African Minerals to raise up to approx $800m

11 November 2010

African Minerals Limited (the "Company")

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, SOUTH AFRICA OR JAPAN

African Minerals to raise up to approximately $800 million

African Minerals Limited (AIM: AMI or the Company), the iron ore project development company that is developing the Tonkolili project in Sierra Leone, West Africa ( "Project"), is pleased to announce the launch today of a non pre-emptive conditional equity placing of 45,000,000 Common Shares ("Placing Shares") at a price of 425 pence per share ("Placing Price") to raise approximately £191.3 million ($307 million1) ("Placing"). China Railway Materials Commercial Corporation has the right to maintain its percentage shareholding in the Company following completion of the Placing and accordingly may wish to subscribe for new Common Shares in addition to the Placing Shares. Concurrently, AMI also announces that it has appointed a Lead Arranger to arrange for the provision of a secured loan facility of up to $500 million ("Debt Fundraising").

Highlights

·; Equity placing to raise proceeds of approximately $307 million

·; Certain major shareholders and other investors have already indicated their support for the Placing at the Placing Price and for an amount significantly in excess of the amount to be raised

·; Sprott Resource Lending Partnership and Dundee Resources Limited have been appointed Lead Arranger to arrange a two year, secured, high yield loan facility of up to $500 million. The Lead Arranger has confirmed that subject to conditions precedent (noted herein) the first $100 million of the Facility will be arranged for funding

·; Proceeds of both the Placing and the Debt Fundraising to be used to finance the remaining construction of Phase 1 of the Project and to take the Company through to first production, expected in Q4 2011

·; Company remains committed to finalising strategic partner discussions with Shandong principally with respect to funding the Phase II expansion of the Project by an incremental 25 Mtpa

·; Incremental Capex expected to take Phase I production rate up to 12 million Mtpa by end of Q4 2012

This summary should be read in conjunction with the remainder of the announcement.

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Contacts

African Minerals Limited +44 207 104 2280

Alan Watling / Miguel Perry

Canaccord Genuity Limited

Placing Agent and Nominated Adviser +44 20 7050 6500

Robert Finlay

Guy Blakeney

Dundee Securities Corporation +1 416 350 3250

Placing Agent

David Anderson

GMP Securities Europe LLP +44 20 7647 2800

Placing Agent

Andrew Young

Mirabaud Securities LLP +44 20 78783360

Placing Agent

Rory Scott

Pelham Bell Pottinger +44 20 7 861 3232

Public Relations

Klara Kaczmarek

Philippe Polman

These materials are not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. African Minerals does not intend to register any part of the offering in the United States or to conduct any offering of the Placing Shares (as defined below) in the United States.

Details of the Placing

The Placing is being carried out by Canaccord Genuity Limited ("Canaccord Genuity"), Mirabaud Securities LLP, Dundee Securities Corporation and GMP Securities Europe LLP as joint placing agents ("Placing Agents") .

45.0 million Common Shares are being placed at 425 pence per Common Share.

The Placing Shares will rank pari passu with the existing Common Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares. The Placing is being made on a non pre-emptive basis.

The Company will apply for admission of the Placing Shares to be traded on the AIM market of the London Stock Exchange ("Admission"). It is expected that Admission will take place and that trading will commence on or around 18 November 2010.

The Placing is conditional upon, inter alia, Admission becoming effective and the Placing Agreement made between the Company and the Placing Agents becoming unconditional and not being terminated in accordance with its terms. The Placing is not however conditional upon the outcome of the Debt Fundraising.

Each of the Placing Agents has agreed subject to the terms and conditions of the Placing Agreement to use its reasonable endeavours as agent for the Company to procure subscribers for the Placing Shares and also to underwrite the settlement of those Placing Shares for which it has procured subscribers.

Appendix I to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. Attention is also drawn to Appendix II to this announcement entitled "Risk Factors".

Under the terms of China Railway Materials Commercial Corporation's ("CRM") equity subscription, which was completed in June 2010 and in which CRM acquired 12.5% of the issued share capital of AMI, CRM was granted certain pre-emption rights. The pre-emption rights entitle CRM to maintain its existing percentage shareholding in AMI in respect of new equity issues by AMI on the same terms as those new equity issues (including as to price). AMI will offer CRM the right to subscribe for new Common Shares over the next 60 days, in accordance with CRM's rights, at the Placing Price. Any new Common Shares taken up by CRM would be in addition to the Placing Shares placed pursuant to the Placing.

Details of the Debt Fundraising

Concurrent with the Placing, the Company has appointed a special purpose vehicle which will be jointly owned by Dundee Resources Limited and Sprott Resource Lending Partnership ("Lead Arranger") to arrange a proposed two year secured, high yield loan facility ("Facility") of up to $500 million.

The Debt Fundraising is conditional upon (amongst other things) the Company raising an aggregate of not less than $700 million in respect of the Tonkolili Project (including proceeds from the Placing,) and completion of satisfactory due diligence by the Lead Arranger.

Sprott Resource Lending Partnership and Dundee Resources Limited have confirmed that the first $100 million of the Facility will be arranged for funding on the terms contemplated below by the Lead Arranger subject to satisfaction of conditions precedent and the approval of the boards of Sprott Resource Lending Partnership and Dundee Corporation. It is intended that the remainder of the Facility will be syndicated, with Canaccord Genuity Limited, Mirabaud Securities LLP, GMP Securities Europe LLP and Dundee Securities Corporation appointed as placing agents in respect of the Debt Fundraising.

The proposed terms of the Facility to be syndicated are as follows:

·; Two year term;

·; interest of 12% per annum, payable monthly, and a commitment fee (as to which see below);

·; repayment by the Company at any time. If the Facility remains outstanding on the first anniversary of drawing, the Company shall pay a bonus equal to 3% of the outstanding balance of the Facility either in cash or Common Shares at the Company's election;

·; estimated all in cost of financing to be an average of 18% per annum; and

·; secured over all of the assets of the Group (subject to a carve out for implementation of Shandong transaction on terms previously announced).

The commitment fee payable in respect of the full $500 million Facility would be as follows:

·; warrants to subscribe for 12.5 million new shares in the Company at an exercise price of £6, at a ratio of 2.5 million warrants for every $100 million principal amount arranged under the Facility. The warrants will be exercisable for a period of 3 years; and

·; 4% of the amount of the Facility payable in the form of Common Shares valued for this purpose at £4.50 per Common Share.

There can be no guarantee that the Debt Fundraising will be completed or that it will be completed on the terms contemplated above. It is expected that any Facility ultimately entered into would be subject to customary conditions precedent (including completion of due diligence) and covenants. 

