Cash Placing and Trading and

18th Jun 2008 07:00



THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR NEW ZEALAND OR ANY JURISDICTION IN WHICH SUCH PUBLICATION RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new Ordinary Shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan, the Republic of South Africa or New Zealand or any jurisdiction in which such publication or distribution would be unlawful.

Members of the general public are not eligible to take part in the Placing referred to below. Invitations to participate in the Placing will be limited to 'Relevant Persons' (as defined below).

18th June 2008

Mwana Africa plc

("Mwana Africa" or the "Company")

Cash placing to raise up to £25m.

Mwana Africa plc (AIM: MWA), the pan-African resources company, is pleased to announce a cash placing (the "Placing") of up to £25m for the purposes set out below, and to provide an update on the Company's recent trading and exploration activities.

Highlights

Placing

Placing of new Ordinary Shares (the "Placing Shares") to institutional investors to raise up to £25m (before expenses) The precise number of Placing Shares will be finally determined by bookbuild such that the gross proceeds arising from the Placing amount to up to approximately £25m.  Based on last night's closing share price of 49.0 pence per Ordinary Share, the Placing would represent approximately 15 per cent. of the Company's existing issued Ordinary Shares (being 337,933,819 Ordinary Shares, which includes 2,666,600 Ordinary Shares held in treasury as issued shares) and up to 51.02m of the approximately 215m authorised but unissued share capital of Mwana Africa.

Proceeds of Placing

Proceeds of the Placing will be used to continue exploration at certain core prospects, to fund initial capital expenditure at Kibolwe and Freda Rebecca, and to give Mwana Africa the flexibility to provide, as necessary, financial support to Bindura Nickel Corporation ("BNC"):

Trading in the year to 31 March 2008

Chief Executive's commentary

Commenting on today's announcement, Kalaa Mpinga, Chief Executive of Mwana Africa said:

Further Information

This summary should be read in conjunction with the full text of the following announcement (including the Appendices to this announcement).

JPMorgan Cazenove Limited ("JPMorgan Cazenove") and Canaccord Adams Ltd ("Canaccord") (the "Banks") are acting as co-managers. The proposed issue of Placing Shares will be at a price to be determined through an institutional bookbuilding process. Potential participants will be invited to tender for Placing Shares. It is expected that the books will close no later than 4:30pm (London time) on 19 June 2008 and pricing and allocations are expected to be set and announced on or before 8.00am (London time) on 20 June 2008. The Banks and the Company reserve the right to close the Bookbuilding Process and announce pricing and allocations at any earlier or later time. The Placing will take place in accordance with the terms and conditions set out in Appendix A to this announcement. Whether the Placing proceeds, the number of Placing Shares and the Placing Price will be decided at the close of the Bookbuilding Process. An announcement detailing the Placing Price and the proceeds to be received from the Placing will be made as soon as practicable after the close of the Bookbuilding Process.

The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the share capital of Mwana Africa, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue. Application will be made for the Placing Shares to be admitted to trading on AIM.

Settlement for any Placing Shares issued pursuant to the Placing as well as admission to trading on AIM is expected to take place on 25 June 2008.

This announcement (including the Appendices to this announcement) has been issued by, and is the sole responsibility of Mwana Africa plc. This announcement (including the Appendices to this announcement) includes "forward-looking statements". Words such as "anticipates", "expects", "intends", "plans", "forecasts", "projects", "budgets", "believes", "seeks", "estimates", "could", "might", "should", and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this announcement (including the Appendices to this announcement), including, without limitation, those regarding the Company's business strategy and plans and objectives of management for future operations and acquisition opportunities, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of the Company or the markets and economies in which the Company operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements, including, without limitation, political, regulatory and economic factors. Factors that would cause actual results or events to differ from current expectations include, among other things, changes in commodity prices, changes in equity markets, failure to establish estimated mineral resources, political risks, changes to regulations affecting the Company's activities, delays in obtaining or failures to obtain required regulatory approvals, failure of equipment, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties involved in interpreting drilling results and other geological data, delays in obtaining geological results, and the other risks involved in the mineral exploration industry. Mwana believes that the assumptions inherent in the forward-looking statements are reasonable; however, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. The Company does not assume any responsibility to update any of such forward-looking statements, save as required by relevant law or regulatory authority.

The securities referred to herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States (as such term is defined in Regulation S under the Securities Act) unless they are registered under the Securities Act or pursuant to an exemption from registration. No public offer of the Placing Shares is being made in the United States.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new Ordinary Shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan, the Republic of South Africa, New Zealand or any jurisdiction in which such publication or distribution would be unlawful. No public offering of securities of the Company is being made in the United Kingdom, the United States or elsewhere. 

Members of the general public are not eligible to take part in the Placing. This announcement, in so far as it constitutes an invitation or inducement to participate in the Placing, is directed exclusively at:

(i) persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of Directive 2003/71/EC and any relevant implementing measures (the "Prospectus Directive") ("Qualified Investors");

(ii) in the United Kingdom, Qualified Investors who are persons (1) who have professional experience in matters relating to investments who fall within article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (2) falling within article 49(2)(a) to (d) (high net worth companies, unincorporated associations etc) of the Order; and

(iii) other persons to whom it may otherwise lawfully be communicated,

(all such persons together being referred to as 'Relevant Persons').

This announcement, in so far as it constitutes an invitation or inducement to participate in the Placing, must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement or the Placing relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing and the Bookbuilding Process set out in this announcement are for information purposes only.

The Banks are acting for the Company and no one else in connection with the Placing and will not be responsible to any other person for providing the protections afforded to its clients, or for providing advice in relation to the Placing and/or any other matter referred to in this announcement (including the Appendices to this announcement).

Except as otherwise stated, references to times in this announcement (including the Appendices to this announcement) are to London time. Except where the context otherwise requires, capitalised terms used in this announcement (including the Appendices to this announcement) have the meanings given in Appendix B to this announcement.

Charl du Plessis, Executive Vice President Exploration of Mwana, who holds a PhD and is a Member of the AusIMM, is a "Qualified Person" as defined in the AIM Rules and in National Instrument 43-101 - Standards of Disclosure for Mineral Projects, and the exploration and resource development information contained in this press release is based upon information prepared under the supervision of Dr. du Plessis.

