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Promising Gold Resource defined for Kodo portion of the Zani-Kodo trend and Government approval of renegotiated OKIMO JV contract

2 September 2009

Mwana Africa plc (“Mwana” or the “Company”) is pleased to announce a promising initial resource estimate for the Zani-Kodo gold prospect in the Democratic Republic of Congo (“DRC”). Mwana is also pleased to announce that it has received the approval of the DRC’s Council of Ministers on the terms of renegotiation of its agreement with L’Office des Mines d’Or de Kilo-Moto (“OKIMO”).

SUMMARY

Zani-Kodo trend

The gold-bearing Zani-Kodo trend has been accurately delineated over a strike length of 9km. Initial drilling, focused on the northern 700m of this 9km strike (Kodo Section), has outlined JORC compliant indicated resources of 190,684 oz of gold and JORC compliant inferred resources of 261,192 oz of gold. A single hole at Zani Central, 5km south of Kodo, confirmed the mineralisation model and intersected a broad zone of gold mineralisation. A drill-ready target at Le Badolite has been identified between Kodo and Zani Central. Major linear soil anomalies parallel to the main trend in the south extension of the trend indicates the continuation of mineralisation under cover into this area.

Approval of renegotiated JV contract

Mwana has received notification that, following renegotiation discussions, its agreement with OKIMO has received approval from the DRC Council of Ministers. Mwana will as under the previous agreement, retain its 80%interest in the joint venture. OKIMO will also retain its 20% free-carried interest. In addition:

• The existing contract (the “contrat d’amodiation”), under which Mwana Africa holds its rights for the exploitation of the Zani Kodo prospect, is to be replaced by a joint venture, whereby Mwana and OKIMO will jointly establish a company (“NEWCO”) which will hold the mining titles.
• One off payments totalling approximately US$600,000 will be made to OKIMO and the mining registry (CAMI) upon creation of the joint venture, including consideration for the transfer of mining titles to NEWCO and settlement of disputes with the “Cadastre Minier” over surface fees accrued from November 2006.

Exploration update

Mwana Africa, in a JV to be formed with OKIMO, holds gold mining rights over 1,610 km2 in Orientale Province, DRC. The eastern area of the Ituri region is underlain by a series of highly prospective greenstone belts of Kibalian age (the Kilo-Moto Belt) which are considered to have high gold potential. This semi-continuous belt hosts three main deposits currently being developed and explored by Moto Mines, AngloGold Ashanti and Mwana Africa (See Figure 1). The Moto greenstone belt was exploited primarily in the 1950s and 1960s by Belgian charter companies, producing more than 3Moz of a total recorded 11Moz gold production from hard-rock mines in the Moto belt, primarily from surface operations (alluvials, shallow oxide pits).

Mwana’s exploration programme has focussed on the Zani-Kodo prospect, in particular around the historical Kodo mine and on a series of regional targets identified through a high-resolution airborne geophysical survey, and where soil geochemistry surveys have been completed.

In April 2007, Mwana Africa commenced a diamond core drilling programme at the prospect. Initial drilling confirmed the presence of a continuous mineralised shear zone at the contact between sandstones and banded iron formation (“BIF”) / graphitic schists. Gold is associated with increased quartz veining and the presence of pyrrhotite and arsenopyrite. Subsequent drilling focused on testing the downdip extensions of this zone over a strike length of 350m (“Kodo Main”). The latest phase of drilling focused on the Kodo Northern Extension zone.

A total of 152 holes and 27,682m have been drilled to date, covering an overall strike length of 700m. Mineralisation of the drilled portion of Kodo Main is open at depth and to the north. The Zani-Kodo trend continues to the south, covering a total of approximately 9km.

Kodo resource

Two discrete subareas have been identified at the Kodo area (Figures 2,3).

