Kalahari Minerals plc / Ticker: KAH / Index: AIM / Sector: Mining & Exploration

19 May 2008

Kalahari Minerals plc ("Kalahari" or "the Group")

Final Results

Kalahari Minerals plc, the AIM-traded mining exploration and evaluation group with a portfolio of copper and uranium prospects in Namibia, announces its results for the year ended 31 December 2007.

Overview

• Continues to strengthen foothold as one of the leading exploration and development companies in Namibia

• Encouraging progress in terms of the exploration, evaluation and development of copper and base metal projects

• Converted uranium joint venture into a direct 36.2% holding in ASX and TSX listed Extract Resources Ltd - post period end increased holding to 39.11%

• Continuing progress at Extract's Husab uranium project - confirmed a major new uranium discovery 

• New office opened in Windhoek and strengthened both the on the ground team in Namibia and the main board 

• Post period end completed a placing to raise £14.4 million and attracted new major institutions to shareholder register

• Healthy cash resources of approximately £13 million following the placing and subsequent purchase of Extract ordinary shares

Chairman's Statement

The year ended 31 December 2007 was a period of heightened activity for your Company as it continues to strengthen its foothold as one of the leading exploration and development companies in Namibia. As well as reporting encouraging progress in terms of the exploration, evaluation and development of our portfolio of projects, we have also strengthened both the team in Namibia and the main board and created a defined strategy, which we believe will deliver increased value to shareholders.  

Drilling activities have continued positively at both our 100% owned copper projects, Witvlei and Dordabis, and we have received encouraging results from the evaluation drilling at the 90% owned Namib Lead Zinc Project. Exploration activities have been ongoing at the 100% owned copper gold project Ubib, where diamond drilling has recently commenced. 

In March 2007, we completed the transaction to convert the uranium joint venture into a direct 36.2% holding in ASX and TSX listed Extract Resources Ltd ('Extract'). This enabled us to focus on our copper and base metal assets, whilst at the same time ensured our continued exposure to the potential upside of these uranium prospects. During the period Extract reported continuing progress at the Ida Dome and Garnet Valley targets and recently confirmed a major new uranium discovery at the Rossing South exploration target.

In order to further develop our copper and base metal projects and maintain our stake in Extract, I am delighted to report that post period end, we completed a placing to raise £14.4 million and attracted new major institutions to our shareholder register. This lifted our cash resources to £16 million, which in these turbulent markets, placed the Company in an extremely strong position. Since we completed the placing, approximately £2.7 million of these funds have been used to purchase an additional 5,456,641 ordinary shares in Extract, lifting our holding to 72,156,641 ordinary shares or 39.11%.

Additionally, the Company's Namibian office in Windhoek is now completed and we welcome various new members to the team including Sadike Nepela as General Manager, Keith Webb as Geology Manager, Scott Herrmann as Project Geologist, Ninnette Kronhert as Human Resources and Finance Manager and Jan Joubert as Geological Advisor and Namibian Representative. The new team has been instrumental in supporting the Board through the period and establishing a full time presence on the ground is a key factor to realising the Company's aim of becoming one of the leading exploration and development companies in Namibia.

Operations

Copper Projects

The Company has continued its aggressive exploration programme to define +250,000 tonnes of copper metal at the key copper targets Dordabis and Witvlei, where three operating reverse circulation drills ("RC") have currently completed 553 holes totalling 54,538 metres. Results have been extremely encouraging and the Company remains focussed on achieving its goal of establishing a copper processing facility fed by multiple ore sources from both targets.  

Witvlei

Activities in the Witvlei copper region, which contains five know copper deposits over a 650km² area, have predominantly targeted the Malachite Pan, Okasewa and Christiadore prospects, where drilling commenced in March 2007. Kalahari is currently firming up 250,000 tonnes of previously defined historic resources and is aiming to quantify a resource base that will support a viable and sustainable operation.

A total of 96 holes have been drilled at Malachite Pan to date for 8,483 m. This drilling, which aims to test historical data down to a depth of 130m and to gain an in depth understanding of where the basal breccia contact lies, has returned some encouraging assays including 22m @1.22% Cu and 16m @1.94% Cu

At Okasewa, 39 holes totalling 4,963m have been drilled and major copper intersections have been generated including 54m @1.51% Cu, 49m @ 1.12% Cu, and 24m @1.84% Cu. At Christiadore, 11 holes totalling 1,336m have demonstrated intersections including 9m @ 2.5% Cu, 7m @3.0% Cu and 5m @ 3.7% Cu.