The Company may consider offering Common Shares with a value of up to approximately $50 million in connection with the Debt Fundraising. It is currently expected that any such offer would be made at the Placing Price.

Background to the Placing and the Debt Fundraising

As stated in the Company's interim report announced on 29 September 2010, the Group's development program is divided into three phases targeting respectively the Phase 1 DSO, Phase 2 saprolite and Phase 3 magnetite iron ore bodies at Tonkolili. Phase 1 construction is already well underway.

The Company has recently made a number of decisions to optimise the economics of the Project. These include the decision to move to an all railway solution for Phase 1 instead of the construction of a road from the Tonkolili to Lunsar section as previously announced. Phase 1 of the Project has been designed around a 10 Mtpa capacity. A potential increase to 12 Mtpa is being planned. Management would expect to achieve this higher rate of production by the end of 2012.

There have been a number of increases in capital expenditure costs including as a result of such improvements to the overall Project design. The additional capital expenditure is expected to result in a positive impact with Phase 1 operating costs presently estimated by the Company to be approximately $27.5 per tonne. Total capital expenditure, including contingencies, is estimated to be approximately $874 million, of which approximately $754 million remains to be incurred.

Total remaining project costs, including capital expenditure, pre production costs and a contingency provision, for Phase 1 are presently estimated by the Company to be approximately $988 million including transaction and interest costs. At 30 September 2010, the Group had cash resources of $230 million. The Group's capital needs and cash resources exclude the impact of any adjustment for potential vendor financing in respect of equipment purchases and any proceeds which may arise from any completed transaction with Shandong.

Given the significant pace of activity underway in Sierra Leone and the timeline associated with the closing of the proposed transaction with Shandong, the Board believes that it is now appropriate to seek further funding sufficient to achieve Phase 1 production. Accordingly, the Company has decided to initiate the Placing and Debt Fundraising. If the Placing and the full amount of the Debt Fundraising are both successfully concluded, they are expected to raise a total of approximately $807 million before fees and expenses, which the Board believes is sufficient to achieve Phase 1 production. However, should the Company not succeed in raising this amount, it would need to look to alternative sources of finance to reach Phase 1 production.

As announced on 29 October 2010, the Company extended the date for Shandong to complete its due diligence to 10 November 2010. The Company confirms that the significant part of the due diligence process (including technical due diligence) has been completed. The remaining elements of due diligence are expected to be completed by 20 November 2010. Although there can be no guarantee that agreement will be reached, progress to date has been good and the Company remains committed to finalising an agreement with Shandong. The proposed security package of the Debt Fundraising has been structured to facilitate the implementation of an agreement with Shandong.

Technical update

The intensive exploration program for the definition of a hematite resource to support Phase I and II was completed in late October 2010. In total over 200km of diamond core has now been drilled at Tonkolili. Resource modeling work is underway by Independent Consultants SRK Consulting (UK) Ltd and a Mineral Resource Estimate for the Direct Shipping Ore (DSO) and Saprolite Resources is expected to be available by early December 2010.

While the above work is ongoing and any estimate of quantity and quality is still conceptual in nature, the Company and SRK remain confident that the above DSO Mineral Resource will support the forecast production rate for this material of 12 million tonnes per annum (Mtpa) of lumps and sinter fines for the 8 year period currently envisaged. The Company and SRK are also confident that the December 2010 Mineral Resource Estimate will also delineate sufficient Saprolite material immediately underlying the DSO to support the forecast production rate for this material of 25 Mtpa of high grade pellet feed for at least the same period of time. This would increase the expected production capacity of Phase II, during which time both types of product will be produced, from the previously announced 25 Mtpa to 35 Mtpa, comprising 25 Mtpa of hematite pellet feed, and a further 10 Mtpa of DSO.

During Phase I, the production of lumps and sinter fines with Fe grades greater than 58% is planned, using simple crushing and screening. The physical properties of the lump ore make it desirable Blast Furnace feed.

Ongoing metallurgical testwork is being conducted by Mineral Technologies (Queensland, Australia) for the definition of the Phase II hematite product stream. Positive results have recently been received from bench scale Heavy Liquid Separation (HLS) testwork, producing concentrates at grades suitable for the production of Blast Furnace pellets. A pilot plant using production scale equipment was commissioned during early November 2010 and pilot testwork is ongoing to optimize the design of the final commercial plant.

The Engineering Study being conducted by WorleyParsons for Phase II infrastructure is due for completion at the end of December 2010 and the Engineering Study being conducted by Ausenco for Phase II covering the mine and processing plant is also on target for completion shortly thereafter.

Despite a longer than usual rainy season, construction of Phase I infrastructure is on schedule. Civil activity is progressing well on both the rail refurbishment and new rail build aspects of the project and bridge strengthening programs are well underway. Material handling design at Pepel port is now complete and structural, mechanical and electrical contractors are due to mobilise on schedule during Q1 2011.

Planning for the production phase is currently being undertaken in parallel with construction. Operational protocols and standard operating procedures are being defined to ensure a smooth transition from construction through commissioning into full production.

Other significant achievements to date include official granting of certain mine and environmental licenses in respect of the Project and a recent agreement from the Ministry of Agriculture, Forestry and Food Security to proceed with construction of the railway through Farangbaia Forest Reserve.

Related Party Disclosure

By virtue of Murray John's position as a director of AMI, and his position as President, CEO and a director of Dundee Resources, an affiliate of Dundee Corporation, Dundee Corporation is considered to be a related party for the purposes of Rule 13 of the AIM Rules for Companies. Based on the arrangements contemplated by this announcement, Dundee Corporation is interested through its affiliates in the following:

·; 20% of the commissions payable to the Placing Agents, to be paid to Dundee Securities, another affiliate of Dundee Corporation, under the Placing Agreement;

·; 20% of the fees payable to the placing agents, to be paid to Dundee Securities, under a mandate letter in respect of the Debt Fundraising;

·; a work fee and success fee payable to the Lead Arranger, in which Dundee Resources will have a 50% ownership interest, in respect of the Debt Fundraising. The success fee is payable on the earlier of the date of closing of the Facility and, if the Lead Arranger has secured written commitments from lenders prepared to lend not less than $300 million and the Company arranges alternative financing for Phase 1 within 120 days of the date of this announcement, that date.

·; A proportionate interest in the fees paid to the Lead Arranger under the terms of the Facility, being 1/12th of the interest and 10% of the commitment fees otherwise payable to the debt providers; and

·; The potential investment by Dundee Resources of $25 million, upon which Dundee Resources will earn interest, a commitment fee and, should the Facility run beyond its initial 12 month term, a bonus of 3% of the then outstanding balance.

