Definitive agreements signed with CRM

For immediate release

1 April 2010

African Minerals Limited

 ("African Minerals", "AML" or "the Company")

Definitive agreements signed with China Railway Materials Commercial Corporation to develop Tonkolili Iron Ore Project

African Minerals Limited (AIM: AMI), the mineral exploration and development company with significant iron ore and base metal interests in Sierra Leone, West Africa, is pleased to announce that further to its press release of 6 January 2010 it has on 31 March 2010 signed the following definitive agreements with CRM in respect of AML's flagship iron ore project at Tonkolili and the related infrastructure projects (together the "Project").

Highlights:

Ø China Railway Materials Commercial Corporation ("CRM") to acquire 12.5% of enlarged share capital of AML at £5.00 per share (for £167,897,370)

Ø These funds, together with the proceeds from the underwritten cash placing announced on 21 January 2010, will fully fund the planned capital expenditure for Phase One of AML's iron ore production and infrastructure project at Tonkolili

Ø AML grants CRM exclusivity until Completion of the transaction, expected to be no later than 31 July 2010, with a break fee of US$10M

Ø Completion is conditional upon, amongst other things, receipt by CRM of all necessary approvals from the Government of the People's Republic of China. If AML terminates the transaction due to CRM's inability to obtain such approvals, CRM will pay AML a break fee of US$10M

Ø CRM and AML have signed a 20 year guaranteed magnetite off-take agreement for minimum of 10 million tonnes per annum ("Mtpa") of magnetite iron ore production from the Second Phase of commercial production at Tonkolili. CRM has an option to extend the Magnetite Off-take Agreement for a further five years

Ø Additionally, under a Hematite Agency Agreement CRM is appointed AML's exclusive agent for expected sales in China of no less than 5 Mtpa and up to 8 Mtpa of hematite iron ore from Tonkolili for a minimum of 20 years

Ø At the beginning of the third year of the Hematite Agency Agreement CRM and AML will enter negotiations to convert the Hematite Agency Agreement to an Off-take Agreement for the entire hematite production from Tonkolili, with effect from the start of the fourth year of the Hematite Agency Agreement

Ø AML has agreed to cease negotiations with all other third parties regarding a possible acquisition of, or merger with AML until completion of the CRM transaction.

Frank Timis, Executive Chairman of African Minerals said:

"I am extremely pleased to welcome CRM, one of China's large-scale state owned enterprises and one of China's largest steel trading companies, as a substantial shareholder of African Minerals. We view CRM's involvement as a significant vote of confidence in the Tonkolili project and in what we are aiming to achieve."

"The establishment of a strong relationship with CRM is an important step forward for the Company as we look to underwrite Tonkolili's Phase One start-up hematite production of up to 8 Mtpa by 2011, giving us access to early cashflow and revenue streams. This, coupled with the Off-take Agreement for a further 10 Mtpa of magnetite for a minimum of 20 years, together with AML's strong and experienced management team led by our CEO, Alan Watling, should provide African Minerals with a strong foundation from which to assess strategic opportunities to secure funds for the Phase Two of iron ore production, targeting 45 Mtpa."

Subscription Agreement

On Completion CRM will acquire 33,579,474 common shares of AML at £5.00 per share, for a total consideration of £167,897,370 and representing 12.5% of the enlarged issued share capital of the Company. Following Completion the issued share capital of the Company will be 268,635,793 common shares. The funds from the subscription together with the funds raised in the underwritten cash placing announced by the Company on 21 January 2010 will fully fund the planned capital expenditure for AML's development of Phase One of the Project. Under the Subscription Agreement CRM has the right to maintain its 12.5% shareholding in the event of any future equity placings by AML. CRM has the right to appoint one non-executive director to the board of AML and to retain this position unless CRM's shareholding in AML falls below 5%. Completion is expected to occur no later than 31 July 2010.

The Subscription Agreement is subject to a number of Conditions Precedent prior to Completion. The material Conditions Precedent comprise the following:

1. The receipt by CRM of all necessary approvals from the Government of the People's Republic of China and other regulatory authorities to the transactions contemplated by the Subscription Agreement;

2. The customary warranties being given by AML being correct in all material respects at Completion;

3. There being no Material Adverse Effect on AML occurring between the date of the Subscription Agreement and Completion;

4. AML not entering into any commitment or agreement prior to Completion which could materially affect the transactions contemplated by the Subscription Agreement;

The Subscription Agreement also contains provisions under which CRM is granted a "Right of First Offer" to act as a supplier to AML of the plant and equipment (including rolling stock, signalling equipment and port handling equipment) and other products and services on the Project.

