Tonkolili Mineral Resource Estimate Upgrade

16 December 2010

African Minerals Limited

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

 TONKOLILI IRON ORE PROJECT MINERAL RESOURCE ESTIMATE UPDATE

TONKOLILI MINERAL RESOURCE GROWS TO 12.8 BILLION TONNES

WITH THE ADDITION OF DIRECT SHIPPING ORE (DSO) AND SAPROLITE IRON ORE RESOURCES, AND FURTHER EXTENSION OF MAGNETITE RESOURCE

HIGHLIGHTS

·; Total JORC compliant iron ore mineral resource at Tonkolili grows to 12.8 billion tonnes with the addition of substantial DSO and saprolite iron ore mineral resources, and a further extension of the magnetite mineral resource

·; 126.5 million tonnes of the JORC compliant mineral resource has an average in situ grade of 58.1% Fe, 2.4% SiO2, 6.0% Al2O3 and 0.09% P. This is hosted by the duricrust portion of the weathered cap overlying the magnetite resource, and is suitable for the production of DSO iron ore products

·; Production of DSO for export as Lumps and Sinter Fines will commence with ore at or above the resource grade and at a predicted weight recovery of 85%. Tonnage scale pilot plant testwork indicates that 55% of this will be as Lumps and 45% will be Sinter Fines

·; A 1.1 billion tonne JORC-compliant saprolite iron ore mineral resource has been defined with an average in-situ grade of 40.0% Fe. This is hosted in the saprolite and lower grade duricrust portions of the weathered cap overlying the magnetite resource. This is suitable for the production of Sinter Fines and a high grade iron ore concentrate

·; Metallurgical testwork has produced concentrates averaging 64.4% Fe, 1.9% SiO2, 2.0% Al2O3, and 0.06% P. On-going pilot plant testwork is underway to determine final grades and recoveries

·; The magnetite JORC-compliant mineral resource has grown to 11.6 billion tonnes at an average in situ grade of 30.1% Fe hosted in fresh magnetite Banded Iron Formation. This is suitable for the production of a very high grade iron ore concentrate

·; Previous tonnage scale magnetite pilot plant metallurgical work produced a high quality iron ore concentrate at a grade of 70.3% Fe, a mass recovery of 26.5%, and with low levels of impurities. The metallurgical flowsheet is an energy efficient process circuit with only 42% of the feed tonnage being ground to the final grind size of 38 microns

Commenting on the Mineral Resource Estimate Update, Frank Timis, Executive Chairman of AML said:

"I am delighted to be able to announce the addition of the DSO and Saprolite iron ore Resources to the JORC Compliant Mineral Resource Inventory at Tonkolili. This, coupled with the increase in the JORC-compliant magnetite Mineral Resource, demonstrates once again that Tonkolili is a world-class iron ore project.

Given the market forecast of significant increases in iron ore prices in the next two years, we are in a very strong position to realise the full potential of the Tonkolili project and to compete alongside leading iron ore producers."

African Minerals Limited (AIM:AMI), the iron ore project development company that is developing its flagship iron ore project (the "Project") at Tonkolili in Sierra Leone, West Africa, is pleased to announce an updated Mineral Resource Estimate for the Project. The updated Mineral Resource Estimate was prepared by independent consultants SRK Consulting (UK) Ltd ("SRK"), and complies with the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, (the JORC Code).

The update reflects the addition of the drill-hole and assay data for the oxidised cap overlying the primary magnetite mineralisation and additional drill-hole and assay data supplementary to the magnetite Mineral Resource Estimate reported on the 17th February 2010. The update now incorporates Mineral Resource Estimates for the full geological profile for the Numbara, Simbili, Marampon and Kasafoni deposits at Tonkolili.