Assuming $500 million is raised pursuant to the Debt Fundraising and that the Facility remains outstanding beyond the first anniversary of closing, affiliates of Dundee Corporationmay earn fees and receive interest payments in aggregate up to approximately $16.4 million over the term of the Facility. This includes $8.3 million in interest, commitment fees and bonus earned on its $25 million potential arranged principal.

The Directors of the Company, having consulted the company's Nomad, believe that each of the interests relating to Dundee Corporation highlighted above, both individually and in aggregate, regarding the arrangement and placing of the Facility is fair and reasonable insofar as its shareholders are concerned.

Competent Persons

The information in the Technical Update section of this announcement that relates to ongoing Resource Estimation work being undertaken by SRK is based on information compiled under the direction of Mr Howard Baker, who is a Member of the Australasian Institute of Mining and Metallurgy ("AusIMM"), and Dr Mike Armitage, who is a Chartered Engineer and a Chartered Geologist and a Member of the Institute of Materials, Minerals and Mining.

Both Mr Baker and Dr Armitage are full time employees of SRK and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Baker and Dr Armitage have reviewed this announcement and consent to the inclusion in the announcement of the matters based on their information in the form and context in which this appears.

The information in the Technical Update section of this announcement that relates to metallurgical testwork is based on information compiled and reviewed by Rodney Elvish, who is a Fellow and CPMet of the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr. Elvish is employed by Biernacki & Elvish Enterprises Pty. Limited, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Elvish has reviewed this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which this appears.

The information in the Technical Update section of this announcement that relates to geological exploration is based on information compiled and reviewed by Marcus Reston, who is a Member of the Australian Institute of Geoscientists ("AIG"). Mr. Reston, General Manager: Geology & Exploration, is a full-time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Reston has reviewed this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which this appears.

Securities Laws

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED AND IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ONLY AT PERSONS WHO ARE (I) QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")), AND/OR (II) PERSONS TO WHOM THEY MAY BE ADDRESSED WITHOUT GIVING RISE TO THE REQUIREMENT FOR A PROSPECTUS UNDER THE PROSPECTUS DIRECTIVE. (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MAY NOT BE AND MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND WILL BE OFFERED AND SOLD ONLY IN "OFFSHORE TRANSACTIONS" AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"). ACCORDINGLY, NO PERSON WILL BE PERMITTED TO PARTICIPATE IN THE PLACING UNLESS, AT THE TIME WHEN ANY OFFER OF PLACING SHARES IS MADE TO, OR ANY OFFER TO PURCHASE PLACING SHARES IS SOLICITED FROM, SUCH PERSON, SUCH PERSON IS NOT "IN THE UNITED STATES" AND, AT THE TIME WHEN SUCH PERSON PLACES AN ORDER TO BUY PLACING SHARES, SUCH PERSON IS "OUTSIDE THE UNITED STATES," IN EACH CASE WITHIN THE MEANING OF RULE 902(H) OF REGULATION S.

THE PLACING SHARES HAVE NOT BEEN, AND WILL NOT BE, QUALIFIED FOR DISTRIBUTION BY PROSPECTUS UNDER THE SECURITIES LAWS OF ANY PROVINCE OR TERRITORY OF CANADA AND MAY ONLY BE OFFERED AND SOLD IN CANADA PURSUANT TO AN EXEMPTION FROM THE PROSPECTUS REQUIREMENTS OF CANADIAN SECURITIES LAWS.

Persons by whom or on whose behalf a commitment to acquire Placing Shares is given ("Placees") will be deemed to have read and understood this announcement, including the Appendices, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in Appendix I.

In particular, each such Placee represents, warrants and acknowledges that:

(i) it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

(ii) its acquisition of Placing Shares will be an "offshore transaction" as defined in Regulation S under the Securities Act;

(iii) it is not within Australia, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares.

This announcement, including the Appendices, is not for distribution directly or indirectly in or into Australia, South Africa or Japan or any jurisdiction into which the same would be unlawful.

No offering of securities is made hereby or will be made in the United States by the Company in connection with the Placing. The Placing Shares have not been and will not be registered under the Securities Act.

This announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of the Company in Australia, South Africa or Japan or any jurisdiction in which such an offer or solicitation is unlawful. No public offering of securities of the Company will be made in connection with the Placing in the United Kingdom or elsewhere.

No prospectus has been lodged with, or registered by, any applicable regulatory authority. In particular, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the prospectus, registration or qualification requirements of the securities laws of Australia, South Africa or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Canada, Australia, South Africa or Japan or any other jurisdiction in which the same would be unlawful.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.

The Placing Shares may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Placing Shares offered should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this announcement you should consult an authorised financial adviser.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND

This announcement does not constitute an offering prospectus within the meaning of Article 652a and/or Article 1156 of the Swiss Federal Code of Obligations (the "Code of Obligations") or a listing prospectus pursuant to the listing rules of the SWX Swiss exchange. Accordingly, the Placing Shares may not be offered to the public in or from Switzerland. This announcement is directed and issued only to those persons to whom it has been provided by the Placing Agents on behalf of the Company for the purposes of purchasing Placing Shares under the Placing described in this announcement and may not be distributed to the public in Switzerland.

APPENDIX I

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Details of the Placing

The Placing Agents have entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out in that agreement, the Placing Agents have agreed to use reasonable endeavours to procure subscribers for the Placing Shares at the placing price of 425 pence per new Common Share ("Placing Price").

Each of the Placing Agents has agreed severally (and not jointly or jointly and severally), subject to the terms and conditions of the Placing Agreement, to underwrite the settlement of those Placing Shares for which it has procured subscribers so that, to the extent that such Placing Shares are not taken up by such subscribers, it shall subscribe for such shares at the Placing Price.

The Placing Shares will rank pari passu in all respects with the existing Common Shares including the right to receive all dividends and other distributions declared in respect of such common shares after the date of issue of the Placing Shares.

This Appendix gives details of the terms and conditions of the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM. It is expected that Admission will become effective on or around 18 November 2010 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing:

1. Canaccord Genuity, Mirabaud Securities LLP, Dundee Securities Corporation and GMP Securities Europe LLP are acting as Placing Agents and agents of the Company.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Placing Agents.

4. The Placing is expected to complete no later than 10.00 a.m. (London time) on 11 November 2010 but may be completed earlier or later at the discretion of the Company.

5. Each prospective Placee's allocation will be agreed by the Placing Agents and the Company and will be confirmed orally by the Placing Agents as agents of the Company as soon as possible thereafter. Oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of the Placing Agents and the Company to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's by-laws.

6. Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by the Placing Agents. The terms of this Appendix will be deemed incorporated in that contract note.

7. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Company and the relevant Placing Agents as agents of the Company, to pay the Placing Agents in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and the Company has agreed to allot and issue to that Placee.

8. The Placing is being made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made.

9. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time on the basis explained below under "Registration and Settlement".

10. All obligations of the Company and/or the Placing Agents under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated at any time up to Admission on the basis referred to below.

11. By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

12. To the fullest extent permissible by law, neither the Placing Agents, the Company nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Placing Agents, the Company nor any of their affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Placing or of such alternative method of effecting the Placing as the Placing Agents and the Company may agree.

Conditions of the Placing

In summary, the obligations of the Placing Agents under the Placing Agreement are conditional on, amongst other things

(a) no Material Adverse Change having occurred and being discovered since the execution of the Placing Agreement;

(b) publication by the Company of announcements of the Placing and pricing announcements by the times set out in the Placing Agreement;

(c) the warranties contained in the Placing Agreement being true, accurate and complete in all material respects;

(d) the Company having complied with all its obligations to be performed or satisfied under the Placing Agreement before Admission in all material respects;

(e) the Placing Agreement becoming unconditional in all other respects; and

(f) admission taking place by 8.00 a.m. (London time) on the date scheduled for admission which is expected to be 18 November 2010 (or such later date as the Company and the Placing Agents may otherwise agree being no later than 10 business days following the date scheduled for admission).

If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Placing Agents by the respective time or date where specified (or such later time and/or date as the Company and the Placing Agents may agree), the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Placing Agents may, at their discretion and upon such terms as they think fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement where such waiver is permitted under the Placing Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

The Placing Agents, the Company or any other person shall not have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Placing Agents.

Termination of the Placing

In summary, the Placing Agents are entitled, at any time before Admission, to terminate the Placing Agreement in relation to their obligations in respect of the Placing Shares by giving notice to the Company if, inter alia:

(a) there has been a material breach of any of the warranties in the Placing Agreement or any material failure by the Company to perform any of its obligations; or

(b) any statement contained in any of the Placing documents is or has become materially untrue, incorrect or misleading; or there is any material omission from the Placing documents; or

(c) there has been, or a Placing Agent has become aware of, or there has been made public, a Material Adverse Change since the execution of this Agreement; or

(d) there has occurred (a) an adverse change in the financial markets in the United States, the United Kingdom, member states of the European Union or in the international financial markets, (b) an outbreak or escalation of hostilities, act of terrorism or other calamity or crisis or (c) any change or development involving a prospective change in national or international political, financial or economic conditions, or currency exchange rates, in each case the effect of which is such as to make it, in the reasonable judgement of the Placing Agents, impracticable or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

(e) admission of the Shares to AIM has been withdrawn, or trading in any shares of the Company has been suspended or limited by the London Stock Exchange, or if trading generally on the London Stock Exchange or the New York Stock Exchange or in the NASDAQ System has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the regulatory authorities of the United Kingdom, the United States or any other governmental or self-regulatory authority, or a material disruption has occurred in commercial banking or shares settlement or clearance services in the United Kingdom, the United States, Canada or Europe which is such as to make it, in the reasonable judgement of the Placing Agents, impractical or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

(f) if a banking moratorium has been declared by the authorities of any of the United Kingdom, the United States or the State of New York or any other member state of the EEA which is such as to make it, in the reasonable judgement of the Placing Agents, impractical or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares.

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by the Placing Agents of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Placing Agents and that they need not make any reference to Placees and that neither they nor the Company shall have any liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No offering document, prospectus or admission document has been or will be submitted to be approved by any applicable regulatory body (including without limitation the FSA) or submitted to any applicable regulatory body (including the London Stock Exchange) in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including the Appendices) released by the Company today and, in Canada, the Canadian Offering Memorandum, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Placees' commitments will be made solely on the basis of the information contained in this announcement and, in Canada, the Canadian Offering Memorandum. Subject to its obligations under applicable law, the Company gives no warranty, representation or undertaking with respect to the completeness or accuracy of the information contained in this announcement. Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement (including the Appendices) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than any information previously published by the Company by notification to a Regulatory Information Service), representation, warranty, or statement made by or on behalf of the Placing Agents or any other person and neither the Placing Agents nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the Company's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the Placing Agents. The Company will deliver the Placing Shares to CREST accounts operated by each of the Placing Agents as agents for the Company, and the Placing Agents will enter their respective delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will take place on 18 November 2010, on a delivery versus payment basis.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Placing Agents.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may: (i) allocate any or all of the Placing Shares to the Placing Agent in accordance with the Placing Agreement; or (ii) sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. If sold as contemplated by (ii) in the previous sentence, the relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Placing Shares which are subject to a hold period under Canadian securities laws will be required to remain in certificated form for the duration of such period and therefore trades in such Placing Shares will be unable to be settled in CREST during such period.

Representations and warranties

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with each of the Placing Agents (in their capacity as underwriters of the Placing Shares and placing agents of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares, the following:

1. that it agrees to the terms applicable to Placees and the terms of the Placing, in each case as contemplated by this announcement, and that it has read this announcement, including the appendices, in its entirety;

2 that it acknowledges and agrees that its commitment to subscribe for Placing Shares on the terms set out herein is irrevocable and is not capable of termination or rescission by it in any circumstances;

3. that (i) no offering document, listing particulars, prospectus or admission document has been or will be prepared in connection with the Placing and (ii) it has not received a prospectus, admission document or other offering document in connection with the Placing or the Placing Shares, other then, in each case, in Canada the Canadian offering memorandum

4. that the Common Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access (i) such Exchange Information and (ii) such information or comparable information concerning any other publicly traded company, in each case without undue difficulty;

5. that it agrees to the terms applicable to Placees and the terms of the Placing, in each case as contemplated by this announcement, and that it has read this announcement, including the appendices, in its entirety;

6. that neither the Placing Agents, the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than this announcement; nor has it requested any of the Placing Agents, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

7. the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, South Africa or Japan and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

8. that it is not within Australia, South Africa, Japan or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares;

9. that (i) at the time when any offer of Placing Shares was made to it, or any offer to purchase Placing Shares was solicited from it, it was not "in the United States", and (ii) at the time when any buy order with respect to Placing Shares is originated by it, it is/will be "outside the United States", in each case within the meaning of Rule 902(h) under the Securities Act.

