PALLINGHURST SELLS PART OF ITS TSHIPI MANGANESE INVESTMENT TO POSCO

HAMILTON, Bermuda - 05 June, 2009 - Pallinghurst Resources (Guernsey) Limited (Ticker: PALLRES.BH) is pleased to announce the purchase by a subsidiary of POSCO of South Korea of an effective 11.36% interest in Tshipi é Ntle Manganese Mining (Pty) Ltd ("Tshipi") from the existing Pallinghurst co-investors, for a total consideration of US$34.3mm.

Pallinghurst, as one of the existing Pallinghurst co-investors in Tshipi, has disposed of an effective 2.27% stake for US$6.9mm.  The disposal is effective 1 July 2009 and is subject to the award of a mining permit to the Tshipi project.  The total interest of the Pallinghurst co-investors in Tshipi will remain constant at 49.9%. The 50.1% remaining interest in Tshipi will continue to be held by the broad based BEE group, Ntsimbintle Mining (Pty) Ltd.

Rationale

Manganese is a key raw material mainly used in the production of steel and POSCO is one of the world's leading steel producers.  The inclusion of POSCO as a Tshipi partner will allow the Tshipi project to benefit from POSCO's technical capability and experience. Additionally, POSCO have negotiated the right to an off-take agreement once the mine enters production.  POSCO will purchase a minimum of 11% and a maximum of 20% of the total manganese ore production from Tshipi each year, at market related prices.

Consideration

Pallinghurst's share of the disposal consideration is US$6.9mm with the disposal decreasing Pallinghurst's effective stake in Tshipi from 9.98% to 7.71%. It is anticipated that the consideration will be used for further investments or general corporate purposes.

Financial effects

The fair valuation of Pallinghurst's remaining 7.71% stake is US$23.1mm based on the price paid by POSCO in this transaction and is consistent with the fair valuation used in the most recent audited annual report to 31 December 2008.  The headline earnings, net assets and net tangible assets per share of Pallinghurst will therefore not change by more than 3% as a result of the implementation of the transaction.

Condition precedent to the sale

The sale is subject to the award of a mining permit to the Tshipi project by the South African Department of Minerals and Energy.

Categorisation of the disposal

The disposal has been categorised as a category 2 transaction in terms of section 9.5(a) of the JSE Listings Requirements.

Pallinghurst Chairman Brian Gilbertson said: "I welcome POSCO as a partner in an exciting manganese project, and see this as a vote of confidence in the project from one of the world's leading steel producers. For South Africa, this is also an important transaction, since this direct investment into the resources space shows international investor confidence and is set to create new jobs".

Pallinghurst CEO Arne H. Frandsen said: "I look forward to a long-term partnership with POSCO in Tshipi as we unlock value in what is set to be one of the world's largest unmined manganese deposits, which can be brought to market at a very attractive cost profile."

For further information please contact:

College Hill                           +27 11 447 3030

Johannes van Niekerk          +27 82 921 9110

BSX Sponsor: First Bermuda Group Limited

Contact:

Michael Schroter, First Bermuda Group               (441) 295-1330