Shares and various reviews and revisions to the Group's contracts and agreements; and

·; $107,000 of financial consulting costs.

Net finance expense

Net finance expense was $449,000 principally reflecting the non-cash charge for the change in fair value of $340,000 on certain classes of the Group's issued warrants which are classified as derivative financial liabilities (refer to note 9.4.5). These fair value movements are reflected within net finance expense because the warrants were issued as a component part of fundraisings completed in September 2010 and September 2009. Additionally, the Group expensed $116,000 of initial costs incurred with respect to the arrangement of debt facilities from two European Development Banks. These facilities are no longer required due to the placing of the Convertible Redeemable Preference Shares (refer to the section of the MD&A titled 'Funds raised'). Further movements relate to $10,000 interest income received on bank deposits offset by $3,000 charge on the unwinding of the discount on long-term provisions.

Taxation

The Group has not incurred a tax expense during Quarter 1-2011. The Group has significant tax losses in Mozambique which are expected to offset future taxable profits for the foreseeable future.

Liquidity and Capital Resources

The Group has no external credit lines and at the date of this report is funded solely through shareholder investment in either Ordinary Shares or Preference Shares. Subsequent to the end of Quarter 1-2011, the Group received additional investment of $11,904,000 (pre issue expenses) in Convertible Redeemable Preference Shares (a component of the Group authorised capital stock of Preference Shares - refer to the sections of the MD&A titled 'Capital Stock' and 'Funds Raised'). The Group is undertaking geological exploration work at the Group's various mining licenses and concessions, including assessing the feasibility of bringing Morrua into production during 2012. Further equity or debt funding will be necessary to implement the Group's geological exploration plans, or if the Group incurs additional expenditure due to unforeseen circumstances.

Cash flows from operating activities

Cash used in operating activities was $4,747,000 in Quarter 1-2011 as a result of operating losses in the period, the deferred receipt of part of the income arising on the tantalum concentrate sales in the Quarter 1-2011 and Quarter 4-2010 in accordance with the agreed payment terms and the build-up of finished goods inventory. Non-cash items in the period relate principally to $141,000 share based payments expense (including bonuses paid in Ordinary Shares of $71,200), $340,000 finance expense reflecting the change in fair value of warrants which are accounted for as derivative financial liabilities, and depreciation of $104,000.

Cash flows from investing activities

Cash used in investing activities was $6,431,000 arising from the purchase of capital assets totalling $6,137,000 and exploration and evaluation expenditure of $304,000 offset by $10,000 interest received. The purchase of capital assets reflects the progression of the Marropino plant upgrade project including the ICC and mobile equipment for the initial phase of production ramp-up, deposits and stage payments on equipment for the new process plant and engineering / project management fees. Exploration and evaluation expenditure principally reflects exploratory drilling work on the Marropino Extension Pegmatite and geological consulting costs.

Cash flows from financing activities

During Quarter 1-2011 the Group received $1,106,000 from the issue of new Ordinary Shares in the Company on the exercise of warrants and share options. Further investment of $12,943,000 was received subsequent to the end of Quarter 1-2011 in April 2011. (refer to the section of the MD&A titled 'Funds raised'). $116,000 of debt arrangement fees were incurred in Quarter 1-2011 on facilities which are no longer required due to the placing of the Convertible Redeemable Preference Shares (refer to the section of the MD&A titled 'Funds raised').

Going Concern

The Directors have prepared these financial statements on a going concern basis as they have a reasonable expectation that the Company and Group have adequate resources to remain in operation for the foreseeable future.

Contractual obligations

At 31 March 2011 the Group had capital commitments of approximately $5,560,000 (31 December 2010: $4,724,000; 31 March 2010: $994,000) principally related to plant, equipment and fees required for the new process plant at Marropino including engineering contractor fees.

The Group has two off-take agreements for the majority of the Group's tantalum concentrate at profitable fixed forward prices. One of these contracts was signed in 2007 and amended in 2010, and the other was signed in 2010 at market related prices at that time.

The Group has commitments under operating leases for the rental of premises, with $184,500 due in 2011 and $96,000 due in 2012.

As at 31 March 2011, the Group had no further commitments.

