SRX.L Regulatory News (SRX)

7 Sep 2011 17:53

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the Offer or the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

FOR IMMEDIATE RELEASE 7 September 2011

Mandatory cash offer

by

Pala Minerals Limited

for

Sierra Rutile Limited

1. Introduction

Pala Investments Holdings Limited ("Pala") has today acquired 1,725,000 Sierra Rutile Shares representing approximately 0.35 per cent. of Sierra Rutile's issued shares (the "Transaction"). As a result of the Transaction, Pala is beneficially interested in 192,273,344 Sierra Rutile Shares in aggregate, representing approximately 38.5 per cent. of the issued shares of Sierra Rutile as at the date of this announcement. Immediately prior to the Transaction, Pala was beneficially interested in 190,548,344 Sierra Rutile Shares in aggregate, representing approximately 38.15 per cent. of the issued shares of Sierra Rutile.

Pala Minerals Limited ("PML"), a wholly-owned subsidiary of Pala, has today entered into an agreement with Pala to acquire the 192,273,344 Sierra Rutile Shares in which Pala is beneficially interested, conditional only on the Offer set out in this announcement becoming unconditional as to acceptances.

Under article 28 of Sierra Rutile's articles of association ("Article 28"), if any person who, together with persons acting in concert with him, holds interests in Sierra Rutile Shares representing not less than 30 per cent., but not more than 50 per cent., of the voting rights of Sierra Rutile and such person, or any person acting in concert with him, acquires an interest in additional Sierra Rutile Shares and thereby increases his percentage interest in such voting rights, that person is required to make an offer to all Sierra Rutile Shareholders on the terms set out in Article 28.

The Pala Group has therefore triggered an obligation under Article 28 for a mandatory cash offer to be made to all Sierra Rutile Shareholders for the Sierra Rutile Shares not already held by the Pala Group at a price of 25 pence per Sierra Rutile Share in cash, being a price not less than the highest price paid for the Sierra Rutile Shares by the Pala Group in the 12 months prior to the announcement of such mandatory offer.

The mandatory cash offer required by Article 28 is being made by PML.

The definitions capitalised in this announcement are contained in Appendix III to this announcement.

2. The Offer

PML hereby offers to acquire, subject to the Acceptance Condition and the further terms set out in Appendix I to this announcement and in the Form of Acceptance, all of the Sierra Rutile Shares not already owned by PML and persons acting in concert with PML on the following basis:

for each Sierra Rutile Share

25 pence in cash

Assuming the exercise of all outstanding options (other than those which have been granted at an exercise price in excess of the Offer price) under the Sierra Rutile Share Schemes, the Offer values all of the issued shares of Sierra Rutile at approximately £129,705,000.

Calculated on the basis set out in Appendix II, the Offer represents a premium of approximately 18 per cent. over the closing middle market price of 21.25 pence per Sierra Rutile Share on 6 September 2011, the business day immediately prior to the date of this announcement.

The procedure for acceptance of the Offer is set out in paragraph 9 of this announcement.

This Offer is not being made in, and this announcement may not be distributed into, the United States, Australia, Japan or Canada.

The availability of this Offer to Sierra Rutile Shareholders who are citizens or residents of jurisdictions outside the United Kingdom, or who are nominees of, or custodians or trustees for, any such person, or who intend to forward this announcement to any jurisdiction outside the United Kingdom may be affected by the laws of other relevant jurisdictions. Such persons should inform themselves about and observe such applicable requirements and read paragraph 6 of Part B, paragraph (c) of Part C and paragraph (c) of Part D of Appendix I before taking any action.

3. Information relating to Pala and PML

Pala is a multi-strategy investment company dedicated to investing in, and creating value across, the mining sector in both developed and emerging markets.

Pala's exclusive investment advisor, Pala Investments AG, has extensive experience within the mining sector. Pala seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative financing solutions.

PML is a wholly-owned subsidiary of Pala. Pursuant to a subscription agreement entered into between Pala and PML on the date of this announcement (the "Subscription Agreement"), Pala has agreed to transfer its holding of Sierra Rutile Shares to PML upon the Offer becoming unconditional.

Pala is a company limited by shares incorporated in Jersey. The directors of Pala are Susan Garrod, David Hopkins and Keith Mackenzie. The principal and registered office of Pala is at 12 Castle Street, St Helier, Jersey JE2 3RT.

PML is a company limited by shares incorporated in the British Virgin Islands. The directors of PML are J. Colin Murray and Gregory Radke. The principal and registered office of PML is at Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands.

Additional information in relation to Pala is available on Pala's website at www.pala.com.

4. Information relating to Sierra Rutile

Sierra Rutile is a company limited by shares incorporated in the British Virgin Islands whose shares are admitted to trading on AIM.

Sierra Rutile is the holding company of SRL, a mining company with operations in the Republic of Sierra Leone. The Sierra Rutile Group is one of the largest private sector employers in Sierra Leone and produces rutile, zircon and ilmenite for use in industrial applications.

The directors of Sierra Rutile are Jan Castro (non-executive chairman), John Bonoh Sisay (chief executive officer), Michael Barton (non-executive director), Michael Brown (non-executive director), François Colette (non-executive director), Dr Charles Entrekin Ph.D (non-executive director) and Alex B Kamara (non-executive director). The registered office of Sierra Rutile is at P.O. Box 4301, Trinity Chambers, Road Town, Tortola, British Virgin Islands.

On 16 June 2011, Sierra Rutile announced its annual results for the 12 months ended 31 December 2010. On 5 September 2011, Sierra Rutile announced its interim results for the 6 months to 30 June 2011.

Additional information in relation to Sierra Rutile, including Sierra Rutile's most recent annual and interim results, is available on Sierra Rutile's website at www.sierra-rutile.com.

5. Background to and reasons for the Offer

As a result of the Transaction, the Pala Group is beneficially interested in 192,273,344 Sierra Rutile Shares in aggregate, representing approximately 38.5 per cent. of the issued shares of Sierra Rutile as at the date of this announcement.

The Pala Group has therefore triggered an obligation under Article 28 for a mandatory cash offer to be made to all Sierra Rutile Shareholders for the Sierra Rutile Shares not already held by the Pala Group at a price of 25 pence per Sierra Rutile Share in cash, being a price not less than the highest price paid for the Sierra Rutile Shares by the Pala Group in the 12 months prior to the announcement of such mandatory offer. The mandatory cash offer required by Article 28 is being made by PML.

Since the time of Pala's initial investment in Sierra Rutile on 15 September 2010, Sierra Rutile's share price has appreciated by over 245 per cent. based on the closing middle market price of 21.25 pence per Sierra Rutile share on 6 September 2011. Furthermore, the Offer price of 25 pence per share represents a premium of approximately 18 per cent. over the closing middle market price, and a premium of approximately 26 per cent. based on the 20-day volume weighted average price, on 6 September 2011.

Consequently, Pala believes that the Offer provides an attractive opportunity, in a highly illiquid stock, for Sierra Rutile Shareholders to realise gains as a result of the substantial share price appreciation achieved to date, plus the premium represented by the Offer price.

Following implementation of the Offer, PML intends that Sierra Rutile will be operated in substantially the same manner as it currently operates and that Sierra Rutile will continue with the strategic initiatives currently being pursued by the Board of Sierra Rutile. PML proposes to deploy Sierra Rutile's fixed assets in the same manner as Sierra Rutile currently does in all material respects. PML's current strategic plans would have no material repercussions on the employment and locations of Sierra Rutile's places of business.

In the event that, despite the Offer becoming unconditional, PML does not acquire sufficient Sierra Rutile Shares to apply the provisions of Article 28.7 of Sierra Rutile's articles of association to acquire compulsorily any outstanding Sierra Rutile Shares, it is not intended that PML would procure that any changes are made to the Board of Sierra Rutile or that any material amendments are made to Sierra Rutile's articles of association. It is PML's intention that Sierra Rutile would remain a publicly listed company in such circumstances.

6. Sierra Rutile Share Schemes

The Offer extends to any Sierra Rutile Shares unconditionally allotted prior to the date on which the Offer closes (or such earlier date as PML may, subject to Sierra Rutile's articles of association, determine) as a result of the exercise of options granted under the Sierra Rutile Share Schemes. To the extent that such options are not exercised and, in the event that the Offer becomes or is declared unconditional in all respects, appropriate proposals will be put to holders of options under the Sierra Rutile Share Schemes. Such proposals will not extend to options which have been granted at an exercise price in excess of the Offer price.

7. Financing arrangements

Full acceptance of the Offer would (assuming exercise of all options under the Sierra Rutile Share Schemes which have been granted at an exercise price at or below the Offer price) involve a maximum cash payment of approximately £81.6 million, which will be satisfied out of the proceeds of a proposed subscription by Pala for new shares in PML for cash pursuant to the terms of the Subscription Agreement, funded by Pala's existing cash and cash equivalent resources.

8. Management and employees

PML confirms that, following implementation of the Offer, the existing contractual and statutory employment rights, including in relation to pensions, of all Sierra Rutile Group employees will be honoured.

9. Procedure for acceptance of the Offer

Forms of Acceptance have been sent to Sierra Rutile Shareholders holding Certificated Sierra Rutile Shares on or before the date of this announcement.

This section should be read together with the instructions and the notes on the Form of Acceptance which are deemed to form part of the terms of the Offer.

Holders of Certificated Sierra Rutile Shares may only accept the Offer in respect of such shares by completing and returning the Form of Acceptance in accordance with the procedure set out in paragraph (a) below. Holders of Certificated Sierra Rutile Shares, but under different designations should complete a separate Form of Acceptance for each designation.

Holders of Depositary Interests may only accept the Offer in respect of such Depositary Interests by a TTE Instruction in accordance with the procedure set out in paragraph (b) below and, if those Depositary Interests are held under different member account IDs, a separate TTE Instruction should be sent for each member account ID.

You should note that, if you hold both Certificated Sierra Rutile Shares and Depositary Interests, you should follow the procedures set out in (a) and (b) below for each type of holding separately.

(a) Certificated Sierra Rutile Shares

(i) To accept the Offer in respect of your Certificated Sierra Rutile Shares

To accept the Offer in respect of Certificated Sierra Rutile Shares you should complete Boxes 1 and 2 and you must sign Box 3 of the Form of Acceptance. If you do not insert a number in Box 2, a valid acceptance will be deemed to be made in respect of all your Certificated Sierra Rutile Shares.

In all cases you must sign Box 3 on the Form of Acceptance in the presence of a witness, who should also sign in accordance with the instructions printed on the Form of Acceptance.

If you have any questions as to how to complete the Form of Acceptance or wish to receive additional Forms of Acceptance, please telephone Computershare on +44 (0) 870 707 1347.

(ii) Return of Form of Acceptance

To accept the Offer in respect of Certificated Sierra Rutile Shares, the completed Form of Acceptance should be returned by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH together with the relevant share certificate(s) for such Sierra Rutile Shares and/or other document(s) of title (see paragraph (iii) below), as soon as possible, but in any event so as to be received by no later than 5.00 p.m. (London time) on 7 October 2011. No acknowledgement of receipt of documents will be given.

