MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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1 The following contains selected additional information regarding the business and operations of African Minerals Limited and certain of its subsidiaries, including Tonkolili Iron Ore (SL) Limited, African Power (SL) Limited, African Railway and Port Services (SL) Limited, TIO Trading Limited, Tonkolili Iron Ore Limited, African Power Limited and African Railway and Port Services Limited (collectively, the Aggregated Group ). Our primary purpose is to provide an update on the business of the Aggregated Group, including unaudited interim condensed aggregated financial statements for the Aggregated Group and updates regarding African Minerals Limited and its affiliates. This information may include forward looking statements. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, such as the words assume, believe, could, estimate, anticipate, expect, intend, may, will, plan, continue, ongoing, potential, predict, project, risk, target, seek, should or would and similar expressions or, in each case, their negative or other variations or comparable terminology or by discussions of strategies, plans, objectives, targets, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth and strategies, our reserves and the industry in which we operate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. You should not place undue reliance on these forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. References herein to the Aggregated Group, we, us and our refer to Tonkolili Iron Ore (SL) Limited, African Power (SL) Limited, African Railway and Port Services (SL) Limited, TIO Trading Limited, Tonkolili Iron Ore Limited, African Power Limited and African Railway and Port Services Limited, except where the context otherwise requires or it is otherwise indicated.

2 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our results of operations and financial condition based on our Unaudited Annual Aggregated Financial Information as at and for each of the years ended December 31, 2013 and December 31, 2012 prepared in accordance with the underlying principles of IFRS although not fully compliant with the consolidation requirements of the relevant IFRS, and our Unaudited Interim Aggregated Financial Statements as at and for the three months ended March 31, 2014 including comparatives as at and for the three months ended March 31, 2013, prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (together, the Aggregated Financial Statements ). The Aggregated Financial Statements are a summation of the standalone financial statements of the Aggregated Group and certain adjustments to reflect intercompany trading and operations. The underlying principles applied in the preparation of these Aggregated Financial Statements are in accordance with IFRS and interpretations issued by IFRIC as issued by the IASB and adopted by the EU as they apply to the IFRIC, as the concept of the Aggregated Group does not exist within the IFRIC framework. The following discussion and analysis should be read in conjunction with our Aggregated Financial Statements and the notes thereto. The following discussion contains certain forward-looking statements that reflect our plans, estimates and beliefs. Our results of operations could differ materially from those discussed in these forward-looking statements. Overview We are the largest producer of iron ore in West Africa and the second largest in Africa in terms of volume and value. Our operations, which include a fully-integrated, owned and operated mine, processing plant, rail, port and marine operations are all located in Sierra Leone. The Mine is located at Tonkolili and is one of the largest iron ore deposits in the world with a JORC compliant resource of approximately 12.8 Bnt of iron ore, comprising 11.6 Bnt Magnetite, 1.1 Bnt Friable Hematite Ore and Mt Hematite DSO, which we believe has a mine-life in excess of 60 years. The ore body is such that the Magnetite is overlain by the Friable Hematite Ore and both are then capped with the on-surface supergene enriched Hematite DSO zone. Supergene enrichment occurs at the base of the oxidized portion of an ore deposit. We currently produce and sell Hematite DSO products, which requires very little processing, only crushing and screening, with no waste stripping (other than internal ore material movement), which allows for low mine site operating costs. Our Hematite DSO products also have low silica content, good physical properties and enjoy strong market demand. Our fully-integrated, owned and exclusively operated infrastructure facilities provide us with complete control of our logistics chain from mine to ship. We have a number of contractual commitments in relation to our exports under various offtake agreements which currently represent all of our exports. For the twelve months ended March 31, 2014, we generated revenue of $953.5 million and EBITDA of $234.8 million. Factors Affecting the Comparability of Our Results of Operations Revenue and Cost of Sales Capitalization We did not record any revenue or cost of sales in 2012, and, in turn, recorded no gross profit as we capitalized revenue and cost of sales as assets under construction during the year ended December 31, Factors Affecting Our Results of Operations The key drivers of our business performance are the export of iron ore from the Mine, iron ore prices, capital expenditure and seasonality. Exports The most significant factor affecting our results of operations is the amount of iron ore that we export. We made our first exports in November 2011, following the commencement of mining and processing operations, rehabilitation of Pepel Port, refurbishment of the Pepel-Lunsar Railway and building of the brand new Lunsar- Tonkolili Railway, a continuous rail infrastructure that stretches over 200 km. Our infrastructure facilities were

3 upgraded during 2012 and early 2013 to support a 20 Mtpa run rate, which we successfully demonstrated a capability to achieve during several periods in 2013 and early in We had an operating run rate of 19.2 Mtpa in December We first demonstrated that our operations were capable of supporting an operating run rate of 20 Mtpa in June 2013, but certain challenges resulted in a decline in our export rate between July and October In particular: (i) the onset of the wet season in Sierra Leone made it more difficult to ship our products over this period than during the dry months at the start of the year; (ii) unforeseen maintenance of our TSVs reduced our export capacity; and (iii) a lateral split in the overland conveyor belt at the Mine reduced our export capacity. In order to minimize the effect of similar problems in the future, we have: (i) implemented a new wet season strategy (See Business Current Operations Wet Season Strategy ); (ii) ordered and subsequently received an additional TSV, which has increased the shipping fleet available to export our iron ore to four vessels; and (iii) have successfully undertaken a complete belt replacement and now hold spare belts in our inventory. We believe that these measures have and will continue to allow us to improve our production and export performance. For example, the actions that we took to remediate the issues mentioned above resulted in our ability to meet revised forecasts of 12.1 Mt exported in During the first quarter of 2014, we reaffirmed that our operations are capable of supporting an operating run rate of 20 Mtpa. Furthermore, in the three months ended March 31, 2014, we improved our operating performance with record exports of 4.6 Mt. During 2014 we plan to build an additional processing plant, as well as carrying out certain rail modifications and port improvements, to enable us to expand our infrastructure capability to 25 Mtpa by the end of 2014 with that run rate being achieved by the end of We plan to start the construction of our first Friable Hematite concentrator facility at the end of 2014, with up to 11 Mtpa of final product concentrate processing capability. Commissioning of the first units is expected to commence within 12 months of the project start. With product export tonnages maintained at 25 Mtpa, we expect to gradually replace the Hematite DSO product tonnage with high value Friable Hematite concentrate. Global Iron Ore Prices and Freight Rates We currently ship our products on a free on board ( FOB ) basis, meaning that we deliver iron ore onto vessels nominated by our customers at Pepel Port and our customers, in turn, arrange for and cover the cost of carriage to the destination port. However, the pricing for all of our sales is calculated based on the Platts 58% CFR China index (the Platts 58% CFR China ), which tracks market sales in China on a cost and freight ( CFR ) basis. Accordingly, the freight cost of shipping the product must then be deducted as part of the final price calculation. As such, our sales prices are affected by the following: Global Iron Ore Prices: Global iron ore prices are a key driver of our performance as our sales contracts are based on the Platts 58% CFR China. This means that any decrease in the Platts 58% CFR China results in a decrease in the prices paid to us and, consequently, a decrease in our revenue. Our performance therefore changes as global iron ore prices fluctuate. The fluctuations in these prices result from numerous factors that are beyond our control, including global supply and demand, expectations with respect to the rate of inflation, the exchange rates of U.S. dollars to other currencies, interest rates, forward selling by producers, production and cost levels in major producing regions, global or regional political, economic or financial situations and a number of other factors. Between January 1, 2013 and March 31, 2014, the spot price for 58% Fe iron ore on a CFR basis ranged from $89.0 per tonne to $143.0 per tonne. The price for 58% Fe iron ore averaged $115.8 per tonne between January 1, 2013 and March 31, 2014 and averaged $103.5 per tonne during the three months ended March 31, Since then, the price for 58% Fe iron ore has continued to decline, averaging $89.5 per tonne over the months of April and May Freight Rates: Pricing for all of our current sales is calculated based on the Platts 58% CFR China, although our products are shipped to customers on an FOB basis. Accordingly, after calculating the Platts 58% CFR China price for the contractual quotation period, we must then deduct the freight cost of shipping the product from Pepel Port to its destination in order to calculate the final price. As such, our revenue is therefore exposed to fluctuations in shipping rates of Capesize Vessels, which have varied significantly in recent years. For example, between January 1, 2013 and March 31, 2014, the C3 freight price has been recorded at a high of $28.8, at a low of $18.8, equaling an average of $22.3 on a per tonne basis. 3

