Open Offer & posting of a circular

2 September 2015

Mwana Africa plc

("Mwana" or the "Company")

Open Offer & posting of a circular to Shareholders

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS NOT A PROSPECTUS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN MWANA OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES.

ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE CIRCULAR TO BE PUBLISHED BY THE COMPANY AND ANY SUPPLEMENT THERETO IN CONNECTION WITH ADMISSION.

Mwana Africa plc announces the publication today of a circular to Shareholders regarding a capital raising to raise gross proceeds of approximately £3.67 million before costs by way of an Open Offer (the "Circular").

Introduction

The Company announces that it proposes to raise up to approximately £3.67 million (approximately £3.47 million net of expenses) through the issue of up to 367,643,523 Open Offer Shares through the Open Offer at the Issue Price. The Board recognises and is grateful for the continued support it has received from Shareholders and is therefore pleased to give Qualifying Shareholders the opportunity to participate in the Open Offer.

The Open Offer provides Qualifying Shareholders with the opportunity to subscribe for Open Offer Shares at the Issue Price pro rata to their holdings of Existing Ordinary Shares as at the Record Date. The Open Offer is being made in accordance with the statutory pre-emption provisions contained in sections 561 and 562 of the Act. Qualifying Shareholders may subscribe for Open Offer Shares on the basis of:

1 Open Offer Share for every 3.802 Ordinary Shares held on the Record Date.

Shareholders subscribing for their full Open Offer Entitlement under the Open Offer may also apply for Excess Shares through the Excess Application Facility subject to the terms and conditions set out in the Circular. Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise gross proceeds of up to approximately £3.67 million for the Company. Fractions of Open Offer Shares will not be allotted and, where necessary, each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number.

The ability of Overseas Shareholders to accept the Open Offer is restricted in certain jurisdictions. Pursuant to section 562 of the Act, the Open Offer to Qualifying Shareholders who have no registered address within a member state of the European Economic Area and who have not supplied the Company with an address within a member state of the European Economic Area for the service of notices will be made by the Company publishing a notice in the London Gazette on 3 September 2015 stating where copies of the Circular and the Application Form may be inspected or obtained on personal application by or on behalf of Qualifying Shareholders.

The Open Offer Shares to be issued pursuant to the Open Offer are to be admitted to trading on AIM and Admission is expected to become effective and trading expected to commence at 8.00 a.m. on 30 September 2015.

The Issue Price represents a discount of approximately 13 per cent. to the closing mid-market price of 1.15 pence per Existing Ordinary Share on 1 September 2015 (being the latest practicable date prior to the posting of the Circular). The Open Offer is not being underwritten and, accordingly the maximum proceeds under the Open Offer will be approximately £3.47 million (after expenses).

Reasons for the Open Offer

The net proceeds of the Open Offer (after commission and expenses) will be used principally for the further development of the Klipspringer diamond mine in the Republic of South Africa (with the objective of re-commencing underground production), corporate restructuring and re-organisation costs (including satisfying non-recurring exceptional items arising from the June 2015 directorate changes), and for general working capital purposes.

Irrevocable Commitments to participate in the Open Offer

The Company has received irrevocable commitments from the following Shareholders that they will take up their Open Offer Entitlements in full as detailed in the table below.

1 Assuming full take up by each Related Party of its Open Offer Entitlement but excluding any Excess Shares that may be applied for.

2 Assuming that the shareholdings of each Related Party is not scaled back to avoid triggering an obligation under Rule 9 of the City Code. See the Circular for further details.

In addition CIMGC, Yat Hoi Ning and Yuan Ching Hu have each confirmed that they intend to apply for Excess Shares pursuant to the Excess Application Facility (subject to scaling back to ensure a maximum holding of no more than 29.9 per cent. of the Enlarged Share Capital, as described in the Circular).

The Directors believe that the above commitments to participate in the Open Offer demonstrate strong support for the Company's development of its projects as set out in the Circular.

Related Party Transaction

The possible subscription for Excess Shares by the Related Parties could constitute, in each case, a possible related party transaction under the AIM Rules.

CIMGC is a related party by virtue of being a substantial shareholder in the Company holding 218,000,000 Existing Ordinary Shares representing 15.60 per cent. of the issued share capital of the Company as at the date of this announcement. Yat Hoi Ning and Yuan Ching Hu are both substantial shareholders and directors of CIMGC.

Separately, both Yat Hoi Ning and Yuan Ching Hu are also Directors of the Company.

The expected shareholdings of the Related Parties as at the date of this announcement and following the Open Offer are as follows:

1 Assuming full take up by each Related Party of its Open Offer Entitlement but excluding any Excess Shares that may be applied for.

2 Assuming that the shareholdings of each Related Party is not scaled back to avoid triggering an obligation under Rule 9 of the City Code. See the Circular for further details.

