Kemin Resources Regulatory News (KEM)

4 February 2013

GMA Resources plc

("GMA" or "the Company")

Proposed acquisition of Joint Venture Kazakh-Russian Mining Company LLP, conversion of loan stock, capital reorganisation, board changes, change of name, notice of General Meeting, notice of class meetings of Loan Stock Holders and readmission to trading on AIM

GMA Resources plc, announces that it has today entered into a conditional agreement to acquire 90 per cent. of the participatory interests in the charter capital of Joint Venture Kazakh-Russian Mining Company LLP ("KRMC").

Highlights

·; KRMC is party to two subsoil use contracts in respect of two molybdenum and tungsten deposits in northern Kazakhstan. The Drozhilovskoye molybdenum-tungsten deposit in Denisovski rayon of Kostanai oblast and the Smirnovskoe molybdenum-tungsten-copper deposit in Karabalyksky rayon, also of the Kostanai oblast.

·; The consideration of £40 million will be satisfied through the issue of 148,320,720 B Shares by the Company to Lother Enterprises Limited (the "Vendor") or, at the Vendor's request, to Bergfolk Corporation, Strathland Enterprises Limited and Hanson Central European Fund LP.

·; The Subsoil Use Contracts are presently suspended. Upon the Contract Reinstatement, the B Shares will automatically convert into New Ordinary Shares on a one-for-one basis.

·; The proposed acquisition constitutes a reverse takeover under the AIM Rules. Shareholder approval to the acquisition and other matters is to be sought at a general meeting. Irrevocable undertakings have been received from holders of 27.6 per cent. of the Existing Issued Share Capital.

·; Loan Stock Holders will be asked to approve amendments to the terms of their loan stock such that their holdings automatically convert into New Ordinary Shares upon the Contract Reinstatement. The approval of Loan Stock Holders to these proposals is being sought at the relevant class meetings of Loan Stock Holders. Irrevocable undertakings have been received from holders of 83.9 per cent. and 96.6 per cent. of the First and Second Loan Stock, respectively.

·; Temporary suspension is expected to be lifted at 7.30 a.m. on 5 February 2013 following publication of the AIM Admission Document later today.

Strategy

·; The Company intends, subject to financing, to commence a four stage process aimed at developing the Drozhilovskoye and Smirnovskoe deposits.

·; Success with either or both deposits is expected to be followed over the following two to three years by the completion of a bankable feasibility study (a "BFS") for a large-scale mining operation producing molybdenum and tungsten concentrates plus potential other by-products.

·; On completion of the BFS, the Company will review its strategic options: whether to finance and build an operating mine or to sell one or more deposits to another mine developer.

Capital Reorganisation:

·; the effect of the Capital Reorganisation will be to convert every 500 Existing Ordinary Shares into one New Ordinary Share and one Deferred Share.

Change of name

·; Upon Admission, the Company will change its name to Kemin Resources plc.

Commenting on the transaction, Ralph Browning, Non-Executive Chairman of GMA Resources plc and proposed Non-Executive Director of Kemin Resources plc, said:

"We are delighted to have agreed terms for a reverse takeover with a business owning potentially very substantial molybdenum and tungsten assets at an opportune time in the economic cycle. These assets have the potential to provide significant investment returns for longstanding supportive GMA bondholders and shareholders. I would like to thank everyone involved in this transaction and I look forward to working with the new Board to develop KRMC's assets."

Further details

Application will be made to the London Stock Exchange for the New Ordinary Shares arising from the Capital Reorganisation to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings will commence in the New Ordinary Shares arising from the Capital Reorganisation on 1 March 2013.

Upon the Contract Reinstatement, the Company will issue the Loan Stock Shares and the B shares will automatically convert into New Ordinary Shares on a one-for-one basis. It is expected that dealings in the shares will commence on the next business day following the Contract Reinstatement.

In the event that the Contract Reinstatement does not become effective on or before 31 May 2013, the Loan Stock Shares will not be issued and the B Shares will be converted into Deferred Shares. Furthermore, dealings in the New Ordinary Shares will be suspended on 3 June 2013, the Company will revert to being an investing company under Rule 15 of the AIM Rules and dealings in the New Ordinary Shares on AIM will be cancelled six months thereafter if the Company has not implemented its investing policy by that date.

FURTHER ENQUIRIES

www.gmaresources.plc.uk

Copies of the AIM Admission Document will be available on the Company's website (www.gmaresources.plc.uk) and from the offices of Field Fisher Waterhouse LLP, 35 Vine Street, London EC3N 2PX.