4 Capital Expenditure The capital expenditure needed to sustain our current operations and for our Friable Hematite Concentrate Plans is expected to have a material impact on our funding requirements for the foreseeable future. In general, we manage and account for our capital expenditure by differentiating between Sustaining and Optimizing Capital Expenditure to sustain our current Hematite DSO deliveries and to expand our infrastructure capacity to 25 Mtpa and Friable Hematite Capital Expenditure for our Friable Hematite Concentrate Plans to establish Friable Hematite concentrate production. Our operations are currently capable of operating at a run rate of 20 Mtpa, which we demonstrated during several periods in 2013 and We expect to spend up to $100 million during 2014 on Sustaining and Optimizing Capital Expenditure. This capital expenditure will be used to build an additional processing plant, which we expect to have commissioned in the third quarter of 2014, as well as for certain rail modifications and port improvements which are substantially complete. Following these improvements and by the end of 2014, we expect to have infrastructure capability of 25 Mtpa and expect to achieve that run rate by the end of We spent $20.1 million on capital expenditure in the three months ended March 31, Our Sustaining and Optimizing Capital Expenditure for this period was $16.7 million, and our Friable Hematite Capital Expenditure for the period was $3.3 million, and $0.1 million related to residual expenditure from our initial development phase. We spent $241.1 million on capital expenditure in the year ended December 31, Of this amount, $119.8 million was spent on the finalization of construction in relation to the Mine, $65.5 million was spent on Sustaining and Optimizing Capital Expenditure and $24.3 million was spent on Friable Hematite Capital Expenditure. In addition, the Aggregated Group recognized a mine restoration and decommissioning provision of $31.5 million which was a non-cash addition capitalized to property, plant and equipment. Seasonality Our results are subject to seasonal fluctuations, in particular in relation to the wet season in Sierra Leone, which lasts from the middle of May to the middle of November, usually peaking in July and August, with an average rainfall of approximately 2,525 mm per annum (compared to the United Kingdom s 1,220 mm per annum). As well as having a disruptive effect on our mining operations due to reduced visibility at the higher mining pits, the wet season affects our ability to transport certain of our products to the market, particularly our higher priced fines, resulting in lower exports during the affected months. Particularly lengthy wet seasons in 2011 and 2012 negatively affected our results of operations for those years by reducing the volume of the products we exported. In 2013, we implemented a new strategy designed to combat the negative effects of the wet season for the first time. We are implementing several initiatives to enhance our management of the wet season, all of which are expected to be in place during the third quarter of A summary of this new strategy is set out in Business Strategy Consistently Operate at 20 Mtpa of Exports. Key Income Statement Items Revenue Revenue represents sales of our A32, Lump Blend, and Fines products which we export within the applicable reporting period. Revenue comprises sales to related parties and key strategic partners, which include SISG and CRM, and additional sales of our products to other customers. See Business Business Strengths Successful Track Record of Strong Partnerships and Business Current Operations Products for more detail. Cost of Sales Our costs of sales are incurred at the mine, the rail, the port and central services. Such costs comprise contractors, consumables, depreciation, personnel costs, travel and entertainment, freight costs, maintenance and repairs, IT and communications, consultants and changes in inventories. Contractors represented 45.4% of our total cost of sales by item in the year ended December 31, 2013 and the mine represented 41.9% of our cost of sales by function over the same period. We are committed to reducing our cost of sales on a per tonne basis in order to enhance our gross and operating profit margins. 4

5 We report our production cash costs on the internationally accepted C1 basis, being the cash costs involved in the mining, processing, railing and shipping of iron ore along with all on-site administration costs but excluding selling costs such as freight, commissions and royalties as well as depreciation, and including inventory movements. We calculate our C1 production cash costs per tonne by dividing our C1 production cash costs by tonnes sold and, consequently, incremental costs decrease as exports increase. Average C1 production cash costs for the three months ended March 31, 2014 were $38.5 per tonne. We expect our C1 production cash costs to continue to decrease on a per tonne basis towards the end of 2014 as we aim to stabilize at a run rate of 20 Mtpa. We also report our cash costs on an all-in basis, representing the cash costs of production (mine, railway and port), selling, general and administrative expenses and Sustaining and Optimizing Capital Expenditure divided by wet tonnes exported ( All-in cash costs ). Our average All-in cash costs for the three months ended March 31, 2014 were $46.0 per tonne. Selling and Distribution Expenses Our selling and distribution expenses comprise sales commissions, royalties payable to the Government, and demurrage. Demurrage is the cost that represents any delay that occurs during the transportation of our goods. Our total selling and distribution expenses for the year ended December 31, 2013 was $79.7 million. General and Administrative Expenses Our general and administrative expenses principally include corporate recharge and share based payments. See Certain Relationships and Related Party Transactions. Our total general and administrative expenses was $33.0 million for the year ended December 31, Finance Costs Finance costs represent (i) our borrowing costs, relating to the effective interest rates on our financing facilities; (ii) financing fees, including political risk insurance for facilities secured on our assets in Sierra Leone, legal fees incurred in relation to finance raising activities and bank charges; (iii) the gain on related party discounted interest rates; and (iv) the unwinding of restoration and decommissioning provision. Taxation Under the Income Tax Act 2000 (issued by the government of Sierra Leone) and under the terms of the Mining License we are liable to pay corporation tax in Sierra Leone based on our taxable profits. In our development stage and during the early ramp up of our export sales, taxable losses built up and as a result a deferred tax asset was recognized on the balance sheet. However, as we stabilized export sales, taxable profits were recorded resulting in a release of the deferred tax asset to the income statement. See Comparison of performance for the years ended December 31, 2013 to the year ended December 31, 2012 Profit after Taxation for more information. Movement of Non-Controlling Interest Put Option Due to the SISG Put Option, under IFRS, SISG s shares in the Operating Companies are not recognized as an equity interest and instead the SISG Put Option is accounted for as a financial liability equal to our best estimate of the amount of the fair value that would be payable to SISG in the event that the SISG Put Option is exercised. Results of Operations Comparison of Performance for the Three Months Ended March 31, 2014 to the Three Months Ended March 31, 2013 The income statements for the three months ended March 31, 2014 and 2013 are derived from the Interim Unaudited Aggregated Financial Statements for the three months ended March 31, 2014 and Three Months Ended 5

6 March 31, % change (Unaudited) Revenue $178.7 $ % Cost of sales (135.2) (204.4) 51.2% Gross profit % Selling and distribution expenses (18.8) (16.4) (12.8)% General and administrative expenses (9.3) (8.0) (14.0)% Operating profit before special items % Special items (42.7) - - Operating profit/(loss) (27.3) Finance costs (4.1) (13.3) (224.4)% Imputed interest cost of deferred income (16.9) (18.0) 6.5% Gain /(loss) on non-controlling interest put option (9.0) (Loss)/profit before taxation for the period (57.3) Taxation (charge)/credit 3.3 (2.1) (163.6)% (Loss)/profit after taxation for the period $(54.0) $ Total comprehensive income for the period (54.0) Attributable to: Equity holders of the Aggregated Group (54.4) Non-controlling interest % ($ in millions) Revenue We recorded revenues of $263.1 million during the three months ended March 31, 2014 from 4.6 Mt of exports compared to $178.7 million during the same period in 2013 in which we exported 2.1 Mt representing an increase of 47.2%. This increase was primarily due to an increase in revenue from our A32 product from $81.0 million during the three months ended March 31, 2013 to $182.6 million during the three months ended March 31, The increase in revenue was due to an increase in exported tonnage, partly offset by a fall in iron ore prices. Cost of Sales For the three months ended March 31, 2014, we recorded $204.4 million in cost of sales comprising $175.3 million of C1 production cash costs, on a FOB basis, and $29.1 million of depreciation compared to $135.2 million in the three months ended March 31, 2014 comprising $105.1 million of C1 production cash costs, on a FOB basis, and $30.1 million of depreciation representing a 51.1% increase of our cost of sales. Our cost of sales principally comprised: Mining Costs: $91.9 million of mining costs, which increased during the three months ended March 31, 2014 compared to $46.1 million for the same period in 2013 due to the ramp up in exports in 2014; Railway and Port Costs: $70.5 million of railway and port costs, which increased during the three months ended March 31, 2014 compared to $47.9 million for the same period in 2013 due to the ramp up in exports in 2014; and Project Assets Depreciation: $29.1 million of project assets depreciation during the three months ended March 31, 2014 compared to $30.1 million during the three months to March 31, The majority of our project assets depreciation relates to assets which are depreciated on a straight line basis, calculated by spreading out the cost of an asset equally over its lifetime. By using the straight line method of depreciation, we expect to see year on year consistency in relation to our project assets depreciation. Gross Profit Our gross profit was $58.7 million for the three months ended March 31, 2014, compared to a gross profit of $43.5 million in the three months ended March 31, 2013, representing an increase of 34.9%. 6

