Offer for Moroccan Minerals Ltd

AURASIAN MINERALS MAKES OFFER TO ACQUIRE MOROCCAN MINERALS LTD

Jan 18, 2016

AURASIAN Minerals plc ("Aurasian" or the "Company") is pleased to announce that it has completed its due diligence and has posted an offer (the "Offer") to the shareholders ("MML Shareholders") of Moroccan Minerals Ltd ("MML") for the acquisition (the "Acquisition") of all of the outstanding shares of the Jersey-based private exploration company.

The directors of MML, who account for 48.5% of the issued share capital of MML, have agreed to vote in favour of the proposed acquisition and have recommended that the remaining MML Shareholders do likewise. The Offer is subject to certain conditions, in particular that MML Shareholders representing not less than 51% of the outstanding shares of MML accept the Offer, and it is open until 19 February 2016.

Terms of the Offer

In line with the terms of the heads of agreement announced on 1 December 2015, Aurasian has offered to acquire all of the outstanding shares in MML (the "MML Shares") on the following basis:

4.22 ordinary shares in the capital of Aurasian ("Aurasian Shares") for each MML share held

Aurasian will also procure that certain funding obligations relating to MML's exploration activities, as set out below, are met.

There are currently 19,200,647 MML Shares in issue and accordingly, if the Acquisition is completed, Aurasian would issue a maximum of 81,026,730 Aurasian Shares (equating to 19.4% of the current number of Aurasian Shares in issue). On completion MML Shareholders would hold 16.3% of the Aurasian Shares then in issue.

Based on the one month volume weighted average price of the Aurasian Shares at 20 November 2015 and an offer of 4.22 Aurasian Shares for each MML Share, each MML Share is valued at 1.48 pence. Aurasian Shares have been valued at 0.35 pence using a 30 day VWAP of the Aurasian Shares traded on the AIM Market between 21 October 2015 and 20 November 2015.

In addition, Aurasian will issue warrants to certain MML Shareholders in lieu of options over MML Shares that have been granted to them previously. Such warrants will grant these MML Shareholders the right to subscribe for in aggregate 1,899,000 Aurasian Shares. Of these warrants 844,000 will have a strike price of 0.7 pence per Aurasian Share and 1,055,000 will have a strike price of 0.58 pence per Aurasian Share.

Directors and Management

With the exception of Didier Fohlen and Fabian Baker, the directors of MML will resign and will be replaced by Peter Mullens who will be appointed by Aurasian. These appointments will take place as soon as practicable after completion of the Acquisition. As soon as practicable after completion of the Acquisition, and subject to ratification by Aurasian's nominated adviser and all other regulatory requirements, Didier Fohlen will be appointed to the board of Aurasian as a non-executive director. Fabian Baker will be appointed as chief operating officer, but will not be appointed to the board.

Background on MML

MML's existing assets comprise the right to earn an interest in a mineral exploration and operational licence in Serbia. Its wholly owned subsidiary, Moroccan Minerals Resources SA, is dormant and will be dissolved or liquidated or removed from the ownership of MML, as a condition of the Offer.

For further information on MML and the Chadine Project in Serbia please refer to the announcement dated 1 December 2015 and the Appendix to this announcement.

Agreed Funding Obligations

MML has certain funding obligations pursuant to a heads of agreement ("Heads") with Balkan Mineral Corporations d.o.o. ("BMC") and the directors of that company concerning the right for MML to earn an interest in a mineral exploration operational license in Serbia (the "Chadine Project"). Aurasian has agreed to ensure that MML will comply with its requirement to provide funding of a minimum of C$75,000 in connection with exploration work concerning the Chadine Project on or before 14 April 2016 in accordance with the Heads.

In the event that MML earns into the fullest extent envisaged in the relevant agreement, it will own 80% of the Chadine Project and will have issued 10% of its (or, if the Acquisition completes Aurasian's) share capital to BMC, its partner in the licence.

Peter Mullens, CEO of Aurasian, stated; "We are very excited by this transaction, with the Chadine Project having the potential, through successful exploration, to deliver an entire district of mineral deposits. The project is located along a 25 kilometre thrust fault with small scale untested zones of mineralisation occurring along it. This could be a game changer for Aurasian. The main zone of mineralisation at Chadine also remains untested down dip."

For further information please contact:

Aurasian Minerals Plc

Peter Mullens (CEO) [email protected]

finnCap Limited - Nominated adviser

Christopher Raggett / Scott Mathieson +44 (0)20 7220 0500

Appendix

Further terms of the earn-in agreement which MML has signed over the Chadine Project with local Serbian company Balkan Mining Corporation are set out below:

MML will fund all exploration costs to completion of a feasibility study to earn an 80% interest in the following stages:

· 20% by funding 1000m of diamond drilling plus surface mapping and sampling to a cost of C$75k before 1 June 2016. Aurasian has agreed to fund this drilling pursuant to the Offer and subject to the completion of the Acquisition;

· 51% by expenditure of a total aggregate of C$3M by 14 April 2019;

· 70% by expenditure of a total aggregate of C$8M by 14 April 2021; and

· 80% by completing a 43-101/JORC compliant feasibility study.

On completion of the feasibility study, BMC may elect one of the following:

· Fund 20% share of all development, construction and production costs to maintain 20% interest; or

· Dilute to a net smelter return of 2% capped at C$10M or purchasable pre-production for C$5M cash at MML's election.

MML will make the following cash and stock issues to BMC:

· C$20k cash on signing of the earn-in agreement;

· 5% of outstanding shares in MML (or Aurasian on completion of the Acquisition) on earning 20% of the project;

· Additional shares up to 10% of outstanding shares in MML (or Aurasian on completion of the Acquisition), capped at a total share value of C$1M, on definition of a CIM/JORC compliant indicated resource containing more than 5Mt at an ore value of $150/t (based on commodity price of Cu, Au, Zn, Pb, Ag only, less expected recovery and treatment charges); and

· Additional shares up to 10% of outstanding shares in MML (or Aurasian on completion of the Acquisition), capped at a total share value of C$2M, on completion of a Preliminary Economic Assessment resulting in an NPV in excess of $100M and an IRR in excess of 20%.

Note: The shares issued to BMC in order to achieve 10% of shares of MML (or Aurasian on completion of the Acquisition) are calculated inclusive of all shares previously issued to BMC. BMC will not be issued more than 10% of shares in MML (or Aurasian on completion of the Acquisition) in total.

ABOUT AURASIAN MINERALS

Aurasian Minerals PLC is an AIM listed junior exploration company exploring for copper and gold. Aurasian has an experienced board and technical team headed up by Chris Goss previously leader in project finance for emerging markets for the IFC, International Finance Corporation. The company is well funded in a difficult market with approximately GBP 1,000,000 in the bank.

For further information please contact Peter Mullens CEO of Aurasian Minerals.