Aurum Mining plc joined the AIM market of the London Stock Exchange in May 2004 with the strategy of acquiring gold projects in the Former Soviet Union (FSU). The Company's management and consultancy team - which brings together formidable experience of mining, the FSU and financial markets - has consistently delivered on its strategy with the result that the Company is on the point of transformation from exploration to production.

The Andash Project

Aurum acquired the licence to the Andash exploration area in northern Kyrgyz in January 2005 and has since advanced Zone 1 to a Proven and Probable reserve of 1.1 million ozs of gold and gold equivalent in copper. The licence area, which extends to 53 sq km, includes a further two ore bodies and five exploration zones, offering a substantial opportunity to increase the Andash Project's resource base and to maximise the mine life and cost efficiency of the proposed mine at Andash Zone 1. Aurum received a Mining Licence for Zone 1 from the Kyrgyz authorities in 2006 and also completed a fully bankable feasibility study, led by Wardell Armstrong International. Zone 1 has a JORC compliant P&P resource of 16Mt of ore at a grade of 1.05g/t and 0.4% copper.

Andash Mining Company (AMC) Aurum Mining’s subsidiary in Kyrgyzstan successfully completed the technical design work for the construction of the open-cast mine at Zone 1 during 2007. The design documentation has been approved by the relevant Kyrgyz authorities

Project Update

2008 began very positively and we made substantial progress with the Andash project, specifically in preparations for the construction of the Zone 1 mine, by way of further exploration work throughout the Andash licence area and in developing our social responsibility initiatives in the Kyrgyz Republic.

Our momentum was interrupted in February 2008 by a civil case brought under the laws of the Kyrgyz Republic, which effectively challenges our ownership of the Andash licence. The immediate impact of the case, which we viewed from the outset as being entirely without merit, was an enforced cessation of the construction of the Zone 1 mine and the temporary suspension of trading of our shares on AIM.

This civil case, the nature of which is virtually impossible to envisage under UK law, has been highly disruptive. It has impacted the timeline of bringing the Zone 1 mine into production, absorbed management time, added to our costs and undermined shareholder value.

The worsening operating environment in the Kyrgyz Republic, which is highlighted by the impact that a seemingly fraudulent and unfounded claim has had on our business, is of deep concern to the Board. As a result we have decided to cease all further investment into the Andash project until the political and operational environments improve sufficiently to warrant further investment.

As outlined in January 2009, the Board continues to seek and evaluate ways to maximise value from the Andash asset. We are still committed to bringing Andash into production as quickly as possible, so whilst debt and equity markets are closed, we are working hard on making Andash more attractive to investors to enhance the opportunity to establish relationships with appropriate business partners.