7 Operating Profit/Loss We made an operating profit of $34.3 million for the three months ended March 31, 2014, compared to an operating loss of $27.3 million for the three months ended March 31, Contributing to such figures were: Selling and Distribution Expenses: We incurred selling and distribution expenses of $16.4 million for the three months ended March 31, 2014 compared to $18.8 million for the same period in 2013 representing a decrease of 12.8%. Of these figures, (i) sales commissions remained stable, with $9.8 million being recorded for the three months ended March 31, 2014 and $10.1 million being recorded for the same period in 2013 reflecting the amounts paid to CRM as part of the agreed marketing and agency fee pursuant to the CRM Sales Agency Agreement, (ii) government royalties were $7.3 million during the three months ended March 31, 2014 compared to $5.4 million for the three months ended March 31, 2013 reflecting increased revenues over the comparable period and (iii) demurrage was a $0.7 million credit in the three months ended March 31, 2014 compared with $3.3 million in the three months ended March 31, This reflects lower levels of OGV waiting times, combined with port income of $2.5 million in the three months ended March 31, General and Administrative Expenses: For the three months ended March 31, 2014 we incurred $7.4 million in corporate recharge compared to $9.4 million in relation to corporate recharge in the comparable period in The corporate recharge represents a provision of strategic and support services from AML to the Operating Companies. In the three months ended March 31, 2013 there was a fixed corporate recharge, however this was amended to a cost per tonne less certain costs, primarily government and legal affairs, incurred in Sierra Leone in the three months ended March 31, Special Items: We have recorded no special items during the three months ended March 31, 2014, compared to $42.7 million of such expenses during the three months ended March 31, Of this amount, $33.5 million was expensed as a penalty for warranty breaches under the SISG Investment Agreement for iron ore offtakes, and $9.2 million represents compensation charges for an inability to fulfil several offtake contracts. Loss/Profit before Taxation Our profit before taxation increased to $60.6 million for the three months ended March 31, 2014, compared to a loss of $57.3 million for the first three months ended March 31, In summary: Finance Costs: Finance costs were $13.3 million in the three months ended March 31, 2014, principally as a result of interest charges of $6.4 million in respect of the PXF Facility, $1.2 million in respect of our 2011 Equipment Financing Facility, $1.0 million in respect of our 2012 Equipment Financing Facility and $1.1 million in respect of the SISG Shareholder Loan. Primarily attributable to the PXF Facility being drawn in April 2013, this expense was an increase on the comparable period, as during the three months ended March 31, 2013, we incurred finance costs of $4.1 million. Imputed Interest Cost of Deferred Income: In the three months ended March 31, 2014, imputed interest cost of deferred income was $18.0 million compared with $16.9 million for the three months ended March 31, A discounted offtake agreement was signed in 2012 for the purchase of iron ore with discounts ranging from 0% to 15%, depending on the benchmark FOB iron ore price in relation to, specifically, volumes of 2 Mtpa of our initial development exports, increasing to 10 Mtpa. In March 2013, we entered into a revised offtake agreement with SISG, which increased the contracted iron ore to be purchased from 2 Mtpa to 4.8 Mtpa. The offtake agreement was subsequently revised again in December 2013 from 4.8 Mtpa to (i) 6.5 Mtpa, up to a project capacity of 25 Mtpa (ii) to 7 Mtpa when project capacity is at 25 Mtpa and (iii) 7.0 Mtpa plus 3/10 of the capacity in excess of 25 Mtpa, up to a maximum of 10 Mtpa at a capacity of 35 Mtpa or more. The updated offtake agreement has an effective date of January 1, 2014, with the same discount range as the previous agreement. The amount recognized at the balance sheet date represents the present value of the iron ore offtake discount that SISG will receive under the SISG Iron Ore Offtake Agreement. The discount rate used in the valuation is 12.5%, based on our estimated cost of capital. Volume and iron ore prices are based on our best estimate. This amount is released to the income statement as SISG takes delivery of its offtake 7

8 volumes and revenue is recognised by the Aggregated Group. The increase in the imputed cost of deferred income from $16.9 million in the three months ended March 31, 2013 to $18.0 million in the three months ended March 31, 2014 reflects a higher year-end opening balance on which this interest is imputed. The charge will eventually decrease to $ nil over the course of the contract. See Certain Relationships and Related Party Transactions Related Party Transactions with SISG. Gain on Non-Controlling Interest Put-Option: The gain attributable to the SISG Put Option increased from a loss of $9.0 million in the three months ended March 31, 2013 to a gain of $57.7 million in the three months ended March 31, 2014 as a result of a revaluation of the interest following movements in AML s share price. Loss/Profit after Taxation Profit after taxation increased to $58.5 million for the three months to March 31, 2014 compared to a loss of $54.0 million for the same period in In addition to the factors described above, there was a tax charge of $2.1 million for the period compared with a tax credit for the same period in The tax credit in 2013 reflects the residual capital expenditure incurred during our project phase and the early ramp up of export sales. During this time, the level of tax losses available for use in future years increased. The higher tax losses increased the deferred tax asset on the balance sheet with a corresponding tax credit to the income statement. During 2014 we generated taxable profits leading to a release of the deferred tax asset to the income statement. Total Comprehensive Expense/Income for the Period Total comprehensive income for the period was $58.5 million for the three months ended March 31, 2014, compared to an expense of $54.0 million over the same period in Profits Attributable to Equity Holders of the Aggregated Group $57.9 million was attributable to the equity holders of the Aggregated Group for the three months ended March 31, 2014, compared to the loss of $54.4 million attributable to such equity holders for the three months ended March 31, Profits Attributable to Non-Controlling Interest The Government has the right to acquire 10% of the equity in ARPS for nil consideration in accordance with the terms of the Mining Licenses and the Mines and Minerals Act. This interest is recognized in our accounts as existing equity, and the attribution of profit/loss after taxation for the period to this non-controlling interest increased to a profit of $0.6 million in the three months ended March 31, 2014 from $0.4 million over the same period in Comparison of Performance for the Years Ended December 31, 2013 to the Year Ended December 31, 2012 The income statements for the years ended December 31, 2013 and 2012 are derived from the Unaudited Annual Aggregated Financial Information for the years ended December 31, 2013 and 2012, prepared in accordance with the underlying principles of IFRS, although the aggregation of this financial information is not fully compliant with the consolidation requirements of the relevant IFRS. We began our formal production phase at the beginning of January Consequently, we have recognized our revenue, operating costs and project depreciation in the income statement (as opposed to capitalizing to the balance sheet), since January 1, Fiscal Year Ended December 31, % change Revenue - (1) $

9 Cost of sales - (1) (656.4) - Gross profit - (1) Selling and distribution expenses - (1) (79.7) - General and administrative expenses - (1) (33.0) - Operating profit before special items Special items $(115.6) (91.1) (21.2)% Operating (loss)/profit (115.6) Finance income (92.9)% Finance costs - (29.3) - Imputed interest cost of deferred income (39.5) (68.9) 74.4% Gain/ (loss) on non-controlling interest put option (41.1)% (Loss)/profit before taxation for the year (40.2)% Taxation (charge)/credit (82.1)% (Loss)/profit after taxation for the year (50.4)% Total comprehensive income for the year (50.4) Attributable to: Equity holders of the AML Group (52.1)% Non-controlling interest (3.9) ($ in millions) (1) Capitalized as assets under construction. Revenue We recorded revenues of $869.1 million for the year ended December 31, 2013 from 12.1 Mt of exports. There is no comparative figure for the same period in 2012, as we credited our sales to assets under construction during Of our total revenue, our Lump Blend product represented $391.2 million, our Fines product accounted for $252.9 million, and our A32 product represented $225.0 million Costs of Sales For the year ended December 31, 2013, we recorded $656.4 million in cost of sales comprising $539.5 million of C1 production cash costs, on a FOB basis, and $116.9 million of depreciation. There is no comparable figure for the year ended December 31, 2012 as we capitalized our cost of sales to assets under construction. Our cost of sales for the year ended December 31, 2013 comprised: Mining Costs: $275.3 million for mining costs; Railway and Port Costs: $217.3 million for railway and port costs; and Project Assets Depreciation: $116.9 million in project assets depreciation. For the same period in 2012 we did not recognize any project asset depreciation as our infrastructure and mining assets were still undergoing commissioning. The majority of our project assets depreciation relates to assets which are depreciated on a straight line basis, calculated by spreading out the cost of an asset equally over its lifetime. By using the straight line method of depreciation, we expect to see year on year consistency in relation to our project assets depreciation. Gross Profit Our gross profit was $212.7 million for the year ended December 31, There is no comparable gross profit or gross margin for the year ended December 31, 2012 as we credited our revenue and, capitalized our cost of sales to assets under construction during that period and, accordingly, did not recognize any revenue. Operating Profit Our operating profit was $8.9 million for the year ended December 31, 2013, compared to a loss of $115.6 million for the same period in 2012, primarily due to the fact that we had generated revenue in 2013 and instead capitalized revenue and cost of sales to assets under construction in

10 Our total selling, distribution, general and administrative and special items expenses were $203.8 million during the year ended December 31, 2013, compared to $115.6 million in the same period in In summary: Selling and Distribution Expenses: We recorded sales and distribution costs of $79.7 million for the year ended December 31, 2013, which included $39.0 million paid to CRM as part of the agreed marketing and agency fee in the CRM Sales Agency Agreement (see Certain Relationships and Related Party Transactions CRM ). The balance predominantly comprised $24.9 million recorded in relation to royalty expenses paid to the Government and $10.3 million of demurrage. There were no comparable figures for the year ended December 31, 2012 as we capitalized our selling and distribution expenses to assets under construction during that period; General and Administrative Expenses: We recorded general and administrative expenses of $33.0 million for the year ended December 31, There were no comparable expenses for the year ended December 31, 2012 as we capitalized our general and administrative expenses to assets under construction during this period; and Special Items: We recorded special items of $91.1 million in the year ended December 31, 2013, a decrease from $115.6 million in the same period in 2012, representing a decrease of 21.2% for the year ended December 31, In summary: (i) (ii) (iii) (iv) (v) Contributing to our special items for the year ended December 31, 2012 was $18.0 million relating to fuel misappropriated at the Mine. The figure recorded is our best estimate of the loss incurred from such fuel theft; Expenses for onerous offtake contracts and contractors claims of $19.7 million as at December 31, 2013 include compensation charges for an inability to fulfill several offtake contracts. For the year ended December 31, 2012, $5.0 million of our special items expenses related to a contractor claim relating to settlement of a construction contract; The intended use of some of our assets, including a camp at the Mine and certain infrastructure facilities, changed over the year and impairment reviews were performed on such assets. As a result of these impairment reviews, the Aggregated Group has recognized an impairment charge of $25.1 million in the year ended December 31, In 2012, rail refurbishment expenditure of $41.5 million was derecognized as a result of increased project scoping. Initial refurbishment work of the 45kg/m existing rail was derecognized when a decision was taken to accelerate the replacement upgrade work to 60kg/m which was completed in 2012 to support an expansion of the project capacity to 20 Mtpa. We recorded no such derecognition in the year ended December 31, 2013; and There was a decrease in penalties for the SISG warranty breach from $51.1 million in the year ended December 31, 2012 to $46.3 million for the year ended December 31, Profit Before Taxation Our profit before taxation was $80.6 million during the year ended December 31, 2013, compared to a profit before taxation of $134.7 million in the same period in 2012, representing a decrease of 40.2%, primarily as a result of the following factors: Finance Income: Our interest income was $0.1 million for the year ended December 31, 2013, compared to $1.4 million for the same period in 2012, representing a decrease of 92.9%. This is largely due to interest earned on a $20.0 million Sierra Leone employee tax prepayment made in February 2012; Finance Costs: Finance costs were $29.3 million in the year ended December 31, 2013, principally as a result of interest charges of $10.2 million in respect of our PXF Facility, $5.4 million in respect of our 2011 Equipment Financing Facility and $5.0 million in respect of our 2012 Equipment Financing Facility. There is no comparable for the year ended December 31, 2012 due to the capitalization of finance costs for that period; Imputed Interest Cost of Deferred Income: In the year ended December 31, 2013, imputed interest cost of deferred income was $68.9 million compared with $39.5 million for the year ended December 31,

