Quarterly Operations and Explorations Update

Asa Resource Group PLC

天然资源集团有限公司

NEWS RELEASE

10 February 2016

Asa Resource Group plc

Quarterly Operations and Explorations Update for the Third Quarter Ended 31 December 2015

Gold - Freda Rebecca Mine (Zimbabwe)

· 2.4% growth in Gold Sales to 18,506 ounces

· Average realised gold sale price for the quarter of US$1,096/oz

· All-in Sustaining C3 Cost for the quarter of US$988/oz and C1 cash cost for the quarter of US$820/oz

· 3 percent All-in Sustaining C3 costs cut and 5.7% C1 cash costs cut

· All-in Sustaining Cost was below the average realised gold price for the quarter

· Average feed grade for the quarter of 2.19g/t

· Clean ROM stockpile

Nickel - Trojan Mine (Zimbabwe)

· 5.6% growth in Nickel Sales to 1,577t

· 10% increase in production of nickel in concentrate to 1,584t

· Averaged net realised nickel in concentrate sale price for the quarter of US$6,121/t

· All-in Sustaining C3 costs of nickel in concentrate for the quarter of US$6,349/t and C1 cash cost for the quarter of US$4,933/t

· 16% All-in Sustaining C3 costs cut and 28% C1 cash costs cut

· Average Head grade for the quarter of 1.78%

· Nickel Recovery rate for the quarter of 87.3%

Diamonds - Klipspringer Mine (South Africa)

· 3% growth in Klipspringer's throughput of Marsfontein fine residue tailings to 54,596t

· 43% decrease in Diamond sales quarter-on-quarter to 19,398cts

· Average realised fine diamonds sale price for the quarter of US$18.18/ct

Gold - Freda Rebecca Mine (Zimbabwe)

Figures shown are unaudited and may vary upon final audit.

C1 cash cost includes costs for mining, processing, administration, accounting movements for stockpiles and gold-in-circuit, and, net proceeds from by-product credits. It excludes capital costs for exploration, mine development or processing mill capital works and royalties

C3 all-in sustaining cost reflects C1 costs plus depreciation and amortisation, thus incorporating the capital cost of production plus interest, other indirect costs and royalties. All-in sustaining costs represents all costs attributable to gold production over the period

Commentary  

Gold Sale Improvement - Gold sales increased from 18,067oz to 18,506oz in Q3 FY2016. The 2.4% increase was the result of improvements in feed grade and recoveries.

Cost Control Implementation - C1 cash costs were reduced by 5.6% in the quarter under review at US$820/oz (Q2 FY2016: US$870/oz). All-in sustaining C3 costs were reduced by 3% to US$988/oz (Q2 FY2016: US$1,023/oz). These reductions can be attributed to the improvement in production efficiency and constant cost control implementation. The drop in C1 cash cost is attributable to a 2% increase in gold production and a 3% decline in C1 operating costs.

Better Feed grade - The average feed grade for Q3 FY2016 increased from 2.15g/t to 2.19g/t reflecting the improved delineation of the ore body through grade control drilling.

Improved Gold Recovery - Gold recovery rate for Q3 FY2016 increased to 85% from 84% in the previous quarter. This is due to the increase in feed grade and reduction in loss of fine carbon to tailings.

Stable tonnes milled production - tonnes milled slightly changed to 308,953t in Q3 FY2016 (Q2 FY2016: 309,102t) on the backdrop of a 0.6% decrease in mill running time due ZESA power cuts and full shell relining required in mills 1 and 2, as well as feed end relining in mill 2. New measures have been put in place to minimize or eradicate these issues in future. 

Comparative marketable price- The average gold price received in Q2 FY2016 was US$1,096/oz (Q2 FY2016: US$1,121/oz), in line with the decline in global gold price.

Tonnes mined had an expected decline of 20% from 336,026t in Q2 FY2016 to 267,448t in Q3 FY2016 due to planned production capping to deplete pre-crusher surface stockpile in the last month of the quarter.

Nickel - Trojan Mine (Zimbabwe)

Figures shown are unaudited and may vary upon final audit.

C1 cash cost per tonne includes costs for mining, processing, administration, offtake costs and penalties, transport costs, accounting movements for stockpiles, and net proceeds from by-product credits. It excludes capital costs for exploration, mine development or processing mill capital works, and, the cost of royalties

All-in sustaining C3 cost reflects cash cost per tonne plus depreciation and amortisation, thus incorporating the capital cost of production, plus interest, other indirect costs and royalties. All-in-sustaining cost represents all costs attributable to nickel production over the period.