The Group expects that payment of contractual obligations will come from funds generated by operations subsequent to the commissioning of the new processing plant at Marropino, and from current funds in the period prior to commissioning.

The Group does not have any off-balance sheet liabilities or transactions that are not recorded or disclosed in the financial statements.

Capital Stock

The Company's authorised capital stock is £7,500,000 divided into 62,500,000 Ordinary Shares of £0.008 each ('Ordinary Shares') and 7,000,000 10% Convertible Redeemable Preference Shares of £1.00 each ('Preference Shares' or 'CPS').

Ordinary Shares

The Company has one class of Ordinary Shares which carry no right to fixed income. Each Ordinary Share carries the right to one vote at the general meetings of the Company.

On 11 March 2011, the Company completed a 20:1 share consolidation of the Company's £0.0004 Ordinary Shares into £0.008 Ordinary Shares. Where noted, amounts included in this report are made with reference to the number of Ordinary Shares subsequent to the share consolidation.

25,696,951 Ordinary Shares are issued at 31 March 2011. Details of Ordinary Shares issued in Quarter 1-2011 are given in note 10. As at the date of this report, the Company has in issue 26,213,280 Ordinary Shares, an increase of 516,329 Ordinary Shares from 31 March 2011, reflecting the issue of 497,658 Ordinary Shares under the Company's agreement with Compagnie Internationale de Participations Bancaires et Financieres SA ('CIPAF') and the issue of 18,671 Ordinary Shares to Directors and employees for services provided (refer below). The issue of Ordinary Shares to CIPAF represents the final tranche of investment subscribed by CIPAF in September 2010.

At 31 March 2011, the Company had commitments in the form of warrants, share options and bonus shares that could result in the issue of a further 4,061,738 Ordinary Shares. Additionally, as at 31 March 2011, the Company was committed to issuing 11,384 Ordinary Shares to Directors for services provided and 7,287 Ordinary Shares to employees for remuneration and sign on bonuses contractually payable in Ordinary Shares of the Company. A further 14,614 Ordinary Shares are committed to PPM. These obligations are reflected in the 'Shares to be issued' reserve, a component of the Company and Group equity. Details of employee share schemes, other call options and arrangements relating to the issue of Ordinary Shares in the Company are set out in notes 10 and 11.

At the Annual General Meeting held on 4March 2011 the shareholders granted the authority to the Directors to issue a further 3,801,732 Ordinary Shares, of which 5,335 have subsequently been issued and 232,159 are earmarked for contractual commitments under options, warrants and bonus arrangements. Authority was also granted to the Directors to allot any Ordinary Shares that may be required to be allotted in connection with any existing and outstanding options, warrants, compensation arrangements and bonuses that have been issued by the Company.

Preference Shares

At the Annual General Meeting on 4 March 2011 the shareholders granted the authority to the Directors to issue 7,000,000 Preference Shares of which 2,822,290 have been issued.

The Company has one class of Preference Shares which carry the right to a fixed preferential dividend at a percentage rate per annum, determined by the Directors at the date of issue and payable in preference to any dividend in respect of any other class of shares. The Directors may provide that different preferential dividends apply to different Preference Shares; in such an event all Preference Shares will be treated as one and the same class. Other than for the preference dividend the Preference Shares do not confer any further rights of participation in the profits of the Company.

The Preference Shares do not carry voting rights at the general meetings of the Company, except in circumstances where the business of the meeting includes consideration of a resolution which directly or adversely varies any of the rights attached to the Preference Shares, in which case the Preference Shareholders may vote in respect of such a resolution.

On winding up of the Company or other return of capital, the assets of the Company will be applied to repaying holders of the Preference Shares in priority to holders of the Ordinary Shares.

Preference Shares may be redeemed by the Company under the terms of redemption of the Preference Shares determined by the Directors at the date of issue.

Preference Shares may be converted into Ordinary Shares of the Company under the terms of conversion of the Preference Shares determined by the Directors at the date of issue.

At 31 March 2011 there were no Preference Shares issued by the Company. As at the date of this report 2,822,290 Preference Shares are in issue. Details of Preference Shares issued subsequent to 31 March 2011 are provided in the section of the MD&A titled 'Placing of Convertible Redeemable Preference Shares' and note 13.