Information on KRMC

History and background

KRMCwas established and registered in December 2001 as a limited liabilitypartnership in accordance with the laws of Kazakhstan. In October 2006,Lother Enterprises Limited("Lother BVI"), a legal entity incorporated in the BritishVirgin Islands, acquireda 90 per cent. participatory interest in KRMC. This interest was subsequently transferred to the Vendor, a company under the same beneficial ownership as Lother BVI, on 30 May 2010. GMA has conditionally agreed to acquire this interest pursuant to the Acquisition Agreement.

In December 2004, subsoil use contracts were entered into by KRMC and the MEMR in respect of the Drozhilovskoye molybdenum-tungsten deposit in Denisovski rayon of Kostanai oblast and the Smirnovskoe molybdenum-tungsten-copper deposit in Karabalyksky rayon, also of the Kostanai oblast. The Drozhilovskoye Subsoil Use Contract has an initial term of 30 years while the Smirnovskoe Subsoil Use Contract has an initial term of 36 years. The exploration period under each contract may be extended twice for two further years each upon agreement between KRMC and the MINT if KRMC applies not later than six months prior to the expiry date of the exploration term.

Drozhilovskoye deposit

TheDrozhilovskoye molybdenum-tungsten depositis located in Denisovski rayon of Kostanayskaya oblast, 55km northeast of Zhitigara and 31km northwest from the rayon center, Denisovka. The small settlement of Okrainka lies some 4km from the deposit. The deposit area covers approximately 6.6km2. In addition to the main valuable ore components of molybdenum (Mo) and tungsten(W) the deposit is also thoughtto contain amountsof bismuth, beryl, lithium, rubidium,cesium, copper, gold and silver.

Sincethe deposit was discovered in 1964 considerable exploration work has taken place culminating in the most recentresource statement undertaken in 2005 (usingthe former Soviet Unionresource and reserve classification system common in Central Asia),which provided a GKZ approved Category C1 and C2 resource estimatefor the northernstockwork, usinga 0.05 per cent. Mo (equiv.) cut-off, of 37.2Mt at 0.107 per cent. Mo and 0.086per cent. WO3. Importantly, the first resourceestimate undertaken in 1974 defined a GKZ approved estimatefor the wholedeposit at C2 of approximately 140Mt at 0.188 per cent. Mo.

Themost recent exploration work on the project was a drillingprogramme in 2006/2007 which broadly substantiated previous work and provided further detail to both the geology and resource base. However, there remains substantial upside to increase the deposit'stonnage from 37.2Mt based on the 1974 resource estimate.

Smirnovskoe deposit 

TheSmirnovskoe molybdenum-tungsten-copper depositis located in Karabalyksky rayon, 156km northwest of Kostanaioblast and some 41km northof Karabalyk, the district centrein northern Kazakhstan. The village of Smirnovka is in the immediate vicinity of the deposit. The deposit area covers approximately 13.7km2.

The deposit has been divided into a larger northern and smaller southern zone, within both zones the principal ore mineral is molybdenite which is associatedwith chalcopyrite and pyrite. Other minerals are rare.

Thedeposit has been studied in much less detail than Drozhilovskoye, althougha 1996, GKZ approved, resource estimate produceda combined Category C1 and C2 resource for both the larger northern and smaller southern zones of approximately 109Mt at 0.1378 per cent. Mo (equiv.) using a 0.05 per cent. Mo equivalent cut-off grade. A further estimatewas provided in 2007 which gave an estimate of 108Mt at 0.1056 per cent. Mo using the same cut-off grade.

Current status of SubsoilUse Contracts

In September 2010, the MINT by its order purported to terminate the Smirnovskoe Subsoil Use Contract, citing non-compliance with the work programme. KRMC successfully contested the order and the purported termination.

Similarly, in March 2011, the MINT purported to terminate the Drozhilovskoye Subsoil Use Contract citing expiration of the exploration period and rejection of KRMC's application to extend its term. KRMC successfully contested the order and the purported termination.

Based on KRMC's understanding with MINT, the period during which KRMC was unable to carry out subsoil use due to the termination of the Subsoil Use Contacts by the MINT will be deemed a suspension period under such contracts.

Following completion of the Acquisition, KRMC will apply to the MINT for the reinstatement of the Subsoil Use Contracts on materially the same terms as originally granted except that KRMC shall apply for the exploration period for both contracts to be extended to 31 December 2016. It is expected that it could take up to six weeks after Admission before the Subsoil Use Contracts are reinstated. Shareholders should note that it is not a condition to completion of the Acquisition that the Subsoil Use Contracts are reinstated. However, the B Shares will only be converted into New Ordinary Shares upon the Subsoil Use Contracts being reinstated on or before 31 May 2013. The Directors believe that the application to the MINT will be successful.

Overview of the Kazakhstan mining industry 

Kazakhstan is located in Central Asia, bordering Russia to the north and China to the east and is the world's ninth largest country, covering 2,717,300 km2. The extent of Kazakhstan's portfolio of mineral resources is not yet fully understood but potential resource figures are substantial.