 

Enquiries

Mwana Africa plc Tel: +44 (0)20 7654 5580

Oliver Baring - Executive Chairman

Kalaa Mpinga - Chief Executive Officer

Peter Sydney-Smith - Finance Director

JPMorgan Cazenove Tel: +44 (0)20 7588 2828

Ian Hannam

Neil Passmore

Canaccord Adams Tel: +44 (0)20 7050 6500

Mike Jones

Andrew Chubb

Merlin Tel: +44 (0)20 7653 6620

David Simonson

Tom Randell

  Further Information

Mwana Africa today announces its intention to raise up to £25m (before expenses) by way of a placing of new Ordinary Shares (the "Placing Shares") to institutional investors. The precise number of Placing Shares will be finally determined by bookbuild such that the net proceeds arising from the Placing amount to up to approximately £25m. Based on last night's closing share price of 49.0 pence per Ordinary Share, the Placing would represent approximately 15 per cent. of the Company's existing issued Ordinary Shares (being 337,933,819 Ordinary Shares, which includes 2,666,600 Ordinary Shares held in treasury as unissued shares) and up to 51.02m of the approximately 215m authorised but unissued share capital of Mwana Africa.

Mwana Africa plc

Background

Mwana Africa is a pan-African resources company established in October 2005. It was the first African-owned, African-managed business in this sector to be admitted to trading on the London Stock Exchange's AIM Market ("AIM").

The Company was formed through a reverse takeover of African Gold plc, the AIM-traded African gold exploration and mining company, by a privately held mining company, Mwana Africa Holdings (Pty) Limited.

Group Strategy

Mwana Africa is a pan-African, multi-commodity resource company with operations and exploration and development activities in South Africa, Zimbabwe, Democratic Republic of Congo ("DRC"), Botswana, Ghana and Angola, in commodities including gold, nickel, copper, zinc and diamonds.

The Company intends to pursue further resource opportunities across the African continent, both independently and in partnership with others.

The Placing

Reasons for the Placing

Mwana Africa continues to progress its exploration and development activities in base metals, gold and diamonds. The acquisitions of SouthernEra and Gravity have brought significant diamond exploration opportunities, principally in the DRC.

Proceeds of the Placing will be used to continue exploration at certain core prospects, to fund initial capital expenditure at Kibolwe and Freda Rebecca, and to give Mwana Africa the flexibility to provide, as necessary, financial support to Bindura Nickel Corporation ("BNC"):

Allow BNC to maintain operations during economic difficulties. Retain ability to proceed with Hunters Road project as soon as conditions become appropriate.

The allocation of the proceeds shown above is indicative, and reflects Mwana Africa's intention as at the date of this announcement. Should the Company determine that expenditure on any of the projects specified above is no longer justified, the Company will reallocate the proceeds of the Placing among the areas described above, and to working capital and general corporate purposes. Pending their use as described, the Company intends to hold the proceeds in cash, under appropriate notice accounts and taking advantage of such short term interest rates as it may be able to obtain.

Details of the Placing

It is proposed that the Placing will be undertaken by the placing of new Ordinary Shares with institutional investors. Up to 74,948,349 new Ordinary Shares are available for allotment, of which it is proposed that up to 51,020,500 will be placed representing approximately 15 per cent. of Mwana Africa's existing issued Ordinary Shares (being 337,933,819 Ordinary Shares, which includes 2,666,600 Ordinary Shares held in treasury as issued shares).

The proposed issue of the Placing Shares will take place at a set price which will be established through an institutional Bookbuilding Process.

The net proceeds of the Placing are expected to be up to approximately £23.7m after deduction of the commission, fees and expenses estimated at approximately £1.3m which will be payable by the Company in connection with the Placing and based on the closing price on 17 June 2008 of 49.0 pence per Ordinary Share.

Bookbuild

To enter a bid into the Bookbuilding Process, institutional investors will be required to communicate their bid to the Banks, specifying the number of Placing Shares for which they wish to offer to subscribe and any price limit to which their offer to participate is subject. The Placing Price will ultimately be agreed by the Company and the Banks following closure of the books. Institutions participating in the Placing will receive the Placing Shares subject to the satisfaction of the conditions contained in, and the non-termination of, the Placing Agreement. Preferential treatment in the allocation process will be given to existing institutional shareholders. It is expected that the books will close no later than 4:30pm (London time) on 19 June 2008 but may be closed earlier or later at the discretion of the Company and the Banks. An announcement detailing the Placing Price and the proceeds to be received from the Placing will be made as soon as practicable after the close of the Bookbuilding Process. Whether the Placing proceeds, the number of Placing Shares and the Placing Price will be decided at the close of the Bookbuilding Process.

Settlement

The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the share capital of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue. Application will be made for the Placing Shares to be admitted to trading on AIM.

Settlement for any Placing Shares issued pursuant to the Placing as well as admission to trading on AIM is expected to take place on 25 June 2008. 

Full details of the terms and conditions of the Placing are set out in Appendix A to this announcement. Placees participating in the Placing will be deemed to have read and understood the full terms and conditions relating to the Placing set out in this announcement (including the Appendices to this announcement) and to be participating on the basis that they accept these terms and conditions in full. 

Placing Agreement

The Banks have entered into the Placing Agreement with the Company under which the Banks have severally (and not jointly and severally), on the terms and subject to the conditions set out therein, undertaken as agents of the Company to use all reasonable endeavours to procure Placees to take up the Placing Shares at the Placing Price. 

Subject to and conditional upon the publication of the Placing Results Announcement in accordance with the Placing Agreement and the signing of a pricing supplement agreement by the Banks and the Company recording the final Placing Price and the final number of Placing Shares (the "Pricing Supplement"), JPMorgan Cazenove and Canaccord have agreed in the Placing Agreement that, to the extent that the Banks fail to procure Placees to subscribe for all of the Placing Shares at the Placing Price (such number of Placing Shares which are not so subscribed being the "Unplaced Placing Shares"), they will themselves subscribe at the Placing Price (or nominate one or more persons to so subscribe) for that percentage of the Unplaced Placing Shares set out opposite their respective names below:

JPMorgan Cazenove 50 per cent.

Canaccord 50 per cent.

The Banks and the Company are not obliged to sign the Pricing Supplement.

The obligations of the Banks under the Placing Agreement are conditional upon, inter alia, (i) the Company complying with its obligations under the Placing Agreement to the extent that the same fall to be performed prior to admission of the Placing Shares to trading on AIM ("Admission"); (ii) the representations, warranties and undertakings given by the Company under the Placing Agreement being true and accurate and not misleading at all times before Admission; and (iii) Admission occurring no later than 8.00 am on 25 June 2008 or such other date as may be agreed by the Banks and the Company, not being later than 30 June 2008.