Other matters

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

There are no specific restrictions on the size of a holding of shares nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights.

Funds raised

Ordinary Shares issued in Quarter 1-2011 for cash consideration

During Quarter 1-2011 the Company issued the following Ordinary Shares for cash consideration:

(1) On 11 March 2011, the Company completed a 20:1 share consolidation of the Company's £0.0004 Ordinary Shares into £0.008p Ordinary Shares. The number and issue price of Ordinary Shares included in this table relate to the number of Ordinary Shares subsequent to the share consolidation.

(2) There were no issue expenses relating to these subscriptions.

Placing of Convertible Redeemable Preference Shares

In March 2011 the Group secured the placing of 2,822,290 Preference Shares (with institutional and other investors) at a price of $4.218 per CPS (the 'Issue Price') raising gross proceeds of $11,904,000 before expenses and $11,120,000 after cash expenses. The CPS have a nominal value of £1.00 each and carry an annual coupon of 10% of the Issue Price, payable quarterly in arrears. Each CPS is convertible at any time at the holders' request into one Ordinary Share in the Company. The Company may give notice of redemption at any date after 11 October 2012 at the Issue Price. The CPS will be mandatorily redeemed on 11 April 2016. The Issue Price was calculated at a 25% conversion premium to the mid-market closing price of 210.5p for the Ordinary Shares of the Company on AIM on 16 March 2011, applying the GBP/US$ exchange rate of 1:1.6031 as published in the Financial Times on 17 March 2011.

The Placing was conditional on admission of the CPS to trading on the PLUS. Admission to PLUS was granted on 11 April 2011, at which date the placing became unconditional. The placing is recorded in the financial statements of the Group in Quarter 2-2011.

In connection with the placing the Group issued warrants to the placing agents over 168,985 Ordinary Shares at a subscription price of 210.5p per Ordinary Share.

The net proceeds of the placing will be utilised to:

·; fund Project Restart; and

·; provide the Group with additional working capital.

Additional Subscription for Ordinary Shares

On 1 April 2011 the Group issued 497,658 Ordinary Shares at a price of 131.74p per Ordinary Share to CIPAF raising approximately $1,049,000 before expenses. This subscription of Ordinary Shares represents the final tranche of investment subscribed by CIPAF in September 2010. The subscription will be recorded in the financial statements of the Group in Quarter 2-2011.

Proposed transactions

As at the date of this report, no agreements to merge with or acquire another entity have been entered into and there are no significant proposed transactions.

Transactions with related parties

During Quarter 1-2011, consulting services were provided by certain Directors, and / or companies in which they have a beneficial ownership, amounting to $493,000 (Quarter 1-2010: $259,000). $343,000 (Quarter 1-2010: $259,000) of these fees are included in the Condensed consolidated statement of comprehensive loss as Administrative expenses and $150,000 (Quarter 1-2010: $nil) are included in Assets under construction, a component of the Group Property, plant and equipment balance. Full details are provided in note 12. These transactions were conducted in the normal course of business and were accounted for at the fair value of the transactions, which is the exchange amount in all instances other than those involving share based payments, where the fair value is determined by means of a valuation model.

Critical accounting estimates

In the application of the Group's accounting policies which are described in note 3 to the Group financial statements for the year ended 31 December 2010, including consideration of the Going concern status of the Company and Group, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The effect on the financial statements of changes in estimates in future periods could be material.

The following are the critical judgements that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Carrying value of tangible fixed assets

At 31 March 2011 the Group has tangible fixed assets with a carrying value of $9,795,000, the recoverability of which is dependent on the Group's ability to finalise the new process plant at the Marropino Mine and realise forecast budgeted results of operations. In February 2011, the Group finalised the detailed design on all circuits of the new processing plant at the Marropino Mine confirming the Group's estimate of the capital investment required in order for the Marropino Mine to be net cash positive and the phases, and timing, of the Marropino Mine restart programme. In accordance with the Plan, the Group has completed the second phase of production ramp up at Marropino, with the purchase and construction of the ICC which will allow the Marropino Mine to approach cash break even on operations from April 2011. Accordingly, the Directors are of the opinion that the carrying value of tangible fixed assets is recoverable.

