Restructure of BEE arrangement and issue of equity

11 November 2010

Strategic Natural Resources PLC

("SNR" or the "Company")

Restructure of black economic empowerment partnership and issue of equity

Strategic Natural Resources plc (AIM:SNRP)  is pleased to announce restructuring and consolidation of the black economic empowerment ("BEE") shareholding in its 74 per cent. owned subsidiary, Elitheni Coal (Pty) Ltd ("Elitheni") as follows:

Highlights

·; new major BEE partner in Elitheni

·; simultaneous subscription for 10,000,000 new ordinary shares of 1 pence in SNR by the new BEE partner

·; approximately £2.67m raised by the SNR group immediately in cash with a further £0.64m receivable by it under a loan agreement

Background

In accordance with South African mining law, as part of the grant of the Company's mining and prospecting rights, SNR is obliged to facilitate the participation of historically disadvantaged persons by 2014 in Elitheni. In order to comply with this, in July 2008 the Company's wholly owned subsidiary, Acharnian Mining Limited ("Acharnian"), transferred shares equating to 26 per cent. of the issued share capital of Elitheni to Vuwa Investments (Pty) Limited ("Vuwa") (21 per cent.) and Mr. Christopher Mazizandile Msutu ("Mr Msutu") (5 per cent.).

Vuwa paid for 4 per cent. of the shares in Elitheni at the time of the transfer in June 2008 and the balance was loaned to Vuwa by Acharnian. In addition, Acharnian also loaned Mr Msutu the purchase price for the Elitheni shares issued to him.

In order to restructure and consolidate the BEE shareholding in Elitheni, Acharnian entered into a conditional share purchase agreement (the "Share Purchase Agreement") on 9 November 2010 with Rapitrade 644 (Pty) Ltd ("Rapitrade") replacing these original loans. Rapitrade is controlled by Mr Phumelele Stone Sizani ("Mr Sizani").

New BEE partner

Under the terms of the Share Purchase Agreement, Acharnian will re-sell the remaining 22 per cent. formerly held by Mr Msutu and Vuwa to Rapitrade for the sum of ZAR 22,000,000 (approximately £2,001,000) (the "Sale Price"). Both Vuwa and Mr Msutu have confirmed in writing to Acharnian their agreement to this consolidation and restructuring of Elitheni's BEE shareholding. This Sale Price will be satisfied by the payment by Rapitrade to Acharnian of ZAR 15,000,000 (approximately £1,370,000) in cash and a simultaneous loan of ZAR 7,000,000 (approximately £637,000) by Acharnian to Rapitrade. This loan will bear interest at a rate equal to the three month LIBOR plus 1.5 per cent. to be rolled up with the principal. Upon Elitheni declaring a dividend, Rapitrade will apply 50 per cent. of the sums payable towards discharging the then outstanding loan.

Rapitrade in turn, has an agreement with Mr Msutu for him to share in Rapitrade's equity. Mr Msutu will continue fulfilling the role of Elitheni's Director of stakeholder management.

The Share Purchase Agreement is conditional, inter alia, on a shareholders' agreement being concluded in respect of Elitheni as well as all necessary regulatory and other approvals being obtained within 40 business days of the date of the Sale and Purchase Agreement.

Following completion of the restructure and consolidation, Acharnian will own 74 per cent. of Elitheni and Rapitrade and Vuwa will each own 22 per cent. and 4 per cent. respectively.

Appoint to the board of Elitheni

In accordance with the terms of the new BEE agreement Rapitrade have the right to appoint a director to the board of Elitheni and it is their intention to appoint Mr Sizani, who is currently a Member of Parliament in the South African Government.

Mr Sizani qualified from the University of East Anglia in the UK with an MA after he had been imprisoned with Mr Nelson Mandela on Robben Island from 1976 to 1981. He was a former Eastern Cape Education Minister and subsequently Chairperson of the African National Congress in the Eastern Cape.

It is the intention of the SNR board to appoint Mr Sizani as a director of SNR over the coming weeks, subject to compliance with the AIM Rules for Companies.

Share subscription

As part of the terms of Rapitrade's involvement as a BEE partner in Elitheni, Rapitrade has agreed to purchase 10,000,000 new ordinary shares of 1 pence each in SNR at subscription price of 13p per share (the "Rapitrade Shares"). The Rapitrade Shares will be issued 10 days after the date upon which the Share Purchase Agreement becomes unconditional and, when issued, will rank pari passu in all respects with the existing issued share capital of the Company. The aggregate funds raised as a result of Rapitrade's subscription, namely £1,300,000, will be used to continue the execution of SNR's business plan.

An application will be made for the Rapitrade Shares to be admitted to trading on AIM following the date of their issue and further announcements will be made in this regard. When issued the Rapitrade Shares will represent 9.61 per cent. of the enlarged share capital of SNR. The total enlarged issued share capital of SNR following the admission of the Rapitrade Shares will be 104,103,333 ordinary shares of 1 pence each in the capital of the Company. The above figure may be used by shareholders at the appropriate time as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.

SNR's CEO David Nel said: "We are excited and honoured to move forward in partnership with Mr Stone Sizani. Finalising and consolidating our paid-up Elitheni BEE shareholding is a significant achievement which will enable us to expedite the objectives we have set out to achieve in the development of Elitheni. We are also pleased to have achieved the 26 per cent. BEE shareholding level required by the Department of Mineral Resources well ahead of the 2014 deadline".

ends

For further information, please contact:

Strategic Natural Resources plc

David Nel, Chief Executive Officer

+27 (0) 41 374 0842

Jeremy Metcalfe, Communications Director

+44 (0)7785 346 718

Nominated Adviser and Joint Broker - Allenby Capital Limited

Nick Naylor / Alex Price / James Reeve

+44 (0) 20 3328 5656

Joint Broker - SP Angel Corporate Finance Limited

Emin Eyi / Tercel Moore

+44 (0) 207 647 9646

Financial PR/IR - Blythe Weigh Communications

+44 (0) 207 138 3204

Ana Ribeiro / Tim Blythe / Matthew Neal

For further information about Strategic Natural Resources plc please visit www.snrplc.co.uk.

About Black Economic Empowerment

Black Economic Empowerment is a programme launched by the South African government with the aim of redressing the inequalities of Apartheid by giving previously disadvantaged groups economic opportunities previously not available to them. It includes measures such as Employment Equity, skills development, ownership, management, Socioeconomic development and preferential procurement.