Further, either of the Banks may, at any time before Admission, terminate the Placing Agreement, inter alia, for breach of warranty by the Company or if there has been a material adverse change in or affecting the operations, properties, condition (financial or other), trading position or prospects or results of operations or general affairs of the Company's group taken as a whole.

Company Lock-up

The Company has agreed in the Placing Agreement that it will not, and that it will procure that none of its subsidiaries will, without the prior written consent of each of the Banks:

between the date of the Placing Agreement and the date which is three months after the date of Admission, enter into any agreement, commitment or arrangement or put itself in a position where it is obliged to announce that any agreement, commitment or arrangement may or will be entered into which could materially and adversely affect the Placing or the issue of the Placing Shares; or

between the date of the Placing Agreement and the date which is three months later, (i) offer, pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or other shares in the capital of the Company or any securities convertible into or exchangeable for Ordinary Shares or other shares in the capital of the Company or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Ordinary Shares or other shares in the capital of the Company, whether any such transaction described in (i) or (ii) above is to be settled by delivery of Ordinary Shares or other shares in the capital of the Company or such other securities, in cash or otherwise, provided that the foregoing shall not prevent or restrict the grant of options under, or the allotment and issue of shares pursuant to options under, any existing employee share schemes of the Company (in accordance with its normal practice) or (where such other share options or warrants have been publicly disclosed by the Company prior to the date of this announcement to the London Stock Exchange or to a Regulatory Information Service) other share options granted or warrants to subscribe for Ordinary Shares issued by the Company.

Placing Authority

Mwana Africa has an authorised share capital of £55,300,000 divided into 553,000,000 Ordinary Shares of 10p each. As at 17 June 2008, Mwana Africa had issued 337,933,819 of such shares, of which 2,666,600 are held in treasury as issued shares.

On 31 July 2007, a resolution of the shareholders of the Company was passed whereby, inter alia, the Directors were generally and unconditionally authorised pursuant to Section 95 of the Companies Act 1985, as amended (the "Companies Act") to allot equity securities (as defined in Section 94(2) of the Companies Act) to a maximum aggregate nominal amount of £7,494,834.90 for cash as if Section 89(1) of the Companies Act did not apply to such allotment, such authority to expire on the date of the annual general meeting of the Company to be held in 2008 or 15 months after the date of the passing of the resolution (whichever is the earlier), but so as to enable the Directors to allot equity securities after such date in pursuance of an offer or agreement entered into prior to such date. It is proposed that up to 51,020,500 of these 74,948,349 Ordinary Shares will be the Placing Shares.

The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the share capital of Mwana Africa, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue. Application will be made for the Placing Shares to be admitted to trading on AIM.

Operations update

Nickel

Mwana Africa owns 52.9 per cent. of Bindura Nickel Corporation (BNC), the only integrated nickel mine, smelter and refinery operation in Africa.

Development metres at BNC's Trojan and Shangani mines fell behind target, due to ongoing skills shortages, power outages and difficulties in procuring spare parts and consumables caused by the ongoing economic instability in Zimbabwe. As a result own nickel production for the year at BNC fell 26 per cent. to 4.2kt (2007 - 5.7kt). Tolled output using imported material was maintained at approximately 2007 levels, leading to overall nickel production at BNC of 7.4kt, 17 per cent. less than in 2007. During the year, BNC achieved an average sales price of $15.51 / lb, slightly below the $15.93 / lb achieved in the year ended 31 March 2007.

In the year to 31 March 2008 BNC spent £13.4m (2007 £11.5m) of internally generated funds on capital investment, including redeepening of the shaft and construction of a new concentrator at the Trojan property and development of a conveyor decline at Shangani. The new concentrator, which began commissioning in March, is expected to result in increased recoveries and a beneficial reduction in the talc content of concentrate produced, while the shaft redeepening and conveyor decline are expected to enhance the grade of ore mined and extend the lives of the two mines. The recent commissioning of a $5m oxygen plant, will enable processing of toll material irrespective of leach alloy production from BNC's own mines.

At Hunters Road an indicated resource of approximately 200,000t contained metal, suitable for open pit mining, has been defined at an average grade of 0.55 per cent. nickel. The initial phase of the Hunters Road project will permit production of approximately 2.5kt contained nickel in concentrates per annum, with expansion opportunities to increase output to 10kt of nickel per year. Although progress has been difficult in the current environment, design work is largely complete, refurbishment of mills is taking place and pre-stripping of the mine has begun. In May 2008, the Zimbabwe Ministry of Finance notified BNC that phase one of its Hunters Road project had been awarded National Project Status, which qualifies the project for certain fiscal incentives. A decision on funding for the Hunters Road project will be taken by BNC in due course.

Gold

Mwana Africa is implementing a two-phase $10m rehabilitation programme at the Freda Rebecca mine, which will target annual production of approximately 80,000oz. In the year to 31 March 2008, Mwana Africa invested approximately $2.2m in the project. Mwana Africa continues to seek agreement with the Reserve Bank of Zimbabwe on the retention of revenues from future gold sales.

Diamonds

Production results at Klipspringer, the operational diamond mine in South Africa in which Mwana Africa holds an approximately 61per cent. interest, have been encouraging.  Following a decision to reopen the mine in December 2007, approximately 6,030 cts were recovered in the first three months of 2008, at an average realised price of approximately $120 / ct. Limited additional capital expenditure will be required to open additional stopes, which will enable an increase in production. At full production, it is expected that the mine could produce approximately 90,000cts per year.

Exploration Update

Gold

Mwana Africa continues to define the mineralisation in the region of its Zani-Kodo gold prospect, located between the Moto Goldmines and AngloGold Ashanti concessions in the DRC. As announced on 19 May, initial results indicate potential for a significant gold deposit, which is likely to be amenable to open pit mining. The Company has recently increased its drilling capacity in order to follow up on particularly promising targets. 

In Ghana, Mwana Africa continues to evaluate options for its 100 per cent. owned Kurofa exploration concession and the 70 per cent. owned dormant Konongo mine. Mwana Africa is currently focussed on the 1km strike length Boabedroo South area, where drilling during 2007 identified gold mineralisation in two parallel zones. The aim is to define an oxide resource suitable for open pit mining.

Base Metals

Exploration activities have continued throughout Mwana Africa's 9,689km2 SEMHKAT (previously Anmercosa) concession.