After oil and gas, the mining industry in Kazakhstan is the second largest economic sector when evaluated in terms of dollar revenues. In 2009, mining represented 19.6 per cent. of Kazakhstan's national GDP and US$21.3 billion worth of economic output. Although the mining sector's growth trajectory has shared a similar pattern of turbulence to that of the global economy during the recent financial crisis, growth in the mining sector is expected to recover strongly. Given that mining is typically a capital intensive industry, employment numbers in the industry are proportionally low relative to dollar output at just 2.4 per cent. of Kazakhstan's workforce. Employment is spread throughout the industry's value chain ranging from logistics and equipment suppliers to exploration geologists.

Molybdenum

Molybdenum properties

Molybdenum has one of the highestmelting temperatures of all the elements, yet unlike most other high-melting point elements, its density is only 25 per cent. greater than that of iron. Its coefficient of thermal energy expansion is the lowest of the engineering materials, while its thermal conductivity exceeds all but a handfulof elements.

Whenadded to steel and cast iron, molybdenumenhances strength, hardenability, weldability, toughness, elevated temperature strength and corrosion resistance. In nickel-base alloys, it improves resistance to both corrosionand high-temperature creep deformation.

Molybdenum-based alloys have a uniquecombination of properties, including high strengthat elevated temperatures, high thermaland electrical conductivity and low thermal expansion. Molybdenum metal and its alloys are often the first choice in many demanding specialised applications.

Molybdenum production

United States Geological Survey data estimated that worldwidein 2010 242,000tof Mo was mined. World reserves were estimated at 10Mt in 2011.

In 2011 it was estimated that North Americaand Mexico would mine 84,300t,South America 56,000t, China 94,000t and the rest of the world 16,000t,of which Kazakhstan would produce360t. World reserves are dominated by China 4.30Mt, North America and Mexico 3.05Mt, South America 1.65Mt and the rest of the world 1.00Mt.

Mining molybdenum

Molybdenum is contained in various minerals, but only molybdenite (MoS2) is suitablefor the industrial production of marketable molybdenumproducts. Molybdenite can occur as the sole mineralisation in an ore body, but is often associated with the sulphideminerals of othermetals, notably copper. Typically, the Mo content of viable ore bodies ranges between 0.01 percent. and 0.25 per cent.

Depending upon the mineralscontained in the ore body and theirquality, molybdenum mines are grouped in three classes:

·; Primary mines, where the recovery of molybdenite is the sole objective;

·; By-product mines,where the recovery of copper-bearingores is the primary objective, and molybdenite recovery provides additional economicvalue; and

·; Co-product mines,where the commercial viability of the mine requiresthat both molybdenite and copper-bearing mineralsbe recovered.

Ifthe ore lies close to the surface, open cast pit technology is employed. Here the overburden is excavated to reveal the ore body for easy extraction. If the ore lies deep underground, the underground block caving technique is employed. Here large blocksof ore are undercut and allowed to collapse under their own weight. The resulting rock is removed to the surface for processing.

Processing molybdenum

Theprocessing of molybdenum can be summarised as follows:

Crushing and grinding Ballor rod mills crush and grind the mined ore to fine particlesthat may be only microns (10-3 mm) in diameter, releasing molybdenite from the gangue (worthlessrock).

Flotation Themilled ore/gangue powder is mixed with a liquid and aeratedin the flotation step. The less dense ore rises in the froth to be collected, while the gangue sinks to be discarded. The resulting MoS2 concentrate contains between 85 per cent. and 92 per cent. MoS2.

Leaching Further treatment by acid leaching can be used to dissolve impurities like copper and lead if necessary.

Roasting Roasting in air at temperatures between500 and 650ºC converts MoS2 concentrate into roasted molybdenite (MoO3) concentrate (also known as technical Mo oxide,or tech oxide).The resulting roastedmolybdenite concentrate typically containsa minimum of 57 per cent. molybdenum and less than 0.1 per cent. sulphur.

Molybdenum products

Many productsflow from the miningand processing of ores containing molybdenite (MoS2), including:

Chemical Molybdenum products

Used in catalysts, polymer compounding, corrosion inhibitors, and high-performance lubricant formulations, these include pure molybdic oxide and molybdates, and lubricant grade MoS2.

Meltstock products

Used as alloy additions to iron, steel, nickel and titanium alloys, these include technical Mo oxide, ferromolybdenum and Mo metal pellets.

Molybdenum metal products

These include powder, Mo metal and Mo-base alloy mill products and products fabricated from them.

Strategy

TheDirectors believe that the depositsat both Drozhilovskoye and Smirnovskoe have the potential to becomesignificant molybdenum concentrate producers in the future either as two separate mining and processing facilities or collectively as two mining operations sharinga single processing facility.

