Exploring for Gold and
Mineral deposits in New Zealand


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14th May 2012

Company Update


The Board remains acutely aware that shareholders have been anticipating a conclusion to our negotiations with Kazakh Resources Ltd ("KRL").

Draft Sales Agreements ("the Agreements") are in place for two projects with KRL. However, further negotiations remain dependent on the Kazakh government's position relating to the Law of Subsoil and Subsoil Use ("the Law") which was passed in 2010. The Law designates certain resources, including gold and tungsten, as `strategic resources' and gives the Kazakh government certain rights of pre-emptive ownership with regard to these resources. The Law also allows the Kazakh government to review projects and determine whether a government agency should become a strategic partner in the projects.

KRL and its local counter-parties are still waiting for the Kazakh government to review the two projects and to decide whether it should become a partner and if so, what equity participation it would have in each project and which government agency or agencies should become a partner or partners in the projects. In addition, it is unclear whether tungsten is covered by the February 2012 German/Kazakh partnership "in the area of raw materials".

The Board is of the view that the Agreements are of commercial merit and will continue to pursue the opportunity but can give no clear indication of timescales at this point. Some encouragement may be drawn from media reports in late April from the 3rd international mining industry forum Minex Central Asia 2012 in Astana. These cite First Deputy Prime-Minister Serik Ahmetov as saying that the Kazakh government is going to cut administrative barriers and simplify approval procedures related to obtaining subsoil use rights.

However, the implementation of the Agreements remain dependent on decisions by, and approval from, the Kazakh government which may continue to take some time.


As noted in our previous announcements, until these negotiations have completed and funds are in place, Agricola and its smaller early stage Moroccan projects have had to maintain a holding pattern.

As shareholders are aware, in November 2009, the Company was granted two gold exploration licenses in the Tan Tan Province, Guelmin-Es Semara region of Southern Morocco. Under the terms of a Joint Venture Agreement (JVA) with the Minerals Explorations Branch of the Moroccan State Bureau for Mines and Hydrocarbons (ONHYM) Agricola is entitled to earn up to 100% of the projects by funding all exploration costs and has management control of the exploration phase. The JVA terms also included a financial requirement for Agricola to spend Euros 350,000 in the twelve months to November 2010. Agricola has received an informal notification from ONHYM that they intend to terminate the JVA on the grounds that Agricola has not met the financial requirements.

While the Board is of the view that it may be possible to extend the JVA, the Moroccan assets are at a very early stage. In the Board's opinion, any funding should be applied either to KRL or other opportunities which offer potentially greater return at lower commercial risk.

New Zealand

In view of the delays in Kazakhstan, over the past few months, the Board has continued to look for other opportunities which are capable of delivering long term opportunities to shareholders. In particular, the Board has identified projects of potential interest in New Zealand which it intends exploring further over the next few weeks.

The Board would like to thank all its shareholders for their continued patience and support. We are working hard to ensure a successful conclusion to our various negotiations and we look forward to providing a further update in the weeks ahead.

The Directors of Agricola are responsible for the content of this announcement.


Agricola Resources PLC
+353 (0) 85 739 2674
Clive Sinclair-Poulton

Alexander David Securities Limited
+44 (0)20 7448 9800
David Scott/ Fiona Kinghorn