11 This cost arises as a result of the SISG Iron Ore Offtake Agreement. The additional increase reflects the higher period-end opening balance on which the interest is imputed and the longer period of twelve months during which income was recorded in 2013 compared to nine months of recorded income in This cost will eventually reduce to $nil over the course of the contract (See - Comparison of Performance for the Three Months Ended March 31, 2014 to the Three Months Ended March 31, 2013 Loss/Profit Before Taxation Imputed Interest Cost of Deferred Income for more information); Gain on Non-Controlling Interest Put-Option: The gain attributable to the SISG Put Option decreased from $288.4 million in the year ended December 31, 2012 to $169.8 million in the year ended December 31, 2013, representing a decrease of 41.1% as a result of a revaluation of the interest following movements in AML s share price (See - Comparison of Performance for the Three Months Ended March 31, 2014 to the Three Months Ended March 31, 2013 Loss/Profit Before Taxation Gain on Non-Controlling Interest Put Option for more information). Profit after Taxation Profit after taxation was $88.4 million for the year ended December 31, 2013, compared to $178.3 million in the same period in 2012, representing a decrease of 50.4% for the year ended December 31, In addition to the factors described above, our tax credit for the period was $43.6 million in the year ended December 31, 2012 compared to $7.8 million in the year ended December 31, The tax credit in 2012 reflects high capital expenditure an accelerated rate of capital allowances during our development phase, which increased the level of tax losses available for use in future years. These tax losses increased the deferred tax asset on the balance sheet with a corresponding tax credit to the income statements. During 2013 the level of capital expenditure decreased, and therefore a lower level of taxable losses was built up. As a result there was a smaller increase in the deferred tax asset on the balance sheet and corresponding lower tax credit to the income statement. Profits Attributable to Equity Holders of the Aggregated Group $87.3 million of our profits was attributable to equity holders of the Aggregated Group for the year ended December 31, 2013, compared to the $182.2 million attributable to such equity holders for the year ended December 31, Profits Attributable to Non-Controlling Interest The Government has the right to acquire 10% of the equity in ARPS for nil consideration in accordance with the terms of the Mining Licenses and the Mines and Minerals Act. This interest is recognized in our accounts as existing equity, and the attribution of profit/loss after taxation for the period to this non-controlling interest increased to a profit of $1.1 million in the year ended December 31, 2013 from a loss of $3.9 million over the same period in 2012 due to a profit being made in ARPS. Liquidity and Capital Resources Our principal sources of funds have historically included cash raised from SISG, bank borrowings, cash flows from operations and contributions from AML, our ultimate parent company, from proceeds of issuances of equity and equity-linked securities. See, for example, Factors Affecting Results of Operations Capital Expenditure for a description of our capital expenditure requirements. We typically use our cash (i) to repay and service any indebtedness that we have incurred, including intercompany loans and external financing; (ii) for capital expenditure in relation to the Mine and our infrastructure facilities (see Factors Affecting Our Results of Operations Capital Expenditure ); (iii) for corporate recharge expenses (see Key Income Statement Items General and Administrative Expenses for an explanation of our corporate recharge payments); and (iv) for working capital to fund our operations. All of our revenue is received offshore in U.S. dollars. Each of the Operating Companies holds a UK bank account in which the majority of our unrestricted cash is held. The restricted cash is held in a bank account at China Development Bank in Hong Kong. Currently, we transfer on a monthly basis approximately $8 million to 11

12 Sierra Leone to cover certain operating expenses, primarily consisting of employee taxes, salaries and taxes for our Sierra Leone based employees and payments to suppliers also based in Sierra Leone. Our ability to upstream cash from the Operating Companies is limited by the SISG Investment Agreement. Withdrawal from the restricted cash must be made pursuant to a decision of the Board of Directors, and must be agreed to by at least one SISG-appointed Director. Furthermore, if at any time AML and/or any of its subsidiaries propose to develop or invest in any iron ore or related infrastructure project in Sierra Leone other than the Mine and related infrastructure, AML must, and AML must procure that its subsidiaries will, give SISG a period of 30 days during which SISG will have the right to review the terms of the newly proposed project and offer to invest in such project with AML as a 25% shareholder on arm s length terms (see Certain Relationships and Related Party Transactions Related Party Transactions with SISG Company Shareholders Agreement Investor Rights ). Our operations are currently capable of operating at a run rate of 20 Mtpa, which we demonstrated during several periods in 2013 and We expect to spend up to $100 million during 2014 on Sustaining and Optimizing Capital Expenditure. This capital expenditure will be used to build an additional processing plant, which we expect to have commissioned in the third quarter of 2014, as well as for certain rail modifications and port improvements which are substantially complete. Following these improvements and by the end of 2014, we expect to have infrastructure capability of 25 Mtpa and expect to achieve that run rate by the end of Financial position and liquidity for the Three Months Ended March 31, 2014 and the Three Months ended March 31, 2013 Three Months Ended March 31, (Unaudited) Net cash flow from operating activities $(212.3) $74.4 Net cash outflow from investing activities (18.1) (23.2) Net cash inflow from financing activities (22.2) Net increase/(decrease) in cash and cash equivalents (79.3) 29.0 Net foreign exchange difference Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $491.7 $370.9 ($ in millions) Net Cash Flow from Operating Activities Our net cash flow from operating activities (which includes increase/decrease in inventories, increase/decrease in trade and other receivables, increase/decrease in non-current liabilities, and increase/decrease in trade and other payables) amounted to an inflow of $74.4 million in the three months ended March 31, 2014, compared to an outflow of $212.3 million for the same period in This difference is largely attributable to a decrease in trade and other receivables of $26.4 million in the three months ended March 31, 2014 compared to an increase to trade receivables of $160.3 million in the same period in The reduction in trade and other receivables in the three months ended March 31, 2014 reflect lower prices for our products, whereas the increase in the three months ended March reflects recognition of revenue in the income statement from January 1, We recorded a decrease in amounts due to AML Group companies of $60.7 million in the three months ended March 31, 2013, reflecting cash upstreamed to AML. There was a decrease in amounts due from AML Group companies of $2.5 million in the three months ended March 31, We also recorded a decrease in trade and other payables of $0.3 million in the three months ended March 31, 2013 compared to an increase of $19.6 million in the three months ended March 31, This change relates to the improved management of our creditor balance during the period. Net Cash Outflow from Investing Activities Our net cash outflow from investing activities was broadly in line with outflows in the three months ended March 31, 2013, with an outflow of $23.2 million over the three months ended March 31, 2014 compared to $18.1 million over the same period in The entirety of such outflows were attributable to payments to 12

13 acquire property, plant and equipment in the three months ended March , whereas in the same period in 2013, $50.5 million on payments to acquire property, plant and equipment was offset by $32.4 million received from pre-production sales. Net Cash Inflow from Financing Activities Our net cash outflow from financing activities was $22.2 million for the three months ended March 31, 2014 compared to an inflow of $151.1 million for the same period in This was largely due to the $156.1 million that we received as proceeds from a bridge loan of $140 million and the 2012 Equipment Financing Facility in the first quarter of 2013, compared to $nil in the three months ended March 31, Repayment of our borrowings was $16.4 million for the three months ended March 31, 2014 compared to $2.6 million for the three months ended March 31, The increase relates to the PXF Facility, 2011 Equipment Financing Facility and 2012 Equipment Financing Facility repayments. Financial Position and Liquidity for the year ended December 31, 2013 and December 31, 2012 Fiscal Year Ended December 31, Net cash flow from operating activities $209.2 $(285.0) Net cash outflow from investing activities (696.8) (155.2) Net cash inflow from financing activities 1, Net increase/ (decrease in cash and cash equivalents (228.4) Net foreign exchange difference (0.5) (0.6) Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $570.8 $341.8 ($ in millions) Net Cash Flow from Operating Activities Our net cash flow from operating activities (which includes proceeds from the SISG Iron Ore Offtake Agreement, change in inventories, change in trade and other receivables, change in non-current liabilities, and change in trade and other payables) amounted to an outflow of $285.0 million in the year ended December 31, 2013, compared to an inflow of $209.2 million for the same period in Our operating cash flow before working capital changes was an inflow of $165.5 million during the year ended December 31, 2013 compared with an outflow of $55.6 million during the year ended December 31, We recorded a decrease in amounts due to AML Group companies of $105.4 million in the year ended December 31, 2013 compared to a decrease in amounts due to AML Group companies of $276.1 million in the year ended December 31, 2012 which related to cash paid upstream to AML after receipt of funds from SISG. We recorded an increase in trade and other receivables of $138.1 million in the year ended December 31, 2013 compared to an increase of $19.0 million in trade and other receivables in the year ended December 31, 2012, caused largely by an increase in our debtors reflecting recognition of revenue in the income statement from January 1, We recorded an increase in trade and other payables of $2.4 million in the year ended December 31, 2012, and recorded a decrease in trade and other payables of $143.3 million in the year ended December 31, The decrease in trade payables in the year ended December 31, 2013 reflects finalization of our commissioning phase in early 2013 and the repayment of construction creditors during the year ended December 31, Finally, during the year ended December 31, 2012 we received $505.6 million in proceeds from SISG as deferred income in No such monies were received during the year ended December 31, (See Comparison of performance for the year ended December 31, 2013 to the year ended December 31, 2012 Loss/Profit before taxation ). Net Cash Outflow from Investing Activities Our net cash outflow from investment activities decreased in the year ended December 31, 2013 to $155.2 million from $696.8 million in the same period in This was primarily due to our considerably reduced spending in relation to property, plant and equipment during 2013 as we completed our project phase and commenced our production phase. Payments in relation to property, plant and equipment amounted to $207.5 million in the year ended December 31, 2013 compared to $939.3 million over the same period in Net Cash Inflow from Financing Activities 13

