Final Results

6 June 2011

GMA Resources plc

("GMA" or the "Company")

Final Results for the year ended 31 December 2010

CHAIRMAN'S STATEMENT

During the year under review, the Company made progress in shifting its focus from being an operator to also becoming an explorer. Although not a typical change in direction, the potential opportunity to improve the valuation of the Company was compelling. Success on this front has been limited to date and a review of the results has been undertaken. GMA will continue to focus its efforts through 2011 on improving the current mine operation, however in parallel, it must continue with its exploration program in order to create longer term sustainable value for its shareholders. The Company is also exploring other diversification opportunities.

The major milestones for the Company during the year were:

- the appointment of a new Chief Executive Officer, Ken Crichton

- the re-structuring of the share capital of the Company including a further injection of capital from Sahara Gold and subsequently the renegotiation of the Company's loan notes

- commencement of exploration drilling of the geochemical anomalies, with 12,945 metres drilled by year end

- reduction in expatriate headcount in an effort to streamline operation costs and the successful transfer of all remaining expatriate costs to the ENOR level

- payment of all backdated surface tax to the Algerian tax authority

- 71% local sales versus 29% export

- re-commissioning of the Tirek CIL plant at Amesmessa

- the re-structuring of the leases and loans of ENOR including debt repayment

- appointment of Omar El-Alfy and Ralph Browning as Non-Executive Director

Operations

The new CEO, Ken Crichton brought a wealth of mine operating experience to the Company and, together with Omar El-Alfy, has been implementing changes to successfully improve efficiency and reduce costs to improve the financial position of ENOR. Further details are explained in the CEO's report below.

Health, Safety and the Environment

The Company is very aware of the health and safety of its employees and takes this issue very seriously. The environment also is of major concern and the Company aims to conform to international standards in its operations. 

Financing

The Company successfully negotiated with its bondholders to roll-up the interest on the bonds in issue and extend the conversion date, to give the Company some flexibility with working capital. At the same time, a fund raising was undertaken to ensure the Company had sufficient working capital for the next 12 months. This financing; to raise a total of £1.5 million (payable in four separate tranches) was via Sahara Gold Limited ("Sahara"), a wholly owned subsidiary of Ascom Precious Metals Mining S.A.E. This resulted in Sahara holding a total interest of approximately 27.2% in the capital of the Company (which was reduced to 26.75% following conversion of £550,000 of the Company's 2012 loan stock by a third party in October 2010 and then further reduced to 26.53% in May 2011 following conversion of a further £250,000 of the Company's 2012 loan stock by a third party).

Ken Crichton also contributed to this financing by investing an additional £100,000.

This strategic alliance with Sahara has been vital in keeping the Company solvent throughout the year and particularly in the technical assistance and resources Sahara have provided to the Company at both the GMA and ENOR level.

Board of Directors

In July 2010, Omar El-Alfy was appointed to the Board as an appointee of Sahara. Omar's contribution has been invaluable in ensuring rigorous financial understanding and reporting whilst also assisting ENOR with negotiations and the ongoing restructuring of the Company's debt and tax obligations.

In December 2010, we welcomed Ralph Browning to the Board as an independent non-executive director. Ralph brings with him a wealth of corporate experience that will be invaluable to the Company for its organic growth.

On behalf of the Board I would like to thank our management team as well as our partners, Sonatrach, the Algerian Government and Sahara.

In the face of a difficult economic and operating environment, the effort of all our stakeholders is necessary to ensure the long term future of the Company. I thank you all for your respective contributions.

David Netherway

Chairman

CHIEF EXECUTIVE OFFICER'S REPORT

It is my pleasure to provide you with an overview on the Company's operating and financial results for the year ended 31 December 2010.

Amesmessa Gold Project

The year under review marked the third year of production from the Company's 52% owned Amesmessa operation.

Gold Sales

Gold Sales of 23,262 oz were recorded during 2010 (2009: 33,992 oz). The revenue from gold sales was equivalent to US$29,449,545 or £18,175,000 (2009: US$32,619,857 or £20,361,000) for an average realised price of US$1,266 per oz (2009: US$959.63).

Approximately 71% of 2010 sales were made in Algeria with the remaining 29% in export markets. It is expected that these proportions will continue into 2011 as the objective of the gold refinery in Algeria is to buy as much as possible of its gold requirements from ENOR to meet its production capacity.

The Company has no gold price hedges in place.

