Press releases

Next phase of Kalagadi Manganese project

19 December 2008

MDM Engineering Group Limited is pleased to announce it has entered into negotiations regarding the next phase of work with Kalahari Resources Inc (“Kalahari Resources”) for their Kalagadi Manganese project in South Africa. MDM Engineering and Kalahari Resources have agreed the scope of work, which is scheduled to commence in January 2009.

The Company has been in ongoing contract negotiations with Kalahari Resources for the full EPCM contract for the plant since it completed the bankable feasibility study in September 2008.

The intention is that MDM Engineering will carry out the front end engineering design (“FEED”) for the project which will incorporate detailed design for the Umtu Sinter Plant at Hotazel and the Coega Smelter Plant at Port Elizabeth in South Africa.

The FEED will also incorporate a CBE (Control Budget Estimate) and the identification of the critical path items and procurement schedules for these critical path items to ensure that the project schedule is kept on track. The project will also take advantage of the current economic environment which has resulted in lower input costs due to the weakening in the price of steel, copper and associated equipment, construction and sub-contractor costs.

MDM Engineering’s Chief Executive Grant Lowman commented:
“This phased package approach is positive news for us as we continue to build on our long-standing track record of converting studies into execution projects. Kalagadi Manganese is a significant project for MDM Engineering as we continue to enhance our project base to create value for our shareholders and strengthen our presence in the mining services industry in Africa.”

For further information:

MDM Engineering Group Limited

Grant Lowman / George Bennett
Tel: +27 (11) 993-4300

Numis Securities Limited

John Harrison (Nominated Adviser)
Tel: +44 (0) 207 260 1000

James Black (Corporate Broker)
Tel: +44 (0) 207 260 1000

Pelham Public Relations

Chelsea Hayes
Tel : +44 (0) 207 743 6675

Key Information

MDM Engineering Group Limited is a minerals process and project management company that provides services to the mining industry. The Company provides a wide range of services from preliminary and final feasibility studies, through to plant design, construction and commissioning, to mining companies. To date, the Company's clients have largely been junior and mid-tier mining corporations with operations in Africa.

The Company was established in November 2006. In February 2007 the Group purchased out of liquidation certain of the intellectual property and fixed assets of MDM Ferroman (Pty) Limited ("MDMF"), a mining services company with an established track record of providing services to the African mining industry. The Company subsequently employed a number of the technical staff of MDMF, and implemented an approach to project execution based on a transparent, open-book Engineering, Procurement, Construction Management ("EPCM" or "cost-plus") basis. In May 2008, the Company successfully listed on the AIM market of the London Stock Exchange. The Company now has what the directors consider to be a strong portfolio of current studies and execution projects and a strong outlook of prospective work, which the directors believe provides the Company with an attractive and visible revenue stream to drive the Company's growth in the future.

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