Update on Proposed Issue of Equity

2 Sep 2010 07:36

2 September 2010 Kryso Resources plc ('Kryso" or the "Company") Update on Proposed Issue of Equity and Potential Project Finance

Due diligence review of Kryso has been concluded to the satisfaction of China

Nonferrous Metals Int'l Mining Co. Ltd. (CNMIM)

Kryso Resources plc (AIM: KYS), the mineral exploration and development company with gold and nickel-copper projects in Tajikistan, is pleased to announce that pursuant to the conditional subscription agreement (the "Subscription Agreement") entered into on 27 July 2010 with China Nonferrous Metals Int'l Mining Co. Ltd. ("CNMIM"), confirmation has been given under the Subscription Agreement by CNMIM that it has concluded its legal, financial and technical due diligence on the Company to its satisfaction.

The Subscription Agreement allows for:

* Conditional placing of 73,269,539 new ordinary shares to CNMIM representing 29.9% of the total issued share capital of the Company at a price of 15p per share (`the Placing Shares') to raise £10,990,430.85 before expenses (subject to adjustment so that the number of Placing Shares subscribed shall represent, on completion of the placing, 29.9% of the total issued shares of the Company) * Conditional issue to CNMIM of one warrant for each Placing Share, conditional on completion of the above placing, exercisable at 21p per share and each entitling CNMIM to subscribe for one further new ordinary share (`the Warrants') * Subject to the completion of the above placing (which is conditional on the approval of CNMIM's shareholders and the other conditions set out below), CNMIM to use best endeavours to procure an offer of debt financing for not less than 70% of the funding requirement to bring the Pakrut gold project into production * Proceeds of placing to be deployed to fund the development of the Pakrut gold project, exploration in the Pakrut licensed area and further exploration at the Hukas nickel-copper project

The Subscription Agreement and the above placing remain subject to a number of conditions including:

* Shareholders of the Company passing resolutions to authorise the Board to allot the Placing Shares and to waive statutory pre-emption rights in respect of such shares at a General Meeting to be convened and held in due course by the Company * Approval of the subscription from all appropriate authorities in the PRC * Admission to trading on AIM of the Placing Shares ("Admission") * No material adverse effect or material breach of warranty or covenant having occurred prior to Admission * No insolvency event, revocation or material adverse amendment of any existing exploration licence or unlifted suspension of the Company's shares from trading having occurred prior to Admission.

The Agreement contains warranties given by the Company to CNMIM as to, inter alia, the organisation, good standing, mineral rights, assets and other matters relating to the Company, its subsidiaries and its business.

A further announcement will be made by the Company when a notice is despatched to convene a general meeting of shareholders of the Company to seek approval for the Placing, or if either party terminates the Agreement for any reason.

Trevor Davenport, Non-Executive Chairman of Kryso, commented:

"Kryso is delighted that CNMIM has completed legal, financial and technical due diligence to its satisfaction. CNMIM is a global mining company with access to Chinese and overseas markets, resources and capital. Together we anticipate real progress towards production with CNMIM's commitment, if the placing successfully completes, to use its best endeavours to procure debt financing, for not less than 70% of the funding cost of the Pakrut gold project, for the construction and commissioning of a mine at the Pakrut gold project."

Enquires:

Dr Trevor Davenport/Craig Brown, Kryso Resources plc

Tel: +44 (0)20 7371 0600

Katy Mitchell, WH Ireland Limited

Tel: +44 (0)161 832 2174

Christian Dennis / Jeremy King, Optiva Securities Limited (formerly Orbis Equity Partners Limited)

Tel: +44 (0) 20 3137 1902

Ben Knowles / Bob Huxford / Leah Kramer, Walbrook PR

Tel: +44 (0)20 7933 8780

For further information, please visit the Company's website www.kryso.com

Notes to Editors:

About the Pakrut Gold Project

The Pakrut gold project, of which Kryso has 100% ownership, is situated in Tajikistan approximately 112 km northeast of the capital city Dushanbe. Pakrut has total JORC Code-compliant Mineral Resources of 3,024,000 oz Au (assuming a cut-off grade of 0.0g/t Au) and is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and western China, and which hosts a number of multi-million ounce gold deposits.

Drilling at Pakrut has previously returned numerous exciting intersections, including the following results released in April 2010:

- Ore Zone 1: 25.5m at 7.5 g/t, 42.4m at 5.4 g/t and 12.0m at 6.4 g/t Au

- Ore Zone 3: 9.0m at 7.5 g/t and 13.5m at 7.5 g/t Au (with 4.5m at 20.1 g/t)

About Tajikistan

Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States (CIS) and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminium smelter in Central Asia. Kryso's management team has extensive experience in the mining industry in Tajikistan.