Emed Mining Public Limited - Remaining land needed for Rio Tinto Copper Mine restart now acquired - Options to acquire further land for Mine expansion

AIM: EMED
TSX: EMD

NICOSIA, Cyprus, Aug. 3, 2012 /CNW Telbec/ - EMED Mining, the Europe-based minerals development and exploration company, is pleased to announce that it has entered into a Sale and Purchase Agreement ("SPA") with Inland Trading 2006, S.L. ("Inland"), part of an established diversified Andalucían investment group, in relation to the €5 million purchase of the last land plot required for planned operations of the Rio Tinto Copper Mine (the "Mine"). This land plot (Plot 2381 on the map link below - the "Land") covers part of the Mine's main tailings dam wall.  The acquisition of the Land is required in order to restart and maintain production at the Mine and satisfies all of the project's needs for tailings deposition from proposed operations along with the potential expansion thereof in the shorter term.

In addition, EMED Mining has been granted options by Inland and Construcciones Zeitung, S.L. ("Zeitung") to acquire additional plots of land in the surrounding district (the "Option Lands"), exercisable within four years at an aggregate price of €9 million. The Option Lands are of interest to the Company because of the scale of potential expansion in the longer term.

These arrangements secure all the land required for the Mine and its potential expansion of both mine life and annual output.  Further details of the SPA and the agreements granting the options to acquire the Option Lands are set out below.

Harry Anagnostaras-Adams, Managing Director, said: "The agreements with Inland and Zeitung fulfil our project's land ownership and access requirements and aligns the interests of those parties with those of our Company, as recently done with the major neighbouring landowner Rumbo 5-Cero SL.

"We now turn all our focus onto satisfying the regulatory requirements so as to be able to complete our project planning. We aim to trigger the project restart at the end of this year, duly permitted, engineered and financed and to then implement planned works including personnel training and recruitment.

"Of equal importance to the preparations for production will be the implementation of a drilling program targeting to increase resources and reserves on the first mine, the Cerro Colorado Open Pit, as well as to validate historical data on other deposits with a view to estimating mineral resources in compliance with today's reporting standards."

Inland Land Acquisition
Pursuant to the SPA, EMED Mining's wholly-owned subsidiary EMED Tartessus, S.L. ("EMED Tartessus") has agreed to acquire the Land for a total consideration of €5 million (plus applicable taxes and adviser fees). The consideration is to be satisfied as follows:

• €1 million which was paid in cash on execution of the SPA;
• €1.5 million payable in cash in eight equal instalments over a period of 24 months; and
• €2.5 million to be satisfied by the allotment of 18,511,675 new ordinary shares of 0.25p each in EMED Mining (the "Consideration Shares") at approximately 10.61 pence per share. The issue of the Consideration Shares will be subject to the conditional approval of the Toronto Stock Exchange.  If such approval is not obtained by 31^st August 2012, EMED Mining will satisfy this sum in cash.

Inland has undertaken not to dispose of the Consideration Shares until the earlier of: (i) receipt by EMED Mining of all permits necessary to exploit the Mine; (ii) 2^nd August 2014; or (iii) the date on which EMED Mining disposes of the Land or its interest in EMED Tartessus.

Options
EMED Tartessus has also been granted options by each of Inland and Zeitung to acquire further lands to facilitate expansion of the Mine.  The terms of the option agreement with Inland are as follows:

• The Company has paid to Inland an option fee of €50,000 on execution of the option agreement.
• A retention fee of €130,500 per annum is due from EMED Mining during the term of the option agreement.  The Company may notify Inland during the term that it no longer wishes to retain the option at which time the obligation to pay the retention fee ceases.
• EMED Tartessus may elect at any time prior to 2^nd August 2016 to acquire the Inland Option Land.
• The purchase price for the Inland Option Land will be €4,648,000 less any retention fees paid by the Company.
• Half of the purchase price will be paid in cash with the balance to be satisfied by the allotment of new ordinary shares in EMED Mining at the higher of 10.61 pence per share and the average 30 day VWAP for such shares on AIM immediately prior to the exercise of the option.  The issuance of new ordinary shares will be subject to approval by the TSX.

The terms of the option agreement with Zeitung, which are largely the same as the agreement with Inland, are as follows:

• The Company has paid to Zeitung an option fee of €100,000 on execution of the option agreement.
• A retention fee of €119,500 per annum is due from EMED Mining during the term of the option agreement.  The Company may notify Zeitung during the term that it no longer wishes to retain the option at which time the obligation to pay the retention fee ceases.
• EMED Tartessus may elect at any time prior to 2^nd August 2016 to acquire the Zeitung Option Lands.
• The purchase price for the Zeitung Option Lands will be €4,202,000 less any retention fees paid by the Company.
• Half of the purchase price will be paid in cash with the balance to be satisfied by the allotment of new ordinary shares in EMED Mining at the higher of 10.61 pence per share and the average 30 day VWAP for such shares on AIM immediately prior to the exercise of the option.  The issuance of new ordinary shares will be subject to approval by the TSX.

Map
Please click here to view the map delineating the land owned by EMED Mining required for restart of the Mine and the Option Lands.

Cautionary Notes

This announcement contains "forward looking information" which may include statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects, TSX approval of the transactions, the future price of metals, the estimation of ore reserves and resources, the conversion of estimated resources into reserves, the realisation of ore reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Accordingly, readers should not place undue reliance on forward looking statements.

Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; the future costs of capital to the Company; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, terrorist attacks, insurrection or war; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Risk Factors" in the Company's annual information form.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward looking statements contained herein are made as of the date of this announcement and the Company disclaims any obligation to update any forward looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.

SOURCE EMED MINING PUBLIC LIMITED

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