Mwana Africa has completed an interpretation of the Xcalibur airborne magnetic and radiometric survey. The study has defined several structural geological and lithological target areas which are considered to have the potential to host world-class bulk tonnage base metal mineralization. These targets are being reviewed and prioritised, and will be incorporated into the current exploration programme. Some 5,000 metres of diamond core drilling and 10,000metres of Reverse Circulation ("RC") and Rotary Air Blast ("RAB") drilling are planned.

An indicated mineral resource, suitable for open pit mining and containing copper in oxide form, is currently being modelled for Kibolwe, with a view to moving to pre-feasibility study by the end of the year. Mwana Africa will evaluate various processing strategies including a modular solvent extraction, electro winning plant ("SX-EW") and production of concentrate through gravity separation. Several similar anomalies, which would extend the life of any such plant, have also been identified in the vicinity.

Pit sampling at Mukema has yielded elevated mineralisation of both copper and silver, while Ambase, a subsidiary of our joint venture partner Anglo American, has completed the first phase of its exploration programme over Lombe, a previously drilled zinc orebody. An airborne electromagnetic (SPECTREM) survey has been completed over NW Block (ca 900 km2).

Diamonds

Through its 20 per cent. shareholding in MIBA, its acquisitions in 2007 of Gravity and SouthernEra and its free-carried interest in the Camafuca project, Mwana Africa has developed a leading position in the highly prospective Kasai craton, one of the richest known diamond-bearing cratons in the world. Since the acquisitions, progress has been made on integrating Gravity and SouthernEra under a single management structure based in Johannesburg.

Mwana Africa is currently progressing kimberlite exploration programmes through several joint venture and framework agreements with partners including BHP Billiton, giving one of the largest diamond exploration landholdings in the DRC. To date, aeromagnetic surveys covering 240,000 line kms have been flown and 370 targets have been identified for further evaluation.

The Company has near-term potential alluvial development permits within the Tshikapa/Kasai alluvial diamond field (Tshikapa Project) in the Kasaï-Occidental Province, and also within a second major alluvial diamond field in the Mbuji Mayi region (Badibanga Project) in the Kasaï-Oriental Province. Sampling in both of these regions is well advanced with the objective of defining and developing a bulk mineable diamond operation.

Mwana Africa is evaluating options for its diamond exploration operations outside the DRC, South Africa and Angola.

For further information concerning the Company's projects, please refer to the technical report dated July 11, 2007 and entitled "Technical Report - An Independent Technical Report on Bindura Nickel Corporation, Freda Rebecca Gold Mine and Semkhat (Anmercosa Exploration Congo SPRL), the Material Assets of Mwana Africa PLC" which is available on SEDAR at www.sedar.com.

Group Financial Information

The group is in the process of compiling full year results for the year ended 31st March 2008. Preliminary audited group financial accounts for the year are expected to be announced on 18 July 2008. At present, Mwana Africa's revenue derives principally from its operating subsidiary, BNC. BNC is expected to report its full year results in the week commencing 23 June 2008.

Owing to the operating and foreign exchange difficulties highlighted above, Mwana Africa reported a loss before tax of £2.5m in the first half of the year. On a consolidated basis, the Company expects, subject to audit, the loss before tax and exceptional items incurred during the second half of the year to be slightly greater in magnitude than that incurred in the first half of the year, resulting in a significant reduction from the £39.2m profit before tax reported for the full year to 31 March 2007.

On a consolidated basis, Mwana Africa's cash balances at 31 March 2008 were approximately £21m (2007 - £38.7m), of which approximately £9m was held by BNC.

Capital investment for the period totalled approximately £25m, comprising approximately £16m on fixed assets (of which BNC approximately £13m) and approximately £9m on exploration, including license fees on exploration properties. During the year the Gravity and SouthernEra acquisitions were completed for a total of £62.7m, principally in shares.

Mwana Africa is currently reviewing the carrying value of its intangible assets. Some downward adjustments, by way of exceptional item, are expected as Mwana Africa seeks to build on its core exploration prospects as described above and dispose of non-core exploration areas.

The Reserve Bank of Zimbabwe ("RBZ") operates a range of foreign exchange controls which can impact on any company in Zimbabwe that generates revenue in currencies other than Zimbabwean dollars. The foreign exchange controls imposed by the RBZ can alter from time to time. During the year BNC was required to repatriate certain of its US dollar revenues in exchange for Zimbabwean dollars. The country is currently experiencing hyper-inflation, which significantly erodes the value of amounts held in Zimbabwean dollars, and affects the quality of financial and management information. In May 2008, the RBZ relaxed certain foreign exchange regulations, which has led to the introduction of a market rate for Zimbabwean dollars and the increasing use of US dollars within the country.

The DRC government is currently performing a review of mining contracts, which includes many of the licenses on which Mwana Africa's exploration and development activities in the country are based. The government of Zimbabwe has recently introduced the Indigenisation and Economic Empowerment Act, 2007. The Company does not expect there to be any material adverse affect from these initiatives, but no assurance can be given as to the outcome of any future discussions or negotiations between the Company and the DRC or Zimbabwean governments.

Corporate and Human Resources

As announced on 24 April 2008, Peter Sydney-Smith was appointed as Finance Director with effect from 1 June 2008, succeeding the late David Fish, a Mwana Africa founder and former Finance Director.

On 5 June 2008 it was announced that David Murangari had been elected to the Presidency of the Chamber of Mines of Zimbabwe. The appointment is for one year, during which time Mr Murangari will continue in his role at BNC, where he has been Managing Director since 2007.

The current economic climate in Zimbabwe has had a significant impact on all our staff in the region. Skills losses throughout Zimbabwe have been severe and are likely to constrain Mwana Africa's activities in the country until stability returns.

 

APPENDIX A

TERMS & CONDITIONS

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY ON THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE ANNOUNCEMENT AND THIS APPENDIX (WHICH FORMS PART OF THE ANNOUNCEMENT) AND THE TERMS AND CONDITIONS SET OUT IN THE ANNOUNCEMENT AND THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS; (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS (1) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE ORDER OR (2) FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE ORDER; AND (C) OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. NEITHER THIS APPENDIX NOR THE ANNOUNCEMENT OF WHICH IT FORMS PART CONSTITUTES AN OFFER OR AN INVITATION TO ACQUIRE OR DISPOSE OF ANY SECURITIES IN MWANA AFRICA PLC.