Kazakhstan is located in a region of increasing steel demand and production, bordered by China and Russia. Molybdenum is a critical component of high grade, corrosion resistantsteel. The geographic location of the two molybdenum deposits supports a compelling case for the development of these two molybdenum deposits.

UponAdmission and following the Contract Reinstatement, the Company intends, subject to financing, to commence a four stage process aimed at developingthe Drozhilovskoye and Smirnovskoe deposits. Whether thesedeposits are developed togetheror individually will be determined by their respective exploration and feasibility studies. Success with either or both deposits is expected to be followed over the following two to threeyears by the completion of a bankable feasibility study (BFS) for a large-scale mining operation producingmolybdenum and tungsten concentrates plus potential other by-products. On completion of the BFS, the Company will review its strategic options:whether to finance and build an operatingmine or to sell one or more deposits to another mine developer. The Company's financialresources are not sufficient to enable the Company to fulfil its strategy outlined below. The Company will be seekingadditional financing. The Assaubayev family intends to support the Company in achieving its strategic aims.

Thedeposits are currentlyviewed as early stage exploration projects. However, since their discovery a numberof exploration programmes have been undertaken with complementary and limited, but encouraging, metallurgical test work.

Phase1 - Verification of Existing Data

TheDrozhilovskoye deposit has been the subject of 71,561m of drilling completedbetween 1964 and 2007over nine successive drillingcampaigns. Extensive drillinghas also been completed on the Smirnovskoe deposit and, although there is limited existing core available,there is a full record of the duplicates of drill core pulps previously sent for assay for much of this drilling.

In 2005 metallurgical test work was completed on 12 samples from Drozhilovskoye and Smirnovskoe. These preliminary results indicated for the Drozhilovskoye samples that molybdenum recovery was approximately 93 per cent. and the concentrate varied from 50-54 per cent.

Theobjective of Phase1, over a four month period,is to conduct a full review of the existing data relating to both the Drozhilovskoye and Smirnovskoe deposits to verify and validate the existing data through a process of:

·; Re-logging of existingdrill hole core data;

·; Assaying existing drill hole core data not yet assayed;

·; Re-assaying selecteddrill hole core and duplicates to validateexisting drill hole assay data;

·; Establishing confidence of drill hole locations;

·; Reviewing and conducting some initial metallurgical testingto validate previous work; and

·; Developing an exploration programme combining geophysics, soil geochemistry and drilling related exploration techniques to confirm the existing resource and expand the resource potential.

Thedeliverables of Phase 1 are the developmentof a geological database and geological model that provides the confidencein the data within the geological model. This geological model will drive the Phase 2 exploration programme.

Phase 2 - Exploration Programme targeting a JORC or equivalent Compliant Resource Statement and Preliminary Economic Assessment

During Phase 2 the intention will be to gain confidencein the previously statedmineral resource potential. This will be done through a series of infill drill holes as identified 'gaps' from the geological model from Phase 1. The exploration programme will apply appropriate geophysics and geochemistry methods to expand the resource potential. The expansionof the resource will be completed by the drilling of new holes in the most prospective areas highlighted by the geophysics and geochemistry.

Detailed metallurgical testingof drill core samples from existingdrill hole data and newly drilledcore will also be ongoing.

In parallel, a preliminary economicassessment will be undertaken that will focus on confirmingthe availability and requirements for the developmentof the two deposits including power, water, environment, metallurgy, logistics and end user requirements for the molybdenumconcentrate. It will alsoinclude a detailed assessment of the demand/ supply balance of molybdenumand future forecast pricing.

A JORC (or equivalent standard, as defined by the AIM Rules) compliant resource statement will be completed and used as part of the preliminary economic assessment as the first step of determining the potential financial attractiveness of the project.

The outcome of Phase 2 will determinethe potential of one or both deposits,when in production, to achieve the economic hurdlesjustifying a pre-feasibility study (PFS).

Phase3 - Pre-Feasibility Study

Thecompletion of Phase 2 will also define the objectives for the PFS. The PFS will considerall the mine developmentoptions and determinethe most appropriate option to pursue in the BFS.

In Phase 2, all the environmental and social impact studies to fulfil the requirements to advance the Drozhilovskoye and Smirnovskoe deposits from exploration to mining will commence. These studies and subsequent management plans are intended to fulfil the Government's licensing requirements, which will enable the Company to apply to the Kazakh government for the issue of the related licences and permits to build and operate a mine.

Drilling should continue to upgrade the deposits from inferred resourcesto an appropriate level of measured, indicated and inferredresources, with a portion being upgraded into proven and probable mining reserves.

The PFS will specifically address issues related to the managementof power, water, logistics, product sales, human resources, health, safety, environment, community, permits to operate, tax, royalties and othergovernment relatedobligations.