Any Form of Acceptance received in an envelope postmarked in the United States, Canada, Australia or Japan or otherwise appearing to have been sent from the United States, Canada, Australia or Japan will be rejected as an invalid acceptance of the Offer. For further information on overseas shareholders see paragraph (c) below, paragraph 6 of Part B of Appendix I and paragraph (c) of Part C of Appendix I.

(iii) Certificated Sierra Rutile Shares - documents of title

If you hold Certificated Sierra Rutile Shares, the completed, signed and witnessed Form of Acceptance should be accompanied by the relevant share certificate(s) and/or other document(s) of title. If for any reason the relevant share certificate(s) and/or the other documents of title is/are lost or not readily available, you should nevertheless complete, sign and return the Form of Acceptance as stated above so as to be received by Computershare no later than 5.00 p.m. (London time) on 7 October 2011. You should send with the Form of Acceptance any share certificate(s) and/or other document(s) of title which you may have available and a letter stating that the remaining document(s) will follow as soon as possible or that you have lost one or more of your share certificate(s) and/or other document(s) of title. You should then arrange for the relevant share certificate(s) and/or other document(s) of title to be forwarded as soon as possible. If you have lost your share certificate(s) and/or other document(s) of title, you should contact Sierra Rutile's registrar, Computershare, 2nd Floor, Queensway House, Hilgrove Street, St Helier, Jersey, JE1 1ES (telephone no. +44 (0) 870 707 1347) for a letter of indemnity for lost share certificate(s) and/or other document(s) of title which, when completed in accordance with the instructions given, should be returned to Computershare at the address set out above.

(iv) Validity of acceptance

Without prejudice to Parts B and C of Appendix I of this document, PML reserves the right (subject to the provisions of Article 28) to treat as valid in whole or in part any acceptance of the Offer in relation to Certificated Sierra Rutile Shares which is not entirely in order or which is not accompanied by the relevant share certificate(s) and/or other document(s) of title. In that event, no payment of cash under the Offer will be made until after (as applicable) the relevant share certificate(s) and/or other document(s) of title or indemnities satisfactory to PML have been received.

If you are in any doubt as to the procedure for acceptance, please contact Computershare on +44 (0) 870 707 1347.

(b) Depositary Interests

If your Sierra Rutile Shares are held as Depositary Interests, to accept the Offer you should take (or procure the taking of) the action set out below to transfer the Depositary Interests in respect of which you wish to accept the Offer to the appropriate escrow balance(s), specifying Computershare (in its capacity as a CREST participant under the Escrow Agent's participant ID referred to below) as the Escrow Agent, as soon as possible and in any event so that the TTE Instruction settles not later than 5.00 p.m. (London time) on 7 October 2011. Note that settlement cannot take place on weekends or bank holidays (or other times at which the CREST system is non-operational) - you should therefore ensure you time the input of any TTE Instructions accordingly.

The input and settlement of a TTE Instruction in accordance with this paragraph (b) will (subject to satisfying the requirements set out in Parts B and D of Appendix I) constitute an acceptance of the Offer in respect of the number of Depositary Interests so transferred to escrow.

If you are a CREST sponsored member, you should refer to your CREST sponsor before taking any action. Only your CREST sponsor will be able to send the TTE Instruction(s) to Euroclear in relation to your Depositary Interests.

After settlement of a TTE Instruction, you will not be able to access the Depositary Interests concerned in CREST for any transaction or charging purposes. If the Offer becomes unconditional, the Escrow Agent will transfer the Depositary Interests concerned to itself in accordance with paragraph (d) of Part D of Appendix I of this document.

You are recommended to refer to the CREST manual published by Euroclear for further information on the CREST procedures outlined below.

You should note that Euroclear does not make available special procedures, in CREST, for any particular corporate action. Normal system timings and limitations will therefore apply in connection with a TTE Instruction and its settlement. You should therefore ensure that all necessary action is taken by you (or by your CREST sponsor) to enable a TTE Instruction relating to your Depositary Interests to settle prior to 5.00 p.m. (London time) on 7 October 2011. In this connection you are referred in particular to those sections of the CREST manual concerning practical limitations of the CREST system and timings.

(i) To accept the Offer in respect of your Depositary Interests

To accept the Offer in respect of Depositary Interests, you should send (or if you are a CREST sponsored member, procure that your CREST sponsor sends) to Euroclear a TTE Instruction in relation to such Depositary Interests.

A TTE Instruction to Euroclear must be properly authenticated in accordance with Euroclear's specifications for transfers to escrow and must contain the following details:

the ISIN number for the Depositary Interests. This is VGG812641063; the number of Depositary Interests in respect of which you wish to accept the Offer (i.e. the number of Depositary Interests to be transferred to escrow); your member account ID; your participant ID; the participant ID of the Escrow Agent (namely Computershare in its capacity as CREST receiving agent). This is 3RA32; the member account ID of the Escrow Agent. For the purposes of the Offer, this is SIEPAL01; and the intended settlement date. This should be as soon as possible and in any event not later than 5.00 p.m. on 7 October 2011.

(ii) Validity of acceptances in respect of Depositary Interests

A Form of Acceptance which is received in respect of Depositary Interests will not constitute a valid acceptance and will be disregarded. Holders of Depositary Interests who wish to accept the Offer should note that a TTE Instruction will only be valid acceptance of the Offer as at the relevant closing date if it has settled on or before that date.

(c) Overseas shareholders

The attention of Sierra Rutile Shareholders who are citizens or residents of jurisdictions outside the United Kingdom, or who are nominees of, or custodians or trustees for, any such person, or who intends to forward this document to any jurisdiction outside the United Kingdom is drawn to paragraph 6 of Part B, paragraph (c) of Part C and paragraph (c) of Part D of Appendix I, which they should read before taking any action.

The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the jurisdictions in which such persons are resident. Persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements.

The Offer is not being made, directly or indirectly, in or into, or by the use of the mails or any means or instrumentality (including, without limitation telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of, the United States, Canada, Australia or Japan, and the Offer should not be accepted by any such use, means, instrumentality or facility or from such jurisdictions. Copies of this document, the Form of Acceptance and any related offering documents are not being, and may not be, mailed or otherwise distributed in, into or from, whether by use of the mails, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange of, the United States, Canada, Australia or Japan. Persons receiving such documents (including, without limitation, custodians, nominees and trustees) must not distribute or send them into or form such jurisdictions or use such mails or any such means, instrumentality or facility for any purpose director or indirectly in connection with this Offer and doing so will render invalid any relevant purported acceptance of the Offer. Accordingly, any accepting Sierra Rutile Shareholder who holds Sierra Rutile Shares who is unable to give the representation and warranty set out in paragraph (c) of Part C or paragraph (c) of Part D of Appendix I of this document, as applicable, may be deemed not to have accepted the Offer.

(d) General

PML will make an appropriate announcement if any of the details contained in paragraph (a) or (b) above alter for any reason.

Normal CREST procedures (including timings) apply in relation to any Sierra Rutile Shares that are, or are to be, converted from Certificated Sierra Rutile Shares to Depositary Interests, or from Depositary Interests to Certificated Sierra Rutile Shares, during the course of the Offer (whether any such conversion arises as a result of a transfer of Sierra Rutile Shares or otherwise). Holders of Sierra Rutile Shares who are proposing to convert any such shares are recommended to ensure that the conversion procedures are implemented in sufficient time to enable the person holding or acquiring the Sierra Rutile Shares as a result of the conversion to take all necessary steps in connection with an acceptance of the Offer (in particular, as regards delivery of share certificate(s) or other documents of title or transfers to an escrow balance as described above) prior to 5.00 p.m. (London time) on 7 October 2011.

If you are in any doubt as to the procedure for acceptance, please contact Computershare by telephone on +44 (0) 870 707 1347 or at the address in paragraph (a)(ii) above. You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.

10. Settlement

Where the Offer becomes unconditional (and except as provided in paragraph 6 of Part B of Appendix I of this document in the case of certain overseas Sierra Rutile Shareholders) settlement of the consideration to which any Sierra Rutile Shareholder is entitled under the Offer will be effected (i) in the case of acceptances received, valid and complete in all respects by the date on which the Offer becomes or is declared unconditional in all respects, within 14 days of the later of such date and 7 October 2011; or (ii) in the case of acceptances received, valid and complete in all respects after the later of 7 October 2011 and the date on which the Offer becomes or is declared unconditional in all respects but while it remains open for acceptance, within 14 days of such receipt, in the following manner:

(a) Certificated Sierra Rutile Shares

Where an acceptance relates to Certificated Sierra Rutile Shares, settlement of any cash due will be dispatched by first class post (or by such other method as the Board of Sierra Rutile may approve). All such payments will be made in Sterling by cheque drawn on a branch of a UK clearing bank.

(b) Depositary Interests

Where an acceptance relates to Depositary Interests the cash consideration to which the accepting Sierra Rutile Shareholder is entitled will be paid by means of a CREST payment in favour of the accepting Sierra Rutile Shareholder's payment bank in respect of the cash consideration due, in accordance with the CREST payment arrangements.

PML reserves the right to settle all or any part of the consideration referred to in this paragraph 10(b), for all or any accepting Sierra Rutile Shareholder(s), in the manner referred to in paragraph 10(a) above, if, for any reason, it wishes to do so.

(c) General

If the Offer does not become unconditional: (i) in relation to Certificated Sierra Rutile Shares, completed Form(s) of Acceptance, the relevant share certificate(s) and/or other document(s) of title will be returned by post (or such other method as may be approved by the Board of Sierra Rutile) within 14 days of the Offer lapsing, to the person or agent whose name and address (outside the United States, Canada, Australia and Japan) is set out in Box 5 of the Form of Acceptance or, if none is set out, to the first named or sole holder at his registered address (outside the United States, Canada, Australia and Japan); and (ii) in relation to Depositary Interests, the Escrow Agent will, immediately after the lapsing of the Offer (or within such longer period, not exceeding 14 days after the Offer lapses, as the Board of Sierra Rutile may approve), give TFE Instructions to Euroclear to transfer all Sierra Rutile Shares held in escrow balances and in relation to which it is the Escrow Agent for the purposes of the Offer to the original available balances of the Sierra Rutile Shareholders concerned.

All documents and remittances sent by, to or from Sierra Rutile Shareholders or their appointed agents will be sent at their own risk.

No payments relating to Sierra Rutile Shares will be made to any U.S., Australian, Japanese or Canadian bank account or sent to any Sierra Rutile Shareholder, or any person or agent designated by a Sierra Rutile Shareholder, with an address in the United States, Australia, Japan or Canada.

11. Disclosure of interests and dealings

Pala is beneficially interested in 192,273,344 Sierra Rutile Shares in aggregate, representing approximately 38.5 per cent. of the issued shares of Sierra Rutile as at the date of this announcement. 165,120,488 of those Sierra Rutile Shares are held by Vidacos Nominees Limited as nominee for Pala.

