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Disposal of interest in Angel Diamonds by Thabex to Mantle Diamonds.

8 October 2008

1. Introduction

1.1. Shareholders are hereby advised that Thabex has entered into a share purchase and option agreement (“the Agreement”) for the disposal of its interest in Angel Diamonds (“the disposal”).

1.2. Pursuant to the Agreement, Thabex and the five other vendors (“the Vendors”) have agreed to dispose of up to 100% of the issued share capital of Angel Diamonds to Mantle Diamonds Limited (“Mantle”), in three stages. Thabex holds 70% of the issued share capital in Angel Diamonds.

1.3. The disposal referred to in 1.2 above, constitutes a category 1 disposal in terms of the Listings Requirements of the JSE (“Listings Requirements”) and is subject to shareholder approval. A circular containing a notice of general meeting will be dispatched to shareholders in due course.

2. Particulars of the disposal

1. 2.1. Initial stage

   1. 2.1.1. The Vendors will initially sell 20% of the issued share capital of Angel Diamonds (“Initial Shares”) to Mantle on a pro rata basis, on the closing date. The purchase consideration for the Initial Shares is US$250 000, which will be paid through the issue of Mantle shares to the Vendors (“Initial Payment Shares”).
   2. 2.1.2. Thabex shall receive US$175 000 worth of the Initial Payment Shares.
   3. 2.1.3. The Initial Payment Shares will be held in escrow by Thabex’s attorneys until the date Angel Diamonds obtains a mining license to explore for and mine diamonds on the Kolo Kimberlite Project (“Grant Date”).
   4. 2.1.4. Thabex will sell US$500 000 of the shareholders loan account to Mantle on the Closing Date, which amount shall be settled in cash (US$200 000 has already been paid to Thabex).

2. 2.2. First option stage

   1. 2.2.1. Mantle has the option to acquire an additional 40% of the issued share capital of Angel Diamonds (“First Option Shares”) from the Grant Date and for a period of seven business days thereafter.
   2. 2.2.2. The purchase price for the First Option Shares will be US$750 000, which will be paid through the issue of Mantle shares to the Vendors (“First Option Payment Shares”).
   3. 2.2.3. Thabex shall receive US$525 000 worth of the First Option Payment Shares.
   4. 2.2.4. The Vendors have agreed to abide by any escrow, lock-up, pooling or other share transfer restrictions, required by securities regulators or underwriters in connection with the public listing of Mantle shares.
   5. 2.2.5. In the event that Mantel acquires the First Option Shares, Mantle shall acquire the remainder of the shareholders loan of US$500 000 from Thabex, which amount shall be settled in cash on the same day.

3. 2.3. Second option stage

   1. 2.3.1. Mantle has the option to acquire the remaining 40% of the issued share capital of Angel Diamonds (“Second Option Shares”), from the Grant Date and for so long as the shareholders agreement to be entered into between Mantle and the Vendors on the closing date, remains in effect.
   2. 2.3.2. The purchase price for the Second Option Shares will be determined by Angel Diamond’s auditors and an independent valuator in terms of the SAMVAL Code.

4. 2.4. Subject of the disposal

   
   The subject of the disposal is Thabex’s 70% interest in and its shareholders loan account against Angel Diamonds.

5. 2.5. The effective and closing date

   
   The effective date of the Agreement was 29 September 2008. The closing date of the Agreement is the date Thabex fulfills all its obligations in terms of the Listings Requirements (“Closing Date”).

6. 2.6. Conditions

   
   The Agreement is subject to the conditions that by the Closing Date:
   1. 2.6.1. the representations and warranties provided by the Vendors in the Agreement are true, accurate and not misleading as at the Closing Date;
   2. 2.6.2. all required consents shall have been obtained from the appropriate governmental authorities and other persons on terms acceptable to Mantle;
   3. 2.6.3. there are no material adverse changes to Angel Diamonds or the value of the Angel Diamonds shares between the date of the Agreement and the Closing date; and
   4. 2.6.4. certain documentation required to implement the Agreement be delivered to Mantle.

7. 2.7. Failure to obtain the mining license

   
   In the event that Angel Diamonds is unable to obtain the mining license:
   1. 2.7.1. the Vendors will sell the Initial Payment Shares back to Mantle for US$1;
   2. 2.7.2. Mantle will sell the shares it acquired in terms of the Agreement back to the Vendors for US$1; and
   3. 2.7.3. Thabex’s portion of the shareholders loan, Mantle’s portion of the shareholders loan and all loans made by Mantle to Angel Diamonds, will be repaid on a pro rata basis, based on the total loan amount held by each of Thabex and Mantle, from the proceeds of the sale of the assets of Angel Diamonds.

3. Business carried on by Angel Diamonds

Angel Diamonds holds a prospecting license over the Kolo Kimerlite project in Lesotho. Angel Diamonds will make an application to obtain a mining license in respect of the Kolo Kimerlite project. Pursuant to the Agreement Mantle will manage the Kolo Kimerlite project and will advance funds to Angel Diamonds by way of loan account in order to, inter alia, conduct a prefeasibility study on the project and construct a mine on the project.

4. Rationale for the disposal

The disposal of the Thabex’s interest in Angel Diamonds will allow Thabex to focus on its main objectives, which are the exploration and mining of kimberlite and alluvial diamond deposits.

5. Application of disposal consideration

The disposal consideration will be used towards working capital requirements of the Company and to undertake further prospecting at the Monastery Mine and to compile a new CPR for Salt River Resources Limited.

6. Pro forma financial effects

The pro forma financial effects have not been included in this announcement as the Company’s annual report has not yet been sent to shareholders, for which Thabex was been suspended from trade on the JSE with effective from 1 October 2008. The annual report is in the process of being printed and should be sent to shareholders on Monday 13 October. The pro forma financial effects of the disposal will be published on SENS on the same date that the annual report is sent to shareholders.

RENEWAL OF CAUTIONARY ANNOUNCEMENT

Shareholders are referred to the cautionary announcement dated 17 July 2008 and the renewal of the cautionary announcement dated 26 August 2008. Shareholders are hereby advised that as the pro forma financial effects of the disposal have not been disclosed to shareholders in this announcement, shareholders are advised to continue exercising caution when dealing in Thabex’s securities until the announcement containing the pro forma financial effects of the disposal is made.