Sovereign Mines of Africa Regulatory News (SMA)

28 July 2011

Sovereign Mines of Africa Plc ("the Company")

Admission to AIM and Commencement of Dealings

Highlights

·; Sovereign Mines of Africa has joined AIM from Plus Markets and First Dealings on AIM have commenced today

·; A Placing of 12,500,000 new Ordinary Shares at 10p per share, comprising 7.54% of the enlarged share capital, has raised £1.25 million before costs

·; Company based on joint venture with the Government of the Republic of Guinea in West Africa to explore five substantial and highly prospective gold properties

·; Exploration drilling commenced in late June on the Mandiana-Magana property

·; Highly experienced exploration mining team

·; Company to pursue further collaborative joint ventures with other governments using the Sovereign Partnership Structure

David Pearl, Chairman, commented:

"After a successful period on PLUS Markets, we are now joining AIM to broaden our investor base as well as raising the profile of the Company with potential new joint venture partners. We believe that our Sovereign Partnership Structure, in collaboration with African Governments, will be the new standard for productive engagement in Africa."

Sovereign Mines of Africa Plc today announces the admission of its Ordinary Shares to the Alternative Investment Market of the London Stock Exchange ("AIM") ("Admission") and the commencement of dealings in its shares. On behalf of the Company, Shore Capital Stockbrokers Limited has placed 12.5 million shares of 1 pence each ("Ordinary Shares") at a placing price of 10p per share, to raise £1.25 million in cash (before expenses), representing approximately 7.54% of the enlarged issued share capital (the "Placing"). At the placing price of the Company will have a market capitalisation on admission of approximately £16.6 million. Shore Capital and Corporate Limited is the Company's Nominated Adviser.

The Company

Sovereign Mines of Africa Plc is a mineral exploration company incorporated in England and Wales and headquartered in London. At the end of 2007, the founders of the Company saw an opportunity to pool their collective expertise and experience in order to form joint ventures for mineral exploration with governments in Africa. The Republic of Guinea in West Africa was identified as the first target and this ultimately gave rise to the establishment of the Company in 2010.

Sovereign Partnership Structure

The Company has entered into a cooperative joint-venture with the Government of Guinea (the "Sovereign Partnership Structure"), pursuant to which the Government was granted a 40 per. cent. equity stake in Sovereign Mines of Guinea, the operating company of the group. The Directors believe that this collaborative approach gives the Company unusual advantages compared with other small exploration companies and as a result it has been able to acquire five early stage substantial and highly prospective properties, covering a total of around 3,600 square kilometres, any of which could, in the Directors' opinion, become a significant gold asset.

The Strategy

The strategy of the Group is to form joint ventures with governments in sub-Saharan Africa to explore for minerals, initially focusing on gold. The Group intends to pursue further collaborative joint ventures with other governments using the Sovereign Partnership Structure. The Directors believe that his approach will have the potential to add value for Shareholders. In this respect favourable responses have been received from the governments of several other resource-rich African countries.

Key Strengths

The Company's key strengths are that:

·; it has entered into partnership with the Government of the Republic of Guinea, who assisted the Company in the selection of its permit areas; and

·; it is currently the holder of the largest area of gold mineral exploration ground in Guinea.

·; it has a highly experienced exploration team.

·; its Directors have influential contacts throughout Africa.

The Placing and Use of Funds

The gross proceeds of the Placing were £1.25 million and the net cash proceeds to the Company of the Placing (after deduction of expenses in connection with the Placing and Admission) were £0.715 million.

The net cash proceeds raised through the Placing will be used to assist in funding exploration costs, including mapping, stream sampling, soil sampling, trenching, drilling, logistical support and licence fees.

The Placing comprised the issue of 12,500,000 new Ordinary Shares by the Company representing approximately 7.54 per cent. of the Enlarged Issued Share Capital of the Company, together with the 6,250,000 Certificated Warrants (on the basis of one Placing Warrant for every two Placing Shares).

The Board

On Admission, the board will comprise of five directors of whom brief details are given below:

David Brian Pearl, 66, Chairman

David Pearl, one of the founders of the Company, is a Fellow of The Institute of Chartered Accountants and qualified with Cooper Brothers, now PricewaterhouseCoopers. Since then he has been involved in all aspects of investment, fund management and corporate finance relating to smaller quoted companies. He has been a director of numerous public companies and was Executive Chairman of London Securities Plc between 1984 and 1994, during which period he was also Non-Executive Chairman of The Crown Suppliers and Deputy Chairman of Medway Ports Authority. He was Executive Chairman of Premier Asset Management Plc from 1995 to 1997 and from 1994 to 2001 was a Non-Executive Director of Stanley Plc.

John Peter Barry, 56, Exploration Director

John Barry has degrees in Geology from The State University of New York (B.A.) and The Pennsylvania State University (M.S.) and an MBA from Heriot-Watt University in Scotland. He has worked for 23 years on a range of gold and base metal deposits in Europe, Africa, Australia and Asia and has discovered, sourced and supervised feasibility studies on multi-million ounce gold deposits in Tanzania in 1996 (the Nyanzaga project - African Barrick Gold Plc), Ghana in 2000 (Ntotoroso, now part of Newmont Gold Corporation's Ahafo gold mine) and Mali in 2003 (Yanfolila - Gold Fields Limited). John is also President and CEO of Rathdowney Resources Ltd (TSX-V), which explores for base metal deposits in Poland and Ireland. John is also Non-Executive Chairman of AIM-listed Orogen Gold plc which is exploring the Deli Jovan gold property in Serbia.

