Baobab Resources : Operations Update

Baobab   Resources   Plc   ('Baobab'   or   the   'Company')   is   wholly   focused   in   Mozambique   where   it   is   currently  
completing  a  Definitive  Feasibility  Study  ('DFS')  at  its  pig  iron  and  ferro-­‐vanadium  project  in  the  Tete  province  (the  

'Tete   Project'),   one   of   Africa's   fastest   growing   mining   and   industrial   centres.   The   International   Finance  Corporation   ('IFC')   holds   a   15%   participatory   interest   in   the   Tete   Project.   The   Company   is   pleased   to   provide   the  
c.45kg   of   pig   iron   product   has   successfully   been   produced.   This   is   further   evidence   of   the   pig   iron  product,   which   can   be   produced   from   the   Tete   project.   Below   are   the   assayed   results   of   pig   iron  achieved  through  the  smelt  test  work.  

Distribution   of   vanadium   as   well   as   deleterious   elements   (phosphorus,   sulphur,   copper,   etc)   has   been  tracked  and  will  be  incorporated  into  a  working  mass  balance.  Initial  results  presented  above  indicate  a  recovery  of  in  excess  of  75%  vanadium  to  the  hot  metal,  which  is  in  accordance  with  the  bench  scale  test  work  completed  at  CSIRO.  It  is  important  to  note  the  low  level  of  Cu  and  also  to  mention  that  the  levels  of  Sulphur,  Phosphorous,  titanium  and  other  deleterious  elements  will  further  reduce  with  the  removal  of  Vanadium.  
Four  to  six  200g  samples  of  pig  iron  will  then  be  subjected  to  vanadium  recovery  test  work  using  various  additives   and   levels   of   oxygenation   to   determine   optimised   conditions   for   two   larger   (5kg)   tests   to  produce  a  sufficient  amount  of  vanadium-­‐rich  slag  for  subsequent  characterisation.  
Both  pig  iron  and  slag  samples  will  be  used  for  marketing  purposes.  
§ Pilot  scale  direct  reduction  trials,  using  bulk  samples  of  Tenge  oxide  iron  ore,  Massamba  carbonate  and  local  thermal  coal  product,  are  on-­‐going  at  FLSmidth's  test  facilities  in  the  USA.  A  first  round  of  kiln  trials  is   now   complete   and   a   second   is   scheduled   to   commence   in   the   coming   weeks.   The   objective   of   these  trials   is   to   confirm   the   rotary   kiln   route   as   a   suitable   technology   with   an   accompanied   process  guarantee.      
§ Marketing  studies  covering  the  merchant  pig  iron  market,  the  vanadium  market  and  the  supply/demand  dynamics  of  steel  production  in  the  Middle  East  have  been  completed.  The  combination  of  low  cost  high  quality   Tete   Pig   Iron   and   competitive   ocean   freight   to   the   Middle   East   indicates   a   production   cost  advantage   over   Middle   Eastern   produced   DRI,   placing   Tete   Pig   Iron   as   an   ideal   raw   material   source   for  an  increasing  focus  on  rebar  manufacturing  capacity  in  this  region.  
The   positive   marketing   results   have   been   incorporated   into   supplementary   data   packs   for   on-­‐going  discussions  with  potential  strategic  partners  in  northern  Asia  and  the  Middle  East,  many  of  whom  were  visited  during  the  week  of  the  23rd  June  2014.  

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Following  an  increased  interest  from  technology  providers  who  can  enhance/increase  the  concentration  of   TiO2   in   slag   into   a   potentially   saleable   product,   a   marketing   study   of   the   TiO2   market   was  commissioned   in   order   to   gain   a   better   understanding   of   this   potential   and   how   it   can   add   to   the  economics  of  the  Tete  project.  
§ Progress   is   being   made   with   regards   to   securing   access   to   port,   rail   and   power   with   negotiations   with  both  public  and  private  sector  entities  in  advanced  stages.  Discussions  concerning  coal  off-­‐take  are  also  underway.  
§ Technical   logistics   studies   are   well   underway   to   ensure   economically   feasible   methods   to   evacuate   the  
pig  iron  product  from  the  project  site  through  to  either  the  ports  of  Beira  or  Nacala.  
§ Geotechnical  and  hydrogeological  drilling  is  complete  and  will  be  incorporated  into  the  pit  optimisation,  
mine  scheduling  and  reserves  classification  studies  being  carried  out  by  SRK  consultants.  
§ The   mining   title   application   is   ready   for   submission   and   work   has   commenced   on   the   drafting   of   the  
mining  contract.  
§ The   environment,   safety   and   health   impact   study   (ESHIA),   resettlement   action   plan   (RAP)   and   social  
development  plan  (SDP)  are  all  making  solid  progress  and  are  largely  on  schedule.  

The information in this release that relates to Exploration Results is based on information compiled by Managing Director Ben James (BSc). Mr James is a Member of the Australasian Institute of Mining and Metallurgy, is a Competent Person as defined in the Australasian Code for Reporting of exploration results and Mineral Resources and Ore Reserves, and consents to the

Philip  Secrett  |  David  Hignell  |  Jamie  Barklem   Tel:  +44  20  7383  5100

Jerry  Keen  |  Toby  Gibbs       Tel:  +44  20  7468  7964  

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