Date:                            28 April 2008

On behalf of:                 Target Resources plc (“Target” or the “Company”)

Target Resources plc

Preliminary Results for the year ended 31 October 2007

Target Resources plc (AIM: TGT), the alluvial diamond and gold mining company operating in Sierra Leone, is pleased to announce its preliminary final results for the full year ended 31 October 2007. Target operates through its subsidiary Milestone Trading Ltd (“Milestone”) and its Sierra Leone subsidiaries (together the “Group”). The Group’s mining leases are all located within the Kono district, which is recognised as the most prospective area for diamond mining in Sierra Leone.  Milestone also has exclusive prospecting licences in other areas.

Sierra Leone is a major producer of gem quality diamonds. It has been responsible for mining of some of world’s most impressive diamonds. The Group is among the first large scale mining ventures to be established in Sierra Leone since the end of the civil war.

Target’s main objective is the recovery of alluvial diamonds and gold in Sierra Leone, and their sale on world markets.

Group Highlights

·          Admitted to AIM in July 2006 raising funds to expand operations.

·          Milestone has successfully entered into joint venture agreements with the Chiefdoms in Sierra Leone specifically in the Chiefdoms of Sandoh, Nimikoro & Nimiyama.

·          The Group has 4,263 acres (17.25 km²) under mining leases in the rich diamond and gold area of Kono, recognised as the most prospective area for diamond mining in Sierra Leone.

·          The Group’s first corporate acquisition completed with the acquisition of Pride Diamonds, LLC (“Pride Diamonds”) in March 2007.

·          In October 2007, Target raised £7.7 million net of costs in equity and long term debt, contracted new mining management and signed a 10 year, first refusal, marketing agreement with a subsidiary of Tiffany & Co for the sale of its diamond production.

·          In January 2008, Target acquired two new exclusive prospecting licences. One is for gold and other minerals in the Tonkolili district covering 520 Sq km and the other for diamonds and gold in Kenema district (known for its “fancy” diamonds), covering 253 Sq km.

·          In April 2008, Target raised a further £1.5 million in equity and short term debt to be used in its new prospecting licences and for working capital.

Commenting on the Company’s results, Freddy Hager, Chairman, said:

“We are encouraged by the progress our team has made over the financial period and we look forward to putting our enhanced earthmoving, dredging and processing capacity to work to ratchet up production in the coming months. We are on track to deliver our mining plan and maximise the full potential of our leases in Sierra Leone for our investors.”

- ENDS -

Enquiries:

Target Resources plc                                      020 7258 2300

Dr Nissim Levy, Managing Director                     www.target-resources.co.uk

Nominated Adviser & Broker

Arbuthnot Securities                                       020 7012 2000

John Prior

Financial PR to Target

Redleaf Communications                                 020 7822 0200

Emma Kane / Adam Leviton /

Henry Columbine                                               al@redleafpr.com

Investor Relations

4C Communications Limited                            020 8949 7171

Carina Corbett

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CHAIRMAN’S STATEMENT

FOR THE YEAR ENDED 31 OCTOBER 2007

I am pleased to present this year’s review of the Group’s operations.  In October 2007 Target raised net proceeds of £7.7 million in equity and debt financing, which are being used to fund the purchase of new equipment for diamond and gold production and working capital.  The Company also contracted a 10 year marketing agreement with Tiffany & Co, the renowned jewellers, whereby Target’s diamond output will be offered on a first refusal basis to Tiffany.

The year has been challenging for the Group with revenues from the mining of diamonds of just £412,175.  The level of mining activity conducted within the year was low due to the transition period between the failure of the previous mining contractors to mine and process agreed tonnages of gravel and the contracting of new mining management under the umbrella of Minex Associates Group. However, notable progress has been made and we look forward with optimism.

During the year under review, the Group had mining leases covering 4,263 acres in 3 chiefdoms in the Kono district of Sierra Leone as follows:

·          1,787 acres in Sandoh

·          1,495 acres in Nimiyama

·          981 acres in Nimikoro

·          This gives a total leased area of 4,263 acres, or 17.25 Sq km.

These mining leases are each held by a local operating subsidiary of the Group. Joint Venture Agreements have been signed with the respective Chiefdoms under which (in the case of Nimiyama and Nimikoro) the Group has 70% of the shares and the profits of the subsidiary and the Chiefdom 30%. In the case of Sandoh, where we are currently mining, the Chiefdom has 11% of the official export value of diamonds, instead of a profit share.