Impairment of intangible fixed assets

The Group's intangible assets relate principally to the Morrua mining concession in the Zambezia Province of Mozambique to which the Group has full legal title. The intangible asset, representing acquisition costs of the mining concession, was impaired during financial year 2008 due to significant uncertainties regarding the extent and timing of any development of the concession. During Quarter 1-2011 the Group has initiated a programme for further geological, metallurgical and engineering studies at Morrua. If a viable resource is determined, the Group plans to bring Morrua into production by the end of 2012. The development will need to be funded through either external funding (shareholder investment or loan arrangements) or through positive cash flows from operations. The timing of any development in this mining concession remains uncertain. The remaining life of the estimated reserves in Morrua amounts to 10 years. If the Group is successful in establishing the commercial viability of Morrua, part or all of the impairment of intangible fixed assets may be written back. The Directors remain optimistic for the development of the concession.

Recoverability of input Value Added Tax

Mozambique Value Added Tax ('IVA') operates in a similar manner to UK Value Added Tax. The Group is exempt from IVA on its exports from Mozambique under the terms of its Mining License Agreement and Mozambique tax law. The Group is able to recover input sales tax on all purchases within Mozambique. The Group is always therefore in a net recovery position of IVA. Since 2004, the Group had not succeeded in recovering IVA from the Mozambique Government. Due to the significant uncertainty over the recoverability of these IVA balances, the Group provided in full against the assets as at 31 December 2009 of $1,611,000 at the US Dollar to Metical exchange rate of 27.5. As at 31 March 2011, the gross and net IVA recoverable assets are respectively $1,449,000 and $901,000 at the US Dollar to Metical exchange rate of 30.60.

In August 2010, $502,000 of the IVA recoverable was approved and subsequently paid by the Mozambique Tax Authority. During 2010, the Group released $1,081,000 of the provision against IVA recoverable assets (measured at the 31 December 2009 US Dollar to Mozambique Metical exchange rate of 27.5) reflecting the refund of IVA due and the revised assessment of the recoverability of the remaining IVA balances.

As at 31 March 2011, the Group has an expectation that $901,000 of the IVA recoverable balances will be collected in an orderly and timely manner. The remaining IVA recoverable balance of $539,000 remains provided against, with recovery subject to the Group providing satisfactory responses to the additional information requested relating to the on-going IVA claims and further discussions with the Mozambique Taxation Authority regarding the ability of the Group to reclaim IVA recoverable balances that were under declared during 2004 to 2007.

Warrants

Certain warrants issued by the Group are classified as derivative financial liabilities as the warrants are issued in a currency other than the functional currency of the Company. At each reporting date the fair value of the warrants is measured using a Black-Scholes valuation model, with changes in the fair value of the warrants recorded in the Consolidated statement of comprehensive loss within finance income/expense. The valuation is sensitive to the inputs in the valuation model, some of which require judgment. The warrants do not create any obligation on the Company other than to deliver shares in the Company for a fixed price at the option of the holder, over the life of the warrants. Further details are provided in note 9.

All results derive from continuing operations. The loss and total comprehensive loss for all periods presented are wholly attributable to equity holders of Noventa Limited.

The Quarter 1-2011 condensed consolidated financial statements of Noventa Limited, registered number 95036, were approved by the Board of Directors and authorised for issue on 9 May 2011. Signed on behalf of the Board of Directors:

1. Basis of preparation

The condensed consolidated financial statements of the Group for the three months ended 31 March 2011, which are unaudited and have not been reviewed by the Company's auditor, have been prepared in accordance with the International Financial Reporting Standards ('IFRS') accounting policies adopted by the Group and set out in the annual report for the year ended 31 December 2010. The Group does not anticipate any change in these accounting policies for the year ended 31 December 2011.

This Quarter 1-2011 report has been prepared to comply with Canadian legal requirements applicable to the Company's listing status on The Toronto Stock Exchange as a Designated Foreign Issuer. In preparing this report, the Group has adopted the guidance in the AIM rules of the London Stock Exchange (the 'AIM Rules') for interim accounts which do not require that the interim condensed consolidated financial statements are prepared in accordance with IAS 34, 'Interim financial reporting'. While the financial figures included in this report have been computed in accordance with IFRSs applicable to interim periods, this report does not contain sufficient information to constitute an interim financial report as that term is defined in IFRSs.