At the completion of the PFS, it is intended that the financial outcomes of a single development plan will have been articulated on the basis of applicable assumptions and the remaining requirements to complete a BFS will have been identified. In addition, the JORC (or equivalent standard, as defined by the AIM Rules) compliant reserve and resource statement will be updated and supported by a revised geological model.

Phase4 - Bankable Feasibility Study

During the preparation of the BFS, the objective will be to provide investors and financiers with the confidence to fund the development through to productionusing both equity and debt financing. The BFS will be prepared taking account of the EquatorPrinciples used by the financial communityas a bench mark to provide financing for mining developmentsin developing nations.

During this phase, work shouldprogress sufficiently with design, engineering and contracts so that, upon funding being obtained, the construction phase can commence quickly and contracts be entered into with contractors.

A mine developmentplan used for the BFS will be based on the updatedreserve and resource statement and supporting geological model.

In addition, it is intended that, prior to the completion of the BFS, all regulatory approvals, permits and licences will be secured.

Licence regulation - Kazakhstan's subsoil regulatory framework

General

Theconstitution of Kazakhstan and Edict of the Presidentof 1996 denotes that all subsoil mineral resources are owned by the Kazakh state.In 2010 responsibility for subsoil miningrelated commodities was assumed by the newly createdMINT.

Theprincipal statute governing Kazakhstan's mining industryis the Subsoil Use Law. This law regulates relations arising in the sphere of subsoiluse and is intended to protect the interests of Kazakhstan, as well as facilitating the rational and comprehensive study and use of subsoil within the country.

Acquisition of subsoiluse rights

According to the Subsoil Use Law, persons may obtain subsoil usage rights in three particular ways: either (i) directly from the state; (ii) through purchase or transfer from another entitled subsoil user; or (iii)through legal succession from the reorganisationof entities alreadypossessing subsoil use rights. The process for acquiring subsoiluse rights is either throughdirect negotiationor an open tender depending upon market conditions, government participation, as well as vendor and purchaser circumstances. The MINT grants exploration and production rights by means of subsoil use contracts. Subsoil use rights are granted for a specified period,but they may be extended before the expiration of the contract.

Termination of subsoil use rights

Subsoil use contracts may be terminated by the MINT if the subsoil user does not satisfy its contractual obligations and such non-compliance is not remediedwithin the timing established by the MINT. Such obligations include, but are not limited to, periodic payment of royalties and taxes to the government and the satisfaction of mining, environmental, safety and health requirements. Under the Subsoil Use Law, if a subsoiluser fails to fulfil the terms and conditions of its subsoiluse contract more than twice, the MINT may make a demand in writing for rectificationof the non-compliance. There are no materiality thresholds connectedwith the non-compliance. The MINT may only unilaterally terminate a subsoil use contract if the subsoiluser fails to rectifytwo breaches within the time specified.

Strategic deposits

TheSubsoil Use Law containsa concept of "fieldsof strategic importance". This concept aims to protect Kazakhstan's national interests in the sphereof subsoil use. In October2011, the Kazakh government prescribed certain fieldsare as being of strategic importance. The Smirnovskoe and Drozhilovskoye depositsare not currently included in this list.

TheMINT has the following rights in respect of fields of strategic importance:

(i) theright to demand amendments and/or additions to a subsoiluse contract if the actionsof the relevant subsoil user, operatingwhat is deemed to be a strategic subsoilfield, results in unfavourable changesto Kazakhstan's economic interests which may adversely affect national security;

(ii) theright to unilaterally terminate the relevant subsoiluse contract if within a certain periodof time (in totalnot more than 12 months)the subsoil user does not agree to enact such amendments; and

(iii) theright to repudiatethe applicable subsoiluse contract unilaterally on two months' notice if it determines that the subsoiluse operations resultin a material adverse change in the economic interests of Kazakhstan, which creates a threat to national security.

Kazakh government's pre-emptive right and the consent of MINT

Another key provision of the Subsoil Use Law is that the Kazakh governmenthas pre-emptive/first refusal rights to purchase, on terms no worse than those proposed to other buyers, any subsoil use rights and equity interestsin any entity holding subsoil use rightsat market prices when such entity wishes to transfer such rights or equity interests. The MINT has the right to terminate a subsoil use contract if a transaction takes place in breach of the pre- emptive/first refusalright, which appliesto transactions done in Kazakhstan and overseas.

In additionto the pre-emptive/first refusalrights of the Kazakh government, the Subsoil Use Law provides that any transfer of subsoil use rights (and/or any equity interests in an entity holding subsoil use rights or other legal entity which may directly or indirectly determine decisions and/or exert influence on the decisions of an entity holding sub soil use rights) to any third party, in whole or in part,may only be made with the prior consent of MINT.

