Financial Update

Angel Mining plc (the "Company" or "Angel Mining")
AIM: ANGM

The Board of Angel Mining, the Greenland focused mining company, is pleased to confirm that a new financing package has been agreed, the components of which are still subject to contract and, in part, subject to shareholder approval.

The key features of the new finance plan are as follows:

Cyrus Capital Partners, LP (“Cyrus”)

FBC Holdings s.a.r.l (“FBC”) and Cyrus have agreed that the repayment terms of its short term loan and capitalised interest of US$21,868,000 will be extended and that a series of payments will be made commencing on 15 February 2011 and ending on 31 December 2011 based on a calculation of free cash from trading and other sources, including any new equity finance raised. The conversion rights on its loan notes will be extended to 31 December 2016 and its royalty entitlement will be increased by a further 3% to 5% of sales value less the cash cost.

New Potential Lender

It has also been agreed that, subject to Angel Mining shareholder approval, the Company should take up US$25,000,000 of a new financing facility offered by a New York based financing company (the “Lender”), which will enable the Company to issue 10% Eurobonds (“Eurobonds”) as it draws down on the facility. The Company is hoping to have contracts finalised on this facility within the next week. On draw down the Lender will have the right, for a period of 45 days, to subscribe for such number of ordinary shares in the capital of the Company (“Ordinary Shares”) at the closing share price per Ordinary Share on the day before the draw down request (“the Investment Share Price”), as will have an aggregate subscription price equal to the sterling equivalent of 110% of the draw down value (“Options”). In addition, the Lender will receive warrants, exercisable for a period of 12 months, to subscribe for such number of Ordinary Shares at the Investment Share Price, as will have an aggregate subscription price equal to the sterling equivalent of 25% of the draw down value (“Warrants”). In the case of both the Warrants and Options, the US Dollar amount of the Eurobonds will be converted into sterling by reference to the closing mid-point spot exchange rate prevailing on the foreign exchange market for the conversion of $ into £ on the date of the drawdown request as published in respect of that day by the Financial Times, subject to a minimum rate of $1 to £1. If the US$/£ rate falls below the minimum rate, the Company will not be able to deliver a drawdown request. The Lender will pay for the equity investment and warrant subscription either in cash, or in 4 year 2% loan notes, which may be offset against the repayment of the Eurobonds. This facility will be secured by a facility fee of 5% which may be satisfied in cash or in Ordinary Shares. It is payable on approval of the Angel Mining shareholders and will be based on the volume weighted average price for the 5 trading days preceding the date of the establishment of the Eurobond programme, which is likely to be the date of the general meeting at which the facility will, hopefully, be approved or a date shortly thereafter.

The above relates to the finance facility that was referred to in the Company’s press release dated 8 July 2010. The Company did have the opportunity of entering into a US$100,000,000 commitment but has now decided to take an initial facility of US$25,000,000. This change of strategy has been decided upon for the following reasons:

1. the Directors did not wish to incur a facility fee in excess of the Company’s actual needs;

2. it is understood that the Company can extend the facility in the future, if needed, and if it is considered to be the most appropriate means of financing the development of the Group; and

3. the Board believes that much of the finance for the development of Black Angel should be debt based project finance, to restrict any unnecessary equity dilution.

A further announcement will be made in due course if the contract with the Lender is executed, and a notice of general meeting is dispatched to shareholders.

The Company is now focussed on:

1. getting Nalunaq into full scale production and repaying the Cyrus short term loan;

2. completing an updated version of the bankable feasibility study for Black Angel; and

3. developing new projects for the benefit of the longer term.

Angel Mining CEO, Nicholas Hall, commented, “The Company now has the prospect of becoming cash generative in the near term from trading for the first time in its history. It has the backing of Cyrus, and a first class team coming together both in Greenland and here in the UK. Although there is still much work to be done, it is clear that the Group has a great opportunity to develop existing and new mining projects.”