The financial information contained in this report also does not constitute statutory accounts under the Companies (Jersey) Law 1991, as amended. The financial information for the year ended 31 December 2010 is based on the statutory accounts for the year ended 31 December 2010. The auditors reported on those accounts: their report was unqualified and did not include any statement of emphasis of matter. Readers are referred to the auditors' report to the Group financial statements as at 31 December 2010 (which is available at www.noventa.net).

These condensed consolidated financial statements for the three months ended 31 March 2011 have been prepared in accordance with the IFRS principles applicable to a going concern, which contemplate the realisation of assets and liquidation of liabilities during the normal course of operations. Having carried out a going concern review in preparing these condensed consolidated financial statements for the three months ended 31 March 2011, the Directors have concluded that there is a reasonable basis to adopt the going concern principle.

Critical accounting judgments adopted by the Directors in the preparation of these condensed consolidated financial statements are included in the section of the MD&A titled 'Critical accounting judgments and key sources of estimation uncertainty'.

2. Segment Information

Based on the risks and returns the Directors consider that the primary reporting format is by business segment. The Directors consider there to only be one business segment, being the mining, extraction and production of tantalum concentrate, currently undertaken solely from the Marropino Mine in Mozambique. Morganite production is incidental to this principal activity and arises as a by-product of the tantalum concentrate production. All administrative expenditure is allocated to this sole segment.

No geographical analysis of the results by region, other than revenue by destination which is reported below, is provided due to the dominance of the Group's operations in Southern Africa (The Republic of South Africa and The Republic of Mozambique) relative to those in Jersey (Channel Islands) other than for 'Cash and cash equivalents'. 'Cash and cash equivalents' balances are predominantly maintained in Jersey (refer to note 9).

Revenue by destination of the Group's customers was:

3. Revenue

An analysis of the Group's revenue is as follows:

All revenues derive from continuing operations in all periods presented.

Tantalum concentrate sales

During Quarter 1-2011 the Group sold 39,682 lbs of tantalum concentrate containing 11,409 lbs of Ta2O5 realising revenue of $604,000. The Group did not realise sales of tantalum concentrate during Quarter 1-2010 while the Marropino Mine was in care and maintenance. Production recommenced at the Marropino Mine subsequent to the end of Quarter 1-2010 in April 2010.

Morganite sales

Morganite production may occur as a by-product of the tantalum concentrate production if morganite is found at the Marropino Mine while mining the pit. During Quarter 1-2011 no morganite was found at Marropino. During Quarter 1-2010, the Group reached agreement with LJ International Limited for the sale of consignment stock held by Goldleaves Trading Limited and Miranda Gems (HK) under the Morganite Joint Venture Agreement between the Group, and these parties. The Morganite Joint Venture Agreement was terminated, with payment of $1,000,000 received by the Group for the sale of the consignment stock.

4. Net finance expense

During Quarter 1-2011 the Group incurred preliminary expenditure of $116,000 for the arrangement of debt facilities from two European Development banks. These facilities are no longer required due to the placing of the Convertible Redeemable Preference Shares (refer to the section of the MD&A titled 'Funds raised'). The related expenditure has been expensed.

5. Intangible assets

The Group's intangible assets relate principally to the Morrua mining concession in the Zambezia Province of Mozambique to which the Group has full legal title. The intangible asset, representing acquisition costs of the mining concession, was impaired during financial year 2008 due to significant uncertainties regarding the extent and timing of any development of the concession. During Quarter 1-2011 the Group has initiated a programme for further geological, metallurgical and engineering studies at Morrua. If a viable resource is determined, the Group plans to bring Morrua into production by the end of 2012. The development will need to be funded through either external funding (shareholder investment or loan arrangements) or through positive cash flows from operations. The timing of any development in this mining concession remains uncertain. The remaining life of the estimated reserves in Morrua at the anticipated mining rate amounts to 10 years.

During Quarter 1-2011 the Group commenced exploration and evaluation activities on two pegmatites on the Marropino Concession - the Marropino Extension pegmatite and the Marropino South pegmatite (refer to the section of the MD&A titled 'Mineral resources, exploration sites and geological outlook'). Expenditure of $304,000 was incurred on drilling of core samples and consultant geologist fees.