If you have been invited and choose to participate in the Placing by making an offer (oral or written) to acquire Placing Shares you will be deemed to have read and understood this Appendix and the announcement of which it forms part in their entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties and acknowledgements, contained in this Appendix. In particular you represent, warrant and acknowledge that you are a Relevant Person. Further, you represent and agree that either (a) you are a QIB (who is also QP) and have duly executed an investor letter in the form provided to you and delivered the same to the Banks), or (b) you are outside the United States and subscribing for Placing Shares in an "offshore transaction" (within the meaning of Regulation S) and, if you are a U.S. Person, you are also a QP. See "Representations and Warranties" below in this Appendix for further representations and warranties you (and any person acting on your behalf) will be deemed to make by participating in the Bookbuilding.

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new Ordinary Shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan, the Republic of South Africa, New Zealand or any jurisdiction in which such publication or distribution would be unlawful. No public offering of securities of the Company is being made in the United Kingdom, the United States or elsewhere. 

In particular, this Appendix and the announcement of which it forms part are not an offer for sale of the securities in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the Securities Act. The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance or any securities commission in Japan, the Republic of South Africa or New Zealand; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, Japan, the Republic of South Africa or New Zealand. 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 the United States, Canada, Australia, Japan, the Republic of South Africa, New Zealand or any other jurisdiction outside the United Kingdom. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the announcement of which it forms part should seek appropriate advice before taking any action.

The distribution of this announcement and the placing of the Placing Shares in certain other jurisdictions may be restricted by law. No action has been taken by the Banks or the Company that would permit such an offer of Ordinary Shares or possession or distribution of this announcement or any other offering or publicity material relating to the Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Banks and the Company to inform themselves about and to observe any such restrictions. This announcement is not for distribution in the United States, Canada, Australia, Japan, the Republic of South Africa or New Zealand.

Details of the Placing Agreement and the Placing Shares

JPMorgan Cazenove and Canaccord have been appointed as joint bookrunners to the Placing.

The Banks have entered into the Placing Agreement with the Company under which the Banks have severally (and not jointly and severally), on the terms and subject to the conditions set out therein, undertaken as agents of the Company to use all reasonable endeavours to procure Placees to take up the Placing Shares at the Placing Price. 

Subject to and conditional upon the publication of the Placing Results Announcement in accordance with the Placing Agreement and the signing of a pricing supplement agreement by the Banks and the Company recording the final Placing Price and the final number of Placing Shares (the "Pricing Supplement"), JPMorgan Cazenove and Canaccord have agreed in the Placing Agreement that, to the extent that the Banks fail to procure Placees to subscribe for all of the Placing Shares at the Placing Price (such number of Placing Shares which are not so subscribed being the "Unplaced Placing Shares"), they will themselves subscribe at the Placing Price (or nominate one or more persons to so subscribe) for that percentage of the Unplaced Placing Shares set out opposite their respective names below:

JPMorgan Cazenove 50 per cent.

Canaccord 50 per cent.

The Banks and the Company are not obliged to sign the Pricing Supplement.

The Placing Shares will, as from the date when they are issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the share capital of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue. 

Admission

Application for all the Placing Shares to be admitted to trading on AIM will be made. Settlement for any Placing Shares issued and allotted pursuant to the Placing will take place on Admission of such shares which is expected to be 25 June 2008.

In this Appendix, unless the context otherwise requires, "Placee" or "you" means a Relevant Person (including individuals, funds or others) on whose behalf an offer to subscribe for Placing Shares has been, or is proposed to be, given and "Placees" and "your" shall be construed accordingly.

Bookbuild

Commencing today, the Banks will be conducting an accelerated bookbuilding process (the "Bookbuilding Process") to determine demand for the Placing Shares. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Bookbuilding Process. No commissions will be paid to Placees or be payable by Placees in respect of any Placing Shares.

Participation in the Bookbuilding Process

Only Relevant Persons who are invited to do so may participate in the Bookbuilding Process. Invitations to participate will be made by telephone through usual sales contacts at JPMorgan Cazenove and Canaccord. If you are invited to participate, your allocation (if any) of Placing Shares will be confirmed to you orally following the close of the Bookbuilding Process and contract notes confirming your agreement to subscribe for Placing Shares. A Bank's oral confirmation to you will constitute acceptance of your offer to acquire Placing Shares and create a legally binding commitment upon you (and you will at that point become a Placee) to subscribe for the number of Placing Shares allocated to you on the terms and conditions set out in this Appendix and in accordance with the Company's constitutional documents.

The Company, JPMorgan Cazenove or Canaccord will make a further announcement following the close of the Bookbuilding Process detailing the number of Placing Shares to be sold and the price at which the same are to be placed (the "Placing Results Announcement").

Principal terms of the Bookbuilding Process

Conditions of the Placing

The obligations of the Banks under the Placing Agreement in relation to the Placing Shares are conditional (inter alia) on:

(a) Admission of the Placing Shares occurring not later than 8.00 a.m. on 25 June 2008 or such other date as may be agreed between the Company and the Banks, not being later than 30 June 2008; 

(b) the Company complying with its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission;

(c) the Company allotting, subject only to Admission becoming effective, the Placing Shares to the Placees, or to JPMorgan Cazenove or Canaccord (or to persons nominated by them);

(d) publication of the Placing Results Announcement no later than 7.00 a.m. on 20 June 2008 or such other time and/or date as may be agreed between the Company and the Banks; and

(e) the representations, warranties and undertakings given by the Company in the Placing Agreement (the "Warranties") being true and accurate and not misleading on and as of the date of the Placing Agreement and at all times before Admission.

If (a) the conditions in the Placing Agreement are not satisfied or waived by the Banks within the stated time period (or such later time and/or date as the Banks may decide) or (b) the Placing Agreement is terminated in the circumstances specified below prior to Admission, the Placing will not take place and your rights and obligations hereunder in respect hereof shall cease and determine at such time and no claim can be made in respect thereof.

By participating in the Bookbuilding Process you agree that your rights and obligations hereunder in relation to the Placing are conditional upon the Placing Agreement becoming unconditional in all respects and not being terminated and will terminate only in the circumstances described in this Appendix (or otherwise in circumstances in which JPMorgan Cazenove and/or Canaccord is entitled to terminate them) and will not be capable of rescission or termination by you.

The Banks reserve the right to waive or to extend the time and/or date for fulfilment of any of the conditions in the Placing Agreement (except that they may not waive the conditions described in (a) and (c) above). The Banks shall have no 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 invoke, waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement, and by participating in the Bookbuilding Process you agree that any such decision is within the absolute discretion of the Banks.

