Loan agreement update

31December 2010

Strategic Natural Resources PLC

("Strategic Natural Resources" or the "Company")

Loan agreement update

The Board of Strategic Natural Resources is pleased to announce that it has agreed a settlement in connection with the loan agreement dated 17 June 2009 (the "Loan Agreement") and entered into by the Company's 74% subsidiary, Elitheni Coal (Pty) Limited ("Elitheni") with Ulitorque (Pty) Limited, a company incorporated in South Africa ("Ulitorque").

Further details and the background to the Loan Agreement are contained in the announcement made by the Company on 20 December 2010.

Details of the settlement

Under the settlement agreement entered in to on 30 December 2010 Elitheni will pay the sum of ZAR15,000,000.00 (approximately £1,456,452 using a rate of £1.00 to ZAR10.299) to Ulitorque in full and final settlement of any and all claims which Ulitorque may have against Elitheni. The sum of ZAR4,867,201.00 (being approximately £472,590 at an exchange rate of £1.00 to ZAR10.299) was paid by Elitheni to Ulitorque on 16 March 2010 and the balance, namely ZAR10,132,799 (being approximately £983,862 at an exchange rate of £1.00 to ZAR10.299) is to be paid by Elitheni to Ulitorque on or before 14 January 2011.

The payment of the balance of the sums owing to Ulitorque will made from Strategic Natural Resources' existing cash resources (including the proceeds of the placing with Rapitrade 644 (Pty) Ltd, announced on 11 November 2010, which is scheduled to complete shortly).

David Nel, Chief Executive Office, commented: "I am pleased that we have been able to reach an agreement with Ulitorque so quickly and without any dilution to shareholders. The Board consider that the certainty achieved by settling this matter will be of benefit to the Company and its shareholders. When compared with the alternative that Ulitorque would otherwise have been entitled to 10% of the shares in Elitheni, which could then in turn be converted up into shares in Strategic Natural Resources thereby causing significant dilution to shareholders, we are of the view that this settlement represents the best solution. The Company remains well capitalised and has a clear pathway to production that remains unaffected by this settlement and the Board looks forward to updating shareholders on further progress shortly."

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For further information about Strategic Natural Resources please visit www.snrplc.co.uk