• Kodo Main Zone: This area has a strike length of 400m and includes the partly mined Kodo orebody (Kodo Main) as well as two distinct hangingwall ore zones (Kodo HW1 and HW2). The Kodo Main ore body is situated in sheared BIF and schists at the upper contact with a competent sandstone where major quartz veining is present. The ore zone is typically 10-15m wide with a maximum thickness of 30m (Figure 4). The Main zone is continuous along strike over the entire drilled length of 700m and contains a high grade shoot, which plunges north-northeast, immediately below historical workings. This shoot extends over a strike of 150m, and contains a lenticular quartz body and increased arsenopyrite mineralisation. The hangingwall ore zones are narrower and are associated with increased shearing along narrow graphitic units within the overall hangingwall schist-sandstone package. The Main zone dips at 60° towards the east and has been drilled to a maximum depth of 220m vertical. The hangingwall zones are less continuous along strike and have been subdivided in HW1, 1A, 1B and HW 2, 2A, 2B during the wireframe construction. They are typically 1-5m in thickness. Higher up in the hangingwall sequence several additional small pockets of mineralisation are present (HW3,4,5,6). A small ore body is also present in the footwall of the Kodo Main area. All ore bodies remain open at depth.
• Kodo Northern Extension Zone: This area is offset to the north of a north-east trending fault zone which marks the northern limit of the Kodo Main zone. Two distinct ore zones are present (Kodo N Extension FW and Kodo N Extension HW). These have widths of up to 11m and are approximately 40m apart. The dip in this area is some 30° shallower than the Kodo Main zone with ore zones dipping approximately 35° to the east (Figure 5). Both zones are open at depth. To the north the mineralisation also remains open but appears to be offset by another NE trending fault.
• Selected intersections from Kodo Main (best widths and grades) include 25m @ 7.7 g/t, 31m @ 6.1g/t, 21m @ 7.2 g/t, 14m @ 10.5g/t, 10m @ 9.0g/t, 4m @ 31.2g/t. Complete assays used for the resource calculation are being posted on www.mwanaafrica.com. All assays were done by the independent accredited SGS laboratory in Mwanza.
• Densities (5,709 measurements) were measured across all mineralised intersections.

Preliminary resource calculation

An initial JORC-compliant resource calculation has been carried out by BMRE Ltd (an independent consultancy) for the drilled portion of the Zani-Kodo trend. Indicated resources of 2,045,307t @ 2.90g/t and further inferred resources of 3,159,511t @ 2.57g/t have been defined, containing 190,684 oz and 261,192 oz gold respectively. Top cuts of 20g/t and 12g/t were applied to the Kodo Main and Northern Extension zones respectively.

The bulk of the indicated resource is situated in the Kodo Main zone where infill drilling has been completed. Conversion of the inferred resource at the Kodo Northern Extension to the indicated category is expected to require a limited amount of infill drilling. In addition, the open ended nature of the mineralisation and the presence of broad intersections at depth, particularly in the Kodo Main zone, indicate that the resource could be significantly increased by further deep drilling to the east of the current holes.

District scale exploration

An interpretation of aeromagnetic data and field mapping has confirmed that the Zani-Kodo mineralised structure extends over a strike length of 9km (Figures 5, 6). Target areas were identified along the trend in areas bounded by NE striking faults similar to the Kodo prospect. A single hole was drilled at the Zani Central target some 5 km south along the Zani-Kodo trend and identified similar lithologies to the Kodo prospect and a mineralisation intersection of 26m @ 1.3g/t (with peaks of up to 3.3g/t). This supports the structural model for mineralisation. An additional Zani-Kodo trend target (‘Le Badolite’) is drill ready.

To the south the controlling structure passes under cover and a soil sampling programme was carried out (Grid 2). This shows three major gold in soil anomalies (Anomalies 2A, 2B and 2C). The geophysical interpretation of this area, combined with field mapping indicates that the area is underlain primarily by easterly dipping BIF’s. It appears that a series of hangingwall structures to the main Zani-Kodo trend are present with stacking of the BIF units. Anomalies 2A and 2B are elongate parallel to these structures, with strike lengths of 3,000m and 2,500m respectively. Gold in soil values consistently in excess of 100ppb are present along the complete strike lengths of both anomalies and their correspondence with interpreted structures indicate the presence of significant mineralisation in bedrock. A further irregular anomaly (2C) is present in the south of the grid (Figures 6, 7)

Kalaa Mpinga, Chief Executive Officer of Mwana Africa, commented:

“We are pleased to be able to announce our first resource estimate based on our initial exploration at the Zani-Kodo gold prospect. Indications are that only limited additional drilling is required to upgrade the majority of the inferred resource to indicated. Moreover, results to date are based on drilling of only 700m of an estimated 9km strike length along the length of Mwana’s prospect the Zani-Kodo trend. Together with the nearby Moto Goldmines and AngloGold concessions, the prospect represents one of the world’s major undeveloped gold resources. The approval by the DRC Council of Ministers of our joint venture agreement with OKIMO is a further step towards realising the potential of this exciting gold prospect.”

A complete version of this press release (PDF - 1.2MB), together with details of significant intersections and diagrams showing the Zani-Kodo licence and project area, and the location of Kodo diamond core drillholes, is available for download.

• Full release (PDF - 1.2MB)
• Kodo Assay (TXT - 1.7MB)

All results obtained by fire assay by SGS Laboratories, Mwanza.