Right to terminate under the Placing Agreement

Either of the Banks is entitled, at any time before Admission to terminate the Placing Agreement and its obligations under the Placing Agreement if, inter alia:

(a) the Warranties or any of them are not true and accurate or have become misleading (or would not be true and accurate or would be misleading if they were repeated at any time before Admission) in respect of a matter which, in the opinion of the relevant Bank (acting in good faith), is material in the context of the Placing by reference to the facts subsisting at the time when the termination notice referred to below is given; or

(b) the Company fails, in any respect which is material in the opinion of the relevant Bank (acting in good faith), to comply with any of its obligations under the Placing Agreement; or

(c)  in the opinion of such Bank (acting in good faith), there has been a material adverse change in or affecting the operations, properties, condition (financial or other), or prospects or results of operations or general affairs of the Group taken as a whole; or

(d) in the opinion of the relevant Bank (acting in good faith), there has been:

(i) a change in national or international financial, political, economic or stock market conditions (primary or secondary);

(ii) an incident of terrorism, outbreak or escalation of hostilities, war, declaration of martial law or any other calamity or crisis;

(iii) a suspension or material limitation In trading of securities generally or the securities of the Company on any stock exchange; or

(iv) any change in currency exchange rates or exchange controls or a disruption of settlement systems or a material disruption or general moratorium in commercial banking,

as would, in the opinion of the relevant Bank (acting in good faith) be likely to prejudice the success of the Placing,

in each of which cases the Banks shall, if practicable in the circumstances, promptly give notice thereof to the Company and then consult with the Company in respect of such matter(s) and the Placing Agreement (other than certain specified provisions) may be terminated by either Bank following such consultation, if any, by the giving of a termination notice and the Placing Agreement (other than certain specified provisions) will thereupon have no further effect.

By participating in the Bookbuilding Process you agree that the exercise by the Banks of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Banks and that they need not make any reference to you and that none of them shall have any liability to you whatsoever in connection with any such exercise.

No Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or in any other jurisdiction. No prospectus or AIM admission document has been or will be submitted to be approved by the London Stock Exchange or the FSA in relation to the Placing and the Placees' commitments will be made solely on the basis of the information contained in this announcement and the Placing Results Announcement. Each Placee, by participating in the Placing, agrees that the content of this announcement and the Placing Results Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of JPMorgan Cazenove, Canaccord or the Company and none of JPMorgan Cazenove, Canaccord or the Company will be liable for any Placee's decision to accept this invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee 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. Nothing in this announcement shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Subject as provided below, settlement for all Placing Shares will be made through CREST. Settlement for any Placing Shares issued and allotted pursuant to the Placing will take place on the date of Admission which is expected to be 25 June 2008.

The Banks reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means as it deems necessary if delivery or settlement is not possible as described above within the timetable set out in this announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

If you are allocated any Placing Shares in the Bookbuilding Process you will be sent a contract note, which will confirm the number of Placing Shares to be subscribed for by you and also confirming the Placing Price and the aggregate amount owed by you to JPMorgan Cazenove or Canaccord, as the case may be, as agent for the Company in relation to the settlement of such Placing Shares. By participating in the Placing, you agree that you will do all things necessary to ensure that delivery and payment is completed in accordance with the standing settlement instructions which you have in place with JPMorgan Cazenove or Canaccord, as the case may be.

If Placing Shares are to be delivered to a custodian or settlement agent, please ensure that the contract note is copied and delivered immediately to the relevant person within that organisation.

Interest is chargeable daily on payments to the extent that value is received after the due date at the rate of five percentage points above prevailing LIBOR. If you do not comply with your obligations, JPMorgan Cazenove or Canaccord may sell your Placing Shares on your behalf and retain from the proceeds, for its own account and benefit, an amount equal to the Placing Price plus any interest due (in settlement of your liability in respect of JPMorgan Cazenove's or Canaccord's payment to the Company on your behalf of the Placing Price of the relevant Placing Shares under the Placing Agreement). You will, however, remain liable on the same basis for any shortfall below the Placing Price and you may be required to bear any interest or losses which may arise upon the sale of your Placing Shares on your behalf.

You will not be entitled to receive any fee or commission in connection with the Placing.

Representations and Warranties

By participating in the Bookbuilding Process you (and any person acting on your behalf):

1. represent and warrant that you have read this Appendix and the announcement of which it forms part in their entirety and have not redistributed them or any part of them;

2. acknowledge that you have been invited to participate in the Bookbuilding Process solely on the basis of this announcement and that no offering document, prospectus, AIM admission document or any other document has been prepared in connection with the Placing or formed the basis of the placing of the Placing Shares with you;

3. acknowledge that the content of this Appendix and the announcement of which it forms part are exclusively the responsibility of the Company and that neither of the Banks, nor any of their respective Affiliates nor any person acting on any of such Bank's or Affiliate's behalf has or shall have any liability for any information, representation or statement contained in this Appendix and/or the announcement of which it forms part or any information previously published by or on behalf of the Company;

4. acknowledge that the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent AIM admission document and financial statements, and similar statements for preceding financial years, and that you are able to obtain or access the Exchange Information without undue difficulty;

5. represent and warrant that you have neither received nor relied on any information, representation, warranty or statement made by or on behalf of JPMorgan Cazenove, Canaccord or the Company other than the information contained in this announcement and that none of JPMorgan Cazenove, Canaccord or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing (and any resulting investment) based on any other information, representation, warranty or statement;

6. acknowledge and agree that you have relied on your own investigation of the business, financial and/or other position of the Company in deciding to participate in the Placing (and in making any resulting investment) and acknowledge and agree that neither of the Banks nor any of their respective Affiliates nor any person acting on such Bank's or Affiliate's behalf, has provided, and will not provide you with any other material regarding the Placing Shares or the Company; nor have you requested the Banks, any of their respective Affiliates or any person acting on such Bank's or Affiliate's behalf to provide you with any such information;

7. represent and warrant that you (and/or any beneficial owner on whose behalf you are making a subscription) are entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to you (and/or such beneficial owner) and that you (and/or such beneficial owner) have fully observed such laws and obtained all such governmental and other guarantees and other consents which may be required thereunder and complied with all necessary formalities;

8. represent and warrant that you are, or at the time the Placing Shares are acquired that you will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Canada, Australia, Japan, the Republic of South Africa or New Zealand;