In the year under review, Target issued shares amounting to US$1.6 million in March 2007 in connection with the acquisition of Pride Diamonds LLC, and raised £5.2 million (net of costs) through a placing of shares in October 2007. These funds, together with US$5 million raised as debt finance from a subsidiary of Tiffany & Co (as explained below), are being utilised by the Group to finance plant and machinery purchases, provide working capital and repay a proportion of its debt.

For the year ended 31 October 2007, the Group generated turnover of £412,175 (2006 – £266,456) which resulted in a loss before tax of £5,251,397 (2006 – £4,383,942). The loss per share is 5.84p (2006 – 5.95p). The Group had cash balances at the year end of £6,066,239 (2006 - £1,052,563).

The period was transitional between the departure of the non-performing previous mining contractor, The Three Captains Ltd, who stopped operations in August 2006, and the appointment of a new mining management team recruited by Minex Associates Group in November 2007. In the interim, the Company continued independent mining but at the same time realised the need for additional equipment, to allow it to increase output and to open further mining sites elsewhere in its leased areas. The fundraising in late October 2007 brought £5.2 million to the Group for purchasing further processing plant, earthmoving and exploration equipment.  As of the date of this statement, all the necessary equipment has been purchased and the last items will be commissioned on site by June 2008.

The new mining management, which was appointed in November, includes professionals in project management, process engineering, metallurgy, river dredging and geology / geo-physics, who compliment the Company’s existing staff.

Active prospecting using an innovative technique known as “Resonance Acoustic Penetration Profiling” is now underway. The process identifies potholes and depressions in rock bars where diamond bearing gravels are usually located.  Drilling with an auger drill and banka drills has also started, allowing us to locate and map actual gravels.

We are encouraged by the size and quality of the diamonds produced in the Group’s mining areas to date, an average sale price per carat of US$507 has been achieved. Exports of diamond output are delivered to Laurelton Ltd, an Antwerp based division of Tiffany & Co, under the 10 year marketing agreement signed in October 2008. All our diamonds are fully certified under the Kimberley Process.

A further optimistic development in 2007 has been the added value of river dredging in addition to land mining. In March 2007, Target acquired Pride Diamonds, LLC, a US incorporated company with small scale river dredging capability. Following the fundraising in October 2007, Target invested part of the proceeds in ordering a cutter head dredge which will allow the rivers within our lease areas to be dredged on a large scale for diamonds and gold, during the wet as well as the dry season.  Dredging is expected to make a substantial contribution to fulfilling the Group’s mining targets in 2008/9.

Target also expects gold production to contribute a sizeable income in future from both land and dredge mining.

A special achievement for our Group is the strategic alliance with Tiffany & Co, one of the world’s largest and most respected jewellery retailers. As part of our October 2007 fundraising, Laurelton Diamonds, Inc (“Laurelton”), a subsidiary of Tiffany & Co, advanced a long term loan of US$5 million to the Group in return for an exclusive, first refusal, 10 year marketing agreement for Target’s diamond output. This alliance shows the confidence of this ethically conscious retailer in our Group, both for the quality of our stones and the corporate social responsibility policies which we implement. In April 2008, Laurelton made a further short term advance of US$2 million to Target and an affiliate of Laurelton invested US$1 million in new shares of Target. 

Exclusive Prospecting Licences (EPL) were granted in January 2008 as follows:

1.               EPL for Gold and other minerals covering 520.45 sq. km (200.94 sq. miles) in the Tane and Gbonkolenken Chiefdoms in the Tonkolili District of the Northern Province of Sierra Leone (“Northern Province”). This licence lies between the Kangari Hills on its east side and the Pampana and Nasi Rivers on its west and north side with the Teye River running near its southern boundary.

The recovery of alluvial gold from this area by small scale miners commenced in the 1930s and is still ongoing under the Government Supervised Artisanal Gold Mining Scheme.  The Pampana, Wungi and Teye Rivers have been proven to contain interesting concentrations of alluvial gold in their channels, flanking flats and terraces.

The licence area covers part of the largest greenstone belt in Sierra Leone, which is recognised as being highly prospective for gold. This is supported by a United Nations funded sampling programme in the headwaters of the Nasi River in the 1980s, which highlighted a number of primary gold anomalies in the area.

2.               EPL for Diamonds, Gold and other precious minerals and metals covering 253.57 sq. km (97.88 sq. miles) in Faiyama Area, Nomo Chiefdom, Kenema District in the Eastern Province of Sierra Leone.

This licence lies along a 30 mile length of the Moro River which forms the border with Liberia in the south east of Sierra Leone.  It was previously held by Gondwana Investments SA but was not explored.  The full width of the river is included within the licence.

