North River Resources Plc Signs Heads of Agreement with Baobab Resources North River Resources ("North River") and Baobab Resources (BAO:LN) have signed a heads of agreement (HoA) on North Rivers Monte Muande magnetite-phosphorus project in the Tete region of Mozambique.

Baobab Resources is currently exploring its "Tete" iron-titanium-vanadium project which is also in the Tete region. Three Stage Investment Programme to Take Monte Muande Through to DFS The initial stage will require Baobab to spend no less than $625,000 on a 2,000m diamond drilling programme for a 60% interest in the project.

Stage 2 will take the project to pre-feasibility, with stage 3 being the completion of a definitive feasibility study.

North River can elect to fund its share of both stage 2 and stage 3.

If it chooses no to, it will dilute to a 25% interest in the project on completion of the pre-feasibility and a 10% interest on completion of the definitive feasibility. The Monte Muande Project The project lies on the flanks of the Tete mafic, the complex that hosts Baobabs Fe-Ti-V project.

Monte Muande is believed to hold significant amounts of phosphorus and magnetite in layered carbonatite intrusions and magnetite deposits.

Original work on the deposit was conducted by the Geological Institute of Belgrade in the 1980s.

Subsequently, Omega Corp then Mavuzi resource carried out exploration across the licence area. The HoA is for the 338km2 licence area that holds the Monte Muande deposit.

It is 25km from the capital of the Province, Tete.

The licences are valid until the third quarter of 2014. Baobab Resource - developing the Tete project Baobabs Tete project currently has a resource of 47.7mt of Fe-Ti-V resource, grading 25.3% iron, 0.18% vanadium oxide and 9.69% titanium oxide.

The outlined resource target is to increase the resource at Tete to between 400mt and 700mt, which is supported by a strong aeromagnetic survey result. The blue-sky potential from Baobab is that it can beneficiate the ore from Tete through to long steel and vanadium/titanium slag products thanks to the availability of cheap electricity from the nearby Cahora Bassa hydroelectric dam.

The company will also benefit from the positive spill-over effects from Vale and Tata-Riversdales coal projects that are also in the Tete area. Analysis Signing the JV HoA with Baobab will be positive for both companies, but mostly for Baobab.

Steady progress is being made by the company at the Tete project, the most recent announcement from the company being that it had finished 3,500m of drilling at the "South Zone" of the deposit.

For North River this is a non-core asset.

If Baobab get positive results from exploration of the asset there is an option for North River to stay at 40% which would be more beneficial for the company than to carry out an independent exploration programme. The addition of Monte Muande will give Baobab an increased scale to develop Tete, thus improving the projects economics.

If North River retains its 10% of Monte Muande it will see residual benefit from the development of the asset, with potential that it be rolled into the larger Tete mine complex.
Christopher Welch Ocean Equities Ltd Authorised and Regulated by the Financial Services Authority Member of the London Stock Exchange Direct Dial: +44 (0)207 786 4377 Switchboard: +44 (0)207 786 4370 Fax: +44 (0)207 786 4371 E-mail: Website: www.oceanequities.co.uk This e-mail may contain confidential information and information proprietary to Ocean Equities Limited ("Ocean") and is intended only for the use of the intended recipient(s).

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