10. that the content of this announcement is exclusively the responsibility of the Company and that neither the Placing Agents nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by the Placing Agents or the Company and neither the Placing Agents nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

11. that neither the Placing Agents nor any person acting on behalf of them nor any of their affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

12. that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

13. that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

14. that it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or the Placing Agents for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and  a "qualified investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus Directive) acting as agent for such person, and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of its that has engaged it to act as such client's agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on such client's behalf without reference to such client;

15. that, if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC (the "Prospectus Directive") (including any relevant implementing measure in any member state), the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of the Placing Agents have been given to the proposed offer or resale;

16. that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA") in respect of which a prospectus would be required;

17. that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state) in respect of which a prospectus would be required;

18. that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

19. that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

20. that it is a Relevant Person as defined above;

21. that it is entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it, and that its subscription/purchase of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

22. that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Placing Agents may in their discretion determine and without liability to such Placee;

23. that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

24. that neither the Placing Agents, nor any of their respective affiliates, nor any person acting on behalf of it, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of either of the Placing Agents and that the Placing Agents have no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

25. that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither the Placing Agents nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Placing Agents in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of the Placing Agents who will hold them as nominee and agent on behalf of such Placee until settlement in accordance with its standing settlement instructions;

26. that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Placing Agents in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

27. that the Company and the Placing Agents will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises the Company and the Placing Agents to produce this announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

28. that it will indemnify and hold the Placing Agents and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix I and further agrees that the provisions of this Appendix I shall survive after completion of the Placing;

29. that it will acquire any Placing Shares purchased by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

30. that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of the Company as well as the Placing Agents. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of UK stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither the Company nor the Placing Agents shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Placing Agents accordingly;

31. that no action has been or will be taken by any of the Company, the Placing Agents or any person acting on behalf of the Company or the Placing Agents that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

32. that, in making any decision to purchase the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

33. that it has (i) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (ii) had access to review publicly available information concerning the Company's group that it considers necessary or appropriate and sufficient in making an investment decision; (iii) reviewed such information as it believes is necessary or appropriate in connection with its subscription or purchase of the Placing Shares; and (iv) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of the Placing Agents;

34. that it may not rely on any investigation that the Placing Agents or any person acting on their behalf may or may not have conducted with respect to the Company, its group, or the Placing and the Placing Agents have not made any representation to it, express or implied, with respect to the merits of the Placing, the subscription or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company, its group, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to purchase the Placing Shares. It acknowledges and agrees that no information has been prepared by the Placing Agents or the Company for the purposes of this Placing;

35. that accordingly it will not hold the Placing Agents or any of their respective associates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company's group or information made available (whether in written or oral form) and that none of the Company, the Placing Agents or any person acting on behalf of the Placing Agents makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information; and

36. that in connection with the Placing, the Placing Agents and any of their respective affiliates acting as an investor for their own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this announcement to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to the Placing Agents and any relevant affiliate acting in such capacity. The Placing Agents intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Placing Agents or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Placing Agents, any money held in an account with the Placing Agents on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Placing Agents' money in accordance with the client money rules and will be used by the Placing Agents in the course of their own business; and the Placee will rank only as a general creditor of the relevant Placing Agent.

All times and dates in this announcement may be subject to amendment. The Placing Agents shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, SOUTH AFRICA OR JAPAN.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts.

These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that would cause actual results or events to differ from current expectations, intentions or projections might include, amongst other things, changes in equity markets, political risks, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain any required regulatory approval, failure of equipment, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties involved in interpreting exploration results and other geological, geophysical and engineering data, delays in obtaining geological results, the success of future explorations, acquisitions and other strategic transactions and other risks associated with mineral exploration, development and production. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements, which are not guarantees of future performance. Forward-looking statements speak only as of the date of such statements and, except as required by the FSA, the London Stock Exchange or applicable law, the Company and the Placing Agents expressly disclaim any obligation or undertaking to review, revise or release publicly any updates to any forward-looking statements to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based, whether as a result of new information, future events or otherwise.

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This announcement has been issued by and is the sole responsibility of the Company.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Placing Agents or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement, including the Appendices, or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Canaccord Genuity, which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Mirabaud, which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

GMP Securities Europe LLP,  which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Dundee Securities Corporation, which is registered as an Investment Dealer under applicable Canadian securities lawsis acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, or the Placing Agents that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and to inform themselves about, and to observe such restrictions.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

APPENDIX II

RISK FACTORS

Investors and prospective investors should consider carefully whether an investment in the Company is suitable for them. The risks and uncertainties summarised below may not be the only ones facing the Group. Additional risks and uncertainties not currently known to the Company or that the Company deems immaterial may also impair the Group's business operations. The Group's business, prospects, financial condition and results of operations could be materially and adversely affected by any of these risks.

Mining Risks

Nature of mineral exploration, development and mining

The development of iron ore deposits involve a high degree of financial risk over a significant period of time, which even a combination of careful evaluation, experience and knowledge of management may not eliminate. Development programmes entail risks relating to the location of economic ore bodies, the development of appropriate metallurgical processes, the receipt of necessary governmental permits and regulatory approvals, and the timely completion of capital projects, including the construction of mining and processing facilities at mining sites. Major expenses will be required to construct mining and processing facilities at a particular site and related logistics infrastructure. There can be no assurances that the proposed mining and processing operations of the Group will be profitable.

The Group's operations are subject to all of the hazards and risks normally incidental to exploration, development and mining of iron ore, any of which could result in work stoppages, damage to persons or property, environmental damage and possible legal liability for any or all such damage. These risks and hazards include, but are not limited to, environmental risks, industrial accidents, labour disputes, changes in public policies, encountering unusual or unexpected geologic formations or other geological or grade problems, unanticipated changes in metallurgical characteristics, encountering unanticipated ground or water conditions, cave-ins, pit wall failures, flooding or rock bursts, periodic interruptions due to inclement or hazardous weather conditions, and unfavourable operating conditions and ore losses.

Should any of these risks and hazards affect any of the Group's planned mining operations or exploration activities, it may cause the cost of production to increase to a point where it is not economically feasible to produce iron ore from the Group's resources, require the Group to write-down the carrying value of the mine or a property which is material to it, cause delays or a complete stoppage in the exploration, development and production of iron ore, result in damage to or destruction of mineral properties or processing facilities or personal injury or death or legal liability, all of which may have a material and adverse effect on the Group's financial condition, results of operation and cash flows.