Pursuant to the Subscription Agreement, PML also has an interest in the 192,273,344 Sierra Rutile Shares referred to above. Pala and PML are acting in concert for the purposes of the Offer.

The following dealings in relevant securities of Sierra Rutile by Pala have taken place during the disclosure period:

Date		Transaction		Number of Sierra Rutile Shares		Price per Sierra Rutile Share
15 September 2010		Share purchase		114,981,497		£0.0870
15 October 2010		Share purchase		750,000		£0.09
12 January 2011		Share purchase		31,459,856		$0.1605
23 February 2011		Placement		43,356,991		£0.10
7 September 2011		Share purchase		1,725,000		£0.2366

Save for the interests of Pala and PML described above, neither Pala, nor PML, nor any of the directors of Pala or PML, nor any member of the Pala Group, nor, so far as the Pala directors and the PML directors are aware, any person acting in concert with Pala or PML for the purposes of the Offer, has any interest in, right to subscribe for, or has borrowed or lent any Sierra Rutile Shares or securities convertible or exchangeable into Sierra Rutile Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or right to subscribe for or purchase the same or holds any options (including traded options) in respect of or has any right to acquire any Sierra Rutile Shares or derivatives referenced to Sierra Rutile Shares ("Sierra Rutile Securities"), nor does any such person have any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery in relation to Sierra Rutile Securities.

No agreement, arrangement or understanding (including any compensation arrangement) exists between Pala or PML or any party acting in concert with Pala or PML and any of the directors, recent directors, shareholders or recent shareholders of Sierra Rutile or any person interested or recently interested in Sierra Rutile Shares which has any connection with, or dependence on, or which is conditional upon the outcome of the Offer.

Neither Pala nor any persons acting in concert with Pala have procured any irrevocable commitment or letter of intent in respect of any relevant securities of Sierra Rutile.

Other than the Subscription Agreement, there are no arrangements of the kind referred to in Note 6(b) to Rule 8 of the Code which exist between Pala or PML or any persons acting in concert with Pala or PML and any other person in relation to any relevant securities of the Sierra Rutile.

There is no agreement, arrangement or understanding whereby the beneficial ownership of any of the Sierra Rutile Shares to be acquired pursuant to the Offer will be transferred to any person, but Pala and PML reserve the right to transfer any such shares to any member of the Pala Group.

Neither Pala nor PML proposes to enter into any incentivisation arrangements with any members of Sierra Rutile management who are interested in Sierra Rutile Shares.

Vladimir Iorich's indirect interest in PML is such that: (i) he is acting in concert with PML; and (ii) he has an indirect interest in more than 5 per cent. of the equity capital of PML.

For the purposes of this paragraph 11: the terms "acting in concert", "interest" and "relevant securities" have the same meanings as defined in the Code; and "disclosure period" means the period commencing on 8 September 2010 (being the date twelve months prior to the commencement of the Offer period) and ending on 6 September 2011 (being the latest practicable date prior to the publication of this document).

12. Action to be taken

If you wish to accept the Offer in respect of Certificated Sierra Rutile Shares, please return the Form of Acceptance duly completed by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH, as soon as possible and, in any event, to be received by no later than 5.00 p.m. (London time) on 7 October 2011. The procedure for acceptance is set out in paragraph 9(a) of this announcement and in the Form of Acceptance.

If you wish to accept the Offer in respect of your Depositary Interests, please send (or, if you are a CREST sponsored member procure that your CREST sponsor sends) a TTE Instruction in accordance with the procedure set out above in paragraph 9(b) of this announcement, as soon as possible and in any event so that the TTE Instruction settles not later than 5.00 p.m. (London time) on 7 October 2011.

13. Responsibility

The directors of Pala and the directors of PML, whose names are set out in paragraph 3 above, accept responsibility for the information contained in this announcement, other than any information in relation to Sierra Rutile that is incorporated into this announcement by reference. To the best of the knowledge and belief of the directors of Pala and the directors of PML (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they take responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

14. General

The Acceptance Condition and the further terms of the Offer are set out in Appendix I to this announcement. Appendix II sets out the bases of calculation used in this announcement. Appendix III contains the definitions of certain terms used in this announcement.

Enquiries:

Colin Murray, Vice President - Operations, Pala Investments AG +41 41 560 9070

Further details

The Offer will not be made, directly or indirectly, in or into, or by the use of the mails or any means of instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of the United States, Canada, Australia or Japan. Accordingly, except as required by applicable law, copies of this announcement are not being, and may not be, mailed or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia or Japan. Persons receiving this announcement (including, without limitation, nominees, trustees or custodians) must not forward, distribute or send it into the United States, Canada, Australia or Japan.

The availability of the Offer to Sierra Rutile Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. In particular, as described in Appendix I, the Offer will not be made directly or indirectly into the United States, Canada, Australia or Japan. Sierra Rutile Shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements and read paragraph 6 of Part B, paragraph (c) of Part C and paragraph (c) of Part D of Appendix I before taking any action.

Application of the Code

By virtue of its status as a company incorporated in the British Virgin Islands, the Code does not apply to Sierra Rutile.

Shareholders are reminded that whilst Sierra Rutile's articles of association require offers to be made on terms that would be required by the Code, save to the extent that the Board of Sierra Rutile otherwise determines, the Panel on Takeovers and Mergers does not have responsibility for ensuring compliance with the Code in respect of the Offer and is not able to answer shareholders' queries in relation to Sierra Rutile, Pala, PML or the Offer.

In particular, the Board of Sierra Rutile has confirmed to Pala and PML that it does not intend to require Opening Position Disclosures and Dealing Disclosures (as referred to in the Code) to be made by shareholders (other than PML and persons acting in concert with PML) in accordance with Rule 8 of the Code. Shareholders are reminded that public disclosures consistent with the provision of Rule 8.3 of the Code should not be e-mailed to the Panel on Takeovers and Mergers.

Forward-looking statements

This announcement contains certain forward-looking statements, including statements regarding Pala's and PML's plans. Such statements relate to events and depend on circumstances that will occur in the future and are subject to risks, uncertainties and assumptions. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements, including, among others, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the mining industry; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this announcement.

Publication of this announcement

A copy of this announcement will be available on www.pala.com by no later than 12.00pm on the business day after the date of this announcement. You can obtain a hard copy of this document or any information incorporated by reference by contacting Computershare, Corporate Actions Projects, Bristol, BS99 6AH. You will not receive a hard copy of this document or any information incorporated by reference unless you so request. You may also inform Computershare that you wish all future documents, announcements and information in relation to the Offer be sent to you in hard copy.

Documents available for inspection

Copies of the following documents will be available for inspection at the offices of Herbert Smith LLP, Exchange House, Primrose Street, London EC2A 2HS, during usual business hours on any weekday (public holidays excepted) and on www.pala.com during the offer period:

(a) the Memorandum and Articles of Association of PML;

(b) this Offer announcement; and

(c) the Form of Acceptance.

APPENDIX I

CONDITION AND CERTAIN FURTHER TERMS OF THE OFFER

PART A - CONDITION OF THE OFFER

The Offer is subject to valid acceptances being received (and not, where permitted, withdrawn) by 5.00 p.m. (London time) on the first closing date of the Offer being 7 October 2011 (or such later time(s) and/or date(s) as PML may, subject to Article 28, decide) in respect of such number of Sierra Rutile Shares to which the Offer relates which, together with the Sierra Rutile Shares acquired or agreed to be acquired by PML or parties acting in concert with PML, carry in aggregate more than 50 per cent. of the voting rights then exercisable at a general meeting of Sierra Rutile, including for this purpose, to the extent (if any) required by the Board of Sierra Rutile, any such voting rights attaching to any Sierra Rutile Shares that may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise, and for this purpose:

(i) the expression "Sierra Rutile Shares to which the Offer relates" shall mean all Sierra Rutile Shares to which the Offer will extend in accordance with paragraph 5(b) below; and

(ii) shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on being entered into the register of members of Sierra Rutile.

PART B - FURTHER TERMS OF THE OFFER

1. Acceptance Period

(a) The Offer will initially be open for acceptance until 5.00 p.m. (London time) on 7 October 2011. Although no revision is envisaged, if the Offer is revised it will remain open for acceptance for a period of at least 14 days (or such other period as may be permitted by the Board of Sierra Rutile) following the date on which the revised Offer is announced. Except with the consent of the Board of Sierra Rutile, no revision of the Offer may be made or announced after 23 October 2011 or, if later, the date which is 14 days before the last date on which the Offer can become unconditional.

(b) The Offer, whether revised or not, shall not (without the consent of the Board of Sierra Rutile) be capable of becoming unconditional after midnight (London time) on 6 November 2011 (or any other time and/or date beyond which PML has stated (and not withdrawn such statement) that the Offer will not be extended), nor of being kept open for acceptance after that time and/or date, unless it has previously become unconditional, provided that PML reserves the right, with the permission of the Board of Sierra Rutile, to extend the time for the Offer to become unconditional to any later time(s) and/or date(s). Except with the consent of the Board of Sierra Rutile, PML may not, for the purpose of determining whether the Acceptance Condition has been satisfied, take into account acceptances received or purchases of Sierra Rutile Shares made after 1.00 p.m. (London time) on 6 November 2011 (or any other time(s) and/or date(s) beyond which PML has stated (and not withdrawn such statement) that the Offer will not be extended) or such later time(s) and/or date(s) as PML, with the permission of the Board of Sierra Rutile, may determine. If the latest time at which the Offer may become unconditional is extended beyond midnight (London time) on 6 November 2011, acceptances received and purchases made in respect of which the relevant documents are received by Computershare after 1.00 p.m. (London time) on the relevant date may (except where the Code permits) only be taken into account with the agreement of the Board of Sierra Rutile.

(c) If the Offer becomes unconditional, it will remain open for acceptance for not less than 14 days from the date on which it would otherwise have expired. If the Offer has become unconditional and it is stated that the Offer will remain open until further notice, then not less than 14 days' notice in writing will be given to those Sierra Rutile Shareholders who have not accepted the Offer prior to the closing of the Offer.

(d) If a competitive situation arises (as determined by the Board of Sierra Rutile) after a "no increase" and/or a "no extension" statement has been made by or on behalf of PML in relation to the Offer, PML may, if it has specifically reserved the right to do so at the time such statement is made, or otherwise with the consent of the Board of Sierra Rutile, choose not to be bound by or withdraw such statement and be free to revise or extend the Offer provided it complies with the requirements of the articles of association of Sierra Rutile and in particular that (i) it makes an announcement to such effect as soon as possible and in any event within four business days after the firm announcement of the competing offer or other competitive situation and notifies Sierra Rutile Shareholders to that effect in writing at the earliest opportunity or, in the case of Sierra Rutile Shareholders with registered addresses outside the United Kingdom or whom PML reasonably believes to be nominees, custodians or trustees holding Sierra Rutile Shares for such persons, by announcement in the United Kingdom at the earliest opportunity; and (ii) any Sierra Rutile Shareholders who accepted the Offer after the date of the "no increase" or "no extension" statement are given a right of withdrawal as described in paragraph 3(c) of this Part B.