Exclusivity and Break Fee

AML has undertaken to CRM that prior to Completion AML will not solicit a proposal from or enter into negotiations with a third party with a view to that party acquiring shares in or assets of the Company or merging with the Company (a "Proposal"). AML therefore announces that it has now ceased discussions with all interested third parties in respect of Proposals.

If CRM terminates the Subscription Agreement due to AML's breach of the warranties or the undertaking relating to a Proposal or due to AML's failure to complete the transaction even though the Conditions Precedent have been satisfied or waived by CRM, AML will pay CRM a break fee of US$10M.

If AML terminates the Subscription Agreement due to CRM's failure to obtain the necessary government approvals by 31 July 2010 or if CRM fails to complete the transaction even though the Conditions Precedent have been satisfied or waived by AML, CRM will pay AML a break fee of US$10M.

Hematite Agency Agreement

To reduce the risk to AML associated with entry into an off-take agreement at the start of production and to provide AML with greater flexibility for its iron ore sales in the market-place, AML and CRM have agreed that Phase One of hematite production will be the subject of an agency agreement rather than an off-take agreement as originally envisaged. AML has therefore appointed CRM as the Company's exclusive agent for expected sales into China of no less than 5 Mtpa and no more than 8 Mtpa of hematite iron ore. The Hematite Agency Agreement will commence on the earlier of the first commercial production of hematite iron ore from the Project or 31 December 2011 and will terminate on the 20th anniversary of its commencement.

Under the Hematite Agency Agreement CRM will receive a commission on hematite iron ore sold by AML to Chinese buyers.

The Hematite Agency Agreement is conditional upon Completion of the Subscription Agreement.

Magnetite Guaranteed Off-take Agreement

The parties have entered into a magnetite iron ore purchase agreement under which CRM will buy a minimum of 10 Mtpa of AML's magnetite production from Phase Two of the Project in each contract year. The Off-take Agreement will commence on the date that AML is in a position to commence commercial production of and ship magnetite iron ore from the Tonkolili mine and will be for a minimum of 20 years. The price to be paid by CRM will be determined based on generally accepted international benchmark pricing. Pricing is based on "FOB Trimmed" pricing and will be reviewed annually.

CRM has the right to extend the Magnetite Off-take Agreement for a further five years upon 12 months' notice to AML.

The Magnetite Off-take Agreement is conditional upon Completion of the Subscription Agreement.

Enquiries:

About CRM:

China Railway Materials Commercial Corporation ("CRM"), headquartered in Beijing, is currently a major integrated service provider in the railway industry and one of the top 3 steel traders in China and has long established relationships with each of the Tier One Chinese Steel Mills and other State Owned Enterprises.

In 2008, CRM's sales revenue and total assets were 100.2billion RMB (approx $14.billion) and 26.8billion RMB respectively. For the first 11 months in 2009, CRM 's revenue reached 91.3billion RMB, distributing 5.13 million tonnes of locomotive oil, 1.98 million tonnes of rail, and 11.27 million tonnes of steel, 10.66 million tonnes of coal and 7.3 million tonnes of ores. In 2009, it was ranked 57th among the TOP 500 Chinese Enterprises, 25th in the service industry and 44th amongst the TOP 500 Enterprise Groups.

Its activities involve the manufacturing of railway materials, rolling stocks, rails, and other railway related materials and services in China and overseas. CRM has a large number of senior professionals specialised in logistics, marketing, research & development, computer applications, business administration and financial management.

CRM has a successful history of overseas investment into the Australian iron ore sector.

Background to the transaction

Under AML's current plans, the development and construction of the Project is to be undertaken in two stages. These preliminary plans are subject to the finalisation of the definitive feasibility study for the Project expected during the first part of 2010.

In Phase One, AML plans to achieve by 2011 an annual production of between 5 and 8 million tonnes per annum (Mtpa) of hematite iron ore products, including the first phase mine development, the upgrade of Pepel Port, the upgrade of the Pepel-to-Lunsar Railway and the construction of a road from Lunsar to Tonkolili, together with auxiliaries required for operations.

In Phase Two, AML plans to achieve an annual combined hematite and magnetite production of up to 45 Mtpa of iron ore products by 2014, including second phase mine development, the construction of a deep-water port at Tagrin, the construction of necessary power facilities and the construction of a heavy haul 200km railway from Tagrin to Tonkolili, together with all associated infrastructure and auxiliaries.

This RNS Announcement includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact, included in this release, including, without limitation, the positioning of the Company for future success, statements regarding potential future production at Tonkolili and future capital plans and objectives of African Minerals, are forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from African Minerals' expectations include, among others, risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined as well as future price of iron ore. Although African Minerals has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. African Minerals does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.

ENDS