14 Net cash inflow from financing activities decreased substantially in the year ended December 31, 2013 to $211.8 million compared to $1,057.6 million in the same period in 2012, primarily due to the receipt of $994.4 million of proceeds from the SISG investment received in March In the year ended December 31, 2013 we recorded proceeds from borrowings of $266.1 million, mainly relating to our PXF Facility and in the year ended December 31, 2012 we recorded proceeds from borrowings of $83.1 million, mainly relating to our 2012 Equipment Financing Facility. Contractual Obligations Commitments under Offtake Contracts We have a number of contractual commitments in relation to our exports under various offtake agreements which currently represent all of our exports. See Certain Relationships and Related Party Transactions for more detail on the arrangements with CRM and SISG. Off Balance-Sheet Arrangements As at the date hereof, we have operating leases with the Government of Sierra Leone relating to the Mine and rail/port and several equipment leases. Emphasis of Matter and Going Concern Considerations Note 3 to our Aggregated Financial Statements states that they have been prepared on a going concern basis. We have prepared a cash flow forecast based on our best estimate of key variables including volumes, price, operating costs and capital expenditure through to December 2015 that supports our conclusion that there is sufficient funding available to meet our anticipated cash flow requirements to this date. However, these cash flows assume that we successfully refinance the PXF Facility; and until this refinancing is complete, there is a material uncertainty that may cast significant doubt over our ability to continue as a going concern. Nevertheless, after making appropriate enquiries and considering this material uncertainty, we are confident that we have several options by which this facility can be refinanced, and have a reasonable expectation that we will have adequate resources to continue in operational existence for the foreseeable future. Furthermore, we are of the view that, upon the successful refinancing of the PXF Facility, the material uncertainty that may cast significant doubt over our ability to continue as a going concern will no longer be applicable. Critical Accounting Estimates The preparation of our Aggregated Financial Statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the Aggregated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based our experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes would differ from these estimates if different assumptions were used and different conditions existed. In particular, we have identified the following areas in which significant judgments, estimates and assumptions are required, and where actual results were to differ, may materially affect the financial position or financial results reported in future periods. Key Judgments In the process of applying our accounting policies, we have made the following judgments, which have the most significant effect on the amounts recognized in the Aggregated Financial Statements: Commissioning of Assets and Production Start Date We have deemed the Mine and related infrastructure substantially complete and ready for its intended use from the beginning of January We have assessed each stage of the asset under construction to determine when it moves into the production stage, this being when the asset is substantially complete and ready for its intended use. Some of the criteria used to identify the production start date included, but are not limited to (i) the ability 14

15 of our infrastructure facilities to deliver substantial tonnage of iron ore from mine to ship and (ii) our ability to produce iron ore in saleable form and within specifications. When a mine development project moves into the production stage, the capitalization of certain mine development costs ceases and costs are either regarded as forming part of the cost of inventory or expensed, except for costs that qualify for capitalization relating to asset additions or improvements or mine development. It is also at this point that depreciation and amortization commences. On January 1, 2013, the capitalization of certain of our Mine development costs ceased and costs are either regarded as forming part of the cost of inventory or expensed, except for costs that qualify for capitalization relating to asset additions or improvements or mine development. It is also at this point that depreciation and amortization commenced and revenues were recognized in the aggregated income statement. During 2012, our iron ore infrastructure and mining assets in Sierra Leone were still undergoing commissioning. The Mine was processing iron ore, and sales had occurred during this commissioning period. The ore stockpile was held as inventory at the end of the year. Commissioning costs were capitalized into assets under construction after deducting the net proceeds from selling iron ore. Trade receivables were recognized for amounts receivable at the end of the year for iron ore sales. Recovery of Deferred Income Tax Assets Judgment is also required in determining whether deferred income tax assets are recognized in the aggregated balance sheet. Deferred income tax assets, including those arising from un-utilized tax losses, require us to assess the likelihood that the we will generate sufficient taxable earnings in future periods, in order to utilize recognized deferred income tax assets. Assumptions about the generation of future taxable profits depend on our estimates of future cash flows. These estimates of future taxable income are based on forecast cash flows from operations (which are impacted by export and sales volumes, commodity prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure, dividends and other capital management transactions) and judgment about the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize the net deferred income tax assets recorded at the reporting date could be impacted. In addition, future changes in tax laws in the jurisdictions in which we operate could limit our ability to obtain tax deductions in future periods. Impairment of Assets We assess each asset or cash generating unit ( CGU ) every reporting period to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions such as long-term commodity prices (considering current and historical prices, price trends and related factors), discount rates, operating costs, future capital requirements, closure and rehabilitation costs, exploration potential, reserves and operating performance (which includes export and sales volumes). These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and/or CGUs. Key Estimates and Assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. We based our assumptions and estimates on parameters available when the Aggregated Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond our control. Such changes are reflected in the assumptions when they occur. Determination of Ore Resources and Useful Lives of Property, Plant and Equipment Ore resource estimates relate to the amount of iron ore that can be economically extracted from the Mine. In order to estimate resources, assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. 15

16 We estimate our ore resources based on information compiled by competent persons as defined in accordance with the JORC Code. In assessing the life of the Mine for accounting purposes, resource estimates are only taken into account where there is a high degree of confidence of economic extraction. Since the economic assumptions used to estimate resources change from period to period, and as additional geological data is generated during the course of operations, estimates of resources may change from period to period. Changes in reported resources may affect our financial results and financial position in a number of ways, including: asset carrying values may be affected due to changes in estimated future cash flows; depreciation, depletion and amortization charged in the income statement may change where such charges are determined by the unit of production basis, or where the useful economic lives of assets change; decommissioning and environmental restoration provisions may change where changes in estimated resources affect expectations about the timing or cost of these activities; and the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of tax benefits. There are numerous uncertainties inherent in estimating ore resources, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of resources and may, ultimately, result in resources being revised. For property, plant and equipment depreciated on a straight line basis over its useful economic life, the appropriateness of the assets useful economic life is reviewed at least annually and any changes could affect prospective depreciation rates and asset carrying values. Mine Rehabilitation Provision We recognized a mine decommissioning and restoration provision as at June 30, 2013 and have assessed the provision at December 31, 2013 and March 31, Significant estimates and assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will affect the ultimate amount payable. Provision calculations assume a discount rate of 10% and inflation of 6%. Decommissioning and restoration costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices over the assumed life of the Mine of 40 years. The provision at the reporting date represents our best estimate of the present value of the future rehabilitation costs required. Put Option over Non-Controlling Interest We entered into the SISG Put Option over a non-controlling interest. Under IFRS, equity is defined as where the AML Group has the unconditional right to avoid cash payments, regardless of probability of the condition. The Directors assessed the terms of the SISG Put Option and determined that IAS 32 takes precedence over IAS 27 Consolidated and Separate Financial Statements (2008). On this basis, the shares held by the noncontrolling party are not recognized as a non-controlling interest within equity. The SISG Put Option was initially measured at the present value of the redemption amount and subsequently accounted for as a financial liability under IAS 39 Financial Instruments: Presentation. As a result, the SISG Put Option is subsequently remeasured at each reporting period. This valuation requires us to estimate the fair value of the amount that would be payable to SISG in the unlikely event that Frank Timis voluntarily resigns from the Board, and SISG exercises its option to sell back its interest, and therefore, is subject to uncertainty. Deferred Income We have entered into a discounted offtake agreement with SISG. The amount initially recognized represents the present value of the iron ore offtake discount that SISG will receive under the agreement; the estimate required determination of the most appropriate inputs including volume, iron ore prices and discount rate. 16