PML may choose not to be bound by a "no increase" or "no extension" statement if, having reserved the right to do so, it announces an increased or improved Offer which is recommended for acceptance by the Board of Sierra Rutile, or in any other circumstances permitted by the Board of Sierra Rutile.

(e) If a competitive situation arises (as determined by the Board of Sierra Rutile) and is continuing on 6 November 2011, PML will enable holders of Depositary Interests who have not already validly accepted the Offer but who have previously accepted the competing offer to accept the Offer by special form of acceptance to take effect on 6 November 2011. It shall be a condition of such special form of acceptance being a valid acceptance of the Offer that (i) it is received by Computershare on or before 6 November 2011; (ii) the relevant Sierra Rutile Shareholder shall have applied to withdraw his acceptance of the competing offer but that the Sierra Rutile Shares to which such withdrawal relates shall not have been released from escrow before 6 November 2011 by the escrow agent to the competing offer; and (iii) the Sierra Rutile Shares to which the special form of acceptance relates are not transferred to escrow in accordance with the procedure for acceptance set out in this announcement on or before 6 November 2011, but an undertaking is given that they will be so transferred as soon as possible thereafter. Sierra Rutile Shareholders wishing to use such special forms of acceptance should apply to Computershare on +44 (0) 870 707 1347 between 9.00 a.m. and 5.30 p.m. (London time) on the business day preceding 6 November 2011 in order that such forms can be despatched. Notwithstanding the right to use such special form of acceptance, holders of Depositary Interests may not use a Form of Acceptance (or any other purported acceptance form) for the purpose of accepting the Offer in respect of such shares.

(f) For the purpose of determining at any particular time whether the Acceptance Condition has been fulfilled, PML shall not be bound (unless otherwise required by the Board of Sierra Rutile) to take into account any Sierra Rutile Shares normally carrying voting rights which have been issued or unconditionally allotted or which arise as the result of the exercise of conversion rights before such time unless Sierra Rutile has notified Computershare on behalf of PML, before that time in writing, of the relevant details of such issue, allotment or conversion prior thereto at the address and by the methods of delivery referred to in paragraph 9(a)(ii) of this announcement. Notification by telex, facsimile or other electronic transmission will not be sufficient.

(g) PML reserves the right to treat as valid in whole or in part acceptances of the Offer which are not entirely in order or which are not accompanied by the relevant share certificate(s) and/or other relevant document(s) of title or not accompanied by the relevant TTE Instruction (subject to paragraphs 5(e)(i) and (ii) of this Part B).

2. Announcements

Without prejudice to paragraph 3(a) of this Part B, by 8.00 a.m. (London time) on the next business day (the "relevant day") following the day on which the Offer is due to expire or becomes unconditional or is revised or extended (or such later time or date as the Board of Sierra Rutile may agree), PML will make an appropriate announcement to a Regulatory Information Service of the position. Such announcement will also state (unless otherwise permitted by the Board of Sierra Rutile) the total number of Sierra Rutile Shares and rights over Sierra Rutile Shares (as nearly as practicable):

(i) for which acceptances of the Offer have been received (showing the extent, if any, to which such acceptances have been received from any person acting in concert or deemed to be acting in concert with PML for the purposes of the Offer);

(ii) acquired or agreed to be acquired by or on behalf of PML or any person acting in concert or deemed to be acting in concert with PML for the purposes of the Offer during the course of the offer period. Similar details of any short positions (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligations or right to require another person to purchase or take delivery will also be stated; and

(iii) held by or on behalf of PML or any person acting in concert or deemed to be acting in concert with PML for the purposes of the Offer prior to the offer period,

and will specify the percentage of the Sierra Rutile Shares represented by each of these figures.

Any decision to extend the time and/or date by which the Acceptance Condition has to be fulfilled may be made at any time up to, and will be announced not later than, 8.00 a.m. (London time) on the relevant day (or such later time and/or date as the Board of Sierra Rutile may agree) and the announcement will state the next expiry date (unless the Offer is unconditional in which case the announcement may state that the Offer will remain open until further notice). In computing the number of Sierra Rutile Shares represented by acceptances and/or purchases, there may be included or excluded for announcement purposes, subject to paragraph 5(e) of this Part B, acceptances and purchases not in all respects in order or not accompanied by the relevant share certificate(s) and/or other document(s) of title or not accompanied by the relevant TTE Instruction or which are subject to verification.

3. Rights of Withdrawal

(a) If PML, having announced the Offer to be unconditional, fails to comply by 3.30 p.m. (London time) on the relevant day (or such later time(s) and/or date(s) as the Board of Sierra Rutile may agree) with any of the other requirements specified in paragraph 2 of this Part B, an accepting Sierra Rutile Shareholder may (unless the Board of Sierra Rutile otherwise agrees) immediately thereafter withdraw his acceptance of the Offer by written notice signed by such shareholder (or his agent duly appointed in writing and evidence of whose appointment satisfactory to PML is produced with the notice) given by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH receiving such notice on behalf of PML. Alternatively, in the case of Depositary Interests, withdrawals can also be effected in the manner set out in paragraph 3(f) of this Part B. Subject to paragraph 1(b) of this Part B, this right of withdrawal may be terminated not less than eight days after the relevant day by PML confirming, if such be the case, that the Offer is still unconditional and complying with the other relevant requirements specified in paragraph 2 of this Part B. If any such confirmation is given, the first period of 14 days referred to in paragraph 1(c) of this Part B will run from the date of that confirmation and compliance.

(b) If by 5.00 p.m. (London time) on 28 October 2011 (or such later time and/or date as the Board of Sierra Rutile may agree) the Offer has not become unconditional, an accepting Sierra Rutile Shareholder may withdraw his acceptance of the Offer at any time thereafter in the manner referred to in paragraph 3(a) above (or in the case of Depositary Interests, in the manner set out in paragraph 3(f) below) before the earlier of (i) the time that the Offer becomes unconditional; and (ii) the final time for lodgement of acceptances of the Offer which can be taken into account in accordance with paragraph 1(b) of this Part B.

(c) If a "no increase" and/or "no extension" statement has been withdrawn in accordance with paragraph 1(d) of this Part B, any acceptance of the Offer after such statement is made may be withdrawn thereafter in the manner referred to in paragraph 3(a) of this Part B (or in the case of Depositary Interests, in the manner set out in paragraph 3(f) of this Part B) not later than the eighth day after the date on which notice of the withdrawal of such statement is sent to Sierra Rutile Shareholders.

(d) Except as provided by this paragraph 3, and subject to paragraph 4 of this Part B, acceptances and elections shall be irrevocable.

(e) In this paragraph 3, "written notice" (including any letter of appointment, direction or authority) means notice in writing bearing the original signature(s) of the relevant accepting Sierra Rutile Shareholder(s) or his/their agent(s) duly appointed in writing (satisfactory evidence of whose appointment must be produced with the notice). Notification by telex or facsimile or other electronic transmission or copies will not be sufficient to constitute written notice. No notice which is postmarked in, or otherwise appears to PML or its agents to have been sent from, the United States, Canada, Australia or Japan, will be treated as valid.

(f) In the case of Depositary Interests, if withdrawals are permitted pursuant to paragraph (3)(a), 3(b) or 3(c) of this Part B, an accepting Sierra Rutile Shareholder may withdraw his acceptance through CREST by sending (or, if a CREST sponsored member, procuring that his CREST sponsor sends) an ESA Instruction to settle in CREST in relation to each Electronic Acceptance to be withdrawn. Each ESA Instruction must, in order for it to be valid and settle, include the following details:

the number of Depositary Interests to be withdrawn, together with their ISIN number (this is VGG812641063); the member account ID of the accepting shareholder, together with his participant ID; the member account ID of the Escrow Agent (this is SIEPAL01) included in the relevant Electronic Acceptance, together with the Escrow Agent's participant ID (this is 3RA32); the transaction reference number of the Electronic Acceptance to be withdrawn; the intended settlement date for the withdrawal; and the corporate action number for the Offer.

Any such withdrawal will be conditional upon Computershare verifying that the withdrawal request is validly made. Accordingly, Computershare will on behalf of PML reject or accept the withdrawal by transmitting in CREST a receiving agent reject (AEAD) or receiving agent accept (AEAN) message.

4. Revised Offer

(a) Although no such revision is envisaged, if the Offer (in its original or any previously revised form(s)) is revised (either in its terms or conditions or in the value or form of the consideration offered or otherwise), and any such revised Offer(s) represent(s) on the date on which such revision is announced (on such basis PML may consider appropriate) an improvement (or no diminution) in the value of the consideration received and/or retained by a Sierra Rutile Shareholder (under the Offer or otherwise), the benefit of the revised Offer will, subject as provided in paragraphs 4(b), 4(c) and 6 below be made available to any Sierra Rutile Shareholder who has accepted the Offer in its original or previously revised form(s), and not validly withdrawn such acceptance (each a "Previous Acceptor"). The acceptance by or on behalf of a Previous Acceptor of the Offer in its original or any previously revised form(s) shall, subject as provided in paragraphs 4(b), 4(c) and 6 below, be deemed to be an acceptance of the Offer as so revised and shall, subject as aforesaid also constitute a separate appointment of PML and its directors as his attorney and/or agent with authority to accept any such revised Offer on behalf of such Previous Acceptor and, if such revised Offer includes alternative forms of consideration, to make on his behalf elections for and/or to accept such alternative forms of consideration on his behalf in such proportions as such attorney and/or agent in his absolute discretion thinks fit and to execute on behalf of and in the name of such Previous Acceptor all such further documents (if any) and take such further actions (if any) as may be required to give effect to such acceptances and/or elections. In making any such acceptances or making any such election, the attorney and/or agent shall take into account the nature of any previous acceptances and/or elections made by or on behalf of the Previous Acceptor and such other facts or matters as he may reasonably consider relevant.

(b) The deemed acceptances and elections referred to in this paragraph 4 shall not apply and the authorities conferred by paragraph 4(a) above shall not be exercised if, as a result thereof, the Previous Acceptor would (on such basis as PML may consider appropriate) thereby receive and/or retain (as appropriate) less consideration in aggregate under the Offer or otherwise than would have been received and/or retained (as appropriate) in aggregate consideration as a result of acceptance of the Offer in the form in which it was originally accepted and/or elected by such Previous Acceptor or on his behalf (unless such Previous Acceptor has previously agreed to receive and/or retain (as appropriate) less in aggregate consideration).

