10 April 2013

Creon Resources Plc

("Creon" or "the Company")

New Investment and Strategic Update

Creon (AIM: CRO), the resource and resource infrastructure focussed investment company, is pleased to announce that it has acquired a 49% equity interest in Singapore based MGR Resources PTE Ltd ("MGR") (the "Investment").

About MGR

MGR is wholesale trader of ferrous metals and ore. It sources iron ore principally from Africa, India and the Middle East and sells on to buyers in East Asia including China. In the 18 month period to 28 February 2013, MGR had unaudited revenues of approximately US$29.5 million and a net profit of approximately US$1.0 million.

Terms of the Investment

Creon has acquired 49% of MGR's equity share capital, for US$49,900 from Fortus PTE Ltd ("Fortus"). The balance of MGR's share capital will be held by Fortus.

Creon has agreed to provide a three year unsecured 15% coupon convertible loan to MGR of up to US$1.95 million to assist MGR to increase its trading operations ("Convertible Loan"). The Convertible Loan can be converted at any time during the three year period at Creon's option into new shares in MGR at US$1 per new share.

Rationale for the Investment and Strategic Update

In the last 9 months, Creon has transformed itself, implemented its strategy and made and progressed its first investment:

·     In June 2012, Creon successfully strengthened its balance sheet via an open offer to all shareholders that raised approximately £12.0 million. It then set its strategy as investing in the resource and resource infrastructure sector.

·     Shortly thereafter, in July 2012, Creon made its first investment of US$15.3 million investment for 46.5% of a joint venture ("JV") with the multi-billion dollar China based shipbuilder, Yangzijiang Shipbuilding (Holdings) Pte Ltd, which is listed on the Singapore Stock Exchange (SP:YZJ) ("YZJ Holdings") in the offshore oil and gas infrastructure sector. The JV has a 40% stake in Jiangsu Yangzijiang Offshore Engineering Co. Ltd. ("YZJOE").

·     In December 2012, YZJOE entered into a US$170 million contract to construct and deliver one unit of a Le Tourneau Super 116E Class design self-elevating Mobile Offshore Jack up Drilling Rig.

Since then, against a background of increasing demand and lead times for deep water offshore rigs, YZJOE has secured licences for the Le Tourneau kit designs and the drilling package.

Furthermore, construction of YZJOE's new rig yard on the prime shorefront land in Taicang, Jiangsu Province on China's east coast, some 50 miles north of Shanghai is now well under way. Within 18 months, the new yard is expected to take on the final stages of the outfitting and construction of YZJOE's first rig order announced in December 2012. The new yard is in the ideal location for rig construction due to its deep water and absence of bridges en route to the open sea.

Today, Creon has announced its second investment, the investment in MGR, which expands Creon's activities into the ferrous metals sector. The Investment will provide recurring income for Creon in the form of interest on the Convertible Loan. Moreover, the Investment provides Creon with entry into and to the ferrous metals sector.

Glen Lau, CEO of Creon, said:

"We are delighted with the continuing progress made by Creon in the resource infrastructure sector. The investment in MGR marks Creon's first foray into the resource trading sector, a sector that shows strong growth. MGR intends to capitalise on that growth by expanding volumes in iron ore as well as entering into other ferrous metal (e.g. chromium, nickel). Creon's wide and deep international contact base in East Asia, the Middle East and Africa will facilitate MGR in taking advantage of the increasing demand for ferrous metals being driven by global urbanisation. MGR is currently working on a number of significant mandates, at least one of which MGR anticipates securing over the coming months"

Related Party Transaction

Glen Lau, Creon's CEO, is a director, but not a shareholder, of Fortus. Accordingly, the Convertible Loan represents a Related Party Transaction for the purposes of AIM Rule 13, and accordingly is conditional upon the approval of the independent directors of the Company ("Independent Directors"). The Independent Directors have given careful consideration to the terms of the Convertible Loan in order to determine whether it is fair and reasonable for the Company's shareholders as a whole.  Having consulted with Daniel Stewart & Company Plc, the Company's nominated adviser, the Independent Directors believe that Creon Asia's entering into the Convertible Loan is fair and reasonable insofar as the Company's shareholders are concerned.

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About Creon Resources plc

Creon Resources Plc is an investment company whose policy is to invest principally in the resources and resources infrastructure sectors. Creon has a deep and broad global network and wide contact base in these sectors, including in East and South East Asia and the Middle East which it leverages to source and make investments. These sectors exhibit high growth and are strategically important. Creon is a proactive investor which assists its investee companies to grow by providing investment, expertise and contacts.