Operations and Exploration Update

24 July 2012

Mwana Africa PLC

("Mwana", the "Group" or the "Company")

26% quarterly increase in Freda Rebecca gold production

Mwana Africa PLC is pleased to provide an update on operations and exploration activity for the quarter ending 30 June 2012.

Highlights

Freda Rebecca Gold Mine

·; 17,985 ozs of gold produced by Freda Rebecca, representing an increase of 26% over the previous quarter and an increase of 119% over the same quarter in 2011.

·; Freda Rebecca recoveries rose to 82% for the quarter (previous quarter - 72%).

·; Freda Rebecca's cash operating costs have dropped to US$784/oz (previous quarter - $952/oz).

Exploration and Development Projects

·; Zani Kodo: Drilling has continued at the Kodo, Gombiri and Lelumodi target areas, diamond drill results received from Kodo continue to show encouraging gold mineralisation, results include: 24m @ 10.08g/t Au and 8.8m @ 3.17g/t.

·; SEMHKAT: Exploration work remains concentrated on the generation of drilling targets for the financial year ending March 2013

Kalaa Mpinga, CEO of Mwana, commented:

"These second quarter results demonstrate the production levels that can be achieved at our Freda Rebecca Gold Mine and we continue to strive for volume and efficiency improvements at the mine. In addition, management focus has been on the recapitalisation and restructuring of Bindura Nickel Corporation and I look forward to providing an update on this process in the near future."

For further information please visit www.mwanaafrica.com or contact:

Mwana Africa PLC Tel: +44 (0)20 7654 5580

Donald McAlister / Lorenz Werndle

Nominated Adviser and Broker

Liberum Capital Limited Tel: +44 (0)20 3100 2000

Michael Rawlinson / Tom Fyson / Christopher Kololian

Public & Investor Relations

Tavistock Communications Tel: +44 (0)20 7920 3150

Ed Portman / Simon Hudson / Mike Bartlett

Charl du Plessis, Executive Vice President Exploration of Mwana Africa, who holds a PhD and is a Member of the AusIMM, and, James Arthur, Executive Vice President Operations of Mwana Africa, Fellow of the Southern African Institute of Mining and Metallurgy, are 'Qualified Persons' as defined in the AIM Rules. The exploration and resource information contained in this report pertaining to Zani Kodo and SEMHKAT have been reviewed and verified by Dr Du Plessis, and, the resource information contained in this report pertaining to Trojan mine, Shangani mine, Hunters Road and Freda Rebecca Gold Mine have been reviewed and verified by Mr. Arthur.

Freda Rebecca Gold Mine

A total of 17,985 ozs (ounces) of gold was produced during the quarter ending 30 June 2012, representing a 26% increase in gold production over the previous quarter and 119% increase over the comparable period last year. Average monthly production for the quarter was 5,995 ozs. The current rate of production represents an annualised run rate of 71,940 ozs per annum. During the twelve month period following the commissioning of the second milling circuit a total of 57,524 ozs has been produced.

Table 1: Summary of Freda Rebecca Quarterly Production Results

Note: figures shown are unaudited and may vary upon final audit. Gold ounces produced incorporate gold released from or caught in 'lock-up' for each period.

Increased mill throughput together with an improved head grade and improved recoveries resulted in a 26% increase in gold production for the quarter and a reduction in cost of production per ounce to $784/oz.

Good progress was achieved during the quarter on improving plant recoveries. Process modifications were made to the leach circuit which have resulted in improved leach kinetics. This, together with improved supervision at the processing plant and process control has contributed to the enhanced average recovery for the quarter of 82%.The availability of ore from three underground mining blocks has allowed a programme of blending and grade optimisation to be implemented which has resulted in an increase in head grade feed to the processing plant.

Mill throughput showed a slight increase for the quarter despite being adversely affected by downtime on the primary crushing circuit in April and downtime on Mill 2 associated with repairs to mill shell liners and grate during May and June. A full reline of Mill 2 was successfully completed over the June month end period and improved mill availabilities are expected as a result.