This area is known for coloured or so-called “fancy” diamonds, which gain high market value.  These diamonds have been and are still being recovered in the Makpele Chiefdom downriver from the licence area, and are thought to be derived from a primary source different from those known in the Kono and Tongo fields.

The presence of primary diamond sources (kimberlites) has been revealed by recent work on the land across the Moro River in Liberia, by Mano River Resources Inc.

The Group intends to start prospecting of the new licences shortly.

Target continues to foster good relations with the people living on its leased areas by giving help to local communities. We have built and handed over three schools to the people of the Kono district, and have helped with the construction of roads in Sandoh Chiefdom. We employ on average some 200 local people, paying a fair wage and observing a policy of gender equality. Rehabilitation of previously mined areas has been largely completed..

The directors remain focused on the development and growth of the business, and on achieving sustainable mining operations at an early date.

Freddy Hager

Chairman

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DIAMOND MINING IN SIERRA LEONE

Sierra Leone is a major producer of gem quality diamonds. It has been responsible for mining of some of world’s most impressive diamonds, including the Star of Sierra Leone, a magnificent 969 carat diamond.

Target’s licences are mainly located within the Kono district, which is recognised as the most prospective area for diamond mining in Sierra Leone.

Sierra Leone

Sierra Leone was a founder member in the Kimberley Process Certification Scheme (KPCS) which was established to discourage the marketing of blood diamonds. The scheme, which is being scrutinised and improved by the Government, ploughs back some of the revenues derived from diamond exports to the individuals and communities involved in the mining areas.

The KPCS scheme has continued to impact positively on the diamond mining sector in Sierra Leone.

Chiefdoms

In Sierra Leone each district contains a number of Chiefdoms. The Chiefs are the traditional rulers of Sierra Leone. Whilst mining licences are issued by the Ministry of Mineral Resources, mineral rights may not be exercised without the express permission of the landowner, typically the Chiefdoms. Target has forged strong alliances with the Chiefdoms upon which its Mining Leases lie, specifically the Sandoh, Nimikoro and Nimiyama Chiefdoms. The Chiefdoms are partners in Target’s operating subsidiaries.

The country has been peaceful for over 6 years and the democratically elected government under President Ernest Bai Koroma is anxious to encourage foreign investment to re-start the economy. The British Government has a long term commitment to the stability of the country. To this end the British Armed Forces continue to maintain a strong presence in the country training and working closely with the Sierra Leone Army.

Alluvial diamond mining

Current theory suggests that diamonds are formed under high pressure and high temperature conditions deep within the earth’s crust. The diamonds are brought to the surface with other rock material in volcanic pipes which solidify to form kimberlite or lamproite pipes. Alluvial diamond deposits are formed from the erosion, over millions of years, of the relatively soft primary diamond bearing kimberlite and lamproite source rocks.

The eroded material is transported by river systems, with the diamonds being deposited in the gravel beds of the rivers or, ultimately, in the ocean. Due to their hardness, diamonds are relatively unaffected by the erosion process, and tend to accumulate and be naturally concentrated in favourable areas for their deposition, while the typically softer and lighter surrounding rock material is washed out to sea.

Sierra Leone’s predominantly alluvial sourced diamond production contrasts with other major diamond producing countries (e.g. South Africa, Botswana, Russia and Australia) whose production is predominantly from kimberlite and lamproite pipes. Other countries that have significant alluvial diamond production include Namibia, Brazil, South Africa and Congo.

The directors believe that alluvial diamond projects have a number of important benefits, including:

·          alluvial diamond exploration can be conducted rapidly and at relatively low cost compared with kimberlite and lamproite exploration;

·          alluvial diamond deposits typically have a higher proportion of gem quality diamonds than kimberlites (as the erosion and transportation process tends to destroy lower quality diamonds);

·          development of reserves requires relatively low level of capital investment; and

·          positive cash flow can often be achieved quickly from the commencement of production.

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CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 OCTOBER 2007

CONSOLIDATED BALANCE SHEET

AS AT 31 OCTOBER 2007

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 OCTOBER 2007

The Group’s other reserves comprise the following:

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 OCTOBER 2007

NOTES TO THE PRELIMINARY RESULTS

FOR THE YEAR ENDED 31 OCTOBER 2007

1.            Introduction

Target Resources plc is a public limited company listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange and incorporated in England. 

The Group’s financial statements for the year ended 31 October 2007, from which this financial information has been extracted, and for the comparative year ended 31 October 2006 are prepared in accordance with International Financial Reporting Standards (“IFRS”), including IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’ and in accordance with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.