Note: the company has amended the reporting of the nickel price received, cash cost and all-in sustaining cost. The average nickel price received reflects the actual price received rather than the actual average price for the quarter as previously reported. Cash costs and all-in sustaining costs are now reported as actual costs incurred, previously these costs were adjusted for the opportunity cost forgone as a result of selling a nickel concentrate rather than a nickel cathode

Commentary

Production Increase - Production of nickel in concentrate rose by 10% in Q3 FY2016 to 1,584t (Q2 FY2016: 1,442t), primarily due to an increase in average head grade and recoveries achieved by mining more of the higher grade ore reserves.

Sale Growth - Nickel sales were 6% higher to 1,577t as compared to 1,494t at Q2 FY2016.

Successful Cost Control Implementation - C1 cash costs of nickel in concentrate dropped by 28% to US$4,933/t from US$6,895/t Q2 FY2016, and all-in sustaining C3 costs of nickel in concentrate dropped by 16% to US$6,349/t in the quarter under review, from US$7,539/t in Q2 FY2016. This was as a result of higher nickel metal production and a reduction in quantity of ore mined Cash costs also reduced due to reclassification of magnesium oxide and arsenic penalties now offset against revenue following an accounting recommendation. Furthermore, the company continues to implement cost reduction initiatives to mitigate the low nickel prices.

Effective Loss Control - The rapid reduction in All-in sustaining C3 costs of nickel in concentrate improved the financial condition in that we are approaching to our loss control target of reducing the sustaining cost to match with the realized sale price.

Stable Nickel Recovery - Recovery was 0.3% lower at 87.3% (Q2 FY2016: 87.6%), reflecting on the strategic shift to focus on quality of the concentrate grade.

Mined tonnage was 9% lower at 86,794t (Q2 FY2016: 95,802t). Production was mainly affected by lack of activity in the 33 lift. The hoisting operation was affected by power outages, hoist breakdown, low compressed air supply and low dump truck availability which affected movement of ore. Some of these issues have already been addressed and plans implemented to mitigate these disturbances where possible.

Head grade was 10% higher at 1.78% (Q2 FY2016: 1.62%). This increase was driven by a focus on high grade areas.

Average nickel price decreased by 11% to US$6,121 (Q2 FY2016: US$6,847). Nickel prices continued to decrease during the quarter. Analysts do predict an improvement in the nickel price as demand is expected to increase although the timing of this is unknown.

A lack of development remains a challenge that the mine is working to address.

Diamonds - Klipspringer Mine (South Africa)

Commentary

The tonnages mined at Klipspringer improved marginally and the rationalisation of mining and haulage is ongoing.

The diamonds recovered decreased for a short period due to the treatment of intermediate tailings material, but the grade has already increased again in January 2016.

The diamond price received increased due to the improved quality of diamonds recovered, due to a change in extraction plan.

An ongoing review of the Klipspringer operations including the feasibility of re-opening the underground fissure mine is in progress and should be completed within the next 6 months.

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Mr Yat Hoi Ning, the Company's Chief Executive Officer commented:

Although the commodity prices continue to fall in this quarter, making the overall business environment even more challenging, with the ongoing improvements put in place by management, our businesses are slowly but surely showing good progress on all levels.

At BNC's Trojan Nickel Mine, our new cost control measures have reduced C1 and C3 costs by nearly $2,000/t and $900/t respectively since quarter ended March 2015. Our management team in Trojan is still investigating ways to further reduce transport costs by 10-15%. Both nickel head grade and concentrate production have increased by 10%, over the past quarter, mainly due to our strategic priority to accessing the higher grade ores.

At Freda Rebecca Gold Mine, the total increase in tonnes mined was almost 25,000t and gold sales were increased by almost 10,000oz gold production, year to date compared to the same period last year. We endeavour to continue with our rolling plan at Freda Rebecca, as it continues to yield positive results.

At Klipspringer Diamond Mine, the diamond treatment plan has treated an additional 12,000t since the comparable 2014 period. The Diamond sale price was increased by US$1.56/ct.

The results in January 2016 were promising and encouraging:

Trojan had a good start in the year. Despite experiencing a lost week at the start of the month our nickel production was close to the target of 644t, only short by 33t in terms of production targets.

It is expected that the call for the last quarter will be met due primarily to operational improvements which will result in reduced underground power interruptions, resolution of compressed air shortages and increased access to dump trucks, enhancing the development pace and hence increased access to high grade ore.

