Tonkolili Project Update

For immediate release 

10 June 2010

African Minerals Limited

("African Minerals" or "the Company")

Tonkolili Project Update

African Minerals Limited (AIM:AMI), the mineral exploration and development company with significant iron ore interests in Sierra Leone, West Africa, is pleased to provide the following update with regard to the Company's flagship Tonkolili Project and related infrastructure projects.

Highlights

·; The Company is currently on schedule to commence production and shipping of 8mtpa Direct Shipping Ore ("DSO") hematite product in Q1 2011 ("Phase I")

·; Work on the haul road and other infrastructure is progressing to schedule

·; An aggressive exploration programme is underway to define additional hematite mineralisation to underpin the expansion of Phase I from 8 mtpa of DSO product to 25 mtpa of DSO and hematite concentrate products ("Phase II")

·; The increase in production capacity from 8 mtpa to 25 mtpa is subject to an engineering study covering process engineering, the extension of the railway from Lunsar to Tonkolili and the construction of a berth at Tagrin Point

·; The Company believes this could deliver the potential opportunity to self-fund the expansion of the project's production capacity from 8 mtpa to 25 mtpa of hematite product and then to 45 mtpa of magnetite product. The timeline for the expansion to Phase II (25 mtpa) will be ascertained following the results of the engineering study, scheduled for delivery Q4 2010

·; Delivery of DFS and FEED reports on Phase III (45mtpa magnetite production) extended until after report on Phase II which is to be delivered in Q4 2010

·; As a result of the planned early production of hematite product, the start of Phase III delivery of 45 mtpa magnetite product pushed out until after 2014, as previously envisaged.

Commenting, Frank Timis, Executive Chairman of African Minerals, said:

"I am delighted to be able to confirm that our Phase I development is on schedule and to confirm our capacity to produce saleable hematite product. The expansion of the drilling programme to define additional hematite mineralisation provides the Company with the potential opportunity to self-fund its growth from 8 mtpa to 25 mtpa of hematite product and in due course its subsequent expansion to 45 mtpa of high grade magnetite product."

Tonkolili Project Update

African Minerals Limited (AIM:AMI), the mineral exploration and development company with significant iron ore interests in Sierra Leone, West Africa, is pleased to provide the following update with regard to the Company's flagship Tonkolili Project ("Project") and related infrastructure projects.

The Company is currently on schedule to commence production and shipping of 8 million tonnes per annum ("mtpa") Direct Shipping Ore ("DSO") hematite product in Q1 2011 and work on the haul road and other infrastructure is progressing as planned.

The Company estimates that, subject to the results of further drilling and metallurgical test work, Tonkolili has the potential to host up to 1.4 billion tonnes of in situ hematite material. The Company therefore expects to realise this target with an aggressive drilling campaign which will run through until Q4 2010.

The potential quantity of hematite mineralisation is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Hematite Metallurgy

Metallurgical work being conducted at RWTH Aachen University in Germany has confirmed earlier results of lumps to fines ratios undertaken by independent metallurgical consultants AMDEL and AMMTEC. These DSO lumps will be produced from the early mining planned from the Simbili deposit at Tonkolili.

Crushing the Simbili hematite cap to pass -31.5 mm results in 70% of the product reporting to the lumps fraction. Other recent work at RWTH Aachen University has confirmed similar lumps to fines ratios are achieved from the hard hematite cap that also occurs at the Numbara and Kasafoni deposits at Tonkolili.

Work undertaken by the CSIRO Iron Ore Division in Australia has shown the hematite in the lump fraction to have very favourable physical characteristics. The ore is quite porous, which gives it a high reducibility in the blast furnace. It has also shown a very good Decrepitation Index for a high Loss On Ignition ("LOI") ore, this also being associated with the hematite's high porosity.

These desirable blast furnace properties coupled with the high lump to fines ratio provide further evidence to support the development of a readily saleable first phase product from the hematite cap at Tonkolili.

Saprolite (to produce hematite concentrate)

A soft hematitic saprolite approximately 60m thick lies between the hard hematite rich duricrust and the primary magnetite Banded Iron Formation ("BIF"), and represents a simple weathered expression thereof.

Primary magnetite grains from the magnetite BIF have been weathered to hematite, with matrix quartz and silicate minerals having been variably leached away or weathered to soft clay minerals. This presents the opportunity to simply beneficiate this material to produce a high grade hematite concentrate suitable for pellet feed.

Preliminary testwork by at RWTH Aachen University including microscopic analysis and shaking table tests has identified that naturally occurring hematite grains are freely liberated from the saprolite. Testwork conducted on fully-liberated feed material consistently produces hematite concentrates with grades averaging greater than 64% Iron, with associated low impurities.

Ongoing metallurgical testwork at RWTH Aachen University is underway and Downer EDI will be contracted to establish final recoveries and grades with pilot plant testwork, with the objective of producing a high grade pellet feed concentrate.

Positive results from drilling in the first quarter of 2010 on the hematite cap and transition material, together with the preliminary metallurgical test results on that material have provided the Company with the confidence and opportunity to focus its management and financial resources and internal and external engineering resources on delivering, in Q4 2010, a study on expanding the delivery of hematite product from beyond 8 mtpa of DSO product to 25 mtpa of DSO and hematite concentrate products (Phase II). This increased production rate also presents the Company with a potential opportunity to self-fund the expansion of the project from 8 mtpa to 25 mtpa of hematite product and then to 45 mtpa of magnetite product. The timeline for the expansion to Phase II will be ascertained following the results of the engineering study, scheduled for delivery Q4 2010.

DFS and FEED Reports update

On the basis of the continued promising results from the drilling and metallurgy for the hematite DSO and Saprolite material, the Company has taken the decision to re-direct its resources to the hematite project and extend delivery of the DFS and FEED for the 45 mtpa magnetite project until after delivery of the hematite engineering study due in Q4 2010.

 As a result of the planned early production of hematite, delivery of 45 mtpa magnetite product will be pushed back from its expected date of 2014 and as such a production schedule will be determined in due course.

The Company has internally estimated that Phase II (25mtpa) would cost in the region of US$1bn and Phase III (production of up to 45 mtpa magnetite) may cost up to US$4bn (total production at the end of Phase III being 70 mtpa total product). However, exact cost estimates of both these phases still need to be determined under studies on Phases II and III. Conceptually a Phase IV of the project (potential production of up to 75 mtpa magnetite) could exist but work to establish this is yet to be undertaken.

Additional Magnetite Potential

The Company believes that an exploration target of an additional 3 to 4bn tonnes of magnetite mineralisation exists at the Kasafoni Prospect. This exploration target has been identified and defined by a detailed knowledge of the airborne and ground magnetic signatures of the Tonkolili magnetite BIF, from information obtained by extensive systematic trenching, and from reconnaissance and recent drilling.

The potential quantity of magnetite mineralisation mentioned above is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

If the magnetite target were to be successfully defined as a JORC[1] compliant Mineral Resource, its

addition to the previously announced 10.5bn tonne JORC compliant magnetite Mineral Resource would increase the total magnetite Mineral Resource to in the order of 13-14 bn tonnes.

Systematic exploration of this target is required to evaluate the mineralisation contained therein, however, this work programme remains suspended while the Company focuses on exploration of the prospective hematite rich zones of the Tonkolili mineral field.

The information in this press release that relates to hematite 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 that relates to geological exploration is based on information compiled by Marcus Reston, who is a Fellow of the Geological Society of London ("FGS"), and 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 press release and has consented to the inclusion in this press release of the matters based on his information in the form and context in which this appears.

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