Operations and Exploration Update

27 January 2011

Mwana Africa PLC

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

Operations and Exploration Update

Mwana Africa PLC is pleased to provide an update on operations and exploration activity for the quarter ending 31 December 2011.

Highlights

·; Freda Rebecca gold mine: 11,573 ozs of gold produced during the quarter, taking production for the 6 months since commissioning of mill 2 to 25,259 ozs.

·; Zani Kodo gold exploration project: drilling results from Zani Central and Kodo Downdip Extension indicate excellent continuity of the broad mineralized zone both at depth and along strike

Kalaa Mpinga, CEO of Mwana, commented:

"Looking back on the last quarter, Freda Rebecca has experienced some short term processing issues with the mills; these are to be expected after the commissioning of the second mill and ramp up in production rates. The mine management is focusing on optimising and fine-tuning the production processes. 

We are delighted with the very promising results from the Zani Kodo gold exploration programme, continuing to confirm what we feel is the tremendous potential at this asset. An update on the Zani resource will be announced shortly."

Freda Rebecca Gold Mine

A total of 11,573 ounces ('ozs') of gold were produced during the quarter ending December 2011. Average monthly production for the quarter was 3,858 oz. During the six month period following the commissioning of the second milling circuit a total of 25,259 ozs have been produced.

 Note: figures shown are unaudited and may vary upon final audit

During the quarter underground rock moving operations performed to expectations. The reduction in grade was attributable to a short term variation associated with a low grade portion of ore exposed during the commissioning of a new mining block.

Mill throughput was adversely affected by two mechanical failures during the quarter. Mill1 experienced high non drive end bearing temperatures associated with alignment issues through the drive train. Mill 2 had a mechanical failure on the air clutch assembly. In addition mill throughput was further affected by down time of leach tanks within the circuit. Down time at the leaching circuit had an additional negative impact on residence time, resulting in low recoveries.

Repairs have been carried out on Mill 1 and 2, and, leach tank availability has improved due to improved operational control and focus on ensuring correct mill grind and improved operation of classification circuits.

Freda Rebecca continues to engage the government of Zimbabwe on the issue of indigenization and management remains optimistic that this will be resolved.

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

Zani Central

Drilling was completed at the Zani Central target, which covers 650m of the Zani-Kodo trend (Figure 1), in the previous quarter. Results for 13 holes were received in the December quarter and are shown in Table 1 with the location of intersections in Figure 2. The results indicate the continuity of a broad (12-37m) zone of low grade mineralization with narrow high grade portions locally. In the central portion of the target a near surface high grade zone is present with a best intersection of 17m @ 4.09g/t including 11m @ 6.17g/t in hole ZNCDD054. The zone dips to the east at around 50°and is continuous along strike with 650m identified to date. The zone remains open at depth and to the south.

A typical cross section is shown in Figure 3.

Table 1: Results received from Zani Central area, Dec 2011 quarter

*Measured widths not true widths

Drilling in 2012 will continue directly south of Zani Central at the Gombiri target (Figure 1).

Kodo Downdip Extension

Drilling was ongoing in this area to the east of the Kodo Main zone (Figure 1). Results for the first five holes were received during the quarter and indicate excellent continuity of the broad mineralized zone both at depth and along strike.

The results are summarized in Table 2 with the location of the intersections relative to previous drilling shown in Figure 4.

Table 2: Results received from Kodo Downdip Extension, Dec 2011 quarter

*Measured widths not true widths

Drilling is ongoing at Kodo and will initially target the downdip extension of the southerly portion of the Kodo Main zone.

For figures 1-4, please click on the link below:

http://www.rns-pdf.londonstockexchange.com/rns/2698W_-2012-1-26.pdf

Further information about Zani Kodo can be found at: www.mwanaafrica.com/operations-and-exploration/drc/zani-kodo-project

Bindura Nickel Corporation

BNC's assets remained on care and maintenance for the quarter ending 30 December 2011, successfully maintaining the integrity of the assets whilst restart funding is sought.

BNC continues to engage the government of Zimbabwe on the issue of indigenization and management remains optimistic that this will be resolved.