(c) The deemed acceptances and elections referred to in this paragraph 4 shall not apply and the authorities conferred by this paragraph 4 shall be ineffective to the extent that a Previous Acceptor:

(i) in respect of Certificated Sierra Rutile Shares, lodges with Computershare at the address set out in paragraph 3(a) of this Part B within 14 days of the publication of the document pursuant to which the revision of the Offer is made available to Sierra Rutile Shareholders (or such later date as PML may determine), a Form of Acceptance or some other form issued by or on behalf of PML in which he validly elects to receive the consideration receivable by him under such revised Offer in some other manner; or

(ii) in respect of Depositary Interests, sends (or, if a CREST sponsored member, procures that his CREST sponsor sends) an ESA Instruction to settle in CREST in relation to each Electronic Acceptance in respect of which an election is to varied. Each ESA Instruction must, in order for it to be valid and settle, include the following details:

the number of Depositary Interests in respect of which the changed election is made, together with their ISIN number (this is VGG812641063); the member account ID of the Previous Acceptor, together with his participant ID; the member account ID of the Escrow Agent (this is SIEPAL01) included in the relevant Electronic Acceptance, together with the Escrow Agent's participant ID (this is 3RA32); the transaction reference number of the Electronic Acceptance in respect of which the election is to be changed; the intended settlement date for the changed election; and the corporate action number for the Offer,

and, in order that the desired change of election can be effected, must include the member account ID of the Escrow Agent relevant to the new election.

Any such change of election will be conditional upon Computershare verifying that the request is validly made. Accordingly, Computershare will on behalf of PML reject or accept the requested change of election by transmitting in CREST a receiving agent reject (AEAD) or receiving agent accept (AEAN) message.

(d) The authorities conferred by this paragraph 4 and any acceptance of a revised Offer and/or any election pursuant thereto shall be irrevocable unless and until the Previous Acceptor becomes entitled to withdraw his acceptance under paragraph 3 above and duly does so.

(e) Subject to paragraph 6 below, PML reserves the right to treat an executed Form of Acceptance or TTE Instruction relating to the Offer (in its original or any previously revised form(s)) which is received (or dated) on or after the announcement or publication of the Offer in any revised form as a valid acceptance of the revised Offer and, where applicable, a valid election for any alternative form of consideration made available pursuant thereto, and such acceptance shall constitute an authority in the terms of paragraph 4(a) above on behalf of the relevant Sierra Rutile Shareholder.

5. General

(a) Save with the consent of the Board of Sierra Rutile and PML, the Offer will lapse unless the Acceptance Condition has been satisfied by midnight (London time) on 6 November 2011 or such later date PML may, with the consent of the Board of Sierra Rutile, decide. If the Offer lapses for any reason, the Offer will cease to be capable of further acceptance and Sierra Rutile Shareholders and PML will cease to be bound by prior acceptances.

(b) The Offer extends to all the Sierra Rutile Shares unconditionally allotted or issued on 7 September 2011 and any further Sierra Rutile Shares unconditionally allotted or issued and fully paid, in each case, while the Offer remains open for acceptance (or such earlier date or dates as PML may decide) other than shares held by PML and parties acting in concert with PML.

(c) The Sierra Rutile Shares are to be acquired by PML fully paid and free from all liens, charges and encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching thereto, including the right to all dividends or other distributions declared, paid or made after the date hereof. If a dividend and/or a distribution and/or a return of capital is proposed, declared, made, paid or becomes payable by Sierra Rutile in respect of a Sierra Rutile Share on or after the date of this announcement and prior to the Offer becoming or being declared unconditional in all respects or lapsing or being withdrawn, PML reserves the right to reduce the value of the consideration payable for each Sierra Rutile Share under the Offer in respect of any Sierra Rutile Share by up to the amount of the dividend and/or distribution and/or return of capital except where the Sierra Rutile Share is or will be transferred pursuant to the Offer on a basis which entitles PML to receive the dividend and/or distribution and/or return of capital and to retain it.

(d) Save with the consent of the Board of Sierra Rutile, settlement of the consideration to which any Sierra Rutile Shareholder is entitled under the Offer will be implemented in full in accordance with the terms of the Offer without regard to any lien, right of set-off, counterclaim or other analogous right to which PML may otherwise be, or claim to be, entitled as against such Sierra Rutile Shareholder and will be effected in the manner described in paragraph 10 of this announcement within 14 days of the later of 7 October 2011, the date on which the Offer becomes or is declared unconditional in all respects and the receipt of a valid and complete acceptance. Subject to paragraph 6 below, no consideration will be sent to an address in the United States, Canada, Australia or Japan.

(e) Notwithstanding the right reserved by PML to treat an acceptance of the Offer as valid (even though, in the case of Certificated Sierra Rutile Shares, the relevant Form of Acceptance is not entirely in order or not accompanied by the relevant share certificate(s) and/or other document(s) of title), except as otherwise agreed with the Board of Sierra Rutile:

(i) an acceptance of the Offer will only be counted towards fulfilling the Acceptance Condition if the requirements of Note 4 and, if applicable, Note 6 on Rule 10 of the Code are satisfied in respect of it;

(ii) a purchase of Sierra Rutile Shares by PML or its nominee(s) or a person acting in concert with PML, if any, will only be counted towards fulfilling the condition if the requirements of Note 5 and, if applicable, Note 6 of Rule 10 of the Code are satisfied in respect of it;

(iii) the Offer will not become unconditional unless Computershare has issued a certificate to PML which states the number of Sierra Rutile Shares in respect of which acceptances have been received which comply with paragraph (i) above, and the number of Sierra Rutile Shares otherwise acquired, whether before or during the offer period, which comply with the requirements of paragraph (ii) above. A copy of such certificate shall be sent to Sierra Rutile as soon as possible after it is issued; and

(iv) Sierra Rutile Shares which have been borrowed by PML may not be counted towards fulfilling the Acceptance Condition.

(f) The terms, provisions, instructions and authorities contained in or deemed to be incorporated in the Form of Acceptance will, in respect of Certificated Sierra Rutile Shares, also constitute part of the terms of the Offer. Words and expressions defined in this announcement have the same meanings when used in the Form of Acceptance unless the context otherwise requires. The provisions of this Appendix I shall be deemed to be incorporated in the Form of Acceptance.

(g) The Offer and the Form of Acceptance and all acceptances and elections in respect of the Offer, or pursuant thereto, and all contracts made pursuant thereto and any action taken or made or deemed to be taken or made under any of the foregoing (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law. Execution of a Form of Acceptance or the sending of a TTE Instruction by or on behalf of a Sierra Rutile Shareholder constitutes his irrevocable submission in relation to all matters arising out of or in connection with the Offer and the Form of Acceptance to the jurisdiction of the courts of England and his agreement that nothing shall limit the right of PML to bring any action, suit or proceeding arising out of or in connection with the Offer or the Form of Acceptance in any other manner permitted by law or in any court of competent jurisdiction.

(h) All references in this announcement and in the Form of Acceptance to 7 October 2011 shall (except in paragraph 1(a) of this Part B and where the context otherwise requires) be deemed, if the expiry date of the Offer is extended, to refer to the expiry date of the Offer as so extended.

(i) Any omission or failure to dispatch the Form of Acceptance or any notice required to be dispatched under the terms of the Offer to, or any failure to receive the same by, any person to whom the Offer is made, or should be made, shall not invalidate the Offer in any way or create any implication that the Offer has not been made to any such person. Subject to paragraph 6 of this Part B, the Offer extends to persons to whom the Offer is made or should be made but to whom the Form of Acceptance or any related offering documents may not be dispatched or by whom such documents may not be received, and such persons may collect copies of these documents from Computershare at the address set out in paragraph 3(a) of this Part B.

(j) Notwithstanding any other provision in this Part B of Appendix I, PML reserves the right to treat acceptances of the Offer and/or elections pursuant thereto as valid if received by or on behalf of PML at any place or places or in any manner determined by it otherwise than as set out in this announcement or in the Form of Acceptance.

(k) All powers of attorney, appointments of agents and authorities in the terms conferred by or referred to in this Appendix I or in the Form of Acceptance are given by way of security for the performance of the obligations of the Sierra Rutile Shareholder concerned and are irrevocable in accordance with section 4 of the Powers of Attorney Act 1971 unless and until the donor of such power of attorney or authority or appointment validly withdraws his acceptance in accordance with paragraph 3 of this Part B.

(l) No acknowledgement of receipt of any Form of Acceptance, TTE Instruction, share certificate(s) and/or other document(s) of title will be given. All communications, notices, certificates, documents of title and remittances to be delivered by or sent to or from Sierra Rutile Shareholders (or their designated agent(s)) will be delivered by or sent to or from such Sierra Rutile Shareholders (or their designated agent(s)) at their own risk.

(m) If the Offer lapses:

(i) in respect of Certificated Sierra Rutile Shares, the Form of Acceptance, share certificate(s) and/or other document(s) of title will be returned by post (or such other method as may be approved by the Board of Sierra Rutile) within 14 days of the Offer lapsing, at the risk of the person entitled thereto, to the person or agent whose name and address outside the United States, Canada, Australia or Japan is set out in the relevant box in the Form of Acceptance or, if none is set out, to the first-named or sole holder at his registered address outside the United States, Canada, Australia or Japan. No such document will be sent to an address in the United States, Canada, Australia or Japan;

(ii) in respect of Depositary Interests, Computershare will, immediately after the lapsing of the Offer (or within such longer period as the Board of Sierra Rutile may permit, not exceeding 14 days after the lapsing of the Offer), give instructions to Euroclear to transfer all Depositary Interests held in escrow balances and in relation to which it is the Escrow Agent for the purposes of the Offer to the original available balances of the Sierra Rutile Shareholders concerned.

(n) In relation to any acceptance of the Offer in respect of a holding of Depositary Interests, PML reserves the right to make such alterations, additions or modifications as may be necessary or desirable to give effect to any purported acceptance of the Offer, whether in order to comply with the facilities or requirements of CREST or otherwise, provided such alterations, additions or modifications are consistent with the requirements of the Code or are otherwise made with the consent of the Board of Sierra Rutile.

(o) The Offer is made at 5.00 p.m. (London time) on 7 September 2011 and is capable of acceptance from and after that date. The Offer is being made by means of this announcement. Copies of this announcement, the Form of Acceptance and any related documents may be collected from Computershare at the address set out in paragraph 3(a) of this Part B.

(p) For the purposes of this announcement, the time of receipt of a TTE Instruction, an ESA Instruction or an Electronic Acceptance shall be the time at which the relevant instruction settles in CREST.

(q) If sufficient Sierra Rutile Shares are acquired, whether pursuant to acceptances of the Offer or otherwise, PML intends to apply the provisions of Article 28.7 of Sierra Rutile's articles of association to acquire compulsorily any outstanding Sierra Rutile Shares to which the Offer relates.

(r) All references in this Appendix I to any statute or statutory provision shall include a statute or statutory provision which amends, consolidates or replaces the same (whether before or after the date hereof).

