AMI.L Regulatory News (AMI)

20 November 2014

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.

Trading of the Company's ordinary shares was suspended at 7:55a.m. this morning, pending a further announcement by the Company.

As previously announced on 12 November 2014, the Company continues to engage with Shandong Iron and Steel Group ("SISG") over the timing of the release of restricted cash of $102m. SISG had previously agreed to the release of this restricted cash in August 2014, but since that time, SISG's authorisation has not been forthcoming. Despite the Company's best efforts to reach an agreement with SISG over the release of these funds, there remains no certainty on the timing of their release.

In the meantime, the Company has been progressing negotiations for alternative funding to finance working capital until the Project becomes cash flow positive. Despite intensive efforts, in the last few days it has become increasingly apparent that alternative sources of funding are unlikely to materialise in the near future.

In the absence of the release of the restricted cash or availability of alternative sources of funding, in order to address the immediate liquidity issues which the Project currently faces, the Company is seeking to engage with SISG and other parties over a partial disposal of its holding in the Tonkolili mine for a fair market value. Such a disposal may result in release of the restricted cash by SISG and/or allow AML to inject additional funds into the Project, as well as potentially strengthening the Company's own financial position.

Furthermore, Standard Chartered Bank had been mandated by the Project to structure a new debt facility. Since the announcement on 12 November 2014, due to a further deterioration in market conditions, the Company and Standard Chartered Bank have reached a view that any structuring of a new debt facility is not currently possible.

There can be no certainty that any partial disposal of the Company's interest in the Tonkolili mine will materialise, and even if concluded, there is no certainty of the timing or financial outcome of such a transaction.

The Company's ordinary shares will remain suspended pending clarification of the Company's financial position.

Contacts:

African Minerals Limited

+44 20 3435 7600

Matthew Hird / Francis O'Neill

Tavistock Communications

+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 current year sales guidance is for 16-18Mt of exports as the operations focus on operating at the 20Mtpa run rate design capacity.

Phase II expansion contemplates the production of an expanded tonnage including the establishment of a high grade concentrate product with the project ramping up to 25Mtpa.

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