Braemore Resources plc – major shareholder update

Braemore Resources plc announces that it has entered into an agreement to further regulate the relationship between the Company and its major shareholder, Atomaer Holdings Pty Ltd. The agreement removes the potential for competition between the two companies and allows Braemore the full benefit of a major shareholder who actively supports the Braemore business strategy.

Key highlights of the agreement include:

• Braemore and Atomaer sign agreement to address potential areas of competition and agree in principal to resolve overhang of Performance Shares
• Specified terms by which Braemore can acquire new nickel and PGM sulphide projects from Atomaer
• Specified terms linking Atomaer’s shareholding in Braemore to its representation on the Braemore board

Atomaer is the registered holder of 315 million ordinary shares, representing approximately 40% of the ordinary shares in issue, and 305 million performance shares of £0.001 each having the rights and restrictions set out in the articles of association of the Company. Atomaer’s contribution in the technological area of Braemore’s development work has been significant, and a strong relationship has ensued. In the current economic climate, the support of a major shareholder has been crucial in Braemore’s ability to continue with its stated business model.

According to Braemore’s Chief Executive Officer, Leon Coetzer, “The agreement clarifies the capital structure of the Company and the terms of conversion of the Performance Shares, providing greater certainty to all shareholders.  It also provides Braemore with the benefit of a first right of refusal over the acquisition of any interests and/or rights to nickel and/or platinum sulphide projects acquired by an Atomaer Group Company on commercial terms. ”
“Key to the agreement is that the performance shares are now linked to the Leinster Nickel Sulphide Tailings Project and that Braemore and Atomaer have agreed to negotiate in good faith the buyback of the Performance Shares; a reinforcement of the on-going positive relationship between the two companies.”

The key terms of the agreement are as follows:

• The company will adopt the new articles of association, subject to regulatory and shareholder agreement.
• The 305 million Performance Shares currently issued to Atomaer will only convert into ordinary shares upon Braemore entering into an agreement with BHP Billiton Nickel West Pty Limited for the exploitation of the Leinster Nickel Sulphide Tailings Project.
• Braemore and Atomaer have agreed to negotiate in good faith the buyback of the Performance Shares on commercial terms to remove any perceived overhang on Braemore’s ordinary shares (subject to regulatory and shareholder approval, if required) after completion of the order of magnitude economic evaluation and engineering scoping studies as agreed to with BHP Billiton, expected to be completed by early November 2008.
• Braemore will have a first right of refusal to acquire interests and rights in each new Nickel and/or Platinum Sulphide Project acquired by any Atomaer Group Company on commercial terms for as long as Atomaer is the registered holder of 30% or more of the issued ordinary shares of Braemore. This replaces the Nickel Rights under the Share Sale Agreement dated 9 May 2005 and entered into between Atomaer, Braemore and Braemore Nickel Pty Limited, which have been cancelled. In addition, Braemore is to reimburse Atomaer for all costs incurred by Atomaer, up to a maximum of A$300,000, in performing its obligations to Braemore in the identification, investigation, evaluation, acquisition and offering of rights to Pan Palladium Limited’s Grass Valley Project.
• For as long as Atomaer is registered holder of 30% or more of the issued ordinary shares in the Company it will be entitled to appoint two directors to the board of directors of Braemore. In order to ensure good corporate governance, it has been agreed, amongst others, that a committee of directors of the Company who are not directors of Atomaer be formed to take decisions relating to matters involving an Atomaer Group Company.
• Project management functions previously performed by Atomaer will be transferred to a Braemore Group Company.
• Atomaer has agreed to a restriction on competition with any Braemore Group Company with respect to the smelting or refining of nickel and platinum group metals.  Further details of this restriction are set out in the Relationship Agreemen