eEnergy Group Regulatory News (EAAS)

16 May 2013

Alexander Mining plc

('Alexander' or the 'Company')

Improved Metalvalue Agreement with Increased Royalties and Minimised Dilution

·; Alexander gross sales royalty entitlement doubled to reflect Alexander's know-how required specifically to develop each project

·; Minimised equity dilution

·; Good technical progress on key project in DRC

·; Encouraging testwork results for zinc recovery from electric arc furnace dust

Alexander is pleased to announce that further to almost one year's positive cooperation and excellent technical progress with Metalvalue Limited ('Metalvalue' - the technical consultant to Metalvalue Capital Holdings (MCH), the investment vehicle managed by Metalvalue Advisors SA) for the electric arc furnace dust ('EAFD') and Democratic Republic of the Congo ('DRC ') plant projects, a new Leaching Technology Licence Agreement (the 'New Agreement') between MCH and Alexander has been signed along the terms of the November 2012 agreement, which has been terminated. This is to reflect the closer understanding of the optimal way to advance projects in the future, and in particular the know-how input by Alexander at each step of the projects' development and necessary transmission to Metalvalue.

Martin Rosser, CEO, said that: "a major outcome is also a greatly improved gross sales royalty and, given Alexander's recently completed equity financing, the benefit of minimised equity dilution."

The focus of work with Metalvalue has been on two specific projects, namely the building of a commercial AmmLeach® copper/cobalt processing plant in the DRC ('DRC Project') and to investigate developing a plant for the recovery of zinc from EAFD. Also associated with these initiatives has been detailed technical work to establish a pilot plant in Australia in conjunction with Metalvalue.

Regarding the DRC Project, Metalvalue is investigating, with Alexander's technical involvement and in conjunction with major support from a leading commodity trading company, the use of a suitable existing plant in the DRC. This has entailed site visits and detailed analysis. Metalvalue hopes to progress detailed negotiations for a plant to produce initially copper cathode metal and also to secure a major supply of ore feed to the plant. The expected timetable to production is being prepared now.

Preliminary testwork by Alexander on recycling EAFD to produce a zinc product has shown highly encouraging results, and the next steps are being discussed with Metalvalue, including the possibility of a dedicated production plant

In the course of activity to date, both companies recognised that amendments to the November 2012 Agreement would be beneficial to reflect the technical services required to implement the use of Alexander's intellectual property and know-how specific to each project, its necessary transmission to Metalvalue and the practical requirements to progress these and other opportunities. Accordingly, it has been decided to negotiate a revised agreement. In the interim, the following has been agreed:

1. MCH has paid Alexander £200,000 in cash for Alexander shares at 3p per share, to be issued imminently.

2. MCH and Alexander will negotiate a revised Leaching Technology Licence Agreement ("Revised Agreement") on a best efforts basis and in good faith to establish more practical arrangements between MCH and Alexander that will be reflected in a new licensing agreement.

3. MCH has been granted an option, expiring 30 April 2014, to purchase 12m Alexander shares at 5p (a premium of 74% over Alexander's closing price of 2.88p) each (total proceeds if exercised of £600,000) as opposed to the previously announced 3p subscription price.

4. A New Agreement between MCH and Alexander has been signed along the terms of the November 2012 Agreement except for the following amendments that have been made:

4.1. The Alexander gross sales royalty entitlement for MCH to licence Alexander's Leaching Technology in the New Agreement has been increased from 1.0% to 2.0% of the Saleable Product value during the Royalty Period; and

4.2. the Second Tranche Payment of £800,000 condition has been reduced to the payment received of £200,000.

5. As per a term sheet separately signed between the two companies, MCH can make available a facility before the end of July 2013 for co-financing a pilot plant to be established in Australia through a £400,000 loan to Alexander ('Pilot Plant Loan'), provided Alexander has secured the necessary additional funding. If Alexander elects to proceed with the pilot plant and draws down the loan, receiving cleared funds from MCH, then agreed loan terms will apply.

In addition, if Alexander elects to draw down the loan, MCH would be granted exclusive rights for AXM's Leaching Technology at the agreed 2.0% gross sales royalty rate in the DRC and Zambia for copper, cobalt, nickel, zinc and molybdenum. However, Alexander would have a call option to buy back MCH's exclusivity rights for an agreed sum, valid until 1 January 2019.

6. If a new agreement has not been signed by 30 September 2013 then the New Agreement above will remain in force.

ENDS

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