9. acknowledge that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Canada, Australia, Japan, the Republic of South Africa or New Zealand and that you will not will not offer, sell, pledge, deliver or otherwise transfer, directly or indirectly, the Placing Shares in or into those jurisdictions except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the applicable securities legislation (and in the case of the United States, in accordance with any additional restrictions set out in the representations, warranties and agreements in this Appendix);

10. acknowledge that where you are subscribing for Placing Shares for one or more managed accounts, you represent and warrant that you are authorised in writing by each managed account (a) to subscribe for the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties and agreements in this Appendix and the announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to you by JPMorgan Cazenove or Canaccord, as the case may be. You agree to indemnify and hold the Company, JPMorgan Cazenove, Canaccord 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 and warranties in this paragraph 10. You agree that the provisions of this paragraph 10 shall survive the resale of the Placing Shares by or on behalf of the managed accounts;

11. undertake to pay any capital duty, stamp duty or stamp duty reserve tax and all other stamp, issue, securities, transfer, registration, documentary or other similar duties or taxes payable or otherwise required to be paid in respect of the allotment, issue, delivery or transfer of the Placing Shares or any interest therein to or by you, or the acquisition or disposal of, or in connection with any agreement to subscribe or for the allotment, issue, delivery or transfer of, the Placing Shares or any interest therein to you or by you pursuant to or as a result of the arrangements contemplated by the Placing Agreement or this Appendix or the announcement of which it forms part or in connection with the issue, execution or delivery of the Placing Agreement or this Appendix or the announcement of which it forms part and any interest or penalties payable in respect thereof and to indemnify (on an after tax basis) and hold harmless JPMorgan Cazenove, Canaccord, the Company and their respective agents to the extent that JPMorgan Cazenove, Canaccord and/or the Company pay or are or become liable to pay any amount in respect of such duties and taxes. References in this paragraph 11 to Placing Shares include any interest in, or rights to allotment of, or rights to subscribe for or options to subscribe, Placing Shares. Neither JPMorgan Cazenove nor Canaccord shall be liable to pay any amount pursuant to this paragraph 11;

12. represent and warrant that:

(i) you are aware of and have complied with your obligations in connection with money laundering under the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2003 (the "Regulations") and, if you are making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by you to verify the identity of the third party as required by the Regulations; and

(ii) you and any person acting on your behalf have complied and will comply with, and have not breached and will not breach, any and all applicable provisions of FSMA with respect to anything done by you or such person in relation to the Placing Shares in, from or otherwise involving the United Kingdom;

13. represent and warrant that if you are in a member state of the European Economic Area you are a Qualified Investor within the meaning of the Prospectus Directive;

14. represent and warrant that if you are in the United Kingdom you are a Qualified Investor within the meaning of the Prospectus Directive and a person (1) who has professional experience in matters relating to investments and fall within article 19(5) (investment professionals) of the Order, or (2) who falls within article 49(2)(a) to (d) (high net worth companies, unincorporated associations etc) of the Order, and you undertake that you will acquire, hold, manage or dispose of any Placing Shares that are allocated to you for the purposes of your business;

15. represent and warrant that you have not offered or sold and as part of the distribution of the Placing shares, will not offer or sell any Placing Shares to persons in the United Kingdom except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within section 85(1) of FSMA;

16. represent and warrant that you have 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;

17. represent and warrant that as far as you are aware you are not acting in concert (within the meaning given in The City Code on Takeovers and Mergers) with any other person in relation to the Company;

18. represent and warrant that you and any person acting on your behalf is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions and have all necessary capacity and have obtained all necessary consents and authorities to enable you and such person to commit to this participation in the Placing and to perform your and such person's obligations in relation thereto (including, without limitation, in the case of any person on whose behalf you are acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement) and will honour such obligations;

19. undertake that you and any person acting on your behalf will pay for the Placing Shares allocated to you 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 JPMorgan Cazenove or Canaccord, as the case may be, may in their absolute discretion determine and without liability to such Placee;

20. acknowledge that participation in the Placing is on the basis that you are not and will not be a client of JPMorgan Cazenove or Canaccord and neither JPMorgan Cazenove nor Canaccord has any duties or responsibilities to you for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement;

21. undertake that the person whom you specify for registration as holder of the Placing Shares will be (a) you, or (b) your nominee, as the case may be. Neither of the Banks 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. You and any person acting on your behalf agrees to subscribe on the basis that the Placing Shares will be allocated to a stock account of JPMorgan Cazenove or Canaccord who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions;

22. acknowledge that any agreements entered into by you pursuant to these terms and conditions shall be governed by and construed in all respects in accordance with the laws of England and you submit (on behalf of yourself and on behalf of any person on whose behalf you are acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, provided 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, JPMorgan Cazenove or Canaccord 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; 

23. acknowledge that time shall be of the essence as regards obligations pursuant to this Appendix to the announcement;

24. if a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive 2003/71/EC, represent and warrant that the Placing Shares purchased by you 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 qualified investors, or in circumstances in which the prior consent of the Banks has been given to the offer or resale;

25. understand that until 40 days after the commencement of the Placing, an offer or sale of the Placing Shares into or within the United States by a dealer, whether or not such dealer is participating in this offering, may violate the registration and prospectus delivery requirements of the Securities Act if such offer or sale is not made in accordance with Rule 144A under the Securities Act; and 

26. acknowledge, represent and agree with the Company and the Banks as follows (a) you are aware that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States; (b) unless you are making the representations set forth in (a) through (g) below, you are not a U.S. Person and are acquiring the Placing Shares in an offshore transaction meeting the requirements of Regulation S; and (c) you will not offer, sell, pledge or transfer any Placing Shares, except in accordance with the Securities Act and any applicable laws of any state of the United States and any other jurisdiction.

