AMI.L Regulatory News (AMI)

10 February 2015

African Minerals Limited

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

Financing Update

African Minerals Limited, the developer, operator and 75% owner of the Tonkolili Iron Ore Project (the "Project") in Sierra Leone, today provides a financing update in relation to the Company's $400m convertible bond (the "Bond").

Under the terms of the Bond, the biannual coupon payment of $17m is due on 10 February 2015. The Company advises it has insufficient funds to meet this payment, and it is unlikely that such a payment will be made in the near future.

Negotiations continue regarding a long term funding solution with Shandong Iron and Steel Group ("SISG"), AML's partner and 25% owner of the Project. The Company also continues to evaluate potential funding solutions with other parties, including but not limited to a partial sale of AML's stake in the Project. Reaching that outcome remains AML's utmost priority and while the Board continues to make every effort to advance these discussions, there can be no certainty that agreement will be achieved. 

In the event that a funding solution is successfully reached, it is highly likely that the outcome would leave little or no value for AML's shareholders, due to significant balances owed to trade creditors before the Project went into care and maintenance, as well as existing bank debt amounting to $276m and the $400m convertible bond, all of which sit ahead of AML's shareholders in the capital structure. Furthermore, SISG has made a number of claims against the Project which further diminish its value.

AML's ordinary shares will remain suspended until the fundamental uncertainty regarding the Company's financial position is removed. The Project remains under care and maintenance.

AML will continue to provide updates as negotiations progress.

Contacts:

African Minerals Limited

+44 20 3435 7600

Matthew Hird / Francis O'Neill

Tavistock

+44 20 7920 3150

Jos Simson / Nuala Gallagher / Mike Bartlett

Jefferies

+44 20 7029 8000

Nick Adams / Alex Collins

About African Minerals

African Minerals operates the Tonkolili Iron Ore Project (the "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 a number of staged expansions. In 2013, African Minerals completed sales of 12.1Mt to its customers.

The Company has also 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 ("GoSL") has a 10% free carried interest.

The Project companies are currently owned 75% by AML, and 25% by Shandong Iron and Steel Group ("SISG"), except for ARPS, which is currently owned 75% by AML and 25% by SISG, with the GoSL having the right to a 10% free carried interest from AML.

www.african-minerals.com