Production Update

Production Update

Hambledon Mining PLC

20 April 2012

Hambledon Mining Plc

(“Hambledon” or “the Company”)

Activities Report for the Quarter Ended 31 March 2012

Hambledon Mining plc (AIM: HMB), the Kazakhstan gold mining and development company, today provides its operational and corporate report for the three months from 1 January to 31 March 2012. A copy of this report will be available on the Company’s website, www.hambledon-mining.com

Q1 OPERATIONAL & CORPORATE OVERVIEW

Gold Production and Mineral Processing

• Year-on-year gold production in Q1 increased 9.4%
• Year-on-year mined tonnes in Q1 increased by 18%
• The winterisation programme completed during 2011 aided overall production figures

Underground Development

• Development of the trial stopes has progressed in accordance with design
• Design and underground development of the first bulk mining zones is on target
• The underground drilling programme to continue throughout 2012

Finance

• RaisedUS$8.6M net of expenses through share issue
• Raised US$3M through a private share placement with the European Bank for Reconstruction and Development (“EBRD”),
• Agreed a US$15M debt facility with EBRD.
• Received proceeds of US$1.2M from the liquidation of Ognevka

Tim Daffern, Chief Executive Officer of Hambledon, commented today: “Q1 has been a quarter of mixed fortunes for the Company. It was the first full quarter of gold production from the underground mine which performed in line with expectations and is a solid base from which to grow production. Extraction from underground remains on schedule to attain a full year target of 100,000 tonnes in 2012 . Because of the extremely cold weather, the first quarter is always the most challenging , but nevertheless the Company produced a total of 4,870 ounces gold, an increase year-on-year for Q1 of almost 10% and improvements were seen across a number of key indicators. The performance and reliability of the process plant was encouraging during severe weather condition, helped by the winterisation programme carried out in 2011. We are also delighted to receive the backing of the EBRD and look forward to a successful partnership in building Hambledon’s future.”.

Production figures for the three months from 1 January – 31 March 2012:

	Â	Â	Â	January	Â	Â	Â	February	Â	Â	Â	March	Â	Â	Â	Total
Total milled tonnes (dry)				50,373				48,044				47,663				146,080
Gold grade (g/t)				1.24				1.43				1.32				1.33
Contained gold (gms)				62,462				68,703				62,915				194,080
Contained gold (oz)				2,008				2,209				2,023				6,240
Gold recovery %				79.12				76.21				79.01				78.1
Total recovered gold (oz)				1,589				1,683				1,598				4,870
Total recovered silver (oz)				2,096				1,770				1,163				5,029
Of which:
Underground milled tonnes (t)				4,220				4,650				5,635				14,504
Underground gold grade (g/t)				2.05				1.39				4.16				2.66
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PROCESSING FROM OPEN PIT AND UNDERGROUND

Gold production for the quarter ended 31 March 2012 of 4,870 ounces was in line with management expectations. Mining activities were primarily from the main open pit, with modest amounts of ore extracted from the underground mine. Q1 was the first full quarter of underground extraction and the Company expects the underground contribution to grow significantly over the course of 2012. It is pleasing to see that the grade from the open pit is increasing in line with the geological models and is approximately 12% higher than the same period last year. Although weather conditions were severe as is normal in the Sekisovskoye region during this period, the winterisation programmes, process plant refurbishment works conducted in 2011 and improvements to maintenance management helped to mitigate some of its effects.

The process plant recovery continues to be below budgeted levels. The cause of this relates to the fluid chemistry associated with the detoxification materials which are being used and increased levels of thin layers of clays and carbonates in the underground ores and deeper sections of the open pit. Recent testwork also indicates an increased level of ore hardness. Remedial works to modify the plant are on-going and are expected to be complete in mid-2012, so that higher recovery levels can be attained.

UNDERGROUND

The decline to access the next level of the underground ore zone advanced according to plan during the quarter with no safety incidents. The development of the underground decline is to be to the 240mrl in 2012, allowing extraction of 100,000 tonnes of ores and establishing a platform of infrastructure for 2013 mining works.

Mining of ores has continued as planned with trials of different extraction stope dimensions to test geo-technical parameters, all of which have provided the necessary confidence to accelerate the use of bulk mining. The trial mining also allowed grade control methods to be stress tested and necessary improvements made to ensure that high grade ores were not intermingled with low grade hanging wall and footwall material.

The construction of the main ventilation house with attendant ventilation fans and heating machinery is on target for commissioning in Q2, 2012, in line with mining plans.

DRILLING

A total of 12,650m of diamond drilling has been completed since the underground geological delineation programme started. The results of this drilling have been published and illustrate the robust geological resource at Sekisovskoye and that the average widths are around 5.5m.

The underground drilling programme will continue throughout 2012 and will be used to both consolidate and upgrade the resource knowledge and also to define mining zones for grade control of stopes.

INFRASTRUCTURE

The remedial works associated with Tailings Dam 3 (“TD3”) have commenced and are expected to be completed in Q3, 2012. All site works are being supervised by onsite technicians and engineers employed by Golders Associates and SRK.

The court actions relating to the TD3 leak are on-going and Hambledon is co-operating fully with the government and courts on all matters. The Company has engaged two specialist law firms to assist in the appeal against the penalties. We remain confident that the fines paid to date will be significantly reduced once the appeal process is completed. Further announcements will be made in due course once more information becomes available.

The construction of Tailings Dam 4 embankment is 75% complete. The construction of the base has commenced. All design and construction supervision is being undertaken by Golders Associates (UK).

The design and construction of the new effluent disposal and treatment building with attendant machinery is due to start in the middle of Q2, 2012 and this marks the next stage in developing an integrated waste handling system that will lower substantially the operating costs of the mineral process plant and effluent disposal.

The detailed design and construction of the second electrical line is due to commence in Q2, 2012, now that all permits have been received. The execution of this project will take approximately 14 months and will result in a second secure electrical supply with increased process plant availability and therefore lower operating costs.

CORPORATE

Akmola

In relation to the acquisition of Akmola Gold LLP, despite the Company's efforts to date, the position remains that certain required permits and waivers from the Kazakhstan authorities have not been received.

Ognevka

The bankruptcy proceedings for Ognevka have been completed and Hambledon has received payment of US$1.2 million as fulfilment of the proceeds to be paid to the creditors. The completion of the auction process and divestment of this property underlines the Company’s focus on precious metal mining in Kazakhstan.

Finance

In March 2012, the Company raised a total of US$8.6 million net of expenses in a placing of shares. In April 2012, the Company announced an equity investment in Hambledon by the EBRD of US$3 million giving the EBRD 6% of Hambledon’s issued ordinary share capital.

The conditions for drawdown of the first US$10 million of the EBRD debt facility are well advanced and the remaining obligations and tasks should be completed in Q2, 2012 to allow drawdown of the first tranche before the end of H1, 2012.

For further information please contact:

HAMBLEDON MINING:
Charles Zorab, [phone]
or
FAIRFAX I.S. PLC (NOMAD AND BROKER):
Ewan Leggat/Katy Birkin, [phone]
or
TAVISTOCK COMMUNICATIONS:
Ed Portman/Jos Simson, [phone]