Principal terms of the Acquisition

Underthe terms of the Acquisition Agreement, the Company has agreed to acquire 90 per cent. of the participatory interests in KRMC for a consideration of £40 millionto be satisfied by the issueof 148,320,720 B Shares to the Vendoror, at the Vendor's request,to Bergfolk, Strathland and Hanson. Pursuant to their terms, the B Sharesshall convert into 148,320,720 New OrdinaryShares if the Contract Reinstatement becomes effective on or before 31 May 2013.

Completion of the Acquisition will be conditional, inter alia, on:

(a) the passingof the Resolutions;

(b) the waiver or expiry of certain rights of pre-emption by the remaining holders of participatory interests in KRMC; and

(c) Admission.

The Acquisition Agreementhas a long stop date of 30 April 2013 after which it will automatically terminate unless GMA and the Vendoragree to extend the period. Subjectto the conditions being satisfied (or where possible, waived), Completion will take place on the date of Admission.

TheAcquisition Agreement containscertain warranties and undertakings given to the Company by the Vendor (and guaranteed by Amrita, the provider of the Working Capital Facility) in favour of the Company and given by the Company to the Vendor in favour of the Vendor, Bergfolk, Strathland and Hanson.

In the event that the Contract Reinstatement does not become effective on or before 31 May 2013, the Consideration Shares shall automatically convert into Deferred Shares on the basis of one Deferred Share for every 499 B Shares held. Where a fraction of a Deferred Share would fall to be issued, the B Shares will instead convert into New Ordinary Shares on a one for one basis. In addition, in such event, pursuant to the Acquisition Agreement, the Company will transfer its participatory interests in KRMC back to the Vendor for £1, subject to the approval of the Shareholders pursuant to the AIM Rules.

In the event that the Contract Reinstatement does not become effective on or before 31 May 2013, then dealings in the New Ordinary Shares on AIM will be suspended on 3 June 2013, the Company will revert to being an investing company under Rule 15 of the AIM Rules and dealings in the New Ordinary Shares on AIM will be cancelled six months thereafter if the Company has not implemented its investing policy by that date.

You are remindedthat the City Code does not currently apply to the Company. Consequently, Shareholders should be aware that they will not be afforded the protections offered by the City Code. Should the Companybecome subject to the City Code before Admission, the Panel may seek to impose additional requirements on the Vendor and/or the Company in relationto the Acquisition (including requiring amendments to the agreed terms).

Background to and reasons for the Capital Reorganisation

Thecurrent market value of the Existing OrdinaryShares is below their nominal value. As a company cannot issue shares at a price below their nominal value, this impactsthe Company's abilityto raise new money. Additionally, the number of ExistingOrdinary Shares that would be requiredto be issued pursuant to both the conversion of the Loan Stock and on conversion of the Consideration Shares would, inthe Directors' opinion,result in an excessive number of shares in issue.

TheDirectors therefore proposeto carry out the CapitalReorganisation, whereby:

(i) the Existing Ordinary Shares are consolidated so as to become ordinary shares of 500 pence each on the basis of one ordinary share of 500 pence for every 500 Existing OrdinaryShares; and

(ii) each of the resultingordinary shares of 500 pence is subdivided and reclassified as one New Ordinary Share and one Deferred Share.

Accordingly, the effect of the CapitalReorganisation will be to convert every 500 Existing Ordinary Shares into one New OrdinaryShare and one Deferred Share.

Holders of fewer than 500 Existing OrdinaryShares will not be entitledto receive a New Ordinary Share following the CapitalReorganisation. Shareholders with a holdingin excess of 500 Existing Ordinary Shares, but which is not exactly divisibleby 500, will have their holding of New Ordinary Shares rounded down to the nearestwhole number of New Ordinary Shares following the Capital Reorganisation. Fractional entitlements, whether arisingfrom holdings of fewer or more than 500 Existing Ordinary Shares, will be sold in the market and the proceeds will be retained for the benefit of the Company.

As the Existing Issued Share Capital is not divisible by 500, the Company must issue an additional 106 Existing OrdinaryShares prior to the CapitalReorganisation. It is intended that these shareswill be issued for 1p per Existing OrdinaryShare prior to the GeneralMeeting.

The Existing Ordinary Shares have been admitted to CREST. Application will be made for the New Ordinary Shares, including those arising from the Capital Reorganisation, to be admitted to CREST, all of which may then be held and transferred by means of CREST. It is expected that the New Ordinary Shares arising as a result of the Capital Reorganisation in respect of Existing Ordinary Shares held in uncertificated form, i.e. in CREST, will be credited to the relevant CREST accounts on 1 March 2013 and that definitive share certificates in respect of the New Ordinary Shares arising as a result of the Capital Reorganisation from Existing Ordinary Shares held in certificated form will be dispatched to relevant Shareholders by 13 March 2013. No temporary documents of title will be issued. Share certificates in respect of Existing Ordinary Shares will cease to be valid on 1 March 2013 and, pending delivery of share certificates in respect of New Ordinary Shares will be certified against the register. The record date of the Capital Reorganisation is 5.00 p.m. on 28 February 2013.