Other than Yat Hoi Ning and Yuan Ching Hu, none of the other Directors hold Ordinary Shares.

The Independent Directors consider, having consulted with Grant Thornton, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Shareholders are concerned.

Other information relating to the Open Offer

The Open Offer is conditional upon the Open Offer Agreement becoming or being declared unconditional in all respects and not having been terminated prior to Admission and Admission of the Open Offer Shares becoming effective by not later than 8.00 a.m. on 30 September 2015 or such later time and/or date (being no later than 8.00 a.m. on 31 October 2015) as the Company and Cantor Fitzgerald Europe may agree.

Accordingly, if any of these conditions are not satisfied, or, if applicable, waived, then the Open Offer will not proceed.

The Open Offer will result in the issue of in total 367,643,523 Open Offer Shares, assuming full take up under the Open Offer (representing, in aggregate, approximately 20.8 per cent. of the Enlarged Share Capital assuming full take up under the Open Offer). The Open Offer Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the Open Offer Shares. No temporary documents of title will be issued.

Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience dilution to their interests in the Company, dependent on the number of Open Offer Shares taken up by Qualifying Shareholders.

Expected Timetable of Principal Events

Notes

1. If you have any queries on the procedures for application under the Open Offer, you should contact the Receiving Agent, Computershare Investor Services (Ireland) Limited, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Republic of Ireland or telephone Computershare Investor Services (Ireland) Limited on +44 (0)370 707 1432. Calls to this number are charged at your service provider's standard rate. Calls from overseas or via mobile phones will cost considerably more. Lines are open from 8.00 a.m. to 4.30 p.m. Monday to Friday. The Computershare helpline cannot provide advice on the merits of the Open Offer nor give any financial, legal or tax advice.

2. The above timetable is subject to change and the Company reserves the right to vary the timetable. If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

3. Unless otherwise specified, all times are London times.

Open Offer Statistics

Additional information and availability of the Circular

Your attention is drawn to the entirety of the information set out in the Circular. The Circular will be available for a period of at least 12 months from today on the Company's website www.mwanaafrica.com free of charge in accordance with the requirements of Rule 26 of the AIM Rules.

Capitalised terms used but not otherwise defined in this announcement bear the meanings ascribed to them in the Circular.

For further information contact:

Mwana Africa plc

Yim Kwan, Finance Director

Amilha Young, Group General Counsel and Company Secretary

Tel: + 44 (0) 20 3696 5470 

Nominated Adviser

Grant Thornton UK LLP

30 Finsbury Square, London EC2P 2YU

Colin Aaronson/Richard Tonthat/Harrison Clarke

Tel: +44 (0) 20 7383 5100

Financial Adviser and Corporate Broker

Cantor Fitzgerald Europe

1 Churchill Place, Canary Wharf, London E14 5RB

Stewart Dickson/Jeremy Stephenson/Patrick Pittaway

Tel: +44 (0) 20 7894 7000

Public and Investor Relations

Russell and Associates

Jim Jones / Leigh King

Tel: +27 (0) 11 880 3924

About Mwana Africa plc

Mwana is a pan-African, multi-commodity mining and development company. Mwana's principal operations and exploration activities cover gold, nickel, copper and diamonds in Zimbabwe, the Democratic Republic of Congo and South Africa.

Cautionary Notice 

The news release may contain certain statements and expressions of belief, expectation or opinion which are forward-looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.

Cantor Fitzgerald Europe, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Open Offer and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Open Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Open Offer or any other matter referred to herein. Its responsibilities as the Company's broker under the AIM Rules are owed to the London Stock Exchange and the Company and not to any other person in respect of his decision to acquire Open Offer Shares in reliance on any part of this announcement. Cantor Fitzgerald Europe has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Cantor Fitzgerald Europe nor does it make any representation or warranty, express or implied, as to the accuracy of, any information or opinion contained in this announcement or for the omission of any information. Cantor Fitzgerald Europe expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement.

Grant Thornton, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Open Offer and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Open Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Open Offer or any other matter referred to herein. Its responsibilities as the Company's nominated adviser under the AIM Rules are owed to the London Stock Exchange and the Company and not to any other person in respect of his decision to acquire Open Offer Shares in reliance on any part of this announcement. Grant Thornton has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Grant Thornton nor does it make any representation or warranty, express or implied, as to the accuracy of, any information or opinion contained in this announcement or for the omission of any information. Grant Thornton expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement.

No person has been authorised to give any information or make any representation relating to the Open Offer and, if given or made, such information or representation must not be relied upon as having been so authorised by the Company, the Directors or Cantor Fitzgerald Europe. In particular, the content of the Company's website does not form part of this announcement and Shareholders should not rely on it.