6. Overseas Shareholders

(a) The making of the Offer in, or to Sierra Rutile Shareholders resident in, or citizens or nationals of, jurisdictions outside the United Kingdom, or to persons who are custodians, nominees of or trustees for, citizens, residents or nationals of such jurisdictions, may be prohibited or affected by the laws of the jurisdiction in which such persons are resident. Such persons should inform themselves about and observe any applicable legal requirements. It is the responsibility of any such person wishing to accept the Offer to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents, which may be required and the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such jurisdiction. Any such person will be responsible for any such issue, transfer or other taxes or other requisite payments by whomsoever payable and PML and any person acting on its behalf shall be fully indemnified and held harmless by such person for any such issue, transfer or other taxes as PML may be required to pay.

(b) In particular, the Offer is not being, and will not be, made, directly or indirectly, in or into the United States, Canada, Australia or Japan, or by use of the mails of, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States, Canada, Australia or Japan, and the Offer should not be accepted by any such use, means, instrumentality or facility or otherwise from within the United States, Canada, Australia or Japan.

Accordingly, copies of this announcement, the Form of Acceptance and any related offering documents are not being, and should not be, mailed or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia or Japan. Persons receiving such documents (including, without limitation, custodians, nominees and trustees) should not distribute them in, into or from the United States, Canada, Australia or Japan or use such mails or any such means, instrumentality or facility for any purpose directly or indirectly in connection with the Offer, and so doing may render invalid any related purported acceptance of the Offer. Persons wishing to accept the Offer should not use the United States, Canadian, Australian or Japanese mails or any such means, instrumentality or facility for any purpose directly or indirectly relating to acceptance of the Offer. Envelopes containing Forms of Acceptance, evidence of title or other documents relating to the Offer should not be postmarked in the United States, Canada, Australia or Japan or otherwise dispatched from the United States, Canada, Australia or Japan and all acceptors must provide addresses outside the United States, Canada, Australia or Japan for the receipt of the consideration to which they are entitled under the Offer or for the return of Forms of Acceptance and (in relation to Certificated Sierra Rutile Shares) share certificate(s) and/or other document(s) of title.

(c) A Sierra Rutile Shareholder may be deemed NOT to have accepted the Offer or to have made a valid election thereunder if (i) he puts "NO" in Box 4 of the Form of Acceptance and therefore does not give the representation and warranty set out in paragraph (c) of Part C of this Appendix I; or (ii) he completes Box 1 of the Form of Acceptance with an address in the United States, Canada, Australia or Japan or has a registered address in the United States, Canada, Australia or Japan and in each case does not insert in Box 5 of the Form of Acceptance the name and address of a person or agent outside the United States, Canada, Australia or Japan to whom he wishes the consideration to which he is entitled under the Offer to be sent; or (iii) he inserts in Box 5 of the Form of Acceptance the name and address and/or telephone number of a person or agent in the United States, Canada, Australia or Japan to whom he wishes the consideration to which he is entitled under the Offer to be sent; or (iv) the Form of Acceptance received from him is received in an envelope postmarked in, or which otherwise appears to PML or its agents to have been sent from, the United States, Canada, Australia or Japan; or (v) he makes a Restricted Escrow Transfer pursuant to paragraph 6(d) of this Part B unless he also makes a related Restricted ESA Instruction which is accepted by Computershare. PML reserves the right, in its sole discretion, to investigate, in relation to any acceptance, whether the representation and warranty set out in paragraph (c) of Part C or (as the case may be) paragraph (c) of Part D of this Appendix I could have been truthfully given by the relevant Sierra Rutile Shareholder and, if such investigation is made and as a result PML determines (for any reason) that such representation and warranty could not have been so given, such acceptances and any election thereunder may be rejected as invalid.

(d) If a Sierra Rutile Shareholder holding Depositary Interests is unable to give the warranty set out in paragraph (c) of Part D of this Appendix I, but nevertheless can provide evidence satisfactory to PML that he is able to accept the Offer in compliance with all relevant legal and regulatory requirements, he may only purport to accept the Offer by sending (or if a CREST sponsored member, procuring that his CREST sponsor sends) both (1) a TTE Instruction to a designated escrow balance detailed below (a "Restricted Escrow Transfer") and (2) one or more valid ESA Instructions (a "Restricted ESA Instruction") which specify the form of consideration which he wishes to receive (consistent with the alternatives offered under the Offer). Such purported acceptance will not be treated as a valid acceptance unless both the Restricted Escrow Transfer and the Restricted ESA Instruction(s) settle in CREST and PML decides, in its absolute discretion, to exercise its right described in paragraph 6(g) of this Part B to waive, vary or modify the terms of the Offer relating to overseas shareholders, to the extent required to permit such acceptance to be made in each case during the acceptance period set out in paragraph 1 of this Part B. If PML accordingly decides to permit such acceptance to be made, Computershare will on behalf of PML accept the purported acceptance as an Electronic Acceptance on the terms of this announcement (as so waived, varied or modified) by transmitting in CREST a receiving agent accept (AEAN) message. Otherwise, Computershare will on behalf of PML reject the purported acceptance by transmitting in CREST a receiving agent reject (AEAD) message. Each Restricted Escrow Transfer must, in order for it to be valid and settle, include the following details: the ISIN number for the Depositary Interests; the number of Depositary Interests in respect of which the Offer is to be accepted; the member account ID and participant ID of the Sierra Rutile Shareholder; the participant ID of the Escrow Agent (this is 3RA32) and its member account ID specific to a Restricted Escrow Transfer (this is RESTRICT); and the intended settlement date. Each Restricted ESA Instruction must, in order for it to be valid and settle, include the following details: the ISIN number for the Sierra Rutile Shares; the number of Sierra Rutile Shares relevant to that Restricted ESA Instruction; the member account ID and participant ID of the accepting Sierra Rutile Shareholder; the member account ID and participant ID of the Escrow Agent set out in the Restricted Escrow Transfer; the participant ID and the member account ID of the Escrow Agent relevant to the form of consideration required; the transaction reference number of the Restricted Escrow Transfer to which the Restricted ESA Instruction relates; the intended settlement date; and the corporate action number for the Offer.

(e) If, notwithstanding the restrictions described above, any person (including, without limitation, custodians, nominees and trustees), whether pursuant to a contractual or legal obligation or otherwise, forwards this announcement, the Form of Acceptance or any related document in, into or from the United States, Canada, Australia or Japan or uses the mails or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of, the United States, Canada, Australia or Japan in connection with such forwarding, such person should (i) inform the recipient of such fact, (ii) explain to the recipient that such action may invalidate any purported acceptance by the recipient and (iii) draw the attention of the recipient to this paragraph 6.

(f) PML reserves the right to notify any matter, including the fact that the Offer has been made, to all or any Sierra Rutile Shareholders:

(i) with a registered address outside the United Kingdom; or

(ii) whom PML knows to be a custodian, trustee or nominee holding Sierra Rutile Shares for persons who are citizens, residents or nationals of jurisdictions outside the United Kingdom,

by announcement or by paid advertisement in a daily national newspaper published and circulated in the United Kingdom or by notice in the London Gazette (in which event such notice shall be deemed to have been sufficiently given, notwithstanding any failure by any such Sierra Rutile Shareholder to receive or see such notice) and all references in this announcement to notice or the provision of information in writing by or on behalf of PML shall be construed accordingly.

(g) The provisions of this paragraph 6 override any terms of the Offer inconsistent with them. The provisions of this paragraph 6 and/or any other terms of the Offer relating to overseas Sierra Rutile Shareholders may be waived, varied or modified as regards specific Sierra Rutile Shareholder(s) or on a general basis by PML in its absolute direction.

(h) References in this paragraph 6 to a Sierra Rutile Shareholder shall include the person or persons executing a Form of Acceptance and, in the event of more than one person executing a Form of Acceptance, the provisions of this paragraph shall apply to them jointly and to each of them.

Overseas shareholders should inform themselves about and observe any applicable legal or regulatory requirements. If you are in any doubt about your position you should consult your professional adviser in the relevant territory.

PART C - FORM OF ACCEPTANCE

This Part C only applies to Certificated Sierra Rutile Shares (unless PML otherwise agrees). If you do not hold Certificated Sierra Rutile Shares you should (unless PML has agreed that you can use a Form of Acceptance) ignore this Part C and instead read Part D below.

Each Sierra Rutile Shareholder by whom, or on whose behalf, a Form of Acceptance is executed irrevocably undertakes, represents, warrants and agrees to and with PML and Computershare (so as to bind him, his personal representatives, heirs, successors and assigns) to the following effect:

(a) that the execution of the Form of Acceptance, whether or not any other boxes are completed shall constitute:

(i) an acceptance, subject to paragraph 6 of Part B of this Appendix I of the Offer in respect of the relevant Sierra Rutile Shareholder's entire holding of Certificated Sierra Rutile Shares (or such lesser number as may have been inserted in Box 2 of the Form of Acceptance provided that if no number is inserted in Box 2, or a number is inserted in Box 2 which exceeds such Sierra Rutile Shareholder's holding of Certificated Sierra Rutile Shares, the acceptance will be deemed to have been made in respect of the Sierra Rutile Shareholder's entire holding of Certificated Sierra Rutile Shares); and

(ii) an undertaking to execute any further documents, take any further action and give any further assurances which may be required to enable PML to obtain the full benefit of the terms of this Appendix I and/or to perfect any of the authorities expressed to be given hereunder or otherwise in connection with such Sierra Rutile Shareholder's acceptance of the Offer; and

in each case on and subject to the terms and conditions set out or referred to in this announcement and the Form of Acceptance and that, subject only to the rights of withdrawal set out in paragraph 3 of Part B of this Appendix I, each such acceptance and election shall be irrevocable;

(b) that the Certificated Sierra Rutile Shares in respect of which the Offer is accepted or deemed to be accepted are sold free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights attaching thereto on or after 6 September 2011, including, without limitation, voting rights and the right to receive and retain all dividends or other distributions declared, made or paid on or after 6 September 2011;

(c) that, unless "NO" is inserted in Box 4 of the Form of Acceptance:

(i) the Form of Acceptance and any related offering documents have not been mailed or otherwise distributed or sent (directly or indirectly) in, into or from the United States, Canada, Australia or Japan or any other jurisdiction where such actions may constitute a breach of any legal or regulatory requirements of such jurisdiction;

(ii) in connection with the Offer, there has been no use, directly or indirectly, of the mails of, or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facility of a national securities exchange of, the United States, Canada, Australia or Japan or such other jurisdiction;

(iii) such Sierra Rutile Shareholder was outside the United States, Canada, Australia and Japan when the Form of Acceptance was sent and at the time of accepting the Offer in respect of the Sierra Rutile Shares to which such Form of Acceptance relates;

(iv) in respect of the Sierra Rutile Shares to which the Form of Acceptance relates, such Sierra Rutile Shareholder is not, and is not accepting the Offer through, an agent or fiduciary acting on a non-discretionary basis for a principal, unless such principal is a corporation or partnership and such agent or fiduciary is an authorised employee of such principal or such principal has given any instructions with respect to the Offer from outside the United States, Canada, Australia and Japan; and