Estimates of resources and reserves

There are inherent uncertainties in estimating iron ore resources and reserves and in projecting potential future rates of iron ore production, including many factors beyond the Group's control. Mineral resource estimates are based on limited sampling and consequently are uncertain because the samples may not be representative. Estimates of different engineers may vary as the estimation process is a subjective process and the accuracy of such estimates is dependent on the quality of available data and engineering and geological interpretation and judgment. Results of drilling, metallurgical testing, production, evaluation of mine plans and exploration activities subsequent to the date of any estimate may justify revision (up or down) of such estimates. Subsequent results of the Group's actual mining and production operations may lead to revisions of these initial estimates.

Additionally, inferred, indicated or measured resources of iron ore are not equivalent to probable or proven reserves which have demonstrated economic viability. Mineral resources have not had sufficient economic considerations applied to them that would enable them to be categorised as reserves. As a result, the Group can give no assurance that mineral resources will be upgraded to mineral reserves. In particular, the Group has not obtained resource reports in relation to the DSO or Saprolite material and so no assurance can be given as to the quantity and quality of this material or the feasibility of mining these.

No assurance can be given that the anticipated tonnages and grades will be achieved, that the physical characteristics of the ores will be as predicted, that the indicated levels of recovery will be realised or that reserves can be mined or processed profitably. Actual reserves may not conform to geological, metallurgical or other expectations. The volume and grade of ore recovered may be below the estimated levels as there can be no assurance that mineral recoveries in smaller-scale tests will be duplicated during production. In particular, no assurance can be given that the Company will be able to reach its Phase 1 production target of 12 Mtpa or its post-Phase 2 incremental production target of 25 Mtpa . Fluctuations in the market price of iron ore products, reduced recovery rates or increased production costs due to inflation or other factors may render the reserves uneconomic to exploit and may result in revision of the Group's mineral resource and reserve estimates from time to time.

If the Company fails to convert existing mineral resources to reserves, if the Company's actual mineral resources or reserves are less than current estimates or if the Company fails to develop its resource base through the realisation of identified mineralised potential, this could have a material adverse effect on the Group's business, financial condition or results of operations.

Development and operating costs

The Group's profitability will depend, in part, on the actual economic returns and the actual costs of developing mines, which may differ significantly from the Group's current estimates. The development of the Group's mining projects may be subject to unexpected problems and delays. The Group's decision to engage in the Project is based on estimates of expected or anticipated project economic returns. These estimates are based on assumptions, including about future iron prices, anticipated tonnage, grades and metallurgical characteristics of ore to be mined and processed, anticipated recovery rates of iron from the ore and anticipated capital expenditure and cash operating costs. In particular, actual cash operating costs, production and economic returns may differ significantly from those anticipated by the Group's estimates.

There are a number of uncertainties inherent in the development and construction of any new mine. These uncertainties include the timing and cost, which can be considerable, of the construction of mining and transportation facilities; the availability and cost of skilled labour, power, water, consumables, such as lubricants and fuel, the need to obtain necessary environmental and other Governmental permits, and the timing of those permits and the availability of funds to finance construction and development activities. For example, the Group may be unable to fund a significant increase in the capital expenditure required to bring the Project into production.

Given the nature of the Project, the Group expects that the implementation and operation of its logistics infrastructure and future mining operations will rely heavily on fuel sources. As such, fuel costs are a major component of the total cost of the projects. The Group expects to buy the fuel it requires from third party suppliers and any increase in the price of oil, gas, diesel or any other fuel commodity that it may use may have a material adverse effect on the Group's business, results of operations and financial condition.

Iron ore products prices

The Group is also exposed to the risk of fluctuations in iron ore products prices. Price declines could require the reassessment of the feasibility of the Project. Even if the Project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed. Price declines could also cause commercial production to become impracticable. In either event, this would have a material adverse effect on the Group's business, results of operations and financial condition.

Competition

Intense competition characterizes the iron ore exploration and mining industry in all of its phases. The Group competes with numerous other companies and individuals worldwide possessing greater financial resources and technical facilities than itself in the search for, acquisition of and development of attractive mineral properties.

Certain environmental risks

Mining operations are subject to various environmental laws and regulations including, for example, those relating to waste treatment, emissions and disposal, and companies must generally comply with permits or standards governing, among other things, tailing dams and waste disposal areas, water consumption, air emissions and water discharges. Environmental legislation and the permit regime are likely to evolve in a manner which will require stricter standards and enforcement and increased fines and penalties for non-compliance and the Group may, in the future, incur significant costs to comply with the environmental requirements imposed under existing or new legislation, regulations or permit requirements or to comply with changes in existing laws and regulations or the manner in which they are applied.

Health and safety

The Group operates in the mining industry which is a hazardous industry. While health and safety regulations in Sierra Leone are not well developed, the adoption and enforcement of more stringent regulations in the future could have a material adverse affect on the Group's operational flexibility and costs. Any failure by the Group to maintain a good health and safety record may also have a material adverse affect on its future operations.

Sierra Leone

Developing countries, political and regulatory instability

The Group's properties are located in Sierra Leone and are subject to its laws and regulations. Mineral exploration and mining activities may be affected in varying degrees by political stability and government regulations relating to the mining industry and foreign investors in Sierra Leone. Any changes in regulations or shifts in political conditions are beyond the control of the Company and may materially and adversely affect its and the Group's business. Operations may be affected in varying degrees by government regulations, policies or directives with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, repatriation of income, royalties, environmental legislation and mine safety. The government may impose conditions that will affect the viability of the Project, such as providing the government with a free carried interest or providing subsidies for the development of the local infrastructure or other social assistance.

Operations may also be affected in varying degrees by political and economic instability, economic or other sanctions imposed by other countries, terrorism, civil wars, guerrilla activities, military repression, crime, extreme fluctuations in currency exchange rates and high inflation.

It is possible that some individuals or entities with whom the Company deals could be subject to the sanctions regimes of various nations, including the United States.

Civil war

Sierra Leone has slowly been recovering from a civil war that erupted in 1991 after conflict in neighboring Liberia spilled over the boarder. The war was declared over in 2002 and United Nations peacekeeping troops left the country in 2005. Sierra Leone has remained peaceful since 2002, however any resurgence in civil unrest could have a material adverse effect on the Group's activities in Sierra Leone and consequentially, on the Company's share price.

Infrastructure

The Project is located in a remote area and the Group will need to construct adequate infrastructure to develop its mining and processing operations there. Sierra Leone's infrastructure was seriously damaged by its recent civil war and although steps have been taken to repair and upgrade existing networks, progress has been slow. Failure in electrical power and telephone coverage and delays in the supply of mechanical parts and other items required for the Group's operations occur frequently in the country.