6. Property, plant and equipment

The net book value of Property, plant and equipment at 31 March 2011 principally represents the equipment and construction costs of the ICC, mobile equipment, deposits made on equipment for the Marropino Mine process plant upgrade, engineering consultant and project management fees directly attributable to the Marropino process plant upgrade, light transport vehicles and critical mining equipment. At 31 March 2011, the Group had entered into contractual commitments for the acquisition of Property, plant and equipment amounting to $5,600,000 (31 March 2010: $994,000; 31 December 2010: $4,724,000).

The Group impaired its operating tangible fixed assets held as at 1 January 2009 and 31 December 2009, reflecting the uncertainty over the future profitability of the Marropino Mine due to the lack of available funding as at those dates for the Group to successfully install a comminution circuit at Marropino and complete a profit generating upgrade of the Marropino plant. If the Group is successful in implementing its plans and making the Marropino Mine a profitable operation, the Directors anticipate that a portion of the recorded impairment will be written back in future periods.

7. Inventories

8. Provisions

8.1 Short-term provisions

Movements in short-term provisions were:

Quarter 1-2011

Year ended 31 December 2010

Taxation provisions represent probable taxation liabilities and penalties arising in Mozambique. Included in this provision is $112,000 (31 December 2010: $95,000; 31 March 2010: $nil) of assessed IVA (including penalties) relating to 2008 identified in the tax inspection into the tax affairs of the Group's subsidiary Highland African Mining Company Limitada undertaken by the Mozambique Tax Authority in December 2009. This provision was reported within Current tax liabilities as at 31 March 2010 at $108,000 at the applicable exchange rate between Mozambique Metical and US Dollar at that date reflecting the assessment, as at that date, that the liability was unavoidable. During 2010, the Group formally contested this assessed IVA with the Mozambique Tax Authority and may be successful in defending the assessment. Accordingly the amount is now reported within Short-term provisions. Of the remaining provision, $142,000 (31 December 2010: $101,000; 31 March 2010: $nil) relates to taxes which the Group has not paid in accordance with the Group's interpretation of the terms of its Mining Licence Agreement. The Mozambique Tax Authority has not formally confirmed this interpretation and there is a significant risk that the amounts may become payable. $16,000 (31 December 2010: $25,000; 31 March 2010: $nil) relates to possible exposures on income tax for 2009. The remaining balance of $38,000 (31 December 2010 and 31 March 2010: $nil) represents tax which the Group paid in 2007 and 2008 where the Mozambique Tax Authority is disputing the validity of the receipts held by the Group.

Other provisions represent liabilities arising from contractual arrangements of the Group under which the Group has obligations to indemnify the third party against costs or losses incurred. These provisions relate to the parent Company, Noventa Limited.

The Group anticipates that any cash outflow arising from short term provisions will be realised in 2011.

8.2 Long-term provisions

The provision relates to the anticipated costs to be incurred in rehabilitating the open pit and surrounding area at Marropino once the mineral ore body has been fully exploited. The movement in the provision in all periods reflects the unwinding of the discount on the amount provided. The estimated remaining life of the mine is 4 years, which may be extended if the Marropino South and / or the Marropino Extension pegmatites prove to be economically viable resources (refer to the section of the MD&A titled 'Mineral resources, exploration sites and geological outlook').

9. Financial instruments

Details of the capital risk management policy of the Group are provided in note 10.

This note provides further information on the financial instruments of the Group.

9.1 Significant accounting policies and classification of financial instruments

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the Group financial statements for the year ended 31 December 2010.

9.2 Financial risk management objectives

The Group actively manages the risks arising from its operations, and financial instruments at Board and Chief Financial Officer levels. The Board of Directors and the Chief Financial Officer have overall responsibility for the establishment and oversight of the Group's risk management framework and to ensure that the Group has adequate policies, procedures and controls to manage successfully the financial risks that the Group faces.