IRON ORE MINERAL RESOURCES

The Mineral Resource Estimate undertaken by SRK utilised 299 drillholes in the Numbara project area, 781 drillholes in the Simbili project area, 130 drillholes in the Marampon project area and 323 drillholes in the Kasafoni project area for a total of 1,533 drillholes for 199,602 drill metres. This is an increase of 108,709 m from the available drill metres used for the February 2010 Mineral Resource Estimate. Of this, 188,778 metres relates to diamond drilling, with the remaining 10,824 metres relating to Reverse Circulation drilling that has also been utilised in the Mineral Resource update. Geotechnical and metallurgical drill holes are excluded from the Mineral Resource update, and were reserved for use in these respective technical disciplines.

The updated Mineral Resource Estimate is comprised of Direct Shipping Ore ("DSO"), Saprolite and Magnetite components, which are reported below according to the respective mineralisation types.

The inclusion of material into the Measured Resource category reflects an increase in geological understanding of the deposits as a result of the significant additional work completed by SRK during 2010.

All Mineral Resource results reported are rounded to one decimal place, except Phosphorous (P) which is rounded to two decimal places. FeTOT is the total iron value. Any differences between totals and sub-totals are a function of rounding.

SRK's full resource estimation report including a breakdown of the Mineral Resource Estimate by project area will be made available on Friday 24th December 2010 on the Company's web-site at www.african-minerals.com.

DSO MINERAL RESOURCE

SRK has reported a combined DSO Mineral Resource Estimate for the Simbili, Numbara, Marampon and Kasafoni deposits totalling 126.5 million tonnes at an average in-situ grade of 58.1% Fe, 2.4% SiO2, 6.0% Al2O3, 0.09% P. This resource is reported at a cut-off grade of 56.5% Fe.

This is comprised of 25.5 million tonnes in the Measured category with an average in situ grade of 59.1% Fe, 57.4 million tonnes in the Indicated category with an average in situ grade of 58.1% Fe, and 43.6 million tonnes in the Inferred category with an average in situ grade of 57.6% Fe.

The DSO Mineral Resource is summarised in Table 1:

Table 1. Direct Shipping Ore Mineral Resource Summary

DIRECT SHIPPING ORE METALLURGY

The DSO Mineral Resource will be used to produce Direct Shipping Ore comprising of Lumps and Sinter Fines. Work is focussing on the production of 12 million tonnes per annum (Mtpa) of DSO material at or above the resource grade of 58.1% Fe, 2.4% SiO2, 6.0% Al2O3, 0.09% P, and at a mass recovery of 85%.

DSO grade duricrust mineralisation has been characterised by CSIRO Iron Ore Division, and has been extensively tested at AMDEL, AMMTEC and at RWTH Aachen University (Germany).

Testwork indicates that the Lumps to Fines ratio after handling will be 55% as -31.5 +6.3 mm Lumps and 45% as -6.3 mm Sinter Fines.

SAPROLITE MINERAL RESOURCE

SRK has reported a combined Saprolite Mineral Resource Estimate for the Simbili, Numbara, Marampon and Kasafoni deposits totalling 1.1 billion tonnes at an average in-situ grade of 40.0% Fe, 21.4% SiO2, 11.2% Al2O3, and 0.09% P. This resource is reported within a cut-off grade range of 26.5% Fe and the DSO cut-off grade of 56.5% Fe.

This material includes both saprolite and sub-DSO grade duricrust mineralisation, and requires gravity based beneficiation for the production of saleable grade products. Metallurgical testwork regarding the beneficiation of this material is summarised in the section below titled "Saprolite Metallurgy".

The Saprolite Mineral Resource Estimate is comprised of 6.1 million tonnes in the Measured category with an average in situ grade of 52.2% Fe, 101.3 million tonnes in the Indicated category with an average in situ grade of 46.6% Fe, and 1,017.1 million tonnes in the Inferred category with an average in situ grade of 39.3% Fe.

The Saprolite Mineral Resource is summarised in Table 2:

Table 2. Saprolite Mineral Resource Summary

SAPROLITE METALLURGY

Saprolite and non-DSO grade duricrust mineralisation have had their beneficiation properties characterised by CSIRO and have been extensively tested at AMMTEC, RWTH Aachen University and at Mineral Technologies.

Mineral Technologies conducted Heavy Liquid Separation testwork on 18 bulk samples from across the Tonkolili project with an average feed grade of 47.2% Fe, 16.9% SiO2, 7.3% Al2O3 and 0.07% P. The testwork yielded concentrates averaging 64.3% Fe, 1.9% SiO2, 2.0% Al2O3, and 0.06% P.

Full scale industrial spirals are being pilot tested by Mineral Technologies as the basis for the design of the saprolite beneficiation plant.

MAGNETITE MINERAL RESOURCE

The total Mineral Resource Estimate for the Simbili, Numbara, Marampon and Kasafoni deposits has now been updated by SRK to 11.6 billion tonnes at an average in-situ grade of 30.1% Fe, 45.0% SiO2, 5.1 Al2O3 and 0.06% P. This resource is reported at a cut-off grade of 20% Fe.

The Magnetite mineralisation requires beneficiation for the production of a high grade concentrate product. The metallurgical characteristics of the magnetite were reported on 17th February 2010, and are summarised in the section below titled "Magnetite Metallurgy".

The Magnetite Mineral Resource now features approximately 2.5 billion tonnes of material that has been upgraded to the Measured Resource category with an average in situ grade of 30.2% Fe. In addition to the Measured Mineral Resource, the total Magnetite Mineral Resource Estimate includes 3.7 billion tonnes in the Indicated category with an average in situ grade of 30.4% Fe, and a further 5.3 billion tonnes in the Inferred category with an average in situ grade of 29.8% iron.

SRK previously reported a 10.5 billion tonne Mineral Resource Estimate for the Simbili, Numbara, Marampon and Kasafoni deposits on 17th February 2010. The increase of 1.1 billion tonnes to the total Magnetite Mineral Resource Estimate reported herein is largely due to the incremental extension of the Western portion of the Kasafoni Resource.

The Magnetite Mineral Resource is summarised in Table 3:

Table 3. Magnetite Mineral Resource Summary

MAGNETITE METALLURGY

Tonnage scale pilot plant test work completed at AMMTEC confirmed that a low energy consuming conventional metallurgical circuit using the proven technologies of Low Intensity Magnetic Separation ("LIMS") and flotation yields high grade iron ore concentrates. Pilot plant runs on composites of the main magnetite Banded Iron Formation zones yielded very high grade concentrates which are summarised in Table 4.

Table 4. Tonkolili Magnetite Plant Feed and Concentrate grades for main BIF composites

Staged crushing and grinding for the reported concentrates progressively removes tailings at the coarsest possible particle size, which minimizes energy consumption. 58% of the feed is removed at coarser size fractions, leaving only 42% of the feed requiring a final grind P80 of 38µ.

This testwork yields excellent results that have exceeded the Company's predictions of iron grade, mass recovery and impurities removal.

QUALIFIED PERSONS

The information in this press release that relates to Mineral Resources is based on information compiled under the direction of Mr Howard Baker, who is a Member the Australasian Institute of Mining and Metallurgy ("AusIMM").

Mr Baker is a full time employee of SRK and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Howard Baker has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears.

The information in this press release that relates to metallurgy is based on information compiled and reviewed by Rodney Elvish, who is a Fellow and CPMet of the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr. Elvish is an independent consultant to the Company, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Elvish has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears.

The information in this press release was compiled and reviewed by Marcus Reston, who is a Member of the Australian Institute of Geoscientists ("AIG"). Mr Reston, General Manager: Geology & Exploration, is a full-time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Reston has reviewed this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which this appears.

In addition to the above, the press release as a whole has been compiled under the direction of Dr. Mike Armitage, who is a Chartered Engineer and a Chartered Geologist and a Member of the Institute of Materials, Minerals and Mining. Dr. Armitage is a full time employee of SRK Consulting (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr. Armitage has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears.

Enquiries: 

Contacts

African Minerals Limited +44 20 7104 2280

Alan Watling / Miguel Perry

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Robert Finlay

Guy Blakeney

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Klara Kaczmarek

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