LONRHO MINING LIMITED ACN 111 501 663 12 Walker Avenue ǀ West Perth WA 6005 ǀ Tel +61-8 9321 5887 ǀ Fax +61-8 9321 5884 ǀ Email general@resdev.com.au ǀ www.lonrhomining.com

ASX Release 19 December 2008

LONRHO MINING LIMITED (ASX: LOM) QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

HIGHLIGHTS LULO PROJECT, ANGOLA The first kimberlite pipe (K72) was identified within the Lulo

Concession. Six priority aeromagnetic anomalies were inspected and

sampled. Heavy mineral micro-probe analyses results are expected in January 2009.

The L6 target on the west bank of the Cacuilo River was

visited. Field evidence suggests this location may represent a buried kimberlite pipe.

OPERATIONS LULO DIAMOND CONCESSION – ANGOLA Kimberlite Exploration The 1,000 km2 aeromagnetic survey flown in January 2008, revealed a cluster of some 200 magnetic anomalies suggestive of kimberlite pipe intrusives. This interpretation was supported by the presence of historically reported kimberlite pipes within the aeromagnetic target area. The view that diamond rich kimberlite pipes are located within this province is reinforced by the extensive illicit diamond digger (garimpeiro) activity within the Cacuilo River catchment area, which hosts the aeromagnetic anomaly cluster as well as the reported kimberlite pipes. The aim is to fast track the discovery of any diamond bearing kimberlites. The largest pipe within a kimberlite province is invariably also the most diamondiferous member. Based on that empirical fact, it was decided to inspect the apparent largest eight accessible targets based on both aeromagnetic modelling and aerial-photo interpretation. The targets are listed in Table 1.

For

per

sona

l use

onl

y

LONRHO MINING LIMITED 19 December 2008 ACN 111 501 663 Page | - 2 - QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

TABLE 1 - KIMBERLITE TARGET ANOMALIES

Anomaly No. Basis for selection

K6 aeromagnetic anomaly only

K14 aeromagnetic anomaly/digger activity

K29 aeromagnetic anomaly/photo feature/hill

K30 as above – adjoining targets/1 source?

K50 aeromagnetic anomaly only

K71 aeromagnetic/photo anomaly

K72 aeromagnetic/photo anomaly

K212 aeromagnetic anomaly only

L6 historical kimberlite/digger activity The field inspection included the surface soil sampling of the selected targets as well as the mapping of any rock outcrops. Targets K212 and the twin targets K29 and K30 were not sampled as the former is a large swamp adjacent to the Cacuilo River and access to the latter was restricted. On the other six sites, a single -2mm screened sample was collected at the point modelled as the centre of the aeromagnetic anomaly. This material was then concentrated using a gold pan. The concentrates were dried and delivered to the MSA Group laboratories in Johannesburg, South Africa. The final micro-probed mineral results are expected towards the end of January 2009. K72 represents a hill with outcrops of lateritised breccia and a heavy concentrate of ilmenites which have now been positively identified by MSA as being picro-ilmenites typical of Group 1 kimberlites. Photo 1 The lateritised summit outcrop of kimberlite K72

For

per

sona

l use

onl

y

LONRHO MINING LIMITED 19 December 2008 ACN 111 501 663 Page | - 3 - QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

Photo 2 Lateritised kimberlite (K72) breccia with high surface concentration of picro-ilmenites

K71 is located about 1.5 km due west of K72. It lies beneath a large grassed area (visible on aerial-photo images) on the summit of a hill. No lateritised outcrops were seen. L6 is located on the west bank of the Cacuilo River where a historical map has indicated a kimberlite pipe location. Due to security consideration relating to the garimpeiros active there in January 2008, this section was not flown by the low level (25 metres) helicopter borne aeromagnetic survey. However, an area of about 15 hectares has been extensively mined to the water table by the garimpeiros to an average estimated depth of 10 metres. The rim of this disturbed area has a very high concentration of ilmenites. The material excavated consists of white sand, gravels and yellow clay, suggestive of the surface in-filled overburden of a buried pipe. A drilling programme is planned here during the dry season 2009.

For

per

sona

l use

onl

y

LONRHO MINING LIMITED 19 December 2008 ACN 111 501 663 Page | - 4 - QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

Photo 3 The L6 target showing garimpeiro diggings to the water table. Digger presence can be seen in the centre of the circular feature. The southern edge of this feature is visible in the distance. The photo was taken from the northern edge of L6.

Photo 4 The L6 target showing the northern edge of the 15 hectare feature targeted by garimpeiros. The alluvial diggings are visible in the Cacuilo River valley flood plain in the distance.

K14. This magnetic anomaly is located within a swampy area within the Cacuilo River floodplain. Abandoned garimpeiro diggings are present on the edge of the swamp. L6. This magnetic anomaly shows no obvious topographic features.

For

per

sona

l use

onl

y

LONRHO MINING LIMITED 19 December 2008 ACN 111 501 663 Page | - 5 - QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