Nathan Anthony Steinberg, 57, Financial Director

Nathan Steinberg has considerable public company experience in the mining sector. He is a Member of the Council of the Institute of Chartered Accountants in England & Wales. He is a partner in Munslows, a specialist tax adviser, holder of the Corporate Finance certificate issued by the ICAEW and a director of Longships PLC and Ambrian Capital PLC, the natural resources investment bank. As part time Finance Director of Pan African Resources Plc he was previously part of the management team responsible for the reverse acquisition of the Barberton Mines located in South Africa in July 2007 which established Pan African Resources as a gold producer.

James Alistair Comyn, 63, Non-Executive Director

After leaving Imperial College London, with a BSc. Hons, in Chemical Engineering, James Comyn, one of the founders of the Company, has spent his career conducting business in Africa. He is currently working for a FTSE 250 listed company, negotiating high level contracts, for the sale of goods and services to Central Banks and Governments in West, Central and East Africa. He was previously Managing Director of four Michelin companies in the Southern Africa region. James Comyn has had many years' experience of negotiating at government level in Africa.

John Franklyn Prochnau, 72, Non-Executive Director

John Prochnau, one of the founders of the Company, is a Mining Engineer and Geologist, with degrees from the University of Washington in Seattle, USA, and McGill University in Montreal, Canada. Early in his career he held executive positions with Selection Trust Limited, London, where he was responsible for U. S. operations, and Billiton International Metals of The Hague, The Netherlands. Since 1984 he has operated as an international minerals consultant, managed a number of private and public companies and been responsible for gold and base metal discoveries and mine developments in North America, South America and Australia. He was co-founder with David Pearl of Brancote Holdings PLC, which discovered the Esquel Gold Deposits in Argentina and which was sold in 2002 for US$200 million.

Senior Management

In addition to the above executives, the key senior management of the group include:

Yury Deryugin, Chief Geologist

Yury Deryugin is a Russian national, who first worked in Guinea between 1990 and 1993 as Chief Geologist of a Soviet Expedition assisting Guinea in a geological mapping survey, which included prospect identification in the Dinguiraye and Kerouane areas. Mr Deryugin also worked for a private equity backed Russia-Guinean company in the Bagui-Dinguiraye area between 1996 and 1997, an area where the Company holds one of its Exploration Permits. Mr Deryugin was one of two senior Russian geologists working for Canadian-listed Moydow Mines who discovered the multi-million ounce E-Zone (Ntotoroso) gold deposit at Ahafo in Ghana which is now an integral part of the Ahafo Gold Mine, Newmont Mining Corporation's flagship gold mine in Africa.

Sherif Haidara, Vice President

Sherif Haidara, who has an MBA in administration, has been CEO since 1998 of La Solutions Inc, which advises companies with business interests in West Africa. He was General Manager of Societe d'Ingenierie de Financement pour l'Afrique from 1990 to 1994 and of Inversora Merden Inc from 1994 to 1996, responsible for negotiations to re-establish diplomatic relations between Israel and Senegal, Mauritania and Niger. From 1995 to 1997 he was Adviser to the President of Comore and from 1995 to 1998 Special Adviser to the president of Niger. He has been a Director of Pearl Capital Partners Limited since 2009.

Abdoully Diallo, Chief Operating Officer of SMG

Abdoulaye Kobina Diallo graduated from the University of Conakry in 1996 with a degree in mathematics. He has been employed by SMG since 2009, first as Data and Concession Manager and more recently as Managing Director. Prior to that he was a consultant to several companies in Guinea advising on logistics. From 1998-2005 he was employed by World Education Guinea as Logistics Manager and from 1996-1997 he was Secretary of Administration for Peace Corps Guinea.

Sherif Haidara and Abdoully Diallo lead an experienced local team which is based at the Company's office in Conakry. The team includes a geophysicist and the two geologists seconded to Guiord by the Guinean Ministry of Mines for the duration of the exploration programme as part of the contribution of the Guinea Government under the joint venture agreement.

Lock-in arrangements

Each of the Directors, Charles Comyn as a director of a Subsidiary, and certain of their related parties, has undertaken to the Company and to Shore Capital, in accordance Rule 7 of the AIM Rules, that they will not dispose of Ordinary Shares for a period of 12 months following Admission and, other than through the Company's broker so as to preserve an orderly market, they will not sell any Ordinary Shares for the period of 12 months thereafter. These arrangements are subject to exceptions permitted by the AIM Rules and will apply in respect of 57,005,199 Ordinary Shares, representing, in aggregate, 34.4 per cent. of the Company's Enlarged Issued Share Capital. In addition, Rufus Pearl and Harry Pearl, adult sons of David Pearl, have undertaken to comply with such orderly market arrangements for the period of 2 years following Admission in relation to their aggregate holdings of 8,500,000 Ordinary Shares, representing 5.13 per cent. of the Company's Enlarged Issued Share Capital. In aggregate, 65,505,199 Ordinary Shares, representing 39.53 per cent. of the Company's Enlarged Issued Share Capital, are subject to the above arrangements.

Working capital

The Directors are of the opinion, having made due and careful enquiry and after taking into account the net proceeds of the Placing receivable by the Company, that the working capital available to the group will, from Admission, be sufficient for its present requirements, that is for at least the next 12 months from the date of Admission

Admission to Trading and Dealing Arrangements

Application has been made for admission of the enlarged share capital to trading on AIM. Admission is effective and dealings in the Ordinary Shares commence today. Following the Placing and Admission the enlarged issued share capital of the Company will comprise 165,692,183 Ordinary Shares.

The Ordinary Shares have the ISIN number GB00B3P3XP06, with SEDOL B3P3XP0. The Ordinary Shares are not dealt on any other recognised investment exchange and no application has been or is being made for the Ordinary Shares to be admitted to any such exchange.

ends

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