Namibian Resources Plc - 1st Quarter Progress Report

                             RNS Number:
                       Namibian Resources Plc
                            04 July 2008


     Progress report for period from 1st March to 31st May 2008.


General.

During the period production by Sonnberg Diamonds (Namibian
Resources' 100%-owned subsidiary) was derived from the Salzpfanne and
the East Salztal North deposits.  The screening plant used for the
Salzpfanne deposit was moved to immediately adjacent to that deposit
in order to reduce operating costs.  A small amount of prospecting
was carried out in the Annatal SE valley.  Total production from all
sources was 567 ct at an average diamond size of 0.44 ct/st.

Mining.

Mining continued during the quarter at the Salzpfanne deposit where
Block A, the southernmost section, was mined out.  A total of 234 ct
at an average diamond size of 0.46 ct/st was derived from this
source.  The southern margin of Block A has been artificially defined
where water is encountered in the salt pan.  A trench extended into
the pan confirmed the continuation of the diamond mineralisation in
that direction but mining will not be attempted until a means of
handling the highly corrosive, high-salinity water in the pan.

Following completion of Block A, Block B immediately to the north was
brought into production.  A total of 106 ct at an average diamond
size of 0.44 ct/st was produced from there.  The slightly smaller
diamond size from Block B is expected as prospecting has shown that
there is a decline in diamond size northwards through the Salzpfanne
deposit.

During May, the screening plant that is used for the Salzpfanne
deposit was moved from West Salztal to immediately adjacent to the
Salzpfanne deposit.  This move could only be undertaken once a
sufficient area of the deposit had been mined to provide a working
area around the plant.  During this move, however, there was loss of
production from this source for much of May.

Production continued throughout the quarter from the East Salztal
North deposit.  This is an extension of the rich East Salztal deposit
that had been mined during 2006-7.  The northern extension is,
however, much sandier and consequently lower in grade.  A total of
223 ct at an average size of 0.42 ct/st was produced from this
location during the quarter.  The production grade to date is
significantly in advance of the prospecting grade.  The original
resource estimate for this deposit of 400 ct is therefore likely to
be exceeded.

Prospecting.

Only a limited amount of prospecting was carried out during the
quarter.  This involved cleaning a thin layer of gravel from around a
bedrock ridge that runs across the floor of the Annatal SE valley
which lies to the east of the East Salztal valley.  It was
anticipated that the bedrock ridge would form a trap site against
which diamonds would be concentrated.  A total of 4.4 ct at an
average diamond size of 0.44 ct/st was recovered.  The recovered
grade was relatively high at 14 cpht but the volumes of  the deposit
were small.  The average diamond size is promising and in the future
a sample trench will be excavated across the northern slope of the
Annatal SE basin where the deposit is thicker.  No estimation of
diamond resources for Annatal SE can be based on the current sampling
information.

Fuel cost and diamond revenues.

During the last year there has been a steady increase in diesel
prices in Namibia.  In the year to April 2008 this has been
approximately 40%, net of the government rebate for mining companies
(which is presently slightly below 10% of the gross).  Fuel comprises
about 20% of Sonnberg's total operating costs, so this increase is of
significance for Sonnberg's operations.  However, the transfer of the
screening plant to immediately adjacent to the Salzpfanne deposit
cuts out a 20-minute haulage cycle for mined deposit, saving on fuel
costs.

Sonnberg produces very high quality diamonds (less than 5% industrial
quality) at a good average size.  Sonnberg's production is sold by
Namdeb to the Namibian Diamond Trading Company in Windhoek with
diamond prices being established in US dollar terms.  Sonnberg's
diamond received values in local currency terms have increased by
around 25% during the quarter compared with the latter part of 2007.
As the quality and size of the diamonds being produced by Sonnberg
during the periods of comparison are similar this represents an
increase in the real value.  It results from both a diamond market
increase as well as a change in the Namibian to US dollar exchange
rates.  This increase in received values more than compensates for
the increase in fuel costs.

Prospects.

During June both screening plants were back in operation at their
respective deposits.  For the June to August quarter it is
anticipated to continue with production from both deposits.


Tony Carlton
Chief Executive Director

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