Dordabis

The Dordabis copper region, located in the heart of the Kalahari Copper Belt, contains five know copper deposits over 875 sq km. The focus at this stage of the exploration programme remains at the Koperberg and RK prospects. Kalahari has recognised that coincident magnetic and gravity supports the potential for iron oxide copper gold mineralisation model, similar to that found at the Olympic Dam and Ernest Henry deposits.

The Koperberg prospect has an initial resource of 1.74mt @ 0.97% copper, representing 17,000 tonnes Cu in-situ metal. These estimations only include 75% of the 22,000m drilled to date. The mineralised zone has been traced over a strike length of 700m north-south and detailed magnetic data demonstrate that Koperberg may lie within a lithological unit up to 35km in length. Metallurgical test work to date indicates +90% recoveries from simple flotation and the company believes there is +50,000 tonnes of resource potential.

Namib Lead Zinc Project

In March 2007 the Company acquired 90% of the Namib Lead Zinc Project, which is centred on the previously producing Namib Lead Mine. The underground mine remains semi-developed and the Company is continuing with metallurgical work with the aim of conducting a bankable feasibility study in 2008.  

Diamond drilling carried out between April and June 2007 covering 17 holes for 3,057m, intersected massive sulphide mineralisation and additional downhole electromagnetic surveys ("EM") were implemented. From these results the Company has identified that 11 of the holes drilled intersected potentially economic mineralisation and that the four target zones remain open at depth. Metallurgy issues are currently being assessed and it is expected that the existing infrastructure will help accelerate Namib to production status, subject to feasibility.

Copper / Gold Project

Located 15km south-west of Namibia's longest producing gold mine, the four million ounce Navachab Gold Mine, the Company's Ubib project covers approximately 713 sq km and is situated within a significant metallogenic terrain characterised by polymetallic base meal-uranium-gold mineralisation. 5,700 soil samples have been taken to date and diamond drilling commenced in March 2008.

Uranium Investment

The Namib Desert, host to a number of major uranium plays including Rio Tinto's Rossing Mine, one of the largest open pit uranium mines in the world, Uramin's Trekkopje Deposit and Paladin Resources' Langer Heinrich Mine, is considered to be one of the most prolific uranium areas in the world. Extract, in which Kalahari has a 39.11% stake, is focused on developing the highly prospective 637 sq km Husab Project located in the heart of it, which ensures that your Company is involved in what could become a major new uranium player. 

Whilst we took the decision to divest our uranium assets in March 2007 in return for the Extract shares, we see our holding as an important part of our growth strategy in Namibia and are keen to support Extract through its development phase. In line with this, post period end we purchased additional shares in Extract bringing our shareholding up from 36.2% to 39.11%. 

Extract, through extensive drilling campaigns, continues to report outstanding drill results generated from the Husab project's two key areas - Ida Dome and Rossing South. These include the bonanza grade zone of 3 metres grading 44,601 ppm (4.46%) U3O8 in Garnet Valley within the Ida Dome area and the assay results confirming a major new uranium discovery at Rossing South as reported in January 2008.  

Ida Dome

Drilling commenced in April 2006 and there are currently five rigs working on site with a sixth expected to arrive in the near future. Following completion of the scoping study in October 2007, the 60,000m drilling programme at Ida Dome, including Garnet Valley and Hollands Dome, is progressing well and the maiden resource statement is underway.

Rossing South

The initial Rossing South discovery holes are approximately 1.5 kilometres from the boundary of Extract's licence area and 7 kilometres south of Rio Tinto's Rossing Mine. The Rossing South target area extends 15 kilometres onto Extract's licence and is covered by desert sands. First pass reconnaissance drilling on three lines 1.6 kilometres apart indicate that uranium mineralisation extends over a zone of at least 3.2 kilometres along regional strike. The width of the mineralised system is at least 160 metres on discovery Line 1 and anomalism over 500 metres wide on Lines 2 and 3.

Given the continued success of the exploration programme, two RC and one diamond core drill rigs have been dedicated to the Rossing South area. Additional reconnaissance drilling will be completed south of Line 3 and north of Line 1 with drilling on Line 4 having already commenced. Extract believes that Rossing South has excellent potential to host a significant uranium deposit under the sand cover and Kalahari entirely supports this view.

Fundraising

Post period end, on 14 April 2008, we were delighted to announce that we had completed a placing of 46,080,000 New Ordinary Shares to raise £14.4 million at 31.25 pence per share. The funds will be used to continue the development of the copper and base metal projects including funding the feasibility study at Namib and to advance the resources at Witvlei into a JORC compliant status. Importantly, it has also allowed the Company to increase its holding in Extract - at the end of April it purchased an additional 5,456,641 ordinary shares in Extract, lifting its holding to 72,156,641 ordinary shares or 39.11%.  