The Group must continue to develop its own infrastructure, including the construction of a railway corridor and replacing port facilities, to support its operations. In the event of interruptions to or failures or delays in the implementation of the Group's logistics infrastructure for any reason (including, without limitation, extended periods without electricity or other necessary elements required to support its operations, weather-related problems, sabotage or other interference in the maintenance or provision of infrastructure, mechanical difficulties, natural disasters, strikes of the Group's employees or employees of entities with which the Group does business, such as port or ship operators, lockouts or bottlenecks or failures of third party contractors to provide the Group with infrastructure in a timely manner or at all), the Group may not be able to commence production of iron ore products on a timely, cost-effective basis or at all, which would have a material adverse effect on the Group's business, operating results and financial condition.

Any failure or unavailability of the Group's operational infrastructure (for example, through equipment failure or disruption to transportation arrangements) could have a material adverse affect on production output from the Project, which in turn could have a material adverse effect on the Group's business, results of operations and financial condition.

Currency fluctuations

The Group's operations in Sierra Leone make it subject to foreign currency fluctuations and such fluctuations may materially and adversely affect the Company's financial position and results. The Company does not engage in currency hedging to off-set any risk of currency fluctuations. The Group's mining revenues are denominated in US dollars and the Company maintains its accounts in US dollars, whereas the operating costs are denominated in Sierra Leone leone. As a result, any significant appreciation of the Sierra Leone leone against the US dollar may materially increase costs and reduce its income.

Repatriation of earnings

There can be no assurance that the Group will not become subject to restrictions on repatriation of earnings or capital from Sierra Leone, or any other country where the Group may invest..

Risks Relating To The Group

Additional funding requirements

The Group's strategy will require additional substantial capital and operating investment. For instance, the total remaining project costs for Phase 1 are estimated to be approximately $988 million. 

The Group will require funds for, among other purposes, construction of mining and transportation infrastructure, managing acquired assets, acquiring new equipment, maintaining the operating condition of the Group's existing equipment, funding operating costs, obtaining title, licences and authorisations and maintaining compliance with environmental laws and regulations.

Each of the Placing and Debt Fundraising is currently conditional. The Placing is not conditional upon the outcome of the Debt Fundraising.  There can be no guarantee that the Placing or Debt Fundraising will be completed or that the Debt Fundraising will be completed on the terms contemplated above. 

In addition, although the Company also remains committed to its discussions with Shandong, and those discussions are ongoing, there can be no assurance that those discussions will result in completion of an investment by Shandong or an investment by Shandong on the terms previously announced.

If the Placing and the full amount of the Debt Fundraising are both successfully concluded, they are expected to raise a total of approximately $807 million before fees and expenses. However, should the Company not succeed in raising this amount, it would need to look to alternative sources of finance to reach Phase 1 production. There can be no assurance that the Company will be successful in raising other additional funds or that other additional funds can be obtained on terms acceptable to the Company.

If the Group is unable to obtain additional financing as needed, or on terms which are acceptable, it may not be able to fulfil its strategy, which could have a material adverse effect on the Group's business, financial position and prospects. It may also be required to reduce the scope of its operations or anticipated growth, reduce or delay capital expenditures, forfeit its interest in some or all of its properties and permits, incur financial penalties or reduce or terminate its operations.

Supplier/contractor risk

The Group relies heavily on a small number of contractors in the development of its mining projects. If one or more of these contractors were to cease trading with Group, the Group may not be able to continue the development of its project or to commence production of iron ore products on a timely, cost-effective basis or at all, which would have a material adverse effect on the Group's business, operating results and financial condition.

Protection of assets and personnel

No assurance can be given that the Group will be able to maintain effective security in connection with its assets or personnel in Sierra Leone. A high degree of security is required to mitigate the risk of loss by theft, either by the Group's employees or by third parties. The Group's assets may not be adequately insured against these risks. The Group's insurance position in general is considered further below.

Assurance of title to properties

The Company has taken reasonable steps to attempt to ensure that proper title to the mineral licences has been obtained and that all grants of mineral rights for the Group's properties have been registered in the appropriate deeds offices. There is no guarantee that title to such properties, or the mineral licenses and permits held by the Group, will not be challenged or impugned. Surveys have not been conducted on all properties, mineral licenses and permits held by the Group. Despite the due diligence conducted by the Company, the records in Sierra Leone are incomplete and there can be no assurance that the Group's interest in such properties, mineral licenses and permits will not be subject to challenge.

In addition, a mineral right in Sierra Leone may be suspended by the government of Sierra Leone until it is certain that the provisions of safety in the Sierra Leone Mining Act are being complied with fully. A temporary suspension order shall lapse within 21 days of its issuance unless it is confirmed in writing by the Minister. A mineral right may be cancelled if the holder of such rights fails to abide by certain stipulated conditions.

Limited operating history

To date, the Group has been focused on exploration and development and has a limited operating history, has not commenced commercial production on any of the licence areas, and the Company has no history of earnings. The Company has not paid any dividends on its Common Shares since incorporation.

As the Group's projects are still in the developmental phase, the Group is subject to risks, expenses and uncertainties associated with the implementation of the business plan that are not typically faced by more mature companies. New mining operations must construct the necessary infrastructure, develop successful business relationships, establish operating procedures, hire staff, install management information and other systems and obtain licences, as well as take other measures necessary to conduct their intended business activities. It is common in new mining operations to experience unexpected problems and delays during construction, development and mine-start up. The Group's projects might be delayed or terminated as a result of several factors, many of which are not in the Group's control, including a failure to obtain necessary licences or authorisations, political instability, government regulatory action, insufficient capital, natural disasters, engineering failures or changes in the Group's business policy. In the event that one or more of the Group's projects is not completed, is delayed or terminated, the Group's operating results may be materially and adversely affected and its operations may differ materially from the activities described in this announcement.

Dependence on ability to hire and retain qualified personnel

The Company's success depends to a significant degree upon the contributions of qualified technical personnel. Its future success will depend in a large part upon its ability to attract and retain highly skilled personnel in Sierra Leone. Competition for such personnel in the mining industry is intense, and the Company may not be successful in attracting and retaining qualified personnel locally or in obtaining the necessary work permits to hire qualified expatriates. Its inability to do so in the future may seriously harm its business and results of operations.

Additionally, the Company depends on its key management for the operation of its day-to-day activities and personal connections and relationships of its key management, particularly those of its Executive Chairman, Frank Timis, are important to the conduct of its business. If the Company were to lose a member of its key management, its business and results of operations might be materially and adversely affected.

Corporate governance

The Company's corporate governance procedures and internal controls may be less developed than those employed by companies in a later stage of development, and may require further development. For example, the Company's board does not have a majority of independent directors. If the Company grows in the future, it may encounter difficulties in the ongoing process of implementing, expanding and enhancing its corporate governance procedures and internal controls, which could have a material adverse effect on its standing in the market and/or its business and financial condition.