Therights attaching to the New OrdinaryShares will be identical in all respectsto those of the Existing Ordinary Shares.

TheDeferred Shares will have no, or very limited rights,and for all practical purposes,be valueless and it is the Board's intention, at an appropriate time, to have the DeferredShares cancelled. No certificates will be issued in respect of the DeferredShares. 

Background to and reasons for the changes to the Loan Stock

It is a condition of the Acquisition Agreement that the terms of the Loan Stock are amended such that all of the outstanding principaland accrued interestof the Loan Stock outstanding at 31 January2013 is automatically converted,subject to the Contract Reinstatement becoming effective, into the Loan Stock Shares, to be apportioned between the Loan Stock Holdersin proportion to their relevant holdings of Loan Stock. In the event that the Contract Reinstatement becomes effective, no interest will accrue onthe Loan Stock from 1 February 2013 until the date of the ContractReinstatement.

Theproposed changes to the First Loan Stock Instrument and Second Loan Stock Instrument are set out in full in the noticesconvening the relevant Loan Stock Meetingsat the end of this document. For such changes to be effective, the resolution to be proposedat the First Loan StockMeeting requires the unanimous approval of the holders of the First Loan Stock either presentor represented at the meeting and the resolution to be proposedat the Second Loan StockMeeting requires the approval of three quarters of the holders of the Second Loan Stock either presentor represented at the meeting.

The effect of the change, is that holders of the First Loan Stock will receive approximately 413 New Ordinary Shares for every £1,000 nominalof the First Loan Stock and holdersof the Second Loan Stock will receive approximately 462 New Ordinary Shares for every £1,000 nominal of Second Loan Stock held.

Copies of the First Loan Stock Instrument and the Second Loan Stock Instrument, togetherwith blacklined comparison documentsshowing all the proposedchanges are availablefor inspection during normal business hours at the registered office of the Company until the date of the Loan Stock Meetings and General Meeting. Copies will also be availableat the Loan Stock Meetingsand the General Meeting.

Directors and Proposed Directors

Details of the Directorsand Proposed Directorsof the Company are set out below. With effect from Admission, William Trew and Sanzhar Assaubayev will be appointedto the New Board.

Directors

RalphBrowning (Non-Executive Chairman and followingAdmission, Non-Executive Director), aged 49, having graduatedfrom The London School of Economics and Political Science in 1985 started his careerat Imperial ChemicalIndustries ("ICI") managinga base and precious metalsportfolio for use as catalysts by ICI in its petrochemical and other businesses. Mr Browning has since been involved in the establishment and growth of numerous other successful businesses on behalf of Citibank, Natwestand Deutsche Bank as well as other providers of risk capital.He has also been a Senior Vice Presidentof Mastercard International in New York, a co-founder of Deutsche Bank's Islamicfinance capitalmarkets businessand Executive Chairman of Orosur MiningInc., a SouthAmerican gold explorer and producer which is quoted in London and Toronto (AIM: OMI, TSX: OMI).

Kenneth Crichton (Non-Executive Director), aged 50, is a mining engineerhaving graduated from the University of New South Wales, Australia in 1985 with 27 years' experiencein the mining industry. Sincegraduating, more than half of his careerhas been working in developing countries and a considerable part in active mine production roles. Currently he is employed as the ChiefExecutive Officer of ASCOM PreciousMetals and Mining ("APM"), an Egyptianbased minerals exploration company focusing in North and East Africa. Currentlyhe is focusing APM's resources on advancing its gold discovery in Ethiopia.Mr Crichton worked for 15 years with BHP Billitonin both Australia and Indonesia, including as the PresidentDirector of PT Billiton Indonesia,a BHP Billiton subsidiary. For fourand a half years, he worked with the LeightonHoldings Group of Companies, a leading construction and mining contractor in Papua New Guinea, Indonesiaand Australia. In these roles Mr Crichton was involved in the management of a number of large mining contracts with clients such as Lihir Gold, Macarthur Coal and BHP Billiton.In addition, he was the GeneralManager of the Roche Eltin Joint Venture, responsible for the miningcontract at that time for the CenturyZinc Mine in Queensland, Australia. Kenneth Crichton is an Australian citizen.