The Trojan Mine remains ready to resume production subject to BNC securing the required restart funding, with all the processes up to the tertiary crushers having been hot commissioned in the previous financial year. Limited development and drilling continues to be undertaken at Trojan. The mine hoisted 4,698 tonnes of waste and 32 tonnes of ore during the quarter as part of its care and maintenance programme. Total underground development during the care and maintenance programme stood at approximately 1,132mat the end of December 2011. The current development is targeting key priority areas included in the restart plan.

Further information about Bindura Nickel Corporation can be found at: www.mwanaafrica.com/operations-and-exploration/zimbabwe/bindura-nickel-corp-bnc 

Katanga Concessions (SEMHKAT)

Exploration during the December quarter of 2011 concentrated mainly on Lunsano and Kakosa. These areas are located in license areas PR753, PR754, PR757 and PR758 (Figure 5).

Lunsano

The Lunsano area hosts a copper anomaly that has been subdivided into three areas: a Southern copper anomaly (6km by 1km), a Northern copper anomaly (6km by 500m) and an Eastern copper anomaly (3km by 300m) in areal extent and of +100ppm Cu tenor (Figure 6 shows a general view of these anomalies). The Lunsano area overlies Roan units which have a known high potential for Cu-Co mineralization.

Detailed geological mapping, utilising trenching and pitting, continued at Lunsano during the period.

Atotal of 95 pits and 357m of trenching were completed in the area during the period. 176 pits, including pits from previous quarters, were rehabilitated. 

Pitting and trenching statistics were as follows:

Table 3. Lunsano pitting and trenching statistics

Currently trenching is investigating the potential of the Kibandawepala ("Bald") Hill metadolerite and pitting is set to investigate the spatial relationship of the Northern and Eastern anomaly to the geology.

Infill soil sampling was carried out on a grid of 500m by 200m which was then reduced to 200m by 50m. A total of 2,191 soil, trench and pit samples from Lunsano were taken. Sampling for this period at Lunsano is summarized in Table 4.

Table 4. Lunsano sampling statistics

A total of 1927 soil and pit samples were dispatched for assaying over the period. Sample preparation of pit and trench samples is on-going. Samples taken from pits and trenches at Lunsano and Kibolwe will be analyzed by Niton.  A total of 3,812 soil, termitaria, trench and pit sample results were received and updated on plans. Figure 6 shows updated soil geochemical results at Lunsano.

Kakosa

A total of 443 soil samples were taken on a grid of 200m by 50m and are yet to be sent to the laboratory (Table 5). Soil sampling was stopped in November due to heavy rains in the area. This re-sampling is aimed at verifying historical anomalous data.

Table 5. Kakosa soil sampling

Kitemena-Kitungulu

A total of 224 soil sample results were received for the Kitemena Grid (PR754). Sampling was done on a grid 1km by 400m. The sampling was aimed at assessing the repeated thrusts (structural target) in conglomerate as interpreted in the area (Figure 7). The results reveal that the high copper values are associated with the aeromagnetic highs and the contact between the Grand Conglomerat units and shale. Infill soil surveys are planned to follow up.

The Kitemena-Kitungulu crew was moved to Lunsano to assist in progressing it rapidly to a drilling stage.

The exploration programme at the concession will focus on Lunsanoover the coming period (detailed geological mapping, trench and pit sampling). With the recent acquisition of a Niton portable XRF instrument, Niton analysis will be utilised to screen all samples before submission to the laboratory. It is anticipated that utilising this instrument will result in a more rapid focusing on areas for additional (e.g. infill) sampling and ultimately drilling. Project generation, review and implementation remain a major focus of the exploration work in Katanga.

For figures 5-7, please click on the link below:

http://www.rns-pdf.londonstockexchange.com/rns/2698W_-2012-1-26.pdf 

Further information about the Katanga Concessions can be found at www.mwanaafrica.com/operations-and-exploration/drc/katanga-concessions  

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.

Enquiries:

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

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Nominated Adviser and Broker

Ambrian Partners Limited Tel: +44 (0) 20 7634 4700

Anthony Rowland / Jen Boorer

Joint Broker

XCAP Securities plc

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Public Relations

Merlin Tel: +44 (0)20 7726 8400

David Simonson

Anca Spiridon