17 Fuel Misappropriation Our best estimate for misappropriated fuel of $18.0 million was recorded in 2012 within the aggregated income statement. This estimate has been based on extrapolation procedures and has therefore involved the use of estimates. We have taken a number of measures to mitigate the risk of further such losses occurring, such as employing a specialized in-house fuel consumption control team. The investigation is ongoing, however in 2013 there have been no developments which have led to an amendment to our original estimate. Share-Based Payments We measure the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. Financial Risk Management Objectives and Policies Our activities expose us to a variety of financial risks. The treasury policy applicable to the Aggregated Group provides certain specific guidance in managing such risks, particularly related to credit and liquidity risk. Any form of borrowings requires approval from the Board and we do not currently use any derivative financial instruments to manage our financial risks. The key financial risks and our major exposures are as follows: Credit Risk Our credit risk is primarily attributable to cash and bank balances, short-term deposits and accounts receivable. We hold our key transactional bank accounts with banks of investment grade. As we operate in a developing country, it is unavoidable that some cash is held with regional banks in Sierra Leone, where the banking system does not operate as efficiently as in major financial centers. We keep only minimal balances with such banks. We manage our credit risk on short-term deposits by only investing with counterparties that carry A- investment grade ratings as assessed by external rating agencies and spreading the investments across these counterparties. Under our risk management policy, allowable counterparty exposure limits are determined by the level of the rating unless exceptional circumstances apply. As at March 31, 2014, substantially all cash and short-term deposits were with counterparties with long-term ratings equivalent to A- or higher. Our credit risk associated with trade accounts receivable is managed through establishing long-term contractual relationships, and in some cases letters of credit, with international trading companies using industry-standard contract terms. The carrying amount of financial assets recorded in the Aggregated Financial Statements, net of any allowances for losses, represents our maximum exposure to credit risk. Liquidity Risk We manage liquidity risk by maintaining cash and cash equivalent balances, and available credit facilities to ensure that we are able to meet our financial obligations as and when they fall due. Aggregated Group-wide cash forecasts are managed centrally and regularly updated to reflect the dynamic nature of our business and fluctuations caused by export volumes and commodity prices. In addition, we are obligated under our credit facilities to satisfy various financial ratio tests on a historical basis and these are monitored using a long-term financial model developed with our lenders and updated at least twice a year. We have complied with all these ratios for tests up to and including March 31, Market Risks Commodity Price Risk 17

18 As we are a single commodity producer, fluctuations in iron ore prices as well as in demand could have a material positive or negative impact upon our financial result and the development of our projects. We are also exposed to changes in the cost of freight for vessels conveying our iron ore to China and on diesel fuel for our mining, infrastructure and marine operations. We manage the risk of fluctuations in price by ensuring that our operations are efficient and low-cost. We have an established customer base and manage demand by entering into offtake contracts, fully committing sales for future periods. Interest Rate Risk Our interest rate risk arises from interest paid on floating rate borrowings and the interest received on cash and short-term deposits. Deposits are invested on a short-term basis to ensure adequate liquidity for payment of operational and capital expenditures. We consider our exposure to changes in interest rates to be immaterial and to date no interest-rate management products have been transacted. Foreign Currency Risk Our functional and reporting currency is U.S. dollars. All of our revenues are derived in U.S. dollars and the majority of our business is conducted in U.S. dollars. Our primary foreign exchange exposure, which is not material, is to the national currency of Sierra Leone, the Sierra Leonean Leone, which mainly consists of payments of Sierra Leone employee salaries and suppliers. Additionally, a small number of suppliers are paid in South African Rand, Euros, and Australian Dollars. These exposures are ongoing and are not considered material hence they are not hedged. The purchase price of non-u.s. dollar denominated capital equipment may be hedged in the future where the foreign exchange exposure is significant and it is in our opinion appropriate to do so. 18

19 BUSINESS Overview General We are the largest producer of iron ore in West Africa and the second largest in Africa in terms of volume and value. Our operations, which include a fully-integrated, owned and operated mine, processing plant, rail, port and marine operations are all located in Sierra Leone. The Mine is located at Tonkolili and is one of the largest iron ore deposits in the world with a JORC compliant resource of approximately 12.8 Bnt of iron ore, comprising 11.6 Bnt Magnetite, 1.1 Bnt Friable Hematite Ore and Mt Hematite DSO, which we believe has a mine-life in excess of 60 years. The ore body is such that the Magnetite is overlain by the Friable Hematite Ore and both are then capped with the on-surface supergene enriched Hematite DSO zone. Supergene enrichment occurs at the base of the oxidized portion of an ore deposit. We currently produce and sell Hematite DSO products, which requires very little processing, only crushing and screening, with no waste stripping (other than internal ore material movement), which allows for low mine site operating costs. Our Hematite DSO products also have low silica content, good physical properties and enjoy strong market demand. Our fully-integrated, owned and exclusively operated infrastructure facilities provides us with complete control of our logistics chain from mine to ship. All of our current exports are covered under our offtake agreements. For the twelve months ended March 31, 2014, we generated revenue of $953.5 million and EBITDA of $234.8 million. The Mine is located in the Sula mountain range in central Sierra Leone and comprises four adjacent deposits: Simbili, Marampon, Numbara and Kasafoni. The discovery of the Magnetite deposit at Tonkolili in March 2008 initiated one of the largest exploration and development programs of its time in Africa. Our initial development consisted of the establishment of an integrated operation including rail, port and mine for the production of Hematite DSO. Since discovery, we have invested over $2.5 billion to develop the project into a large-scale 20 Mtpa capacity operation, and starting from January 2013, we deemed the Mine and infrastructure facilities substantially complete and ready for their intended use. Since that date, we have successfully demonstrated that our operations are capable of supporting an operating run rate of 20 Mtpa during several periods in 2013 and in We believe that we are well positioned to achieve a sustainable 20 Mtpa run rate during 2014, before expanding further from We expect to export 16 to 18 Mt of product in 2014, up from 12.1 Mt in 2013, with annual average C1 production cash costs of between $34 and $36 per tonne, down from $44.5 per tonne in On a quarter-on-quarter basis, we increased exports from 2.1 Mt in the three months ended March 31, 2013 to 4.6 Mt in the three months ended March 31, 2014 and C1 production cash costs decreased from $50.4 per tonne to $38.5 per tonne over the same period. We believe that once we reach an export run rate of 20 Mtpa, which we expect to achieve by the end of 2014, we will be able to reduce our C1 production cash costs to approximately $30 per tonne. The table below presents a summary of quarterly operating data. Three Months Ended March 31, 2013 Three Months Ended June 30, 2013 Three Months Ended September 30, 2013 Three Months Ended December 31, 2013 Three Months Ended March 31, 2014 Mining Tonnes DSO Ore Mined Mt Tonnes Friable Hematite Ore Mined Mt Total Mined Mt Processing Tonnes DSO Ore Treated Mt Total DSO Produced Mt Export Total Exported (Wet) Mt

20 Grade % Total Exported (Dry) Mt No. of Vessels # Costs and Revenues C1 Production Cash Costs ($ / t) Gross Revenue (Platts 58.0%) ($ / t) Freight Rate (Wet) ($ / t) Achieved FOB (Dry) ($ / t) Our investment of $2.5 billion to develop the project was initially financed exclusively through equity, up to the end of 2010, and subsequently through a combination of convertible debt, strategic investment, bank financing and cash flow from operations. As part of these financings, we entered into a number of investment and offtake agreements with key Chinese partners. In 2010, CRM, a major integrated service provider in the railway industry and a leading Chinese steel trader, invested million in the AML Group in return for 12.5% of the shares issued by AML, and entered into an exclusive sales agency agreement for DSO products in the People s Republic of China and a 20 year agreement for iron ore offtake for magnetite. In 2012, SISG, a Chinese state owned enterprise and one of the world s largest steel producers, invested $1.5 billion in the Operating Companies in exchange for a 25% stake in each entity and a discounted offtake agreement for the life of the Mine and an annual option to purchase 25% of exports. Our operations are inherently low cost. Our current Hematite DSO production requires no waste stripping as the iron ore deposit is located on surface, and very little processing (only crushing and screening), which allows for low mine site operating costs. Products at the Mine are loaded onto our owner-operated trains and transported via our exclusively operated 200 km railway to Pepel Port. The relatively short railway from the Mine to the well-positioned Pepel Port minimizes our transportation costs and was developed on partly preexisting infrastructure, which also minimized our initial development cost. Once our products reach Pepel Port, they are offloaded onto TSVs and re-loaded onto customers Capesize Vessels at the transhipment anchorage, which is located approximately six nautical miles from the Freetown coast and 28 nautical miles from Pepel Port. The Mine and infrastructure facilities are well-positioned to serve both the Chinese and European markets with competitive seaborne export routes; from Pepel Port, it takes approximately 9 days to ship to Europe and approximately 33 days to ship to China. Our operations are currently capable of operating at a run rate of 20 Mtpa, which we demonstrated during several periods in 2013 and We expect to spend up to $100 million during 2014 on Sustaining and Optimizing Capital Expenditure to sustain our current Hematite DSO deliveries and to expand our infrastructure capacity to 25 Mtpa. This capital expenditure will be used to build an additional processing plant, which we expect to have commissioned in the third quarter of 2014, as well as for certain rail modifications and port improvements which are substantially complete. Following these improvements, we expect to have infrastructure capability of 25 Mtpa by the end of 2014, with that run rate being achieved by the end of We plan to start the construction of our first Friable Hematite concentrator facility at the end of 2014, with up to 11 Mtpa of final product concentrate processing capability. Commissioning of the first units is expected to commence within 12 months of the project start. We manage and account for capital expenditure to establish Friable Hematite concentrate production. With product export tonnages sustained at 25 Mtpa, we expect to gradually replace the Hematite DSO product tonnage with high value Friable Hematite concentrate. We believe that Friable Hematite concentrate will attract a higher selling price due to its increased grade and quality, and although operating costs may also increase given the additional processing costs, this is expected to provide a higher margin than the DSO that it replaces. Over time, we believe that our 25 Mtpa exports will become entirely composed of this high value concentrate product. Structure We conduct our operations in Sierra Leone through the Operating Companies, namely the Company (which focuses on operation and development of the Mine), ARPS (which focuses on operation and development of the infrastructure facilities), APL (which has been created to focus on any future power development and operations, and is currently dormant) and TIO Trading (our UK based sales vehicle through which we conduct our trading operations.). 20