K50. This is the largest of the aeromagnetic anomalies. It lies on an interfluve area with no obvious topographic features. K212. This magnetic anomaly lies beneath a swampy area within the floodplain of the Cacuilo River. The presence of garimpeiros prevented access onto this site. K29 and K30 are two magnetic anomalies within 400m of each other and may represent feeders of one pipe. Access was not possible due to the rugged terrain and prevailing weather conditions. Alluvial Exploration The exploration of the west bank Cacuilo River terrace gravels will commence early in the dry season as access into these wet areas present difficulties during the current wet season. A 4 km river frontage has been selected for the first phase of exploration. Access tracks along the bank of the river will be constructed along which control points can be established for the surveyed base lines cut at right angles to the river. These parallel base lines will be spaced at 500 metre intervals along which exploration pits at 100 metre intervals will be sited. This will allow for accurate sub-surface geological mapping on which the bulk sampling and trial mining programmes will be based. The planning for the rotary pan construction and transportation to site is well advanced. This diamond recovery plant is scheduled to commence operations within the second quarter of 2009. Most of the garimpeiros have departed following an Angolan army operation in August 2008. However, it was obvious from this recent visit that many diggers have drifted back into the Cacuilo River valley. This issue is being addressed with Endiama, the Angolan government diamond mining department. The current camp is located some 5 km from the river. A contingent of 21 Manbodji security guards armed with AK47 rifles were despatched to the Lulo Concession in September 2008 and are now deployed in a defensive role to protect the exploration activities. SCHMIDTSDRIFT – SOUTH AFRICA Production and Sales for the Quarter Production for the quarter was 910 carats from 219,088 ROM tonnes at an average grade of 0.42 carats per hundred tonnes. The production included 15 stones in excess of 5 carats in size. This included 5 stones between 10 and 30 carats in size. During the quarter, 720 carats were sold at an average price of US$472 for a total of US$340,003. A total of 694 carats were sold to Representation Investments (Pty) Ltd (previously Unitrade 1266 CC) for US$330,467 and 26 carats were sold to the State Diamond Trader for US$9,536. Sale of the Schmidtsdrift operation In August 2008, the Company entered into an option agreement to sell the Schmidtsdrift operation to New African Mining AG (NAM). Under the Option Agreement, NAM paid a non-refundable option fee of US$500,000 for an exclusive option to conclude an agreement for the sale of the Company’s interests in the Schmidtsdrift operation.

For

per

sona

l use

onl

y

LONRHO MINING LIMITED 19 December 2008 ACN 111 501 663 Page | - 6 - QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

On 6 October 2008 the Company signed formal agreements (the agreement) for the sale of the Schmidtsdrift operation. In terms of the agreement, NAM was to acquire all the Schmidtsdrift assets from Lonrho. This included all plant and equipment on the Schmidtsdrift site, the prospecting right for the Schmidtsdrift property, all rehabilitation deposits for the Schmidtsdrift property and the 80% shareholding in Schmidtsdrift Mining Enterprises (Pty) Ltd (collectively hereafter referred to as the Schmidtsdrift asset). The total purchase consideration for the Schmidtsdrift asset was US$11.8 million payable in cash. In addition, NAM was to assume rehabilitation liabilities of US$1.4 million. On 31 October 2008 NAM paid the required US$500,000 into trust with their lawyers in terms of the agreement. The US$500,000 was to be released to the Company on the Effective Date – refer to the Company’s 31 August 2008 half year report. On 14 November 2008 the South African Competition Commission granted the unconditional approval for the sale of the Schmidtsdrift asset. The Effective Date of the Sale, in terms of the agreement, is the date of approval by the Competition Commission, namely 14 November 2008. NAM has instructed their lawyers not to release the US$500,000 held in trust and has failed to make any further payments in terms of the agreement. The Company has served NAM with notice to remedy their breaches and the agreement will now be cancelled. The South African companies are likely to be placed into liquidation and this process has commenced. KAMFERSDAM – SOUTH AFRICA In November 2007, the Company agreed to sell certain tailings dumps near Kimberley in South Africa and its Kamfersdam new order prospecting rights to Meepo Investment Consortium (Pty) Ltd for A$3.7 million (see announcements dated 15 and 28 November 2007). De Beers has approved the sale of the tailings dumps which was a condition of the transaction. Completion of the sale of the new order prospecting rights will also now occur subject to receiving final approval of that transaction from the Department of Minerals and Energy. No exploration costs have been incurred by the Company on this asset during the quarter. GROEN RIVIER – SOUTH AFRICA The Groen River prospect is an exploration alluvial diamond prospect located in Namaqualand adjacent to an exploration programme conducted by Firestone Diamonds and De Beers. No exploration costs have been incurred by the Company on this asset during the quarter. KLIPSPRINGER JOINT VENTURE – SOUTH AFRICA Background The Company owns a 20 percent interest in the Mwana Africa Plc (Mwana) operated Klipspringer mine.

For

per

sona

l use

onl

y

LONRHO MINING LIMITED 19 December 2008 ACN 111 501 663 Page | - 7 - QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER 2008

During 2007 a trial mining and bulk sampling exercise was undertaken by Mwana to try a new mining method and test market conditions. The mining method was changed to a more conventional underhand stoping method as opposed to the long hole open stoping method used in the initial mine design. The mine was re-engineered with the new mining method resulting in reduced tonnage along with a significant reduction in manpower and costs but designed to operate in a strong Rand environment. The trial mining programme was operated successfully and in December 2007 a decision was made by Mwana to commence commercial production. Production and Sales for the Quarter Production for the quarter was 7,579 carats from 15,487 ROM tonnes at an average grade of 48.94 carats per hundred tonnes. During the quarter, 8,681 carats were sold at an average price of US$97 per carat raising a total of US$838,257. The mine currently employs 210 people including contractors. This is under review given the current market conditions. No costs were incurred by the Company during the quarter. MILES KENNEDY DIRECTOR 19 December 2008 Competent Persons Disclosure The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves has been prepared by Consulting Geologist Manfred Marx and Consulting Consulting Geophysicist, E.O. Kostlin (in relation to Angola) and Gerhard du Plessis (in relation to South Africa). Mr Marx and Mr Kostlin are consultants to the Company and have sufficient experience with the relevant style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to be qualified as a Competent Person as defined in the 2004 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr du Plessis is a full time employee of the Company and has sufficient experience with the relevant style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to be qualified as a Competent Person as defined in the 2004 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Each of Mr Marx, Mr Kostlin and Dr du Plessis consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

For

per

sona

l use

onl

y