I am delighted to welcome new major institutions to our shareholder base including Blakeney Management and further strengthen our relationships with various existing shareholders, who chose to take part in the placing.  

Following the placing and subsequent purchase of Extract ordinary shares, we are now in an extremely enviable position with cash resources of approximately £13 million.

On the ground

In tandem with our increased exploration activities, we have considerably strengthened the team in Namibia and opened a new office in Windhoek. In October we welcomed to the Board Namibian national Steve Galloway as non-executive Director. Steve has extensive experience working in Namibia across mining, energy, investment and financial sectors, having begun his career as a geologist before moving to Government official roles including Chief Mineral Economist and establishing NedCapital, a financial services company in 1999. We believe Steve is a valuable asset for the Company and will assist greatly in strengthening our presence and relationships in Namibia.

On the Namibian management side, we now have a first rate team in place having made five key appointments. These include Sadike Nepela as General Manager, Keith Webb as Geology Manager, Scott Herrmann as Project Geologist, Ninnette Kronhort as Human Resources and Finance and Jan Joubert as Geological Advisor and Namibian Representative.

Outlook

Namibia is undoubtedly an exciting country to operate in. Not only does it have a friendly mining code, but we believe it is one of the most prolific countries for natural resources within Africa. We therefore remain focussed on developing our existing assets and further increasing our exposure within the country.  

Q1 2008 has already proven to be very exciting with excellent progress made. We are on target to complete the 75,000m scheduled 2008 drill programme aimed at ascertaining the feasibility of commencing one or more mining operations and we continue to fully support Extract in its activities at the Husab Project.  

In summary, I believe we are achieving our goal of being recognised as a leading junior institutional-quality base metal and uranium investment opportunity in the global market. The recent fundraising endorses the progress we have made on developing our assets and I believe that we can significantly increase the value of the operations going forward. 

Mark Hohnen
Chairman
16 May 2008

Consolidated Income Statement

For the year ended 31 December 2007

Basic earnings per share from continuing operations is 6.8p (2006: loss 1.61p).

Basic earnings per share from discontinued operations is 0.2p (2006: loss 0.2p).

Total basic earnings per share for the year is 7p (2006: loss 1.81p)

Diluted earnings per share from continuing operations is 6.2p (2006: loss 1.61p).

Diluted earnings per share from discontinued operations is 0.2p (2006: loss 0.2p).  

Total diluted earnings per share for the year is 6.4p (2006: loss 1.81p).

Consolidated Statement of Recognised Income and Expense

For the year ended 31 December 2007

Company Statement of Recognised Income and Expense

For the year ended 31 December 2007 

Consolidated Balance Sheet

31 December 2007 

Company Balance Sheet

31 December 2007

Consolidated Cash Flow Statement

For the year ended 31 December 2007

Cash and cash equivalents comprises cash at bank balances.

Company Cash Flow Statement

For the year ended 31 December 2007 

Cash and cash equivalents comprises cash at bank balances.

* * ENDS * *

For further information please visit www.kalahari-minerals.com or contact:

Notes to the Financial Statements

For the year ended 31 December 2007

1. NATURE OF FNANCIAL INFORMATION

The financial information set out above does not comprise full accounts as defined in the Companies Act 1985. Full accounts were sent to shareholders on 16 May 2008 and will be available on the Company's website at www.kalahari-minerals.com 

2. EARNINGS PER SHARE

At the year end the company had granted 4,400,000 (2006: 1,885,476) options on ordinary £0.01 shares which were antidilutive in the year. 

3. POST BALANCE SHEET EVENTS

On 29 February 2008 the company issued 1,500,000 ordinary £0.01 shares at a premium of £0.07 per share.

On 5 March 2008 the company issued 3,000,000 ordinary £0.01 shares at a premium of £0.07 per share.

On 15 April 2008 the company admitted to the Alternative Investment Market a placement of 46,080,000 new ordinary £0.01 shares at 31.25p per new ordinary share.

On 30 April 2008 the group acquired a further 5,456,641 ordinary shares in Extract Resources Limited for a price per share of AUS $ 1.05. This increased the group's interest in Extract Resources Limited to approximately 39.11% of its total voting rights. 

4. DIVIDENDS

No dividend is proposed for the year ended 31 December 2007.

5. AGM

The annual general meeting will be held at Lawrence Graham LLP, 4 More London Riverside, London SE1 2AU on 11 June 2008 at 10.00 am.

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