GMA Resources Plc : GMA Resources' Board Decision to Withdraw from ENOR Spa

» Latest Press Releases » 19 October 2011 GMA Resources' Board Decision to Withdraw from ENOR Spa With regret, the Board of Directors of GMA has advised Sonatrach, its joint venture partner in ENOR Spa, that it has taken the decision to withdraw from its participation as a shareholder of ENOR Spa, the operator of the Amesmessa Gold Mine within the Tirek Amesmessa Concession in Algeria. ENOR Spa is GMA Resources’ only trading asset, the withdrawal will result in a write-off of the investment. The grade of the mined ore at Amesmessa has fallen considerably since 2009 and the mining costs have risen due to an increasing strip ratio (increasing depth of mining). The revenue generated by the operation is unlikely to be sufficient to meet the obligations of ENOR Spa, even taking into account current record gold prices. By December 2012, bond holders will be due principal and interest totalling £8.47 million. This future liability therefore gives little incentive for third parties to be attracted to GMA for current or future investment. Of equal weighting, extensive exploration, including more than 32,000 metres of drilling over the last 18 months, has not delineated any significant new or potential gold resources to give the Company confidence that this situation will improve or justify further investment in the future. GMA has invested in total over £33 million in ENOR and it cannot continue to sustain the financial burden of this loss making operation with no confidence that there is an economic justification to continue. The Company is working with Sonatrach and the regulatory bodies in Algeria to complete its withdrawal in an orderly manner and in compliance with Algerian laws and regulations. The Company is making significant efforts to secure an alternative opportunity but there is no material progress to report at this time. Enquiries: GMA Resources Plc Ken Crichton [phone] Merchant Securities Limited (Nomad) David Worlidge [phone] Notes to Editors: GMA owns a controlling 52% stake in ENOR spa ("ENOR"), the Algerian based operating company for the Tirek-Amesmessa project, with the remainder owned by Sonatrach, the Algerian state-owned oil and gas company. ENOR holds the exploitation authorisation to the Tirek-Amesmessa property, an area of some 1,417 km2, located approximately 450km south west of the city, Tamanrasset, in southern Algeria. Amesmessa is an open pit heap leach gold mine located in the extreme south of the permit area. The now closed Tirek mine site is located centrally in the northern third of the exploration permit area, some 60 km north of Amesmessa. GMA's shares are traded on the AIM market of the London Stock Exchange (AIM: GMA). For further information on the Company, please visit: www.gmaresources.co.uk