AAAM African Aura

TIDMAAAM

RNS Number : 6634U

African Aura Mining Inc.

20 October 2010

20 October 2010

TSX-V: AUR

AIM: AAAM

RECEIPT OF US$4.2M FROM SEVERSTAL RESOURCES

African Aura Mining Inc. ("African Aura" or the "Company"), the TSX--V (AUR) and AIM (AAAM) listed exploration and development company focused on gold and iron ore in sub-Saharan Africa, announces that it has received US$4.2m from Lybica Holding B.V., an indirect wholly-owned Dutch subsidiary of Severstal Resources ("Severstal"), pursuant to the terms of its agreement with Severstal of 23 May 2008 ("the Agreement").

The payment represents the deferred one third consideration, payable to African Aura two years post-completion as part of the Agreement, for the shares acquired by Severstal in the original Putu project joint venture company, African Iron Ore Group Ltd ("AIOG"). The first tranche of US$8.3m representing two thirds of the amount payable was received from Severstal on completion of the agreement on the 10 December 2008. AIOG, now named Severstal Liberia Iron Ore, is the holding company for the Putu iron ore project located in eastern Liberia. African Aura retains a 38.5% interest in the Putu project.

The Company is debt free and has a cash position of approximately GBP8.9m / US$14m as of October 2010.

Luis da Silva, President and CEO of African Aura commented:

"The early payment of these funds from Severstal further enhances the Company's treasury following the conversion of the loan note holders in the last two weeks. Debt free and with more cash to apply into our projects, we will continue to do what we do best and add value at the project level."

About African Aura Mining Inc.

African Aura is an established exploration and development company listed on the TSX-V (AUR) and London's AIM (AAAM). The Company operates two divisions, namely: iron ore and gold:

- The iron ore division includes its 38.5% interest in the Putu iron ore project in Liberia, which is moving through pre-feasibility managed by joint venture partner Severstal Resources (the mining division of Moscow listed OAO Severstal). In September 2010 Putu was granted a 25 year renewable Mineral Development Agreement by the Government of Liberia. The division also includes a 100% interest in the Nkout iron ore project and surrounding iron targets in Cameroon which is subject to a resource definition drilling programme.

- The gold division includes the multi million ounce potential New Liberty greenstone gold deposit, which is being advanced through a bankable feasibility study, and the proximal Ndablama, Weaju, Silver Hills and Gondoja gold projects all within the Company's Bea Mountain 25 year renewable Mineral Development Agreement. .

In addition, the Company presently has a 22% interest in AIM-listed diamond producer Stellar Diamonds Plc (AIM: STEL, www.stellar-diamonds.com).

The Company has a highly motivated and experienced team with a track record of discovering mines and taking projects through development and into production. As a pioneer, African Aura has attracted some excellent strategic partners and shareholders, always with the objective of preserving or enhancing shareholder value. For further information on the Company you are invited to visit its website at www.african-aura.com or SEDAR's website at www.sedar.com, or contact one of the following:

African Aura Mining Inc.

Luis da Silva, President & CEO Tel: +44 (0) 20 7257 2930

Evolution Securities Limited

Simon Edwards / Tim Redfern / Neil Elliot Tel: +44 (0) 20 7071 4300

Pelham Bell Pottinger

Charles Vivian / James MacFarlane Tel: +44 (0) 20 7861 3232

Forward-looking Statements

This press release includes certain forward-looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the future plans and objectives of African Aura, are forward-looking statements that involve various known and unknown risks and uncertainties as well as other factors. Such forward-looking statements are subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including delays in obtaining or failure to obtain required regulatory approvals. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Any forward-looking statements speak only as of the date hereof and, except as may be required by applicable law, African Aura disclaim any obligation to update or modify such forward-looking statements, either as a result of new information, future events or for any other reason.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

Ends

This information is provided by RNS

The company news service from the London Stock Exchange

END

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