Tonnage mined from underground fell during the quarter as a result of lower Load-Haul-Dump (LHD) and dump truck availabilities. Mill feed was supplemented from surface stockpile material. As part of the mine's re-capitalisation programme delivery of two new LHDs is expected during the next quarter, this will contribute to de-risking of underground operations and feed to the mills.

In June, Mwana announced that Freda Rebecca received ISO 14001 and OHAS 18001 certification, the internationally recognised standards for sustainable environmental management and occupational health & safety management systems.

Further information about Freda Rebecca Gold Mine can be found at:

www.mwanaafrica.com/operations-and-exploration/zimbabwe/freda-rebecca-gold-mine 

Zani-Kodo JV

During the quarter to 30 June 2012, drilling has continued with three diamond core drill rigs at three target areas:

§ Kodo downdip extension

§ Gombiri

§ Lelumodi

The position of the target areas is shown in Figure 1

Kodo

Drilling continues to target the downdip extension of the Kodo mineralised zone. During the quarter a total of seven diamond holes (for 2,906m) were drilled. Drilling has continued to intersect excellent widths of visible sulphide mineralisation in both quartz veins/breccias and deformed Banded Iron Formations (BIFs).

Selected results received for the quarter are summarised in Table 2 below, with the location of results shown in Figure 2.

Table 2: Selected results received, Kodo area, April-June 2012.

The results indicate the following:

§ The exceptional results received in hole KDODD072 are situated in the hangingwall of a secondary thrust fault and appear to occur within a thickened BIF zone in a hangingwall antiform. Importantly, the mineralised zone has been upthrown by approximately 45m vertically (Figure 3).

§ Hole KDODD069 is interpreted to have intersected a secondary thrust fault resulting in the lack of intersection.

§ Hole KDODD076 was drilled in the southern portion of Kodo and the excellent intersection shows that a continuous, broad, high grade zone is present in this area. The presence of two zones in this hole is also interpreted to be the result of thrust duplication along a secondary splay.

§ A detailed reinterpretation of all Kodo data has been carried out. This has allowed clarification of the role of secondary thrust faulting in defining the mineralised zones. In particular thrust repetition can account for the presence of two zones in many holes. This model can also account for holes with narrow intersections (e.g. KDODD069).

Drilling at Kodo will continue to target extensions of these high grade zones and significantly extend the mineralised envelopes. The increased understanding of the role of secondary thrust splays in the overall geometry of the mineralised system at Kodo will also allow better definition of the structural framework of the deposit and a more robust definition of the ore zones.

Gombiri

This target area is situated immediately south of the Zani Central area (Figure 1). A cross section of the Gombiri area is shown in Figure 4. Drilling to date has concentrated on the most easterly holes. These have intersected a broad dolerite intrusion which has intruded the target BIF horizon. More westerly holes are currently in progress and show that the intrusion becomes narrower at shallower depths with the result that visible sulphide zones in sheared BIF are visible. Assay results are awaited.

Zani South - Lelumodi

This target area is located to the east of the southerly extension of the Zani-Kodo trend (Figure 1) and is interpreted to be associated with a series of hangingwall splays. A substantial NW-SE trending gold in soil anomaly is present in this area (Figure 1).

Drilling during the quarter focused on completing a full cross section of the area, with heel to toe diamond holes. This has been completed and a number of significant visibly mineralised zones have been identified.

A geological cross section is shown in Figure 5. This shows the metasedimentary sequence of footwall metagreywacke-metasiltsone and narrow BIF unit to be overlain by a series of mafic intrusions and metabasalt. A single narrow mineralised zone has been identified in the BIF unit. To the east, two major mineralised zones have been identified. These are different in style to those at Kodo and along the Zani-Kodo trend and consist of strongly silicified shear zones. The shear zones appear to be focused along zones of felsic metavolcanics and/or metasediments within the mafic dominated sequence. Visible sulphide zones of 14-22m are observed in core with assay results awaited.