While the Group does not have a written policy relating to risk management of the risks arising from any financial instruments held, the close involvement of the Chairman, Chief Executive Officer and Chief Financial Officer in the day to day operations of the Group ensures that risks are monitored and controlled in an appropriate manner for the size and complexity of the Group. Financial instruments are not traded, nor are speculative positions taken. The principal risks that the Group faces with an impact on financial instruments are summarised below. Further details by class of financial instrument are described later in this note.

The Group's key financial market risks arise from changes in foreign exchange rates ('currency risk'). The Group is also exposed to credit risk. To a lesser extent the Group is exposed to interest rate risk and liquidity risk.

Currency risk

The Group is exposed to foreign currency exchange risk mainly between the US Dollar, South African Rand, Mozambique Metical and Great British Pound. The potential currency exposures are:

·; Transactional exposure in respect of:

§ operating costs and capital expenditures incurred in currencies other than the functional currency of operations; and

§ financial assets and liabilities denominated in currencies other than the functional currency of Group companies, such as bank balances held in currencies other than US Dollar, and trade payables denominated in Mozambique Metical or South African Rand.

·; Translational exposures in respect of investments in overseas operations which have functional currencies other than US Dollar.

The Group's policy is to minimise transactional exposure through maintaining detailed forecast cash flows by principal currency in which cash inflows and outflows are made, allowing the Group where possible to retain funds in the relevant currencies to create natural hedges against exchange fluctuations.

Credit risk

The Group principally has exposure to credit risk on its bank balances, trade receivables and other receivables. This risk is managed through the selection of bank counterparties based on the financial security of the counterparty, credit assessment of customers and contractual terms and conditions and monitoring.

Interest rate risk

The Group is, to a limited extent, exposed to interest rate risk which arises principally from the Group's bank and cash balances.

Liquidity risk

The Group has limited liquidity risk as at 31 March 2011 due to its cash balances exceeding its monetary liabilities.

9.3 Categories of financial instruments

Based on the application of the accounting policies with respect to financial instruments, amounts included in the relevant balance sheet items represent the following categories of financial instrument:

9.4 Classes of financial assets and liabilities

The Group analyses its financial instruments into the following classes based on the differing risks to which the instruments expose the Group:

9.4.1 Fair value

For all classes the book value and fair value are the same. The assumptions used by the Group to estimate the fair values of financial instruments are summarised below:

(i) For 'Short term operating assets' and 'Short term operating liabilities' the fair value approximates to book value because of the short maturities of these assets and liabilities.

(ii) For 'Bank balances and cash in hand', the fair value has been determined to approximate book value. The Group has no fixed rate deposits exceeding one month as at each reporting date.

(iii) For warrants the fair value has been calculated using a Black Scholes valuation model due to the short term of the derivative instruments. The warrants are carried at fair value and accordingly the book value and the fair value of the warrants is the same. The fair values of the warrants are derived from inputs other than quoted prices that are observable for warrants, either directly (i.e. as prices) or indirectly (i.e. derived from prices) and they are therefore categorized within level 2 of the fair value hierarchy set out in IFRS 7.

9.4.2 Short term operating assets

These assets are principally subject to credit risk. The balance at 31 March 2011 principally comprises trade receivables from the sale of tantalum concentrate, IVA recoverable in The Republic of Mozambique, and VAT recoverable in The Republic of South Africa (the balance at 31 December 2010 principally comprises trade receivables from the sale of tantalum concentrate and IVA recoverable in The Republic of Mozambique; the balance at 31 March 2010 principally comprises VAT recoverable in The Republic of South Africa). Credit risk arises due to changes in the credit rating of the counterparty. The Group's credit risk is reduced as it only transacts with a small number of counterparties who, in the opinion of the Directors, have a sound credit rating. The Group's exposure to credit risk is further controlled by reviewing its credit exposure to counterparties at regular intervals.

The maximum exposure to credit risk is the carrying value of the class at all balance sheet dates.

No amounts included in 'Short term operating assets' are past due and not impaired at either reporting date. The Group does not hold any security against the receivables in 'Short term operating assets'.