At Freda Rebecca in January 2016 there was an improvement in gold production during the month resulting in 5,769oz being produced (Dec 2015 - 5,688oz) at an average realized price of $1,109/oz. Power suspension is still the major disruption factor. We will replace current transformers in February and expect the new transformers will improve power supply continuity to the operation. To combat other challenges we have faced we are installing off-set liners that are intended to improve on throughput as well as commissioning a new loading unit to improve and stabilise ore availability.

In the meantime, our cost control measures shall continue in order to optimise the performance of the mines. I remain confident that this pattern of steady improvement will persist until operating targets are reached.

ABOUT ASA RESOURCE GROUP PLC

Asa Resource Group Plc is a pan-African resources company with operations in Zimbabwe and South Africa, and a broad range of exploration projects and interests in the Democratic Republic of Congo (DRC) and Angola.

In September 2015 the Company changed its name from Mwana Africa plc to Asa Resource Group Plc to better reflect the Company's global strategy. The Group has a diverse asset base, including gold, nickel, copper, cobalt and diamonds and intends to diversify and reorganize its business along commodity lines as well as stimulating growth through global investment.

The group's primary listing is on the London Stock Exchange's AIM market and enjoys the strategic advantage of having supportive and influential shareholders in China. While the Company has been built on mining in Zimbabwe and South Africa, it is intended that its interests will be diversified beyond mining as well as geographically.

In Zimbabwe, Asa's interests are the Trojan and Shangani nickel mines and the Freda Rebecca Gold Mine. Asa's nickel and gold projects include Hunter's Road and Maligreen, with the Makaha deposit being a gold exploration prospect.

The Freda Rebecca Gold Mine in Zimbabwe restarted operations in 2009 and in the 12 months ended March 2015, produced 58,714oz of gold.

The Trojan Nickel Mine is owned by Asa's Zimbabwe subsidiary Bindura Nickel Corporation (BNC). After a four-year period of being under care and maintenance, in 2012 BNC carried out a US$23m restructuring and recapitalisation programme which allowed it to restart the Trojan mine. The first sale of nickel concentrate to Glencore plc took place in April 2013. In the 12 months ended March 2015, BNC produced 7,306t of nickel.

In the DRC, Asa has exploration programmes in Zani-Kodo (gold), Katanga (copper) and a 20% stake in Société Minière de Bakwanga (diamonds).

In the Katanga Province, Asa has a Joint Venture with Zhejiang Hailiang Company Limited to jointly explore for copper within the licensed areas. The Katanga concessions are otherwise known as SEMHKAT (Société d'Exploration Minière du Haut Katanga).

The Zani-Kodo joint venture project has a JORC compliant gold mineral resource of 2.97Moz.

Klipspringer Diamond Mine is Asa's South African interest. Asa holds a 69.77% interest in Klipspringer and although the mining operations are temporarily on care and maintenance, the tailings retreatment plant is in production. The viability of underground mining is being investigated.

Qualified Person

The information presented in the annual report that relates to Mineral Resources of the Kodo, Badolite, Zani Central and Lelumodi deposits is based on information compiled by Dr Colin Porter, who is a full time employee of Mwana Africa, has a PhD in geology, is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM), and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012)'.

The information presented in the annual report that relates to Mineral Resources of the Kibolwe deposit is based on information compiled by Gayle Hanssen, who is a Director and Geological Consultant with Digital Mining Services (pvt) Ltd., has a BSc (Hons) in geology, is a Registered Professional Natural Scientist ( Pr. Sci. Nat ) with the South African Council for Professional Natural Scientific Professions (SACNASP), and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012)'.

The Competent Persons consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

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

London:

Asa Resource Group Plc

One Fleet Place, London EC4M 7W

Yim Kwan, Finance Director

Amilha Young, Group General Counsel and Company Secretary

Tel: +44(0) 20 3696 5470

Hong Kong:

Asa Resource Group Plc

Units 509-510, Level 5, Core E, Cyberport 3, 100 Cyberport Road, Hong Kong

Samuel Ng, Investment Manager

Tel: +852 25662638

Nominated Adviser

Grant Thornton UK LLP

30 Finsbury Square, London EC2P 2YU

Colin Aaronson, Richard Tonthat, Carolyn Sansom

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 Relations

Kirstin Barwise (South Africa) Tel: +27 (0) 74 825 3202

E-mail: communications@asaukplc.com