AMI.L Regulatory News (AMI)

27 January 2012

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

Financing arrangements for Phase 1 Tonkolili expansion

As part of the 20mtpa Tonkolili Phase 1 expansion AML is currently in advanced discussions in order to secure financing to fund this growth on the most attractive commercial terms. These discussions include refinancing the existing $417m secured loan facility, with bank debt on improved and less restrictive terms.

Separately, progress towards the completion of the planned $1.5Bn investment by Shandong Iron and Steel Group is continuing and we remain highly confident of a successful conclusion to that process.

A further announcement in relation to this financing will be made in due course.

The Company is also pleased to confirm that the butterfly stacker at the port is now in operation.

Ends

Contacts:

African Minerals Limited +44 20 3435 7600

Mike Jones

Aura Financial +44 20 7321 0000

Michael Oke / Andy Mills 

Deutsche Bank +44 207 545 8000

Rupert Green

About AML

African Minerals is developing its Tonkolili iron ore project in Sierra Leone, with a JORC compliant resource of 12.8Bnt. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I is expected to produce 20 million tonnes of iron ore per annum at full capacity.

Phase II now contemplates a 30Mtpa expansion, taking production to 50Mtpa, and the establishment of an expanded port facility at Tagrin Point, a new standard gauge, heavy haul railway from Tonkolili to Tagrin Point, and an expanded production facility at the mine to produce a 64% high grade hematite concentrate.

African Minerals and its contractors currently employ approximately 7,300 people in Sierra Leone, 85% of whom are Sierra Leonean nationals.

The Company has developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone has a 10% free carried interest. With the exception of this interest, the Tonkolili project companies are currently owned 100% by AML.

The Company has also executed a definitive agreement with Shandong Iron and Steel Group ("Shandong") whereby Shandong will invest $1.5Bn at the project level to acquire a 25% interest in the project companies, with associated discounted product offtake. The investment is subject to Chinese regulatory approvals.

www.african-minerals.com