RNS Release - Loan Transactions

31 October 2011

Prosperity Minerals Holdings Limited

 ("Prosperity" or "the Company")

Loan transactions in relation to Prosperity's investment in Brazilian iron ore mines

Prosperity Minerals Holdings Limited ("PMHL.L") is an iron ore operator serving the People's Republic of China ("PRC") and a real estate owner and developer in the same market. It is also an investor in two PRC cement manufacturers.

Between January 2011 and August 2011, Prosperity made loans of US$ 12.8 million (the "Original Loans") to Globest Participaceos Ltda ("GPL"), at an interest rate of 8 per cent per annum.

On 31 October 2011, Pro-Rise Limited ("Pro-Rise"), a wholly owned subsidiary of the Company, entered into a loan agreement with GPL, under which Pro-Rise agreed to provide GPL with a loan of $ 10 million at an interest rate of 8 per cent per annum (the "Loan").

On full drawdown, total loans to GPL will amount to $ 22.8 million (the "Aggregated Loans") and $ 8.6 million of this is to be repaid no later than 24 January 2012 and $ 1.4 million no later than 31 August 2013. The balance is to be repaid upon written demand (subject to positive cash flow) no later than 29 August 2013 in respect of $ 2.8 million and 30 October 2013 in respect of $ 10 million.

The Loan, when aggregated with the Original Loans, constitutes a substantial transaction for Prosperity under Rule 12 of the AIM Rules.

Information on GPL

Prosperity holds an effective 35 per cent interest in United Goalink Limited ("UGL"), a joint venture company engaged in the exploration and production of iron ore in Brazil. GPL, an indirect subsidiary of UGL, holds approximately 602.3 square kilometres of exploration rights and 3.01 square kilometres of mining concessions in the State of Ceará, Brazil.  Further information on the Company's investment in UGL is set in the announcements dated 9 December 2010 and 29 December 2010.

Reasons for, and benefits of, the Aggregated Loans

The Aggregated Loans are to be used by the joint venture company to fund capital expenditure of setting up an iron ore processing plant, upgrading facilities and other operating expenses. These upgrades are expected to increase production volume and quality, bringing enhanced profit and cashflow to the Company.    

The Directors believe that the Aggregated Loans are in the interests of the Company and its shareholders and were funded by a mix of cash and bank loans.

Further enquiries:

Prosperity Minerals Holdings Limited                                      +852 3187 2618

Patrick Li

Neelke Kruger-Logan

Citigate Dewe Rogerson                                         &# 160;                +44 (0) 20 7638 9571

Martin Jackson

Kate Lehane

Daniel Stewart & Company plc                                          ;       +44 (0) 20 7776 6550

Corporate Finance: Paul Shackleton, Noelle Greenaway

Corporate Broking: Martin Lampshire

Notes to Editors:

Prosperity (AIM: PMHL) is:

 - an iron ore operator serving the PRC;

 - a specialised real estate owner and developer in the same market; and

 - an investor in two cement plants, also in the PRC.

Prosperity's iron ore business has been operating since 1992 and sources iron ore, for shipment and use in the PRC, from major international iron ore producers in South Africa, Brazil and Australia, as well as from South East Asia, Thailand and Malaysia in particular. The majority of the Company's iron ore is sold to large steel manufacturers in the PRC. In the fiscal years ended 31 March 2010 and 2011, Prosperity shipped 7.9 million tonnes and 6.3 million tonnes of iron ore respectively. In December 2010, Prosperity acquired a 35% effective interest in a Brazilian mining operation which owns approximately 602 square kilometres of exploration rights and 3.01 square kilometres of mining concession in the State of Ceara. The first shipment of 51,000 tonnes was made in March 2011.

Prosperity has operated a real estate investment and development division since February 2010 which is focused on creating a portfolio of PRC property and development assets with good upside potential and manageable risk. The Company has entered into a number of agreements with its partners to develop recreational, commercial and residential projects in Guangzhou City and Changzhou City in the southern PRC and Hangzhou City in the east. Prosperity also acquired interests in an existing commercial building in Guangzhou which is the largest city in the southern PRC and the third largest in the Country (after Beijing and Shanghai). It has a population in excess of 12 million people and is located in the Pearl River Delta, the foremost economic zone in the southern PRC.

In April 2010, Prosperity disposed of its cement business in the PRC but retained its 33.06% interest in Anhui Chaodong Cement Company Limited (ACC). ACC is located in Anhui Province in the eastern PRC. The designed sellable output capacity of ACC is 5.1 million tonnes of cement and clinker per annum. On 1 September 2010, Prosperity acquired a 25% equity interest in Liaoning Changqing in Liaoning Province, in the northern PRC. Liaoning Changqing completed construction of a new 2 million tonnes per annum cement and clinker production line in April 2010 and normal production commenced on 2 July 2010. Following the completion of a share issuance in August 2011, Prosperity's interest in Liaoning Changqing was diluted to 16.11%.

The PRC is the World's second largest economy (behind the US) and the biggest buyer of iron ore; it is also the largest producer and consumer of cement.