CRM subscribes to Convertible Bond

16 May 2012

China Railway Materials subscription takes Convertible Bond

Proceeds to $400 Million

African Minerals Ltd (the "Company" or "AML") confirms that, following receipt of relevant regulatory approvals, China Railway Materials Company Limited ("CRM") has completed its subscription for $50m of the Company's 8.5% convertible bonds due 2017 ("the Bonds") through CRM (Hong Kong) Holdings Ltd, its wholly owned subsidiary. These Bonds have been issued today, and are on the same terms as, and form a single series with, the $350m of convertible bonds issued on 10 February 2012.

As previously announced, CRM has the right to maintain its shareholding in the Company at up to 12.5% in the event of any future equity issue by AML. CRM's subscription to the Bonds, which represents 12.5% of the enlarged issue of the Bonds, removes any potential dilution of their shareholding if the Bonds convert into fully paid common shares of the Company.

The common shares to be issued upon conversion of the Bonds issued to CRM would represent approximately 4.6 million common shares or 1.4% of the current total number of issued and outstanding common shares of the Company.

Mr. Liu Guoping, CRM's nominated director on AML's Board, said

"We are delighted by African Minerals' achievements in bringing Tonkolili into production in such a short period of time and are committed to working with them as supportive, long-term partners."

Frank Timis, Executive Chairman of AML commented:

"The subscription by CRM for their full entitlement of AML's convertible bonds underlines their commitment to AML's growth story and also signals the support of China for our long term strategy."

ENDS

Contacts:

African Minerals Limited

+44 20 3435 7600

Mike Jones

Aura Financial

+44 20 7321 0000

Michael Oke / Andy Mills

Deutsche Bank

+44 207 545 8000

Rupert Green

African Minerals is developing its Tonkolili iron ore project in Sierra Leone, with a JORC compliant resource of 12.8Bnt. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I is expected to produce 20 million tonnes of iron ore per annum at full capacity.

Phase II now contemplates an expanded production facility at the mine to produce an additional 30Mtpa of 64% high grade hematite concentrate and the establishment of an expanded port facility at Tagrin Point.

African Minerals and its contractors currently employ approximately 9,700 people in Sierra Leone, 82% of who are Sierra Leonean nationals.

The Company has also developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone ("GoSL") has a 10% free carried interest.

The Tonkolili project companies are currently owned 75% by AML, and 25% by Shandong Iron and Steel Group ("SISG"), except for ARPS, which is owned 65% by AML, 25% by SISG and 10% by GoSL.

www.african-minerals.com