Included in the 'Short term operating assets' are receivables which have been provided against. Movements in the allowance account against 'Short term operating assets', which principally relates to the input IVA recoverable in Mozambique (refer to the section of the MD&A titled 'Critical accounting judgments and key sources of estimation uncertainty') is as follows:

The increase in the allowance account during Quarter 1-2011 reflects the increase in the underlying input IVA balance recorded by the Group of $33,000, an increase in the allowance against deposits for defendant legal costs of $23,000 and a foreign exchange loss of $25,000. Amounts written off in Quarter 1-2011 are irrecoverable bail monies paid by the Group in 2006 on behalf of employees. The decrease in the allowance account in 2010 reflects the revision to the assessment of recoverability of the IVA balances as at 31 December 2009 of $1,081,000 and the effect of the devaluation of the Mozambique Metical on the IVA recoverable balance, partially offset by an increase in allowance against IVA accruing during 2010 of $38,000 and deposits for defendant legal costs of $92,000.

9.4.3 Bank balances and cash in hand

All amounts are carried at amortised cost, and, other than cash in hand, are interest bearing assets, with interest rates arranged with counterparty financial institutions based on commercial negotiations, reflecting the term, currency and amount of each deposit. As at all reporting periods, bank balances were held in current accounts or deposit accounts with a maturity of less than one month.

The principal risk arising for 'Bank balances and cash in hand' is credit risk in terms of counterparty default. In the current economic climate, the Group actively manages this risk through the monitoring of the credit status of the counterparty financial institutions. As at the balance sheet date the Group's assets in 'Bank balances and cash in hand' are principally held with the following banks, which are all high quality financial institutions:

The maximum amount subject to credit risk is the carrying value of this class.

'Bank balances and cash in hand' is also subject to the risk of changes in foreign currency exchange rates. The impact of changes in foreign currency exchange rates on the carrying value of 'Bank balances and cash in hand' is shown along with all other financial instruments, in the foreign currency sensitivity analysis below.

9.4.4 Short term operating liabilities

'Short term operating liabilities' represents trade, and other payables arising in the normal course of business. No interest is chargeable on any of the items included in 'Short term operating liabilities', as long as the Group adheres to the agreed payment terms with each supplier.

The principal risks associated with 'Short term operating liabilities' are liquidity risk and the risk of changes in foreign currency exchange rates. The impact of changes in foreign currency exchange rates at the carrying value of this class is shown in the sections below respectively on liquidity risk and foreign currency sensitivity analysis along with all other financial instruments of the Group.

9.4.5 Warrants

'Warrants' contains warrants issued by the Company which are classified as derivative financial liabilities because the warrants are issued in a currency other than the functional currency of the Company.

Warrants falling within this category were issued by the Group in September 2009 (the '2009 warrants'), twice in September 2010 (the 'September 2010 warrants - 1' and the 'September 2010 warrants - 2', together the 'September 2010 warrants'), once in October 2010 and once in December 2010 (collectively the '2010 warrants') as part of fundraisings in these months. Upon initial recognition, the fair value of the warrants is 'carved out' of the funds received from shareholder investment and recorded within derivative financial liabilities. At each reporting date the fair value of the warrants is measured, with changes in the fair value of the warrants recorded in the Consolidated statement of comprehensive loss within finance income/expense. At each exercise date, the derivative liability fair value of the warrants exercised is recorded to the Share premium account. The warrants do not create any obligation on the Company other than to deliver Ordinary Shares in the Company for a fixed price (360p per share for the September 2009 warrants subsequent to the March 2011 share consolidation and 200p per Ordinary Share for the 2010 warrants subsequent to the March 2011 share consolidation), at the option of the holder, for 18 months from the date of issuance of the September 2009 warrants and 2 years from the date of issuance of the September 2010 warrants. The warrants do not therefore expose the Company or Group to any risks as at the balance sheet date.

Subsequent to the March 2011 share consolidation, 20 warrants must be exercised to acquire one Ordinary Share in the Company. Movements in the number of warrants outstanding are as follows:

(1) 275,253 Ordinary Shares were issued upon the exercise of 5,505,075 warrants in Quarter 1-2011.

(2) If all warrants were exercised at 31 March 2011, the Company would be required to issue 2,139,387 (31 December 2010: 2,414,641; 31 March 2010: 468,750) Ordinary Shares.

Movements in the fair value of the warrants derivative financial liability are as follows:

The fair value of warrants at the relevant period ends has been determined using a Black Scholes valuation model with the following inputs: