Update re Cape Lambert and Secured Loan Facility

31 January 2011

African Minerals Limited

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

Amended Agreement Reached with Cape Lambert in respect of the Marampa/Pepel Infrastructure Project

Update on Secured Loan Facility

African Minerals Limited (AIM: AMI), the iron ore project development company that is developing the Tonkolili project in Sierra Leone, West Africa, is pleased to announce that, further to its press releases of 16 July 2010 and 14 October 2010, the Company has reached an amended agreement with Cape Lambert Resources Limited (ASX:CFE)("CFE" or "Cape Lambert") in respect of the Marampa / Pepel Infrastructure Project (the "Project").

The key points of the previously disclosed agreement were that:

·; CFE would have the right to fund 33% of the refurbishment costs of the Project in return for an equivalent 33% interest in the Project, and a right of first refusal to match any third party offer, if received, for the balance of the Project; and

·; The Company would provide CFE with infrastructure capacity (excluding rolling stock) for 2Mtpa production from CFE's Marampa mine, through Pepel Port on commercial terms to be agreed between the parties.

Further to negotiations between the two parties, both companies now confirm that, with CFE having been granted the option to increase transport capacity to 5Mtpa, CFE will not be exercising its right to buy in to the Marampa / Pepel Infrastructure Project, but will take up its right to access the transport infrastructure, under the following terms:

·; AML will provide 3rd party access rights to CFE on commercial terms to transport up to 2 Mtpa of CFE's iron ore production from its Marampa mine on the Marampa Railway and via Pepel Port, using AML's stockyard;

·; CFE will have an option to increase this transport capacity to 5 Mtpa once the Tagrin Infrastructure Facilities are in full operation;

·; Any extension required to construct the "spur" to the Marampa Railway linking CFE's operation at Marampa to the current route of the Marampa Railway will be at CFE's cost;

·; CFE will be responsible for sourcing its own rolling stock and locomotives; and

·; The parties will enter into good faith negotiations to finalise and execute full form legal agreements reflecting the commercial and legal terms as set out above.

Executive Chairman, Frank Timis, commented:

"We are pleased to have reached agreement with Cape Lambert to provide them access to export routes for the Marampa Iron Ore Project and we are happy to retain our ownership of this important transportation infrastructure. The surplus capacity in the infrastructure system that we are constructing will mean that this Marampa tonnage is in addition to African Minerals' initial Phase 1 capacity of 12Mtpa.

Sierra Leone will benefit from this additional tonnage through the successful development of a further project by another operator, and African Minerals will also benefit through its own equity holding in Cape Lambert."

African Minerals is also pleased to announce that, further to its press release of 22 December 2010, the Company has made good progress towards completion of its Secured Loan Facility. Final form legal documentation has been circulated to the lenders for signature, and the Company will make a further more detailed announcement upon completion.

Contacts:

African Minerals Limited +44 20 7104 2280

Alan Watling / Miguel Perry

Canaccord Genuity Limited +44 20 7050 6500

Robert Finlay / Guy Blakeney

Aura Financial +44 20 7321 0000

Michael Oke / Andy Mills