Operational and Funding Update

17 December 2012

African Minerals Limited ("AML" or the "Company")

Operational and Funding Update

African Minerals Limited today provides an update on various project matters as the Company continues to ramp up production at the Tonkolili iron ore mine in Sierra Leone.

·; Three ocean going vessels have been loaded and dispatched so far in December, and year-to-date export tonnage is now 4.1Mt with ship loading continuing.

·; While mine production and processing have exceeded 5Mt in FY 2012, shipped production for the full year is likely to fall below previous guidance due to the impact of the extended wet season.

·; Production ramp up continuing satisfactorily, remaining on track to deliver a sustainable production rate of 20Mtpa during Q2 2013.

·; Total tonnes processed at Tonkolili in November achieved an average rate of 9.4Mtpa (October: 5.5Mtpa), with a more recent sustained rate of 11.1Mtpa and a peak production rate achieved so far of 15.2Mtpa.

·; As previously announced, the Company is in advanced discussions to convert the existing $100m Standby Facility ($80m drawn) from Standard Bank to a $150m revolving credit facility; and

·; With the support and approval of the project company Boards, the project companies are in advanced discussions to establish a new facility of up to $250m to provide additional financial headroom during the ramp up period.

OPERATIONAL UPDATE

Year to date, the Company has produced 5.1Mt of saleable product, with current stockpiles of 1.3Mt. However, due to the impact of the extended wet season, it is now likely that shipped production for the full year will fall below previous guidance. Three ocean going vessels have been loaded so far this month, and year to date exports now stand at 4.1Mt, with ship loading continuing.

The new Wet Processing Plant ("WPP") at Tonkolili continues to ramp up, with no major issues identified to date. The process facilities at Tonkolili are continuing to build up towards a sustainable combined production rate of 20 Mtpa during Q2 2013 as previously announced.

The process facilities at the mine have achieved a daily peak production of 41,624t, equivalent to a production run rate of 15.2Mtpa. In October, the mine processed material at an average rate of 5.5Mtpa, in November this increased to 9.4Mtpa, and more recently a sustained rate of 11.1Mtpa was achieved over a 15 day period.

FUNDING UPDATE

Further to the announcement of 21 November 2012, the Company is pleased to report that it is in advanced discussions with Standard Bank to convert the existing $100m Standby Facility ($80m drawn) to a $150m revolving credit facility.

Additionally, the Group, with the support and approval of the project Boards, is in advanced discussions to secure an additional working capital facility of up to $250m to provide additional financial headroom during the ramp up period.

Both of these facilities are expected to be completed in early Q1 2013.

CEO, Keith Calder, commented:

"I remain pleased with the progress we have achieved to date at our integrated mine, rail and port project in Sierra Leone. Our processing plants continue to ramp up well, with no major issues identified to date, and, whilst disappointed we will not achieve exports of 5Mt in 2012 due to the impact of the extended wet season, I am confident of achieving our targeted production rate of 20Mtpa during Q2 2013.

"The decision of the project Boards to seek to secure additional funding of up to $250m will provide the Group with a comfortable level of financial headroom to manage the ramp up to our targeted 20mtpa production rate whilst maintaining $500m earmarked for the next phase of the Group's expansion which we plan to commence in 2013."

Contacts:

African Minerals Limited

+44 20 3435 7600

Mike Jones

FTI Consulting

+44 20 7831 3113

Billy Clegg / Ben Brewerton

Deutsche Bank

+44 207 545 8000

Brent Nabbs

African Minerals is developing its Tonkolili iron ore project in Sierra Leone, with a JORC compliant resource of 12.8Bnt. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I is expected to produce 20 million tonnes of iron ore per annum at full capacity.

Phase II now contemplates an expanded production facility at the mine to produce an additional 30Mtpa of 64% high grade hematite concentrate and the establishment of an expanded port facility at Tagrin Point.

African Minerals and its contractors currently employ approximately 11,000 people in Sierra Leone, 83% of who are Sierra Leonean nationals.

The Company has also developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone ("GoSL") has a 10% free carried interest.

The Tonkolili project companies are currently owned 75% by AML, and 25% by Shandong Iron and Steel Group ("SISG"), except for ARPS, which is currently owned 75% by AML and 25% by SISG, with the GoSL having a 10% free carried interest.

www.african-minerals.com