PROPOSED RESTRUCTURING OF AFRICAN AURA MINING INC.

/NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES./

TSX-V: AUR
AIM: AAAM

LONDON, Nov. 5 /CNW/ - African Aura Mining Inc. ("African Aura" or the "Company"), the TSX V (AUR) and AIM (AAAM) listed exploration and development company with divisions focused on iron ore and gold projects in sub-Saharan Africa, announces that its Board of Directors has determined, in principle, to proceed with a restructuring of its assets. The objective of such restructuring is to enhance shareholder value by, among other things, improving the recognition and value of its iron ore and gold assets by separating such assets between two companies (as described below).

African Aura's current principal assets are:

Iron Ore Division

• the 38.5% owned Putu iron ore project in Liberia, with a NI 43-101 Inferred mineral resource estimate of 1.08 Bt @ 37.6% Fe from 2.6km of strike of a 12-13km target
• the 100% owned Nkout iron ore project in Cameroon, an 8km long priority magnetic target on which recent (2010) drilling has intersected iron ore mineralisation, with a further 12km of  magnetic targets to be tested
• the 70% owned Ngoa iron ore project in Cameroon which is contiguous to the Nkout project

Gold Division

• the New Liberty gold project in Liberia, with a NI 43-101 compliant measured and indicated mineral resource of 1.38 million ounces at a grade of 3.18 g/t Au (6.65Mt at 3.49 g/t measured and 6.87Mt at 2.88 g/t indicated) and on which a resource estimate to NI 32-101 requirements and a Preliminary Economic Assessment are underway
• a portfolio of hard rock gold prospects in Liberia within a 457 km² mining licence, including the Ndablama and Weaju projects, which have been subjected to artisanal mining activity
• a portfolio of hard rock gold prospects in Cameroon, including the Batouri project which has been subjected to artisanal mining, and the prospective Ntem licence, together totalling 1,074 km²

African Aura's Board believes that:

• the Company's current market capitalisation understates the intrinsic value of its gold and iron ore assets in west Africa
• investors tend to prefer 'pure play' single commodity focused entities for undertaking valuations and market comparisons
• providing shareholders with a shareholding in a new company that holds the gold assets, pro-rata to their shareholding in African Aura (which will hold the iron ore assets), will offer exposure to the potential value to be created from each set of assets
• following the completion of the Arrangement (as defined below), each of African Aura and Aureus (as defined below) will be better positioned to finance their respective businesses and grow through exploration and acquisition

The Arrangement
African Aura proposes to complete the reorganization by way of a plan of arrangement (the "Arrangement"), which will be subject to regulatory, shareholder and court approval. Pursuant to the Arrangement, as currently proposed, African Aura's gold assets and any related liabilities (as well as its shareholding interest in Stellar Diamonds plc and an amount of cash) will be transferred to a new company to be incorporated and proposed to be called "Aureus Mining Inc." ("Aureus"), with African Aura retaining its current interest in its iron ore assets. Under the Arrangement, holders of African Aura common shares will be entitled to receive new common shares of African Aura and common shares of Aureus in exchange for the common shares of African Aura held by such holders on the record date of the Arrangement. Upon completion of the Arrangement, African Aura shareholders will continue to hold a 100% interest in the assets of both African Aura and Aureus, through their separate shareholdings in each of African Aura and Aureus. It is expected that neither African Aura nor Aureus will hold shares in the other.

While the proposed Arrangement remains subject to further review and approval by African Aura's Board of Directors, the Company is in the preliminary planning stages and has already applied for an advance income tax ruling from the Canada Revenue Agency (the "CRA") to confirm that the Arrangement may be completed on a tax neutral basis for African Aura, its shareholders and Aureus.

The completion of the Arrangement will be conditional upon, among other matters, the Toronto Stock Exchange (the "TSX") and AIM of the London Stock Exchange ("AIM") having conditionally approved the listing thereon of the Aureus common shares to be received by African Aura's shareholders pursuant to the Arrangement, subject only to compliance with the usual requirements of the TSX and AIM, as applicable.

The Arrangement will also be subject to shareholder approval by at least two-thirds of the votes cast by shareholders of African Aura at a meeting of shareholders called for such purpose. The Company expects to deliver an information circular, describing the proposed Arrangement in greater detail, to shareholders, with a view to holding a special meeting of shareholders to approve the Arrangement and completing the Arrangement in Q1 2011. Further particulars relating to the Arrangement, including the record and meeting dates for such shareholders' meeting, will be announced in due course by press release.

As announced in the Company's press release dated November 1, 2010, David Reading has been appointed as a non-executive director to the Board of Directors with immediate effect. Upon completion of the Arrangement, it is anticipated that Mr. Reading will be appointed as the Chief Executive Officer of Aureus as well as a director, and will be joined by David Netherway (as non-executive Chairman), Steven Poulton (as a non-executive director) and Luis da Silva (as a non-executive director) on the Board of Directors of Aureus. The Directors of African Aura are presently considering additional individuals for nomination to the Board of Directors of Aureus.

Luis da Silva, President & CEO of African Aura commented:
"African Aura is in the enviable position of having advanced potentially 'company making' assets in two different commodities. The Board recognises that, when compared to its peer group, African Aura's current capitalisation can conceivably be defended by either its iron ore assets alone or its gold assets alone. The Arrangement, if completed as envisaged, is a mechanism designed to allow shareholders to benefit from the value of owning a share in each of two dedicated pure play entities. Shareholders will be entitled to receive one new share in African Aura and one share in Aureus for each share they hold in African Aura. We look forward to keeping shareholders updated on the progress of the Arrangement".