Insurance and uninsured risks

The Company may, in the course of its exploration and mining activities, become subject to liability for hazards that cannot be insured against or which the Company may elect not to be so insured against because of high premium costs. Such risks include industrial accidents, labour disputes, unusual or unexpected geological conditions, catastrophic equipment failures, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Occurrences could result in personal injury or death, environmental damage to the Group's properties and equipment, properties of others, delays in exploration, monetary losses and possible legal liability.

In addition, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Group or to other companies in the mining industry on acceptable terms. Losses from uninsured risks may cause the Group to incur costs that could have a material adverse effect upon the Group's financial performance and results of operations.

Litigation risks

All industries, including the mining industry, are subject to legal claims, with and without merit. The Group may become involved in legal disputes in the future. Defence and settlement costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, there can be no assurance that the resolution of any particular legal proceeding will not have a material adverse effect on the Group's financial position or results of operations.

Conflicts of interest

Certain of the Company's shareholders and directors are shareholders and directors of other natural resource companies and also of resource finance companies, and, to the extent that such other companies may participate in ventures with the Group, the directors may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. As has been the case in the past, in the event that such a conflict of interest arises at a meeting of the directors, a director who has such a conflict will abstain from voting for or against the approval of such a participation or of its terms. In appropriate cases the Company will establish a special committee of independent directors to review a matter in which one or more directors or management, may have a conflict.

From time to time, the Company, together with several other companies, may be involved in a joint venture opportunity where several companies participate in the acquisition, exploration and development of natural resource properties, thereby permitting the Company to be involved in a greater number of larger projects with an associated reduction of financial exposure in any given project. The Company may also assign all or a portion of its interest in a particular project to any of these companies due to the financial position of the other company or companies. In accordance with the laws of Bermuda, the directors are required to act honestly and in good faith with a view to the best interests of the Company. In determining whether or not the Company will participate in a particular programme and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to the Company, the degree of risk to which the Company may be exposed and its financial position at that time. Other than as indicated, the Company has no procedures or mechanisms to deal with conflicts of interest.

Risks related to the shares

AIM

An investment in companies whose shares are traded on AIM are perceived to involve a higher degree of risk and be less liquid than an investment in companies whose shares are listed on the main market of the London Stock Exchange (the "Main Market"). AIM is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those that apply to companies admitted to trading on the Main Market. The future success of AIM and liquidity in the market for shares cannot be guaranteed. In particular, the market for shares may become or may be relatively illiquid and therefore, such shares may be or may become difficult to sell.

Trading market for the Shares

The share price of emerging companies can be highly volatile and shareholdings illiquid. The market price of the shares may be subject to wide fluctuations in response to many factors, some specific to the company and its operations and others to AIM in general including, but not limited to, variations in the operating results of the Group, divergence in financial results from analysts' expectations, changes in earnings estimates by stock market analysts, general economic conditions or legislative changes in earnings estimates by stock market analysts, general economic conditions or legislative changes in the Group's sector.

In addition, stock markets have from time to time experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could have a material adverse affect on the market price for the shares. The trading of the shares on AIM should not be taken as implying that there will be a liquid market for the shares and there is no guarantee that an active market will develop or be sustained. It may be more difficult for an investor to realise his investment in the Company than in a company whose shares are admitted to trading on the Main Market.

Prospective investors should be aware that the market price of the shares may go down as well as up and that the market price of the shares may not reflect the underlying value of the Company. Investors may, therefore, realise less than or lose all of their investment.

Dilution of shareholders' interest

Shareholders will not have the benefit of pre-emption rights entitling them to purchase an amount of any further issue of shares proportionate to their current shareholding and preserve their existing percentage interest in the Company. As a result, if the Company issues shares in the future to raise additional funding, there is a risk that the interests of existing shareholders will be diluted. If the Placing and the Debt Fundraising are successfully completed, the unissued authorised share capital would reduce but it would still remain significant. In addition, as is contemplated above in this announcement, the Company may, consider offering, on a non pre-emptive basis, Common Shares with a value of up to $50 million in connection with the Facility. Also, as part of the commitment fee payable to the Lead Arranger in connection with the Debt Fundraising, as contemplated above the Company is proposing to issue warrants and Common Shares.

Takeover Code

The City Code on Takeovers and Mergers (the "City Code") is not expected to apply to the Company on the basis that the Company is incorporated in Bermuda and the Company's shares are not admitted to trading on a regulated market. Consequently, the Company will not be regulated by the City Code and shareholders will not benefit from the protections afforded by the City Code.

DEFINITIONS

Terms not otherwise defined below have the same meanings given to them elsewhere in this

announcement:

"Admission" means admission of the Placing Shares to trading on the London Stock Exchange's

AIM market;

"AIM" means the AIM market of the London Stock Exchange;

"Board" means the board of directors of the Company;

"Canaccord Genuity" means Canaccord Genuity Limited;

"Common Shares" means the common shares of $0.01 each in the share capital of the Company or, as the case may be, CREST depositary interests in respect of such shares;

"Company" means African Minerals Limited;

"Directors" means the directors of the Company;

"Group" means the Company and its subsidiary undertakings;

"London Stock Exchange" means London Stock Exchange plc;

"Material Adverse Change" means a material adverse change in, or any development reasonably likely to involve a material adverse change in or affecting, the condition, financial, operational or otherwise, or in the management, business affairs, solvency or prospects of the Company or any other member of its group, whether or not arising in the ordinary course of business;

"Mtpa" means million tonnes per annum

"Placees" means investors with whom Placing Shares are placed;

"Placing" means the placing of the Placing Shares described in this announcement;

"Placing Agents" means Canaccord Genuity Limited, Mirabaud Securities LLP, Dundee Securities Corporation and GMP Securities Europe LLP;

"Placing Agreement" means the agreement dated the date of this announcement and entered into by the Company and Canaccord Genuity Limited  Mirabaud Securities LLP, Dundee Securities Corporation and GMP Securities Europe LLP in connection with the Placing;

"Placing Price" means 425 pence per Common Share;

"Placing Shares" means the new Common Shares, or depository interest in respect of new Common Shares, to be issued pursuant to the Placing;

"Securities Act" means the US Securities Act 1933;

"Shandong" means Shandong Iron & Steel Group Co, Ltd;

"United States" or "US" means the United States of America, its territories and possessions, any

State of the United States and the District of Columbia;

"£" means the lawful currency of the United Kingdom; and

"$" means the lawful currency of the United States of America.