Each subscriber of Placing Shares who is in the United States or is a U.S. Person will be deemed to have acknowledged, represented to and agreed with the Company and the Banks as follows:

(a) the subscriber (1) is acquiring the Placing Shares in an offshore transaction that meets the requirements of Regulation S and is a QP or (2)(x)is a QIB (who is also a QP); (y) is acquiring the Placing Shares for its own account or the account of a QIB (who is also a QP); and (z) is aware, and each beneficial owner of such Placing Shares has been advised, that the issue or sale to it is being made in reliance on Rule 144A or another available exemption from registration;

(b) for so long as any of the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, it shall not resell or otherwise transfer any of the Placing Shares except (1) to the Company or any of its affiliates; (2) in an offshore transaction in accordance with Regulation S in a manner that does not require the Company to register as an investment company under the Investment Company Act; (3) inside the United States in accordance with Rule 144A to a person whom the seller reasonably believes is a QIB that is purchasing such Placing Shares for its own account or for the account of a QIB to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A or pursuant to another available exemption from registration under the Securities Act, and in each case to a person who is a QP; or (4) pursuant to an effective registration under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States;

(c) it agrees that it will give to each person to whom it transfers the Placing Shares notice of any restrictions on transfer of the Placing Shares;

(d) it understands that its certificated Placing Shares (if any) will bear a legend substantially to the following effect, until the expiration of the applicable holding period with respect to the Placing Shares set forth in Rule 144 under the Securities Act:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER HEREBY, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF MWANA AFRICA PLC THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO MWANA AFRICA PLC AND ITS AFFILIATES, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT AND APPLICABLE FOREIGN LAWS AND IN A MANNER THAT DOES NOT REQUIRE THE COMPANY TO REGISTER AS AN INVESTMENT COMPANY UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") (C) INSIDE THE UNITED STATES IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT PROVIDED BY RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A OF THE SECURITIES ACT) WHO IS ALSO A "QUALIFIED PURCHASER" WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT; OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT THAT COVERS RESALES OF SECURITIES. THE HOLDER FURTHER AGREES THAT THE ORDINARY SHARES ARE ''RESTRICTED SECURITIES'' WITHIN THE MEANING OF RULE 144(A)(3) UNDER THE SECURITIES ACT AND THAT IT WILL NOT DEPOSIT SUCH SECURITIES INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF SHARE OF MWANA AFRICA PLC ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK."

 (e) it acknowledges that the Placing Shares (whether in physical, certificated form or in uncertificated form held in CREST) are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, are being offered and sold in a transaction not involving any public offering in the United States within the meaning of the Securities Act and that no representation is made as to the availability of the exemption provided by Rule 144 for resales of Placing Shares. The acquirer understands that the Placing Shares may not be deposited into any unrestricted depositary receipt facility in respect of Placing Shares established or maintained by a depositary bank;

(f) it understands that any offer, sale, pledge or other transfer of the Placing Shares made other than in compliance with above-mentioned restrictions may not be recognised by the Company;

(g) it understands that the Company is not, and does not propose to be, registered as an investment company under the Investment Company Act and the rules thereunder.

Each subscriber of Placing Shares will be deemed to acknowledge that the Company, the Banks and their Affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements and agrees that if any of the representations or agreements deemed to have been made by its subscription of the Placing Shares are no longer accurate, it shall promptly notify the Banks and the initial subscribers. If it is acquiring Placing Shares as a fiduciary or agent for one or more investor account, it represents that it has sole investment decision with respect to each account and it has full power to make the foregoing representations and agreements on behalf of each account.

You agree to indemnify and hold harmless the Company and the Banks from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by you (or any person on whose behalf you are acting) of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agree that the provisions of this Appendix shall survive after completion of the Placing.

General

This Appendix and the announcement of which it forms part have been issued by the Company and are the sole responsibility of the Company.

JPMorgan Cazenove and Canaccord are each acting for Mwana Africa plc and no one else in connection with the Placing and will not be responsible to any other person for providing the protections afforded to their respective clients, or for providing advice in relation to the Placing and/or any other matter referred to in this announcement (including the Appendices to this announcement).

You and any person acting on your behalf acknowledge that none of the Banks owe any fiduciary or other duties to you in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement. 

You and any person acting on your behalf acknowledge and agree that any of the Banks or any of their respective affiliates may (at their absolute discretion) agree to become a Placee in respect of some (or all) of the Placing Shares.

When you or any person acting on your behalf is dealing with JPMorgan Cazenove or Canaccord, as the case may be, any money held in an account with the respective Bank on your behalf will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. You acknowledge 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 respective Bank's money in accordance with the client money rules and will be used by the respective Bank in the course of its own business; and you will rank only as a general creditor of the respective Bank.

  APPENDIX B

DEFINITIONS

In addition to those terms otherwise defined in this Announcement:

"Admission" means admission by the London Stock Exchange of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules;

"Affiliate" shall have the meaning given to that term in Rule 405 under the Securities Act;

"AIM" means the AIM Market operated by the London Stock Exchange;

"AIM Rules" means the current rules published by the London Stock Exchange applicable to companies with a class of listed securities admitted to trading on AIM;

"Banks" means the JPMorgan Cazenove and Canaccord;

"Bookbuilding Process" means the institutional bookbuilding process to be undertaken by the Banks as part of the Placing to determine the Placing Price;

"Canaccord" means Canaccord Adams Limited;

"Company" means Mwana Africa plc;

"FSA" means the Financial Services Authority;

"FSMA" means the Financial Services and Markets Act 2000 (as amended);

"Group" means the Company and its subsidiary undertakings including, where the context requires, any one or more of such companies;

"Investment Company Act" means the United States Securities Act of 1940, as amended;

"JPMorgan Cazenove" means JPMorgan Cazenove Limited;

"London Stock Exchange" means London Stock Exchange plc;

"Order" means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended);

"Ordinary Shares" means ordinary shares of 10 pence each in the share capital of the Company;

"Placees" means the placees procured by the Banks pursuant to the Placing Agreement which may include QIBs in the United States;

"Placing" means the placing of the Placing Shares with Placees to be effected by the Banks on the terms and subject to the conditions set out in the Placing Agreement;

"Placing Agreement" means the agreement entered into on the date of this announcement by JPMorgan Cazenove, Canaccord and the Company in relation to the Placing;

"Placing Price" means the price per Placing Share at which any Placing Shares are to be subscribed by Placees;

"Placing Results Announcement" means the press announcement giving details of the results of the Placing;

"Placing Shares" means the Ordinary Shares proposed to be issued pursuant to the Placing;

"QIBs" means "qualified institutional buyers" as defined in Rule 144A under the Securities Act;

"Qualified Investors" means "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive; 

"QPs" means "qualified purchasers" as that term is used in 3(c)(7) of the Investment Company Act, and defined in Rule 2a51 under such act; 

"Securities Act" means the United States Securities Act of 1933, as amended; and

"U.S. Person" has meaning assigned to it in Section 902(k) of Regulation S of the Securities Act.

ENDMSCSFEEDWSASESM

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