Mining Operations

During 2010, mining was focused predominately in veins contained within the Amesmessa area, however some mining was completed in areas north of Amesmessa in an attempt to lower the overall strip ratio. Combined high grade and heap leach ore tonnages mined were far lower for 2010 primarily due to poor excavator availability due to lack of spare parts.

A major disappointment for 2010 was the lack of high grade ore that was predicted by the geological model. The tonnage of high grade ore mined in 2009 was 60,720 tonnes versus only 36,410 tonnes in 2010.

In Q2 2011, post period end, the following corrective actions were implemented to address some of the mining issues experienced in 2010.

1) The Operations Manager was relocated from Amesmessa to the Algiers office to manage the day to day operations of the mine with the purchasing team reporting directly to him. The Operations Manager is responsible for relationships with the various major spare parts suppliers in Algiers and abroad.

2) The ENOR management team was expanded and strengthened by new key personnel resulting in a more timely and effective decision making process.

3) Four 50 tonne excavators and four trucks were hired to supplement the existing ENOR fleet whilst the dealer begins to rebuild and repair key equipment.

4) Grade control drilling was concentrated on verifying and updating the existing geological model of veins in and around Amesmessa, focusing on confirming the location of high grade shoots of ore.

Heap Leach and CIL Operations

The average grade of the material processed during 2010 for both the CIL (which was commissioned in August 2010) and the existing heap leach operation was 3.05 g/t versus the 2009 grade of 4.45 g/t, a fall of 31%. The fall in grade was the major contributing factor to the less than ideal performance of the Amesmessa Mine in 2010. Some of this was made up for by an increase in the heap leach recovery by longer irrigation of the heaps.

In Q2 2011, the following actions were taken to address the 2010 crushing issues;

1) The purchase of a new primary and secondary crusher for the existing crushing circuit using an existing loan facility from ENOR's bank. The installation of this plant will be completed in August 2011.

2) A tender is in progress to hire a portable crushing fleet to increase production at Amesmessa for the coming 12 months.

3) A planned refurbishment of the existing primary and secondary crusher once the new units are installed.

Exploration

During 2010, the Company's exploration activities could be broken down into two complementary strategies. Initially the first phase of drilling that commenced in June 2010 was targeting near term ore for the mine for 2011 and 2012. The areas targeted were known veins and existing mining areas that in the past had produced ore for the heap leach. This phase however did not produce the results expected.

The second phase of drilling then focused on the geochemical anomalies that had been identified. Following initial results, the conclusion drawn is that a number of the anomalies demonstrated a wide mineralized zone running north-south along the shear zone but with uneconomic grades of gold - a technical success but to date no economically viable results.

Subsequent drilling activities have now been split with the primary focus on further drilling of the known veins with the most promising prospects. This included drilling in existing mining areas and in the mining pit, in order to update the existing geological model and confirm high grade locations for ore in 2010 and 2011. Vein 7 has produced some very encouraging results and remains to date a highly prospective area for near term ore.

Based on the results to date of the drilled geochemical anomalies the Board has decided to be more selective and to put a limited amount of drilling 'fence lines' across as many of these anomalies as possible in order to test them. In the past each anomaly has been extensively drilled so only a few have been tested. Generally, however, each has demonstrated a wide mineralized zone running from north to south along the shear zone, but to date no significant economic mineral intercepts have been identified, a disappointing outcome.

Looking to 2011, the focus is now and will continue to be on near term ore, due to the drop in grade in 2010, and known veins or drill holes that produced encouraging results in 2010. The drilling of geochemistry anomalies will be a lower priority in 2011 and a review by an independent consulting geologist has commenced to test the validity of this geological hypothesis of drilling these geological anomalies against the results achieved to date. The independent review will highlight to the GMA Board whether the ongoing drilling of these anomalies versus results to date gives sufficient probability of discovering a large economic deposit or not.

Health Safety and Environment

The frequency rate of incidents decreased in 2010 from 2009, which is encouraging when compared with the number of new indigenous employees who joined ENOR in 2009. The improvement is attributed to a workforce that is becoming more experienced, coupled with supervisors who are more aware of the requirements to regularly communicate at pre-shift meetings potential hazards in the work place while allowing employees the opportunity to share any potential environmental and safety hazards they have identified during their shift.

Environmental protection continues to be a primary goal of ENOR and during 2010 no environmental incidents were reported.

Corporate Social Responsibility

The key contribution at Amesmessa to the local nomadic tribes has been access to free medical assistance and, where required, providing medical evacuations to the major city of Tamanrassett.