21 The controlling interest in each of the Operating Companies is owned by AML, which indirectly owns a 75% stake in each. In March 2012, SISG purchased a 25% stake in each TIO, APL and ARPS as part of its $1.5 billion investment in the Aggregated Group, and in February 2013 purchased a 25% stake in TIO Trading. In addition, in accordance with the terms of the Mining Licenses and the Mines and Minerals Act, the Government has a right to acquire 10% of the equity in ARPS for nil consideration. Key Strengths World Class Iron Ore Resource The Mine is one of the largest iron ore deposits in the world, with a JORC compliant resource of approximately 12.8 Bnt of iron ore, comprised of 11.6 Bnt Magnetite, 1.1 Bnt Friable Hematite Ore and a current delineation of Mt Hematite DSO, with a multi-generational mine life. The ore body is such that the Magnetite is overlain by the Friable Hematite Ore and both are then capped with the on-surface supergene enriched Hematite DSO zone. This geology has allowed us to initially develop the Mine with the infrastructure necessary to export our on-surface Hematite DSO at a run rate of 20 Mtpa, which we successfully achieved during several periods in 2013 and in Hematite DSO has been well-received by the market, particularly by Chinese steel mills, where demand is driven by the product s low silica content, making it an attractive and sought after blending component. We have a number of contractual commitments under various offtake agreements which currently represent all of our exports. In March 2014, we provided an update of the Hematite DSO resource. The JORC compliant Hematite DSO mineral resource estimate at the Mine was updated to Mt grading 57% Fe as at March 31, 2014, with 94% of the total mineral resource estimate classified in the Measured and Indicated categories. As mining progresses from on-surface supergene enriched Hematite DSO to deeper resources, the quality of our products will increase as we begin to process the underlying ore. The underlying Friable Hematite Ore is amenable to low cost concentration and we expect to process it into a premium high grade Hematite Concentrate product with approximately 62% Fe content, thereby helping to improve our product margins. We expect to provide an updated Friable Hematite resource statement, including optimized metallurgical parameters in the third quarter of Together, the Hematite DSO and Friable Hematite Ore resources represent less than 10% of the Mine ore body, with the remainder consisting of Magnetite, which is expected to be exploited over many decades thereafter. Low Cost Operation with Exclusive-Use Infrastructure Drive Strong Economics Our operations are inherently low cost. Our current Hematite DSO production requires very little processing (only crushing and screening) and no waste stripping, which allows for low mine site operating costs. The relatively short Railway and well-positioned Pepel Port minimize transportation costs and were developed partly on existing infrastructure, ensuring low capital intensity for our initial development. In addition, we have an exclusive-use Infrastructure Lease over the rail and port facilities, which ensures a direct route to Pepel Port, with access to Chinese and European markets, without any reliance on third parties. We are focused on reducing costs even further through improving operating efficiencies, reducing corporate overheads, centralizing procurement, transfering skills to Sierra Leone based employees and the continuous review of contracts to achieve more favorable terms as we transition from the project phase to an established mine operator. Approximately 70% of our budgeted C1 production cash costs are fixed, creating significant operating leverage as our export volumes increase in the near future. According to our estimates, C1 production cash costs will be approximately $34 to $36 per tonne in 2014, decreased from $44.5 per tonne in 2013 on a per tonne basis. Once production volumes are at a consistent run rate of 20 Mtpa, we expect that the Mine will achieve C1 production cash costs of approximately $30 per tonne on a sustainable basis by the end of 2014, a reduction from $38.5 per tonne for the quarter ended March 31, 2014, and from $41.8 per tonne for the last twelve months ended March 31, Impressive Development Timeline With less than four years from discovery to first production, we believe that the Mine has been one of the most rapidly developed projects of this scale in Africa. The discovery of the Magnetite deposit in March 2008 initiated the largest exploration and development program of its time in Africa. Our first exports were achieved 21

22 in November 2011 following the commencement of mining and processing operations, rehabilitation of Pepel Port, refurbishment of the Pepel-Lunsar Railway and building of the brand new Lunsar-Tonkolili Railway, a continuous rail infrastructure that stretches over 200 km. Our infrastructure facilities were upgraded during 2012 and early 2013 to support a 20 Mtpa run rate, which we demonstrated a capability to achieve during several periods in 2013 and early in At a 20 Mtpa run rate, we are the largest producer of iron ore in West Africa, the second largest in Africa and a significant global producer. Successful Track Record of Strong Partnerships Our accelerated growth has been expedited by our ability to attract and maintain strategic relationships with several world-class partners, giving us access to funding, security of sales through offtake agreements, and favorable supply lines for capital equipment procurement. We have been successful in raising sufficient funds to support our project development activities with 620 million raised through equity placements, $1.5 billion through project level investments from our strategic partner SISG and $1.4 billion through various capital market transactions and bank financing facilities. As part of our fundraising, we have entered into a number of investment and offtake agreements with key Chinese partners: In 2010, CRM, a major integrated service provider in the railway industry and a leading Chinese steel trader, invested million in the AML Group in return for 12.5% of the shares issued by AML, and entered into an exclusive sales agency agreement for DSO products in the People s Republic of China and a 20 year agreement for iron ore offtake for magnetite.; and in 2012, SISG invested $1.5 billion in the Operating Companies in exchange for a 25% stake in each entity, a discounted offtake agreement for the life of the Mine and an annual option to purchase 25% of exports. From the initial investment, $284 million remains available as at March 31, 2014 which the shareholders have allocated to help fund Friable Hematite Capital Expenditure. Quality and Invested Management Team with Proven Track Record The seasoned and experienced management team of the Company and of AML has extensive mining sector knowledge and a successful track record of developing iron ore assets and related infrastructure. The vast majority of the business of the AML management team focuses on the Operating Companies. Our management team has significant investments in AML. Frank Timis and Gibril Bangura together hold over 15% of AML s shares. Frank Timis has been the Executive Chairman of the Company since 2007 and of AML since 2006 and has guided our successful development from resource discovery to first production in the Operating Companies. Ian Cockerill was appointed as an Independent Non-Executive Director and Vice Chairman of AML in July He brings significant senior leadership to the Board, with over 38 years of experience in Africa and the mining industry generally. His previous roles have included serving as the Chief Executive Officer and Director of Anglo Coal Holdings Ltd and as a Director and Chief Executive Officer of Gold Fields Ltd. Bernard Pryor, CEO of AML, has been a director of the Company since August 2013 and a director of AML since April He brings significant experience having held senior executive positions at Anglo American plc, and other public companies including Adastra Minerals, Q Resources and others. Matthew Hird, who joined as a director of the Company and as AML s Chief Financial Officer in October 2013, brings significant experience from his previous roles as Chief Financial Officer of Kazakhmys and as a senior executive at Vedanta Resources, both of which are natural resources groups listed on the Main Market of the London Stock Exchange. Gibril Bangura has been an Executive Director of AML since 1998 and a director of the Company since He is a founding shareholder of AML with strong contacts both in Sierra Leone and across West Africa and has significant insight into Sierra Leone. Cui Jurong, a Vice President of SISG, has been a director of the Company since 2012 and a director of AML since 2012, following completion of the SISG investment. He has 30 years of experience in the steel industry 22

23 and has served in a variety of leadership roles in steel and iron plants in the Gansu Province. He previously served as Deputy Director General of the Gansu Province Geological Mineral Exploration Development Authority and as the Deputy Mayor of a city in Gansu Province. We also have a number of operational managers in place, including mining engineers and geologists, who have a wealth of international experience in the industry. Strong and Positive Relationship with the Government and Local Communities As a result of having invested over $2.5 billion in Sierra Leone, we are a significant partner in furthering the Government s development goals. In addition to being the largest contributor to GDP and the tax base in Sierra Leone, the Government also holds a 10% equity interest in ARPS. We have a strong in-country presence, headed by AML SL Executive Chairman and co-founder of AML Gibril Bangura, who is a Sierra Leone national, and we are the largest single employer in the private sector in Sierra Leone, employing approximately 7,150 personnel, (of which 80% are Sierra Leone nationals) throughout the operations covering several chieftain regions spanning over 200 km from Freetown to the mine. We have also made social investments in a number of priority areas, such as health and education. Our community engagement initiatives include the upgrading of medical facilities, schooling programs, improved social services, industrial and agricultural programmes, cultural and sporting projects, and together with the government, tertiary and vocational education programmes, amongst many others in the areas where we operate. We believe we have a close working relationship with members of the Government and have detailed knowledge and experience of the business and political environment in Sierra Leone. Strategy Our strategy is focused on the operation and continued development of our fully-integrated, owned and exclusively operated mine, plant, rail, port and marine operations. We intend to pursue this strategy as follows: Consistently Operate at 20 Mtpa of Exports Our immediate focus is to produce iron ore on a consistent basis at the 20 Mtpa run rate. Although this run rate has been achieved on several occasions during 2013 and 2014, we are implementing several initiatives to further enhance our management of the operations in order to stabilize our export level at 20 Mtpa, while minimizing production disruption during the most intense period of our wet season. The wet season in Sierra Leone lasts from the middle of May to the middle of November, usually peaking in July and August, with an average rainfall of approximately 2,525 mm per annum (compared to the United Kingdom s 1,220 per annum. During this period each year, the heavy rainfall experienced can restrict our ability to access higher pits as the wet season cloud base negatively impacts visibility. The heavy rainfall also restricts our ability to ship our fines and A32 products (classified as Group A Cargo ) as it causes significant increases to their moisture content. These products are at risk of liquefying and therefore cannot be shipped where their moisture exceeds their respective transportable moisture limits. However, our lump and lump blend products are classified as Group C Cargo, meaning that they are not susceptible to liquefaction and therefore we are able to transport them safely with higher moisture content. We have devised a seasonal shipping strategy, which was first implemented in 2013, to ensure that we are able to export products on a year round basis. This strategy primarily involves export of Group C Cargo in the wet season and Group A Cargo in the dry season. We are implementing several other initiatives to enhance our management of the wet season, all of which are expected to be in place during the third quarter of 2014 including: Product de-sliming (removing water-absorbent clays) which includes the establishment of de-sliming circuits at our existing plants, to eliminate clay and super-fine materials; Creation of intermediate product (shippable without any moisture level constraint); 23