The silicified shear zones correspond to the downdip extension of the Lelumodi surface artisanal workings. They are also situated just to the west of the most anomalous gold in soil values, which is consistent with the anomaly representing material which has been transported a short distance. This relationship between the mineralised zones and gold in soil anomaly indicates that the entire 3,500m strike length anomaly could have potential for significant mineralisation. The silicified shear zones are considered to have a tabular geometry and the broad widths intersected to date suggest that they will have considerable continuity both downdip and along strike.

Current drilling at Lelumodi is now on a 50m x 50m grid with a view to defining a resource in that area.

Further information about Zani Kodo can be found at:

www.mwanaafrica.com/operations-and-exploration/drc/zani-kodo-project

Bindura Nickel Corporation ("BNC")

BNC's assets remained on care and maintenance for the quarter ending 30 June 2012, successfully maintaining the integrity of the assets.

The Trojan Mine remains ready to restart subject to BNC securing the required funding, with all key process functions up to the tertiary crushers having been hot commissioned in the previous year. BNC is now focused on recapitalisation, resolving legacy creditors and finalising a retrenchment programme such that the Trojan restart can commence. On 7 June 2012, BNC announced, by way of an EGM notice to its shareholders, the commencement of a rights issue process which is expected to culminate at the end of July 2012. Proceeds of the rights issue will be used to fund the restart of the Trojan Nickel Mine. The conclusion of the rights issue is conditional, inter alia, on the satisfactory resolution of a staff retrenchment programme and legacy creditor issues. Notably, on 29 June 2012, BNC shareholders approved the various resolutions required to implement the recapitalisation and restructuring at BNC. Discussions with staff and creditors are ongoing.

Limited refurbishment work within the milling, flotation and thickening sections at the Trojan processing plant, together with some underground development and resource drilling, is being carried out. The current underground development is targeting priority areas in the re start plan. Resource drilling at Trojan is targeting the down dip extension of the high grade massive sulphide zone within the main orebody.

Further information about Bindura Nickel Corporation can be found at:

www.mwanaafrica.com/operations-and-exploration/zimbabwe/bindura-nickel-corp-bnc 

Katanga Base Metals Concessions (SEMHKAT)

Over the June 2012 quarter exploration work concentrated on Lunsano, as the major focus remains the generation of drilling targets for the financial year ending March 2013. The area covers part of PR754, PR757 and PR758 (Figure 6 & 7). Trenching and pitting continued to investigate the potential of silicified and ferruginous shale and Mine Series ridges hosting in-situ copper geochemical anomalies (see Tables 6 & 7). The casual labour complement was increased in April and May, which resulted in substantial trenching, pitting, sampling and analysis increases.

The Lunsano area is located 25km due south of Likasi and overlies the Roan Group of rocks with known potential for Cu-Co mineralisation. The Southern copper anomaly (6km by 1km), Northern copper anomaly (6km by 500m) and the Eastern copper anomaly (3km by 300m) all form part of the broader Lunsano geochemical anomaly (Figure 7).

Geological mapping in conjunction with trenching and pitting was carried out on the Northern, Southern and Eastern geochemical anomalies, with a focus on distinguishing the erosional regimes of the Lunsano terrain in order to delineate in-situ copper. Re-mapping of Mine Series Units to the SW of the Southern copper geochemical anomaly was completed.The geology of Lunsano as a whole and the Mine Series Units will be updated in the third quarter.

Pitting and trenching was carried out on the Kilundu Mine Series units and the argillaceous shale units on the SW and SE of the Southern copper geochemical anomaly (Figure 7). Combined totals of 3,583.9m of trenching and 121 pits were achieved over the period (Table 3). An increase in casual labour complement from 20 in May to 50 in June resulted in trenching and pitting increasing by 79% and 345% respectively compared to May figures.Trenching and pitting will continue into the third quarter.

Table 3. Lunsano trenching and pitting statistics.

A combined total of 3,895 pit and trench samples were collected over the April-June period. The sampling statistics for Lunsano are summarised in Table 4.

Table 4. Lunsano sampling statistics.