In addition a key factor in supporting the community is to ensure that the wells spread along the pipe line, from the borefield to Amesmessa covering 109 km, are functioning properly and the nomadic tribes have access to a sufficient supply of water for their livestock at regular intervals along the route in this harsh Sub Saharan environment.

Financial Results

The Company reported a loss attributable to the GMA shareholders of £2,156,000 or 0.44p per share for 2010. This compares with a loss of £5,221,000 or 1.27p per share in 2009. The main factor driving the 2010 loss was the lower than expected grade of ore mined through the year resulting in a shortfall in budgeted production.

Going Concern

The Group incurred a loss for the year of £7,760,000 and its current liabilities exceeded its current assets at the year-end by £958,000.

Due to the low production this year and the many legacy issues and obligations that the Company's subsidiary, ENOR spa ("ENOR") must honour, management have taken a pro-active approach in initiating negotiations with ENOR's primary lending institutions and tax authorities with the aim of rescheduling the majority of ENOR's medium to long term debt and tax obligations . The objective is to alleviate some cash flow pressures at ENOR which will allow it to utilise any excess cash in improving current production levels and continue its aggressive exploration plan. Currently, ENOR has successfully renegotiated over £4,067,039 in overdraft facilities, converting and consolidating them into a three year loan with a one year grace period. All remaining and outstanding principal repayments on loans with other lending institutions are not due until September 2011. The Board is confident that ongoing negotiations with these lending institutions with regards to ENOR's remaining obligations will prove successful, however negotiations remain at an early stage. In light of the ongoing losses at ENOR, the Board of GMA has made impairment provisions totalling approximately £15 million against the carrying value of the long term debtor due from ENOR as set out on page 32 and in note 4 to the parent Company balance sheet.

The parent Company currently has sufficient cash to continue until October 2011, with an estimated cash burn of approximately £70,000 per month. The Board have initiated discussions with its larger shareholders for a further cash injection however negotiations are still at an early stage and much depends on the remaining drill results and whether an improvement in overall production levels can be achieved. The Board is also seeking to diversify its asset base by considering other opportunities.

The Board is confident that the necessary steps have been taken with the aim of rectifying and improving current low production levels at ENOR and that Amesmessa remains an exploration opportunity, and the Board continues to consider it appropriate to prepare the accounts under the going concern presumption. However, it acknowledges that at the time of approval of these financial statements, there remains a material uncertainty on the Company's and Group's ability to continue as a going concern.

The material uncertainty relates to the ability of the Group to identify further economically viable deposits and raise adequate funding necessary to be able to exploit the reserves once identified while servicing current debt obligations as they fall due.

The Challenge for Amesmessa

The challenge for ENOR and the Amesmessa Mine is to focus on increasing production through the use of third party contractors and the identification of higher grade ore containing zones. The supply chain for spare parts continues to pose a problem for ENOR, however by subcontracting a portion of the load and haul and crushing part of the business, this should alleviate some of the pressure by relying on experienced contractors to perform these functions. ENOR is also working very closely with its current suppliers to improve current lead times and levels of service. GMA has worked extremely hard through 2010 in strengthening relationships with ENOR's management team and the Company's joint venture partners, in order to streamline and focus on the key drivers required to operate the mine and improve the overall economics of the operation. The new management structure will assist this and, having the right reporting relationships in place, should improve the quality and effectiveness of decision making going forward.

Objectives for 2011

·; Exploration drilling will focus on confirming the existence of gold ore in known veins and will primarily focus on areas identified as encouraging from drill results in 2010.

·; Mobilise the four hire excavators and four hire trucks to increase stripping and ore mining capacity.

·; Mobilise a mobile crusher to increase near term crushing capacity whilst waiting for the new primary and secondary crusher to be installed.

·; Refurbish the old primary and secondary crushers.

·; With increased production build a third heap leach pad towards the end of 2011.

Kenneth Crichton

Chief Executive Officer

ENQUIRIES:

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 DEMCEMBER 2010

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2010

1. BASIS OF PREPARATION

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2010 or 2009, but is derived from those accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 will be delivered following the Company's Annual General Meeting. The Auditors have reported on the 2010 accounts; their report was modified by an emphasis of matter in respect of going concern, the circumstances of which are described below. 

The Group's consolidated financial statements are for the year ended 31 December 2010. They have been prepared in accordance with the accounting policies set out in the Report and Accounts.

The Group prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU).

The consolidated financial statements have been prepared under the historical cost basis. They are presented in UK Sterling and are rounded to the nearest thousand (£'000) except where otherwise noted.