The financial information contained in these preliminary results does not constitute full statutory accounts within the meaning of Section 240 of the Companies Act 1985.  The figures are extracted from the Group financial statements for the year ended 31 October 2007 which have been agreed with the Company’s auditors and will be filed with the Registrar of Companies, sent to shareholders and will be available on the Company’s website at www.target-resources.co.uk following formal completion of the audit. The auditors’ report on the full financial statements for the year ended 31 October 2007 is yet to be signed.

The comparative figures for the year ended 31 October 2006 are not the statutory accounts for that financial period. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985.

2.         Share Based Payments

The above charges are based on the requirements of IFRS 2 on share based payments. For this purpose, the weighted average estimated fair value for the share options granted was calculated using a Black-Scholes option pricing model in respect of options. The volatility measured at the standard deviation of expected share price return is based on statistical analysis of the share price since the Company’s admission to Alternative Investment Market (“AIM”) and this has been calculated at 90%. The risk free rate has been taken at 5.50%. The estimated fair values and other details which have been processed into the model are as follows:

            *  Except for these options which have a vesting period of three years, no other options have any vesting period. The charge for national insurance on share based payments has been calculated by reference to the difference between the market value of the underlying shares at the balance sheet date and the exercise price of options. The accumulated reserves under IFRS 2 and the accumulated national insurance provision as at 31 October 2007 were £2,111,175 and £122,551 respectively.

3.         Loss Per Share

The basic loss per ordinary share has been calculated using the loss for the financial year attributable to the Company’s equity shareholders of £5,248,325 (2006: £4,435,693) and the weighted average number of ordinary shares in issue of 89,864,590 (2006: 74,876,210).

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 92,610,619 (2006: 79,426,646). The diluted loss per share has been kept the same as the basic loss per share as the conversion of share warrants and options decreases the basic loss per share, thus being anti-dilutive.

4.         Goodwill

The Group’s goodwill of £1,003,442 arose from the acquisition of 100% of the issued share capital of Pride Diamonds LLC (“Pride”) in March 2007. Pride is incorporated in Delaware, USA, operates in Sierra Leone and owns specialised river dredging equipment. The acquisition of Pride has been accounted for using the purchase method (“acquisition method”). Details of the acquisitions are set out below:

The initial consideration for the acquisition of Pride was US$1,600,000 (£817,650), satisfied by the issue of 2,349,570 new ordinary shares of 1p each in Target at 34.8p per share. A deferred consideration is payable in cash to the vendors of Pride based on 3 per cent of the Group’s future diamond sales, capped at US$1,900,000 (£970,973).

5.         Other Intangible Assets

The costs for mining licences includes a sum of £390,829 (US$750,000) for the acquisition of mining licences during 2006, payable over a period of five years. Of this amount £159,439 has been paid to date by 31 October 2007, £71,052 is included in other payables, payable in the next financial year and £160,338 is payable after more than one year.

There have been no amortisation charges on deferred exploration and mining licences this year as the accumulated amortisation brought forward equates to the total amortisation as at 31 October 2007 in respect of these assets based on the Group’s accounting policy.

6.         Plant and Equipment

7.         Events After The Balance Sheet Date                         

On 4 January 2008, Target acquired the following Exclusive Prospecting Licences (“EPL”) at a direct cost of $92,280, each for a term of two years from 31 December 2007: 

·          The first EPL is for Gold and other minerals covering 520.45 sq. km (200.94 sq. miles) in the Tane and Gbonkolenken Chiefdoms in the Tonkolili District of the Northern Province of Sierra Leone (“Northern Province”).

·          The second EPL is for Diamonds, Gold and other precious minerals and metals covering 253.57 sq. km (97.88 sq. miles) in Faiyama Area, Nomo Chiefdom, Kenema District in the Eastern Province of Sierra Leone.

On 22 April 2008, Laurelton Diamonds, Inc (a subsidiary of Tiffany & Co (NYSE:TIF)) provided Target with a US$2,000,000 short term debt financing, and an affiliate of Laurelton Diamonds, Inc acquired  3,350,084 new ordinary shares in Target at a price of 15p per share.

8.         Dividends

            No dividends are proposed in respect of the current financial year.

9.         Annual General Meeting

The Annual General Meeting of Shareholders will take place at 11:00 am on 11 June 2008 at the offices of Arbuthnot Securities Limited, Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR.  All shareholders are welcome to attend. A copy of the Annual Report and Financial Statements will be sent to shareholders and will also be available on the Company’s website: www.target-resources.co.uk