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  Stock Exchange Announcement

Date:	21 November 2008
On behalf of:	Target Resources plc

Target Resources plc ('Target' or the 'Company')

Operational Update

 

Target Resources plc (AIM:TGT), the alluvial diamond and gold mining company operating in Sierra Leone, is pleased to make the following update to the market:

Highlights:

• All equipment necessary to operate the Dense Media Separation plant ('DMS') has been delivered, installed and is operational. 

• New 200 tph scrubber has landed in Freetown and is planned to be installed and commissioned by the end of November.

• Production of terrace gravel started in October, with output averaging 3.5 cpht.  Output to date has yielded 847 carats, with a Kimberley Process valuation average of $682 per carat on exported parcels.

• Twinkle 10' dredge and Dove jig both fully installed and commissioned; waiting for the water levels to subside before commencement of dredging operations.

• Drilling programme is continuing, with further significant gravel resources results identified.

Equipment:

With the arrival of the new 200tph scrubber, planned to be operational by the end of November 2008, the mine construction phase is complete.

The dredging operation is ready to commence following the extensive commissioning and training of the operators on the sophisticated 10' Rotor Head Dredge from Twinkle Co. The dredge is floated and connected to a large Dove jig ready to process gravels from the river. Adjustments are being made to improve the interoperability of the dredge and the jig.

 

In the past 2 weeks the dredge has cleared sand from the section known as 'Pool 24' and we are awaiting the subsidence of the water level in order to begin dredging gravels. 

 

Diamond Production:

To date processing of gravel has been hampered by the small and old scrubber. Mining of gravel has continued, with gravel in excess of processing capacity being stockpiled. Once the new scrubber is installed production is planned to be ramped up to 3,500 tons a day. During installation of the new scrubber, there may be a few days with no production.

The quality of the diamonds produced is encouraging. The Sierra Leone Governmental Kimberley Process valued the last 3 exported parcels, of 847 carats in total, at an average of $682 per carat.

While appreciating that the above figures are only valuations, the last actual sale price achieved in the October 2008 sale to Laurelton Diamonds Inc was $580 per carat.  

Exploration:

An extensive drilling programme in our Bagbema area has indicated gravel resources for at least 6 months' work. We plan to start drilling in the 'waterfalls' area west of the Bagbe early in the New Year to establish new gravel resources.

Financial:

Once the new scrubber is fully operational and steady anticipated production levels are achieved, the Company should move to a cash flow positive position at an operational level. We maintain regular contact with our current debt funders and, should financial shortfall occur, are confident of extending the current facilities available to the Company. 

Commenting on the operation, Dr Nissim Levy, Managing Director, said:

'We are pleased to have started operations again and are encouraged by initial results. The new scrubber and dredge are scheduled to be in operation soon, which should result in our production levels increasing significantly, and see us move to a cash flow positive position'.

- ENDS -

  Enquiries:

Target Resources plc	20 7258 2300
Dr Nissim Levy, Managing Director	www.target-resources.co.uk
Nominated Adviser and Broker
Arbuthnot Securities	020 7012 2000
John Prior
Ed Burbidge

About Target 

• Target is an alluvial diamond mining and exploration company operating in Sierra Leone.

• Target is among the first large scale mining ventures to be established in Sierra Leone since the end of the civil war in 2002.

• The Company has 4,263 acres (17.25 Sq km) under mining leases in the rich diamond and gold area of Kono, which is recognised as the most productive area for diamond mining in Sierra Leone.

• The Company has Exclusive Prospecting Licences for Gold, covering 520 sq km in the Alluvial Gold area in the Tonkolili district and for Diamonds, covering 254 sq km in Kenema District, known for its 'fancy' diamonds.

  

Target Resources Plc 

16th Floor, Marble Arch Tower, 55 Bryanston Street London, W1H 7AA 

Tel +44 (0)20 7258 2300, Fax +44 (0)20 7258 2321 

Email:  info@target-resources.co.uk

Web: www.target-resources.co.uk

Registered in England and Wales, Company No 5566717

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