Going concern

The Group incurred a loss for the year of £7,760,000 and its current liabilities exceeded its current assets at the year-end by £958,000.

Due to the low production this year and the many legacy issues and obligations that the Company's subsidiary, ENOR spa ("ENOR") must honour, management have taken a pro-active approach in initiating negotiations with ENOR's primary lending institutions and tax authorities with the aim of rescheduling the majority of ENOR's medium to long term debt and tax obligations . The objective is to alleviate some cash flow pressures at ENOR which will allow it to utilise any excess cash in improving current production levels and continue its aggressive exploration plan. Currently, ENOR has successfully renegotiated over £4,067,039 in overdraft facilities, converting and consolidating them into a three year loan with a one year grace period. All remaining and outstanding principal repayments on loans with other lending institutions are not due until September 2011. The Board is confident that ongoing negotiations with these lending institutions with regards to ENOR's remaining obligations will prove successful, however negotiations remain at an early stage. In the light of the ongoing losses at ENOR, the Board of GMA has made impairment provisions totalling approximately £15 million against the carrying value of the long term debtor due from ENOR as set out on page 32 of the Report and Accounts and in note 4 to the parent Company balance sheet.

The parent Company currently has sufficient cash to continue until October 2011, with an estimated cash burn of approximately £70,000 per month. The Board have initiated discussions with its larger shareholders for a further cash injection however negotiations are still at an early stage and much depends on the remaining drill results and whether an improvement in overall production levels can be achieved. The Board is also seeking to diversify its asset base by considering other opportunities.

The Board is confident that the necessary steps have been taken with the aim of rectifying and improving current low production levels at ENOR and that Amesmessa remains an exploration opportunity, and the Board continues to consider it appropriate to prepare the accounts under the going concern presumption. However, it acknowledges that at the time of approval of these financial statements, there remains a material uncertainty on the Company's and Group's ability to continue as a going concern.

The material uncertainty relates to the ability of the Group to identify further economically viable deposits and raise adequate funding necessary to be able to exploit the reserves once identified while servicing current debt obligations as they fall due.

2. LOSS BEFORE INCOME TAX

Loss before income tax is stated after charging / (crediting):

3. FINANCE COSTS

4. INCOME TAX EXPENSE

There is no tax charge in the year due to losses incurred by the Group, which are not currently being recognised as a deferred tax asset due to uncertainty over the recoverability of such losses in the foreseeable future.

The main trading subsidiary ENOR spa, based in Algeria is exempt from local corporation tax until 1 July 2011 and so any profits or losses are non-taxable.

5. LOSS PER SHARE

The diluted loss per share does not differ from the basic loss per share as neither the exercise of share options, nor the conversion of the loan stock, would have the effect of reducing the loss per share and are therefore not dilutive under the terms of IAS 33.

6. NON-CONTROLLING INTERESTS / RELATED PARTY TRANSACTIONS

The non-controlling interest represents a holding of 48% of the shares in the subsidiary Company, ENOR spa, by "Sonatrach", the Algerian State owned Oil and Gas Company. The Company has adopted the revised IAS 27 early and has recognised separately the share of losses incurred by the non-controlling shareholders as at 31 December 2010. In the prior year, the loan from the non-controlling shareholder was reclassified as a separate component of equity as, in the opinion of the Directors, there is no obligation for the Group to repay the balance in the foreseeable future.

An accrual of £260,000 has been recorded by the Company for the benefit of Sahara in consideration for services provided by K Crichton and O El-Alfy.

Other than the balances disclosed elsewhere in these financial statements, there were no significant related party transactions during the year. Movements on the balance with non-controlling shareholders are given below:

7. EVENTS AFTER THE BALANCE SHEET DATE

On 21 January 2011, the Company raised £325,000 by way of subscription for 26,000,000 ordinary shares in the capital of the Company and a further £295,000 on 21 April 2011 for 23,600,000 ordinary shares in the capital of the Company. Furthermore, on 24 May 2011, the Company received an exercise notice in respect of £250,000 nominal of 10 per cent. unsecured convertible loan stock 2012. Accordingly the Company issued 5,000,000 ordinary shares in the capital of the Company.

8. DIVIENDS

The Directors do not recommend the payment of a dividend.

9. AVAILABILITY OF REPORT AND ACCOUNTS

Hard copies of the accounts have been posted to shareholders and are available from the Company's registered office, One America Square, Crosswall, London EC3N 2SG, and are available to download from the Company's website www.gmaresources.co.uk.