(v) if such accepting Sierra Rutile Shareholder is not a citizen, resident or national of the United Kingdom, he has observed the laws of all relevant jurisdictions, obtained all requisite governmental, exchange control or other required consents, complied with all requisite formalities and paid any issue, transfer or other taxes or other requisite payments due from him in each case in connection with such acceptance, in any jurisdiction and that he has not taken or omitted to take any action which will or may result in PML or any other person acting in breach of the legal or regulatory requirements of any such jurisdiction in connection with the Offer;

(d) that, in relation to Certificated Sierra Rutile Shares, the execution of the Form of Acceptance and its delivery to Computershare constitutes, subject to the Offer becoming unconditional in all respects in accordance with its terms, the irrevocable separate appointment of each of PML and its directors, authorised representatives and agents as such Sierra Rutile Shareholder's attorney and/or agent (the "attorney"), and an irrevocable instruction to the attorney (in accordance with section 4 of the Powers of Attorney Act 1971) to complete and execute all or any form(s) of transfer and/or other document(s) at the discretion of the attorney in relation to the Sierra Rutile Shares referred to in paragraph (a)(i) above, in respect of which the accepting Sierra Rutile Shareholder has not validly withdrawn the acceptance, in favour of PML or such other person or persons as PML or its agents may direct and to deliver such form(s) of transfer and/or other document(s) at the discretion of the attorney together with any share certificate(s) and/or other document(s) of title relating to such Sierra Rutile Shares for registration within six months of the Offer becoming unconditional in all respects and to do all such other acts and things as may in the opinion of the attorney be necessary or expedient for the purposes of, or in connection with, the acceptance of the Offer and to vest in PML or its nominee(s) the Sierra Rutile Shares as aforesaid;

(e) that in relation to Certificated Sierra Rutile Shares the execution of the Form of Acceptance and delivery to Computershare constitutes, subject to the Offer becoming unconditional in all respects in accordance with its terms and to the accepting Sierra Rutile Shareholder not having validly withdrawn the acceptance, a separate and irrevocable authority and request:

(i) to Sierra Rutile or its agents to procure the registration of the transfer of the Certificated Sierra Rutile Shares referred to in paragraph (a)(i) above pursuant to the Offer and the delivery of the share certificate(s) and/or any document(s) of title in respect thereof to PML or as it may direct;

(ii) to PML or its agents, (subject to the provisions of paragraph 6 of Part B of this Appendix I) to procure the dispatch by post (or such other method as may be approved by the Board of Sierra Rutile) of a cheque in respect of any cash consideration to which such Sierra Rutile Shareholder is entitled, at the risk of such Sierra Rutile Shareholder, to the person or agent whose name and address outside the United States, Canada, Australia or Japan is set out in Box 5 of the Form of Acceptance or, if none is set out, to the first-named or sole holder at his registered address outside the United States, Canada, Australia and Japan;

(f) that, subject to the Offer becoming unconditional in all respects in accordance with its terms (or, in the case of voting by proxy, if the Offer will become unconditional in all respects or lapse depending upon the outcome of the resolution in question or in such other circumstances as PML may request and the Board of Sierra Rutile may permit), in respect of the Certificated Sierra Rutile Shares in respect of which the Offer has been accepted, or is deemed to be accepted, which acceptance has not been validly withdrawn, and which have not been registered in the name of PML or as it may direct:

(i) PML or its agents shall be entitled to direct the exercise of any votes and any or all other rights and privileges (including the right to requisition the convening of a general meeting or separate class meeting of Sierra Rutile) attaching to any such Sierra Rutile Shares;

(ii) the execution of a Form of Acceptance by a Sierra Rutile Shareholder shall constitute with regard to such Sierra Rutile Shares:

(A) an authority to Sierra Rutile or its agents from such Sierra Rutile Shareholders to send any notice, circular, warrant or other document or communication which may be required to be sent to him as a member of Sierra Rutile to PML at its registered office;

(B) an authority to PML or its agents to sign any consent to short notice of a general meeting or separate class meeting on his behalf and/or to execute a form of proxy in respect of such Sierra Rutile Shares appointing any person nominated by PML to attend general meetings and separate class meetings of Sierra Rutile or its members or any of them (and any adjournment thereof) and to exercise the votes attaching to such Sierra Rutile Shares on his behalf, such votes (where relevant) to be cast so far as possible to satisfy any outstanding condition of the Offer; and

(C) the agreement of such Sierra Rutile Shareholder not to exercise any of such rights without the consent of PML and the irrevocable undertaking of such Sierra Rutile Shareholder not to appoint a proxy for or to attend any such general meeting or separate class meeting;

(g) that he will deliver to Computershare, at the address set out in paragraph 3(a) of Part B of Appendix I, his share certificate(s) and/or other document(s) of title in respect of the Certificated Sierra Rutile Shares referred to in paragraph (a)(i) of this Part C and in relation to which acceptance has not been validly withdrawn, or an indemnity acceptable to PML in lieu thereof, as soon as possible and in any event within six months of the Offer becoming unconditional in all respects;

(h) that he will do all such acts and things as shall, in the opinion of PML or Computershare be necessary or expedient to vest in PML or its nominee(s) or such other person as PML may decide title to the number of Certificated Sierra Rutile Shares inserted or deemed to be inserted in Box 2 of the Form of Acceptance;

(i) that the terms and conditions of the Offer contained in this announcement shall be incorporated in and form part of the Form of Acceptance, which shall be read and construed accordingly;

(j) that he agrees to ratify each and every act or thing which may be done or effected by PML or its directors or agents or Sierra Rutile or its agents, as the case may be, in the proper exercise of any of the powers and/or authorities hereunder;

(k) that on execution and delivery, any Form of Acceptance shall take effect as a deed;

(l) that if any provision of Part B or Part C of this Appendix I shall be unenforceable or invalid or shall not operate so as to afford PML or Computershare or any authorised representative of any of them or their respective agents the benefit or authority expressed to be given therein, he shall with all practicable speed do all such acts and things and execute all such documents as may be required to enable those persons to secure the full benefits of Part B or Part C of this Appendix I;

(m) that he submits, in relation to all matters arising out of the Offer and the Form of Acceptance, to the jurisdiction of the English courts; and

(n) that in relation to Certificated Sierra Rutile Shares the execution of a Form of Acceptance and its delivery to Computershare constitutes a separate authority to PML and its directors in the terms of paragraph 4 of Part B of this Appendix I.

References in this Part C to a Sierra Rutile Shareholder shall include references to the person or persons executing a Form of Acceptance and in the event of more than one person executing a Form of Acceptance the provisions of this Part C shall apply to them jointly and to each of them.

PART D - ELECTRONIC ACCEPTANCES

This Part D only applies to Depositary Interests. If you only hold Certificated Sierra Rutile Shares you should ignore this Part D and instead read Part C above.

Each Sierra Rutile Shareholder by whom, or on whose behalf, an Electronic Acceptance is made irrevocably undertakes, represents, warrants and agrees to and with PML and Computershare (so as to bind him, his personal representatives, heirs, successors and assigns) to the following effect:

(a) that the Electronic Acceptance shall constitute an acceptance of the Offer in respect of the number of Depositary Interests to which a TTE Instruction relates and subject to the terms and conditions set out or referred to in this announcement and that, subject only to the rights of withdrawal set out in paragraph 3 of Part B of this Appendix I, each such acceptance shall be irrevocable;

(b) that the Depositary Interests in respect of which the Offer is accepted or deemed to be accepted are sold free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights attaching thereto on or after 6 September 2011, including, without limitation, voting rights and the right to receive and retain all dividends or other distributions declared, made or paid on or after 6 September 2011.

(c)

(i)

the documents relating to the Offer have not been mailed or otherwise distributed or sent (directly or indirectly) in, into or from the United States, Canada, Australia or Japan or any other jurisdiction where such actions may constitute a breach of any legal or regulatory requirements of such jurisdiction;

(ii) in connection with the Offer, there has been no use, directly or indirectly, of the mails of, or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facility of a national securities exchange of, the United States, Canada, Australia or Japan or such other jurisdiction;

(iii) such Sierra Rutile Shareholder was outside the United States, Canada, Australia and Japan at the time of the input and settlement of the relevant TTE Instruction;

(iv) in respect of the Sierra Rutile Shares to which the Electronic Acceptance relates, such Sierra Rutile Shareholder is not, and is not accepting the Offer through, an agent or fiduciary acting on a non-discretionary basis for a principal, unless such principal is a corporation or partnership and such agent or fiduciary is an authorised employee of such principal or such principal has given any instructions with respect to the Offer from outside the United States, Canada, Australia and Japan; and

(v) if such accepting Sierra Rutile Shareholder is not a citizen, resident or national of the United Kingdom, he has observed the laws of all relevant jurisdictions, obtained all requisite governmental, exchange control or other required consents, complied with all requisite formalities and paid any issue, transfer or other taxes or other requisite payments due from him in each case in connection with such acceptance, in any jurisdiction and that he has not taken or omitted to take any action which will or may result in PML or any other person acting in breach of the legal or regulatory requirements of any such jurisdiction in connection with the Offer or his acceptance thereof;

(d) that the Electronic Acceptance constitutes the irrevocable separate appointment of PML and its directors, authorised representatives and agents as such Sierra Rutile Shareholder's attorney and/or agent (the "attorney"), and an irrevocable instruction to the attorney (in accordance with section 4 of the Powers of Attorney Act 1971) (i) if the Offer becomes unconditional in all respects in accordance with its terms, and subject to the accepting Sierra Rutile Shareholder not having validly withdrawn the acceptance, to do all such acts and things as may in the opinion of the attorney be necessary or expedient for the purposes of, or in connection with, the acceptance of the Offer and to vest in PML or its nominee(s) the Sierra Rutile Shares referred to in paragraph (a) above; and (ii) if the Offer does not become unconditional in all respects, to give instructions to Euroclear, immediately after the lapsing of the Offer (or within such longer period as the Board of Sierra Rutile may permit, not exceeding 14 days from the lapsing of the Offer), to transfer all relevant Sierra Rutile Shares to the original available balance of an accepting Sierra Rutile Shareholder;

(e) that the Electronic Acceptance constitutes, subject to the Offer becoming unconditional in all respects in accordance with its terms and to the accepting Sierra Rutile Shareholder not having validly withdrawn the acceptance, a separate and irrevocable authority and request:

(i) to Sierra Rutile or its agents to procure the transfer to PML, or as it may direct, by means of CREST all or any of the Depositary Interests referred to in paragraph (a) above;

