AMI.L Regulatory News (AMI)

12 December 2014

African Minerals Limited

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

Temporary Marampa Access Agreement and Loan

African Minerals Limited, the developer, operator and 75% owner of the Tonkolili Iron Ore Project in Sierra Leone, today announces that, African Railway and Port Services (SL) Limited ("ARPS"), a subsidiary of African Minerals, has entered into a temporary infrastructure access arrangement with Timis Mining Corp (SL) Ltd ("TMC"). The temporary agreement consists of transportation services for TMC's Marampa product using AML's rail and port operations.

Prior to the temporary cessation of operations, announced on 1 December 2014, ARPS had been negotiating an interim infrastructure access agreement with TMC. Given the change of operational and financial circumstances, it is not appropriate to enter into this arrangement, as it would not be possible for ARPS to deliver the required services at this time.

Notwithstanding the temporary cessation of operations, the Company has been in discussions with the Government of Sierra Leone with regards to safeguarding employment. The Government consider this essential, given the current challenges facing Sierra Leone from Ebola, and wishes to ensure continuation of as many businesses as possible, which supports local employment and tax revenues in these difficult times.

Key terms of Temporary Access Arrangement

As such, the directors of the Company (other than Mr Frank Timis) have approved the following temporary access arrangement with TMC, which constitutes a related party transaction (TMC is a related party within the meaning of the AIM Rules by virtue of Mr Timis's shareholding in TMC and his position as Executive Chairman of the Company):

· ARPS will provide TMC with access to its rail and port infrastructure and equipment to transport TMC product from a temporary train loadout point, to and through the Pepel port.

· ARPS will provide staff on a labour only basis to operate its railway and port facilities.

· TMC will make arrangements direct with contractors for equipment and services not provided by ARPS.

· ARPS will charge TMC $100,000/month as an infrastructure access fee, plus all labour at cost which is estimated to be $370,000/month.

· This arrangement will terminate automatically in the event of resumption of normal operations (which would require negotiation and approval of a new arrangement) and is subject to review after 3 months.

AML is of the view the temporary arrangement has little or no risk for ARPS, and has the following significant benefits in the current circumstances:

· Full recovery of labour costs, and contribution to costs of national staff who are in any event required to perform care and maintenance activities;

· Improved security of the assets through continuation of visible activities over port and rail;

· TMC arrangements with contractors allows those contractors to keep equipment and staff on site, thus protecting the ability to recommence operations quickly; and

· Operation of mechanical assets assists with ongoing care and maintenance.

Alan Watling, Chief Executive Officer of African Minerals, said:

"Reaching a temporary access agreement with Timis Mining Corporation safeguards the continued operation of the Marampa mine and maintains essential economic benefits in the region. This temporary agreement will fall away on when operations are resumed.

Whilst management continues every effort to secure funding to resume operations, negotiations have not materially progressed since our announcement of 1 December 2014. There remains no certainty that a funding solution for the Company will be forthcoming."

Loan from Timis Holdings Limited

Timis Holdings Limited (which is also a related party within the meaning of the AIM Rules by virtue of Mr Timis's shareholding in Timis Holdings Limited) has agreed to fund on behalf of the Company, on an unsecured basis, up to $250,000 of professional costs to be incurred by the Company's lawyers, Cleary Gottlieb Steen & Hamilton LLP.

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.

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