Heads of Agreement for an AmmLeach Licence

23 February 2015

Alexander Mining plc

("Alexander" or the "Company")

Agreement signed for an AmmLeach® Licence for Browns Project, Northern Territory, Australia

· Heads of Agreement signed with Compass Resources Limited ("Compass") for an AmmLeach® licence and certain technical and management services.

· Feasibility study planned for use of AmmLeach® at Compass' treatment plant in Australia for copper, cobalt and nickel production.

· Alexander expects to form a strategic alliance in Australia with Compass to investigate further outstanding copper opportunities.

The Company is delighted to announce that it has signed a non-binding Heads of Agreement ("HoA") with Compass, a listed Australian public company (ASX:CMR), for executing a definitive agreement ("Agreement") covering an AmmLeach® licence and certain technical management services for Compass in the Northern Territory, Australia. These arrangements should significantly accelerate the first commercial adoption of Alexander's proprietary AmmLeach® technology.

Background on Compass

(website: www.compass-resources-limited.com )

Compass currently is a party to three commercial joint ventures in the area north of Batchelor, approximately 100km from Darwin, the capital of the Northern Territory, Australia. The joint ventures are all with HNC (Australia) Resources Pty Limited ("HAR"). HNC (Australia) Exploration and Mining Pty Limited (wholly owned by HAR) is the Joint Venture Operator for all three joint ventures ("JVs"). The JVs are the Oxide JV, the Sulphide JV and the Regional Exploration JV.

The Browns project includes a fully constructed 1.3 million tonnes per annum design capacity oxide ore treatment plant ("Plant") and associated infrastructure. The Plant was originally designed to produce 10,000t copper, 1,000t of contained cobalt and 700t contained nickel per annum.

The Plant operated for four months, starting in September 2008, before shutting down due to mineral processing problems. Since then the mine site and Plant have been subject to a care and maintenance regime.

Martin Rosser, Chief Executive Officer, said:

"We greatly look forward to working closely together with Compass under this transformative agreement. Based on the completion of a positive AmmLeach® feasibility study and production go-ahead, the Project would complement our AmmLeach® technology with existing high quality mining assets.

The plan is to generate significant economic value from the Project area. Australia is one of the world's leading mining countries and together with Alexander's metallurgical team based in Perth, Western Australia, it provides an exemplary project to work on together with Compass Resources.

In addition, Compass and Alexander believe that market conditions are the most favourable for several years for growth by attractively priced corporate acquisitions. Accordingly, both companies expect to form a strategic alliance in Australia to investigate the acquisition by Compass of copper resources which can be exploited using the Leaching Technologies. This will be on terms to be agreed in respect of each such project."

The first step is the completion of an AmmLeach® feasibility study, with a pilot plant programme, funded by Compass. This pilot plant programme would be carried out at the independent commercial facilities of Simulus Engineers, Perth, Western Australia, under the supervision of Alexander's technical personnel. This would lead to the completion of a feasibility study into commercial production and is dependent upon statutory approval and obtaining all necessary permits required to recommence production.

Compass is currently working to complete a financing facility with sophisticated institutional investors as a first step in a proposed major refinancing and relisting of the company. The proceeds of the financing will be used for various purposes, including payments due under the Agreement to Alexander and for the third party AmmLeach® pilot plant and feasibility study costs.

Compass and Alexander are currently working to finalise the definitive Agreement, which will be conditional on completion of Compass' proposed financing ("Condition"). The key commercial terms agreed in the HoA are summarised below.

AmmLeach® Licence

On satisfaction of the Condition, the Company will grant to Compass a non-transferable licence to use Alexander's leaching technologies (AmmLeach®) for the sole purpose of extracting base metals or value added metal containing products from ore mined at or sourced from Compass properties. The licence will be granted on the following terms:

I. Cash payment by Compass of A$825,000 to Alexander on commencement of the Agreement; and

II. A royalty of 2.6077% on saleable metal production after capped third party royalties.

Consultancy Services

Alexander will provide technical project management services ('Consultancy Services') to Compass as follows.

I. During the AmmLeach® pilot plant and feasibility study period

Alexander will provide Consultancy Services to Compass during the period through to completion of the feasibility study and a construction go-ahead decision point, whereby;

Compass will pay to Alexander:

· an initial fee of A$275,000 on commencement of the Agreement;

· A$400,000 three months after the initial fee payment; and

· A$425,000 upon delivery of the feasibility study.

II. During construction and commissioning stage

There will be two A$275,000 payments made to Alexander, as follows:

· A$275,000 three months after delivery of the feasibility study; and

· A$275,000 on plant commissioning in accordance with the technical specifications set out in the Feasibility Study.

Granting of Alexander Share Options

Conditional upon the Agreement being executed, satisfaction of the Condition and subject to Alexander shareholders' approval at the 2015 AGM, the Company will grant to Compass the following share options:

I. options over 5 million ordinary shares of 0.1p each at an exercise price of 7.5p per share for 18 months from issue; and

II. options over 5 million ordinary shares of 0.1p each at an exercise price of 10.0p per share for 24 months from issue.

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