A total of 1,108 Kilundu trench field samples from the Mines Series were sent to ALS Chemex laboratory in June.

Trench and pit samples treated and analysed are summarised in Table 5. Sample preparation and analysis increased by 78% and 74% respectively in June compared to May figures. Combined totals of 3,969 and 4,174 trench and pit samples were prepared and analysed over this period.

Table 5. Field sample preparation and Niton analysis statistics.

Niton results on trench intercepts continue to be positive and encouraging (Tables 6 & 7). Table 6 summarises the results of trench intercepts for the eight trenches completed to the SE of the Southern copper geochemical anomaly. The high copper values in this area are associated with the silicified and ferruginous shale and brecciated shale units. The trenches cover an average strike and width length of 900m and 150m respectively yielding an average copper value of +100ppm over their entire trench length with the longest trench LUN7 giving 275m@130ppm Cu. The most notable is LUN3 giving [email protected] Cu. The trenched area occurs in an in-situ copper anomaly on silicified and ferruginous shale ridges. This is a potential drill target. The geology of this area will be updated on plan during the third quarter.

Table 6.Trench intercepts by Niton assaying (Silicified and ferruginous shale ridges).

The most notable trench intercepts in the Mines series Units are as shown in Table 7. The average copper content on trenches in the Mines Series ranges from 150 to 200ppm. On the Mines series high values of copper and cobalt are associated with the dolomitic shale which extends to the SW. TRMS5 gave a peak value of [email protected]%Cu.

Table 7. Niton analysis of trenches in Mines Series units.

Nineteen grab samples from Kibandawepala Hill artisanal pits were collected and analysed by Niton as shown in Table 8. All the pits occur in metadolerite and all samples collected contained trace malachite mineralisation. Sample S5 gave a peak value of 1.03% Cu. The Kibandawepala Niton trench results are being analysed.

Table 8. Niton analysis of grab samples from Kibandawepala artisanal pits.

ANGLO-SEMHKAT JV.

Field work commenced in April. Infill soil sampling was completed on the Kasolo, Komeshia, Kabransuki, Sase, Mlalaninga, Dilungu, Gunji, Katenge, Diseba, Kikunka, Kabibangao and Kimani. A total of 2459 samples were collected over the May-June period. Sample preperation and Niton assaying is on-going.

Detailed prospect mapping was completed for Kasolo, Gunji and partially completed for Mende target. Data interpretation and map compilation for Kasolo and Gunji is still to be finalised.

A reverse circulation ("RC") drilling rig, which was mobilised to Maina Camp in May, has commenced drilling. A second multi-purpose RC/DD rig was mobilised in June. From May 2012 to date, 340 RC holes totaling 10,235m were completed. All holes were drilled on 25m centres and to an average depth of 30m.

The Katenge target combines a soil geochem anomaly with coinciding SPECTREM EM, as well as a vegetation anomaly (possible Cu clearing, Fig 8). At least one of the holes intersected visible Cu mineralisation in form of malachite in carbonaceous and partially pyritic shale on the base of the Grand Conglomerat. NITON analysis of the holes is pending.

Encouraging results were obtained from the Gunji area with up to 0.60% Cu and 0.18% Ni intersected in the shallow RC holes (Figure 8). The intersections occur along strike of a strong soil geochem and vegetation anomaly (copper clearing), which is however located just outside the project area. All holes with high Cu grades exhibited increasing Cu concentrations with increasing depth.

Positive results from infill soil sampling and shallow RC drilling over this quarter has prompted the establishment of further drill access tracks (8.2km completed) at the Katenge, Kikunka and Kabibangao targets.

Further information about the Katanga Concessions can be found at:

www.mwanaafrica.com/operations-and-exploration/drc/katanga-concessions  

For associated maps (figures 1, 2, 3, 4, 5, 6, 7 & 8), please click on, or paste the following link in to your web browser, to view the PDF file:

http://www.rns-pdf.londonstockexchange.com/rns/3120I_-2012-7-23.pdf