Braemore Resources plc confirms the occurrence of an operational incident at a furnace at Mintek’s ConRoast smelting facility in Johannesburg, South Africa on Friday, 27 March. A full enquiry will be completed; however preliminary investigations suggest superficial damage to the plant and minimal impact on production. Safety procedures were strictly adhered to and no personnel were injured in the incident.

Initial estimates anticipate a cost of full repair to the operating infrastructure of the furnace of R1.5 million , to be jointly incurred by Mintek and Braemore. The majority of this cost will be for the repair and replacement of electrical cables. The furnace is anticipated to return to full production within 10 days.

The incident was caused when water from a water leak came into contact with molten material, which instantly vapourised the water, causing a series of minor explosions. This is the first incident of this nature in five years of operating the ConRoast technology at Mintek and occured during a period of trialling high sulphur content material in the furnace. The incident further supports the requirement of a complete ConRoast process, which under normal operating procedures removes all sulphur from the feed material through a roasting step.

Normal operating conditions take into account the hazards associated with such an event and the nature of the ConRoast technology allowed the incident to be quickly contained.

Shareholders of Braemore Resources plc are advised that the Company expects its earnings and headline earnings per share for the six months ended 31 December 2008 to show a 0.56p loss as opposed to the 0.15p loss for the corresponding period to 31 December 2007.

The Company has made significant positive progress on its projects and continued production from its newly-expanded ConRoast smelter in South Africa totalled 6,892 platinum group metal (PGM) ounces for the period.

Whilst the unaudited financial results for the six months ended 31 December 2008 have not yet been finalised, the Company anticipates an after-tax loss for this period of £4.40 million (loss per share: 0.56p). This compares with an after-tax loss of £1.015 million for the six months ended 31 December 2007 (loss per share: 0.15p).

Specific events that contributed to the increased expenditure and losses include:

• About 50% of the anticipated after-tax loss can be attributed to the recent settlement of a single old-order contract that may have exposed the Company to market volatility around PGM prices and unfavourable processing terms. This contract has been concluded and replaced by new contracts from both Anglo Platinum Limited (“Anglo Platinum”) and Northam Platinum Limited (“Northam”). The new contracts in place are cash positive, with significantly reduced price exposure.
• The JSE listing completed in July 2008 and the associated legal and compliance expense.
• The decommissioning of the 1.5MW smelter and the subsequent construction and commissioning of the larger 3.2MW ConRoast smelter expansion, as part of the commercialisation of the technology. During this period there was reduced production as the previous smelter was taken offline to replace it with the new smelter. Consequently no production resulted in September 2008 although overheads were still incurred.
• The commitments for the Leinster Nickel Project testwork and reports required by BHP Billiton (BHPB) to conclude the scoping study.
• The acceleration of the research programme to conclude the process flow sheet for the hydrometallurgical refining of the PGM iron alloy.

During this period the Company completed smelting the initial contracted low-grade concentrate through the original 1.5MW furnace. As mentioned above, this old contract has been replaced with newly-contracted material from Anglo Platinum and Northam. Current contracts with Anglo Platinum and Northam are cash positive.

Braemore has also advanced the restructuring of the Company to realise a significant reduction in overhead costs which will flow through into the next reporting period. The cash position of the Company as at the end of the period was £2.54 million. At the end of February the Company’s cash balances were approximately £1.6 million with PGM alloy in-stock valued at £4.1 million.

The Company’s unaudited results for the six months ended 31 December 2008 will be released on SENS and published in the press by 31 March 2009.