24 Polymer dosing (allows shipment of higher moisture material); Implementation of moisture reduction systems under stockpiles (active dewatering through vacuum); and Stockpile covering. Principal in our planning is the establishment of de-sliming initiatives. By implementing these initiatives, we believe we will export 16 to 18 Mt of product in 2014, reduce average annual C1 production cash costs and exit the year in 2014 with a sustainable 20 Mtpa export rate. Further Reduce Cash Costs and Improve Operating Efficiencies We have significantly reduced our average C1 production cash costs from $44.5 per tonne in 2013 to $34 per tonne in March 2014 when a run rate of 20 Mtpa was achieved and aim to further reduce our C1 production cash costs and improve efficiencies through a number of initiatives with a focus on centralized procurement, lower shipping costs, bringing select operations in-house and the continuous review of contracts. We have been able to renegotiate several key supply contracts, which were put in place prior to commencement of our exports, on more favorable terms as we have transitioned from a project to an established mine operator with a production track record. As Sierra Leone has become a more established mining jurisdiction, the general cost of attracting experienced labor, including contractors, has also decreased. We have identified benefits from centralized procurement, which primarily include reducing the number of suppliers to secure improved pricing and improving supply partnerships with key vendors. As our export volumes have increased and we ship more product, we are assessing the benefits of transferring contracts from FOB to CFR, which is expected to lead to a permanent relative reduction in shipping costs. As we gain greater operational experience, we are also looking to bring certain contracted operations in-house, as well as a rebalancing of our workforce in Sierra Leone with a shift towards national employees, which would reduce overall wage costs. In addition, the Mine has a relatively high fixed cost component, and increased tonnages result in significant dilution of those fixed costs. As quarterly exported tonnes rose from 3.8 Mt in the fourth quarter of 2013 to 4.6 Mt in the first quarter of 2014, C1 production cash costs reduced from an estimated $42.8 per tonne to $38.5 per tonne. The March C1 production cash costs, with exports of 1.75Mt, was $34 per tonne. We expect to achieve C1 production cash costs of approximately $30 per tonne at the sustainable 20 Mpta export level by the end of 2014, once our current cost initiatives have been fully implemented. Expand to 25 Mtpa of Exports Our current operations are capable of operating at a run rate of 20 Mtpa, which we demonstrated during several periods in 2013 and We are currently building an additional processing plant, which we expect to be commissioned in the third quarter of 2014, as well as carrying out certain rail modifications and port improvements which are substantially complete. With these upgrades, we expect to be able to expand our infrastructure capability to 25 Mtpa by the end of 2014 and expect to achieve that run rate by the end of Establish a High Value Friable Hematite Concentrate In addition to reaching an infrastructure capacity of 25 Mtpa, we also plan to establish a high value Friable Hematite concentrate product alongside our Hematite DSO production. Following the conversion of the existing large-scale wet processing plant 1B, a portion of Hematite DSO product will be replaced with up to 11 Mtpa of Friable Hematite concentrate. We expect that this product will attract a materially higher selling price due to its increased grade and quality, though operating costs may also increase given the additional processing costs. The higher value concentrate product is also expected to result in a materially higher margin compared to the Hematite DSO product that it replaces. Based on current reference prices, gross revenue per tonne is expected to increase by approximately $30 per tonne for this concentrate product, with an expected increase in margin in excess of $20 per tonne. Following receipt of engineering studies from Ausenco Limited, a global engineering, procurement, construction management and operations service provider ( Ausenco ), in 2014, we have identified the key technical and commercial parameters for development of the Friable Hematite concentrate facilities and we expect the first concentrator to involve a low capital intensity conversion of the existing large-scale wet processing plant 1B. Commissioning of the first concentrator is expected within 12 months of commencement of the project. The total capital cost for this conversion and associated additional works is estimated, within a +/- 25% accuracy, to be approximately $311 million. The concentrator will target 24

25 production of approximately 11 Mtpa of a +63% Fe concentrate product, with an average mass yield of 56%, from head feed sourced from the medium grade portion of the 1.1 Bt Friable Hematite resource. The engineering studies from Ausenco are subject to approval by the board and shareholders of the Company, including SISG, prior to implementation. With near term expansion of infrastructure capacity of up to 25 Mtpa and Friable Hematite processing expected to commence in 2015, the life of our recently increased Hematite DSO grade component of the JORC compliant resource (which will run concurrently with the Friable Hematite processing) is expected to be extended until at least Over time, we expect to increase production of the high value concentrate product to fully replace Hematite DSO production, whilst maintaining exports of 25 Mtpa. We anticipate a commitment from another lending institution for $50 million within four weeks of the Issue Date. Our Business History We began our operations in Sierra Leone in 1996, and in 2008 discovered the Magnetite deposit at Tonkolili, which initiated the largest exploration and development program of its time in Africa. We were granted a 25 year mining lease over the Mine by the Government in 2010, renewable for further 15 year periods in accordance with the Mines and Minerals Act We were also granted a 99-year lease over the infrastructure facilities by the Government in 2009, which is extendable in 45-year periods. Prior to commencing our initial development, infrastructure in the region was undeveloped. As part of our initial work, we refurbished 74 km of the existing narrow gauge Pepel-Lunsar Railway and completed the construction of the new 126 km Lunsar-Tonkolili Railway, in order to connect the Mine to the pre-existing Pepel Port. Our initial development also included the refurbishment and expansion of the facilities at Pepel Port, which included dredging the Pepel channel, building new train unloading stations, building a double stockyard with 1 Mt lay down capacity including various stackers and reclaimers, refurbishing a 730 meter jetty with dual conveyors and shiploaders, and constructing a fuel berth. Processing of iron ore started at Tonkolili in December 2010, initially with small mobile crushing facilities (termed the 1A process plant). Following the rehabilitation of Pepel Port, refurbishment of the Pepel-Lunsar Railway, the building of the new Lunsar-Tonkolili Railway and the commencement of mining and processing operations, the first export of iron ore was achieved in November The small temporary processing facility, 1A, which produced the ore for the first ore on ship in November 2011, was supplemented during 2012 by a large-scale wet processing plant, 1B. Also during 2012, an additional processing plant, 1D, was commissioned such that the design output of the various Tonkolili processing plants was in excess of 20 Mtpa. Our infrastructure facilities were upgraded during 2012 and early 2013 to support this 20 Mtpa run rate, which we first demonstrated a capability to achieve in June Today, we are the largest producer of iron ore in West Africa, the second largest in Africa and a significant global producer. AML shares were listed on AIM in 2005, initially as Sierra Leone Diamond Corporation, which was renamed African Minerals Limited in We have been successful in raising sufficient funds to support our project development activities with 620 million raised through equity placements, $1.5 billion through project level investments from our strategic partner SISG and $1.4 billion through various debt capital market transactions and bank financing facilities. Geological Setting and Mineralization General The ore body has a strike length of over 20 km, comprising a very large Magnetite deposit (high Fe content) overlain with Friable Hematite and topped with a Hematite DSO cap at approximately 57% Fe, which is located at the surface and requires no stripping. The final pit shells as currently modelled represent an area larger than Manhattan Island, NY, USA. 25

26 Mineralization at the Mine forms hills that rise up to approximately 500 meters above the valley floor (approximately 836 meters above sea level). The resource depth is calculated at approximately 400 meters below the valley floor and the open pit is currently planned to a depth of approximately 300 meters below the valley floor. The below picture represents a cross section of the ore body and the division between Magnetite, Friable Hematite and Hematite DSO. The weathering profile is transitional across the site, from the highly oxidized and enriched Hematite DSO near the surface to primary banded iron formation of Magnetite at depth. The Hematite DSO requires little beneficiation and no processing but is a lower value product with Fe around 57%. As mining increases and reaches the Friable Hematite and Magnetite deposits, the material requires additional processing to produce premium Concentrate products with higher Fe grades. We believe that Friable Hematite concentrate will attract a higher selling price due to its increased grade and quality, and although operating costs may also increase given the additional processing costs, this is expected to provide a higher margin than the DSO that it replaces. Over time, we believe that our 25 Mtpa exports will become entirely composed of this high value concentrate product. Resources SRK produced a JORC Compliant Mineral Resource Estimate in December 2010 (the 2010 SRK Report ) and an updated JORC Compliant Mineral Resource Estimate for the Hematite DSO Resource in March 2014 (the 2014 SRK Report, and together with the 2010 SRK Report the SRK Reports ). The estimated and reported total JORC compliant iron ore mineral resource of the Mine according to the SRK Reports is 12.8 Bnt of iron ore comprised of 11.6 Bnt Magnetite, 1.1 Bnt Friable Hematite and Mt Hematite DSO. According to the 2014 SRK Report the JORC compliant Hematite DSO resource has been updated to Mt grading 57.0% Iron, 2.9% Silica, 6.6% Alumina, and 0.08% Phosphorus. In total, SRK has derived a mineral resource for the oxidized portion (Hematite DSO, Friable Hematite Ore and Magnetite material) of the Mine as set out below: Material Tons FE TOT % SiO 2 % Al 2 O 3 % P% (Mt) Mineral Resource Statement (March 2014) Hematite DSO (SRK 2014 Measured, Indicated and Inferred) >53.5% Fe Measured