(ii) to PML or its agents (subject to the provisions of paragraph 6 of Part B of this Appendix I) to procure the making of a CREST payment obligation in favour of the Sierra Rutile Shareholder's payment bank in accordance with the CREST payment arrangements in respect of any cash consideration to which such Sierra Rutile Shareholder is entitled, provided, in relation to a CREST member whose registered address is in the United States, Canada, Australia or Japan, PML shall instead procure that all of, and in relation to any other Sierra Rutile Shares PML may (if, for any reason, it wishes to do so) determine that all or any part of, any such cash consideration shall be paid by cheque despatched by post to the first-named or sole holder at his registered address outside the United States, Canada, Australia or Japan;

(f) that, subject to the Offer becoming unconditional in all respects in accordance with its terms (or, in the case of voting by proxy, if the Offer will become unconditional in all respects or lapse depending upon the outcome of the resolution in question or in such other circumstances as PML may request and the Board of Sierra Rutile may permit), in respect of the Depositary Interests in respect of which the Offer has been accepted, or is deemed to be accepted, which acceptance has not been validly withdrawn, and which have not been registered in the name of PML or as it may direct:

(i) PML or its agents shall be entitled to direct the exercise of any votes and any or all other rights and privileges (including the right to requisition the convening of a general meeting or separate class meeting of Sierra Rutile) attaching to any such Depositary Interests;

(ii) the Electronic Acceptance by a Sierra Rutile Shareholder shall constitute with regard to such Depositary Interest:

(A) an authority to Sierra Rutile or its agents from such Sierra Rutile Shareholders to send any notice, circular, warrant or other document or communication which may be required to be sent to him as holder of a Depositary Interest (including any share certificate(s) or other document(s) of title issued as a result of conversion of such Depositary Interest into a Certificated Sierra Rutile Share) to PML at its registered office;

(B) an authority to PML or its agents to sign any consent to short notice of a general meeting or separate class meeting on his behalf and/or to execute a form of proxy in respect of such Depositary Interest appointing any person nominated by PML to attend general meetings and separate class meetings of Sierra Rutile or its members or any of them (and any adjournment thereof) and to exercise the votes attaching to such Depositary Interest on his behalf, such votes (where relevant) to be cast so far as possible to satisfy any outstanding condition of the Offer; and

(C) the agreement of such Sierra Rutile Shareholder not to exercise any of such rights without the consent of PML and the irrevocable undertaking of such Sierra Rutile Shareholder not to appoint a proxy for or to attend any such general meeting or separate class meeting;

(g) that if, for any reason, any Depositary Interests in respect of which a TTE Instruction has been effected in accordance with paragraph 9(b) of this announcement are converted to Certificated Sierra Rutile Shares, he will (without prejudice to paragraph (f)(ii)(A) above immediately deliver or procure the immediate delivery of the share certificate(s) or other document(s) of title in respect of all such Sierra Rutile Shares as so converted to Computershare at the address referred to in paragraph 3(a) of Part B of this Appendix I or to PML at its registered office or as PML or its agents may direct; and he shall be deemed upon conversion to undertake, represent, warrant and agree in the terms set out in Part C of this Appendix I in relation to such Sierra Rutile Shares;

(h) that the creation of a CREST payment obligation in favour of his payment bank in accordance with the CREST payment arrangements referred to in paragraph (e)(ii) above shall, to the extent of the obligation so created, discharge in full any obligation of PML to pay to him the cash consideration to which he is entitled pursuant to the Offer;

(i) that, he will do all such acts and things as shall in the opinion of PML or Computershare be necessary or expedient to vest in PML, or its nominee(s) or such other persons as PML may decide, title to the number of Depositary Interests comprised in the Electronic Acceptance and all such acts and things as may be necessary or expedient to enable Computershare to perform its functions as Escrow Agent for the purposes of the Offer;

(j) that he agrees to ratify each and every act or thing which may be done or effected by PML or Computershare or any of their respective directors or agents or Sierra Rutile or its agents, as the case may be, in the exercise of any of his powers and/or authorities hereunder;

(k) that if any provision of Part B or this Part D of this Appendix I shall be unenforceable or invalid or shall not operate so as to afford PML or Computershare or any authorised representative of any of them or their respective agents the benefit or authority expressed to be given therein, he shall with all practicable speed do all such acts and things and execute all such documents that may be required to enable those persons to secure the full benefits of Part B and Part D of this Appendix I;

(l) that he submits in relation to all matters arising out of the Offer and the Electronic Acceptance, to the jurisdiction of the English courts;

(m) that, by virtue of the Regulations, the making of an Electronic Acceptance constitutes an irrevocable power of attorney by the relevant holder of Sierra Rutile Shares in the terms of all the powers and authorities expressed to be given by Part B, this Part D and (where applicable by virtue of paragraph (g) above) Part C of this Appendix I to PML and Computershare and any of their respective agents; and

(n) that in relation to Depositary Interests, the Electronic Acceptance constitutes a separate authority to PML and its directors in the terms of paragraph 4 of Part B of this Appendix I.

References in this Part D to a Sierra Rutile Shareholder shall include references to the person or persons making an Electronic Acceptance, and in the event of more than one person making an Electronic Acceptance the provisions of this Part D shall apply to them jointly and to each of them.

APPENDIX II

BASES OF CALCULATIONS

(a) References to the value of the Offer assume the number of issued shares of Sierra Rutile in certificated form and represented by depositary interests to be 499,525,000 of which 192,273,344 are already beneficially owned by Pala. References to the value of the Offer assuming the exercise of all outstanding options (other than those which have been granted at an exercise price in excess of the Offer price) are based upon the Sierra Rutile Shares currently in issue as referred to above, and the 19,295,000 Sierra Rutile Shares which are at 6 September 2011 (being the latest practicable date prior to the publication of this document) the subject of options granted under the Sierra Rutile Share Schemes (other than those which have been granted at an exercise price in excess of the Offer price).

(b) Unless otherwise stated, all prices and closing prices for Sierra Rutile Shares are closing middle market quotations derived from the AIM Appendix to the Daily Official List.

(c) The volume weighted average price for a Sierra Rutile Share for the 20 trading days up to and including 6 September 2011 is sourced from Bloomberg.

APPENDIX III

DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

"Acceptance Condition"		means the condition to the Offer set out in Part A of Appendix I
"AIM"		means the market of that name operated by the London Stock Exchange plc
"Article 28"		means article 28 of Sierra Rutile's articles of association
"Australia"		the Commonwealth of Australia, its states, territories and possessions
"Board of Sierra Rutile"		board of directors of Sierra Rutile from time to time
"Canada"		Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-division thereof
"certificated" or "in certificated form"		a share or other security which is not in uncertificated form (that is, not in CREST)
"Certificated Sierra Rutile Shares"		existing unconditionally allotted or issued and fully paid shares of no par value each in Sierra Rutile which are in certificated form
"Code"		the City Code on Takeovers and Mergers
"Computershare"		Computershare Investor Services PLC
"CREST"		the relevant system (as defined in the Regulations) in respect of which Euroclear is the Operator (as defined in the Regulations)
"CREST member"		a person who has been admitted by Euroclear as a system-member (as defined in the Regulations)
"CREST participant"		a person who is, in relation to CREST, a system-participant (as defined in the Regulations)
"CREST sponsor"		a CREST participant admitted to CREST as a CREST sponsor
"CREST sponsored member"		a CREST member admitted to CREST as a sponsored member
"Depositary Interest"		a dematerialised depositary interest representing an entitlement to an existing unconditionally allotted or issued and fully paid share of no par value in Sierra Rutile
"Electronic Acceptance"		the inputting and settling of a TTE Instruction which constitutes or is deemed to constitute an acceptance of the Offer on the terms set out in this announcement
"ESA Instruction"		an Escrow Account Adjustment Input (AESN), transaction type "ESA" (as described in the CREST manual issued by Euroclear)
"Escrow Agent"		Computershare in its capacity as escrow agent (as defined by the CREST Manual issued by Euroclear)
"Euroclear"		Euroclear UK & Ireland Limited
"Form of Acceptance"		means the form of acceptance and authority for use in connection with the Offer
"member account ID"		the identification code or number attached to any member account in CREST
"Offer"		the mandatory cash offer made by PML to acquire all of the Sierra Rutile Shares not already held by PML, or parties acting in concert with PML, on the terms and subject to the condition set out in this announcement and the Form of Acceptance, and including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer
"Pala"		Pala Investments Holdings Limited, a company limited by shares incorporated in Jersey, whose registered office is at 12 Castle Street, St Helier, Jersey, JE2 3RT
"Pala Group"		Pala, its subsidiaries or subsidiary undertakings, its holding companies, and the subsidiaries of its holding companies and, where the context so permits, each of them
"participant ID"		the identification code or membership number used in CREST to identify a particular CREST member or a CREST participant
"PML"		Pala Minerals Limited, a company limited by shares incorporated in the British Virgin Islands, whose registered office is at Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands
"Regulations"		the Uncertificated Securities Regulations 2001 (SI No. 2001/3755)
"Regulatory Information Service"		means a Regulatory Information Service that is approved by the Financial Services Authority and is on the list maintained by the Financial Services Authority in Appendix 3 to the listing rules issued by the UK Listing Authority pursuant to Part VI of the Financial Services and Markets Act 2000
"Sierra Rutile"		Sierra Rutile Limited a company limited by shares incorporated in the British Virgin Islands, whose registered office is at P.O. Box 4301, Trinity Chambers, Road Town, Tortola, British Virgin Islands
"Sierra Rutile Group"		Sierra Rutile and its subsidiaries and subsidiary undertakings
"Sierra Rutile Share Schemes"		the Sierra Rutile Limited Share Option Plan and any other plan pursuant to which options over Sierra Rutile Shares have been granted and remain outstanding
"Sierra Rutile Shares"		Certificated Sierra Rutile Shares and Depositary Interests
"Sierra Rutile Shareholders"		holders of Sierra Rutile Shares
"SRL"		Sierra Rutile Limited a company limited by shares incorporated in Sierra Leone which is a wholly owned subsidiary of Sierra Rutile
"Subscription Agreement"		means the subscription agreement entered into between Pala and PML on the date of this announcement pursuant to which, inter alia, Pala has agreed to transfer its holding of Sierra Rutile Shares to PML upon the Offer becoming unconditional
"subsidiary" and "subsidiary undertaking"		have the meanings given to them in the Companies Act 2006
"TFE Instruction"		a Transfer from Escrow instruction (as defined by the CREST Manual issued by Euroclear)
"Transaction"		the acquisition on the date of this announcement by Pala of 1,725,000 Sierra Rutile Shares representing approximately 0.35 per cent. of Sierra Rutile's issued shares
"TTE Instruction"		a Transfer to Escrow instruction (as described in the CREST manual issued by Euroclear) in relation to a Depositary Interest meeting the requirements set out in paragraph 9(b) of this announcement
"uncertificated" or "in uncertificated form"		a share or other security title to which is recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST
"United States"		the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction
"£" or "Sterling"		pounds sterling, the lawful currency for the time being of the UK and references to "pence" and "p" shall be construed accordingly
"$" or "US Dollars"		United States dollars, the lawful currency for the time being of the United States and any references to "cents" shall be construed accordingly

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