Lonrho Mining Quarterly Report

RNS Number : 4842K
Lonrho PLC
19 December 2008

19 December 2008

LONRHO PLC
("Lonrho" or "the Company")

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

Lonrho (AIM: LONR), the conglomerate with a structured portfolio of African investments, is pleased to note the following announcement
to the Australian Securities Exchange this morning by Lonrho Mining Ltd (formerly known as Nare Diamonds), which is owned 24.16% by Lonrho:

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.

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.

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.

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.

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.

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.

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.

LONRHO ENQUIRIES

Lonrho Plc +44 (0)20 7016 5105
David Lenigas, Executive Chairman +44 (0)7881 825 378
Geoffrey White, Chief Executive Officer +44 (0)7717 307 308
Emma de Borchgrave, Executive Director +44 (0)7867 785 177

Pelham PR
Charles Vivian +44 (0) 20 7743 6672
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7743 6375
+44 (0) 7841 672831

Collins Stewart Europe : NOMAD to Lonrho
Hugh Field +44 (0) 20 7523 8350

About LONRHO:

Lonrho Plc is an expanding conglomerate that is rapidly growing a successful business throughout Africa. The Company's shares are traded
on the London AIM stock exchange (LONR). Lonrho is strategically focused on the development of business opportunities in infrastructure,
transportation, support services, hotels and natural resources. The Company has over 19,000 shareholders and substantial institutional
backing to support its mandate to build a profitable business that plays a fundamental role in the development of the African economy.

Since 2006, the Company has invested in or acquired control of:

Hotel Cardoso - www.hotelcardoso.co.mz (retained)
Lonrho Mining - www.lonrhomining.com
Luba Freeport - www.lubafreeport.com
Fly540 - www.fly540.com
Swissta Holdings - www.swissta.com
SA Independent Liner Services - www.saliners.com
Bytes and Pieces www.bytespieces.com
Kwikbuild - www.e-kwikbuild.co.za
LonZim - www.lonzim.co.uk

This information is provided by RNS
The company news service from the London Stock Exchange

END

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