Proposed Directors

William Trew (Proposed Non-Executive Chairman), aged 54, graduatedfrom the University of Wales in 1979 with a degree in engineering and achieved a Master's degree in engineering at Randse Africanse University in Johannesburg in 1984, while working at the Chamber of Mines. Since then he has gained over 32 years' experience in the mining and engineering industry as both a project manager and senior engineer for some of the world's most significant gold mining companies, including Gold Fields Limited and Bateman Engineering. In 1986 he founded MAED Limited, a specialist project management and engineering design company specialising in the gold mining industry. He is a registered professional engineer with the Engineering Council of South Africa. He was appointed Chief Executive Officer of Oxus Gold plc in November 2002, and later left the Company in February 2008. He was also the chairman of Marakand Minerals plc, which was listed on AIM between 2004 and 2008, and was a non-executive director of KazakhGold Group Limited between 2004 and 2009. He holds directorships in a number of private companies and is currently chairman of the MAED group of companies and a director of Gold Mines of Uganda and Paracale Gold Limited.

Sanzhar Assaubayev (Proposed Chief Executive Officer), aged 26, is the Chief FinancialOfficer of the AltynGroup Kazakhstan LLP. Formerly he was the director of international affairs of JSC MMC Kazakhaltyn and an Executive Director of the KazakhGold Group Limited, the gold mining corporation. He is also a member of the board of directors of Altyn Group PLC and Nectar Capital Limited. He was educated at the Leysin American School in Switzerland, where he specialised in management, and the American University in the United Kingdom and holds a Bachelor degree in Business Administration. Mr. Assaubayev is fluent in Russian and English, as well as Kazakh (his native tongue).

Current trading and prospects

Since April 2012 the Company has been classified as an investing company in accordance with Rule 15 of the AIM Rules, having disposed of all revenue generating assets. Accordingly, the Company has earned no revenues in the current financial year. The Directors believe that the acquisition of the 90 per cent. stake in KRMC represents the best option available to protect and enhance the Loan Stock Holders' and Shareholders' interests. The Enlarged Group will be an early stage exploration Company. The Enlarged Group's prospects are dependent on its ability to secure additional financing in order to implement its strategy.

Dealing restrictions

On Admission, Kenneth Crichton will be interested in 16,000 New Ordinary Shares, representing approximately 1.29 per cent. of the New Ordinary Shares in issue at Admission and approximately 0.01 per cent. of the voting rights of the Company at Admission.

On Admission, Bergfolk will be interested in 133,117,846 B Shares, representing approximately 89.01 per cent. of the voting rights of the Company's issued share capital at Admission. Following the conversion of the B Shares into New Ordinary Shares after the Contract Reinstatement, Bergfolk will be interested in 133,117,846 New Ordinary Shares representing approximately 87.56 per cent. of the Enlarged Issued Share Capital.

The Directors and the Proposed Directors, on behalf of themselves, their families and other persons deemed to be connected with them and Bergfolk on behalf of itself and other persons deemed to be connected with it, have undertaken pursuant to the Lock-in Agreements to Merchant Securities and the Company not to dispose of such interests (subject to certain limited exceptions) until 12 months after Admission. The Directors have undertaken for a further period of 12 months that they will only dispose of an interest in the Company's shares through Merchant Securities, except in certain limited circumstances. The Proposed Directors and Bergfolk have further undertaken that for a further period of 12 months they will only deal or otherwise dispose of any such interests where the price paid and the size of the interests being dealt with or disposed of is within certain pre-determined parameters and provided that such dealing or disposal is notified to Merchant Securities.

On Admission, Strathland and Hanson will be interested in 10,642,012 and 4,560,862 B Shares, respectively, representing approximately 7.12 and 3.05 per cent. of the voting rights of the Company's issued share capital at Admission.

Strathland and Hanson on behalf of themselves and other persons deemed to be connected with them, have undertaken that for a period of one year after Admission, they will only deal or otherwise dispose of any such interests where the price paid and the size of the interests being dealt with or disposed of is within certain pre-determined parameters and provided that such dealing or disposal is notified to Merchant.

Other information

A General Meeting of the Company, to be held at the offices of Merchant Securities Limited, 51-55 Gresham Street, London EC2V 7EL on 28 February 2013 at 10.10 a.m. (or, if later, immediately following the Second Loan Stock Meeting) to consider and, if thought fit, passing the Resolutions.

Kenneth Crichton has irrevocably undertaken to vote in favour of the General Meeting Resolutions in respect of his own shareholding, which amounts to 1.29 per cent. of the Existing Issued Share Capital.

In addition to these undertakings, a number of the Company's other Shareholders have also given Irrevocable Undertakings to vote in favour of the General Meeting Resolutions. In aggregate the undertakings held by the Company as at the date of this document (including the undertaking received from Kenneth Crichton referred to above) amount to 27.6 per cent. of the Existing Issued Share Capital.

Subject to the passing of the Resolutions at the General Meeting and on Admission the name of the Company will change to Kemin Resources plc.

Following Admission, the Company will have 1,236,006 Ordinary Shares in issue and admitted to trading on AIM.

Note: If the above dates change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service