About African Aura Mining Inc.
African Aura is an established exploration and development company listed on the TSX Venture Exchange (AUR) and London's AIM (AAAM). The Company operates two divisions, namely: iron ore and gold:

• The iron ore division includes a 38.5% interest in the 12-13km long Putu iron ore project in Liberia, located approximately 125km inland from the deepwater shoreline of eastern Liberia. Putu is moving through pre-feasibility managed by African Aura's joint venture partner Severstal Resources (the mining division of Moscow listed OAO Severstal), who has invested US$30m to earn a 61.5% interest in the project. Putu has a NI-43-101 compliant mineral resource of 1.08 billion tonnes of iron ore at 37.6% total iron, from drilling undertaken on a 2.6km section of the ridge, which is less than 25% of the project's strike length. The best drill results to date are 91m at 61.3% Fe oxidised Banded Iron Formation ("BIF") hematite and 232m at 40.8% Fe magnetite. A further 21,500m has been drilled (as of October 26, 2010) since the mineral resource calculation.
• The iron ore division also includes a 100% interest in the Nkout iron ore project in Cameroon. Nkout is defined by an 8km long geophysical anomaly, co-incident with a range of hills, from which surface sampling to date has returned an average grade of 55% Fe. A further 12km of modelled BIF has been defined by airborne geophysics. Nkout is presently the subject of a 4,500m initial mineral resource definition drilling programme, which has intersected up to 75m of hematite BIF and 195m of magnetite BIF. The drill programme is designed to provide a maiden inferred mineral resource estimate and, subject to results, will be followed up by a further 4,000m of drilling.
• The gold division includes the New Liberty gold deposit, which is a classic Archaean shear zone hosted greenstone gold deposit located in western Liberia. The project has a mineral resource of 1.38 million ounces (NI 43-101 compliant 13.533 Mt measured and indicated mineral resource at 3.18 g/t gold) projected to a depth of 300m, comprising three zones along a 1.75km strike length. The best drill intersect from New Liberty is currently 8.45 g/t Au over 37m from 55m depth and the deposit, which crops out at surface, remains open at depth. Metallurgical testwork undertaken by the Company on drill core from New Liberty has indicated a non-refractory ore with excellent expected recoveries of up to 93%. A Resource Statement and Preliminary Economic Assessment by AMC Consultants (UK) Limited are presently underway, both of which will contribute to a Definitive Feasibility Study for an open pit followed by an underground gold mine, targeting 100,000oz annual production.
• New Liberty is one of a series of gold deposits located within the Company's 457km² 'Class A' 25 year renewable Mining Licence. At the Ndablama prospect, located 40km north east of New Liberty, it is estimated by the Company that over 4,000 artisanal miners are actively mining gold during the rainy season. Geologically, Archaean greenstone belts are known to host major gold mines in Canada, Australia, the Democratic Republic of the Congo and Tanzania. The Company considers that the Archaean geology of the Man Craton of west Africa is one of very few provinces globally that is highly prospective, but has yet to be systematically explored.

In addition, the Company has an approximate 22% interest in AIM-listed diamond producer Stellar Diamonds plc (AIM: STEL, www.stellar-diamonds.com).

The Company has a highly motivated and experienced team with a track record of discovering mines and taking projects through development and into production. As a pioneer, African Aura has attracted some excellent strategic partners and shareholders, always with the objective of preserving or enhancing shareholder value.

Forward-Looking Information
This press release contains certain forward-looking information. All information, other than information regarding historical fact, that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this press release includes, but may not be limited to: the future plans and objectives of African Aura, including the completion of the proposed Arrangement and the terms, timing and consequences relating thereto; the anticipated management and Board of Directors of Aureus; the listing on the TSX and AIM of the Aureus common shares to be received by African Aura shareholders in connection with the proposed Arrangement; mineral resource estimates; information relating to the continued exploration and development of African Aura's mineral properties; statements relating to the application for an advance income tax ruling from the CRA; future production at the Company's New Liberty gold deposit; and expectations relating to the completion of an inferred mineral resource estimate on the Company's Nkout project. The foregoing and other forward-looking information contained in this press release reflects the current expectations, assumptions or beliefs of African Aura based on information currently available to African Aura. With respect to the forward-looking information contained in this press release, African Aura has made assumptions regarding, among other things: general business, economic and mining industry conditions; African Aura's mineral resource estimates; the completion of the Arrangement, including the receipt of all necessary approvals to proceed therewith; the Company's ongoing exploration and development activities; and it has also been assumed that no material adverse change in the price of precious and/or base metals occurs and no significant events occur outside of African Aura's normal course of business.

Such forward-looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: delays in obtaining, or a failure to obtain, required regulatory approvals (including the approval of the TSX and AIM with respect to the listing of the Aureus common shares to be received by African Aura's shareholders as part of the proposed Arrangement); the Company's inability to complete the proposed Arrangement or obtain a favourable confirmation from the CRA regarding the tax consequences of the Arrangement; risks normally incidental to exploration and development of mineral properties; uncertainties in the interpretation of drill results and mineral resources estimates; adverse changes in precious and/or base metal prices; and future unforeseen liabilities and other factors including, but not limited to, those listed under "Risk Factors" in the Company's Annual Information Form dated April 30, 2010 available under the Company's profile on SEDAR at www.sedar.com.

Forward-looking information speak only as of the date on which it is made and, except as may be required by applicable law, African Aura disclaims any obligation to update or modify such forward-looking information, either as a result of new information, future events or for any other reason.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

For further information:

on the Company you are invited to visit its website at www.african-aura.com, or SEDAR's website at www.sedar.com, or contact one of the following:

African Aura Mining Inc.
Luis da Silva, President & CEO   Tel: [phone]

Evolution Securities Limited
Simon Edwards / Tim Redfern   Tel: [phone]

Pelham Bell Pottinger
Charles Vivian / James MacFarlane   Tel: [phone]