IGE takes write-down of diamond project - cash outflow significantly reduced

IGE takes write-down of diamond project - cash outflow significantly
reduced

IGE Resources AB (OSE: IGE) today announced the Company's first quarter
2011 results. IGE's EBITDA came in at SEK -24.3 million, which is at par
with last year's first quarter. The Company's result before tax ended at
SEK -169.6 million, after a SEK 144.9 million write-down of the
Cassanguidi diamond mine in Angola.

IGE had revenues of SEK 4.9 million in the first quarter, while the
Company had no revenues in the same period last year. All revenues in
the first quarter are attributable to diamond sales from the Cassanguidi
mine.

"IGE has decided to put further financing of the Cassanguidi project on
hold. Insufficient financing for major equipment replacement has caused
persistent operational interruptions, which have had a significant
adverse effect on revenue generation from the project. As the outcome of
the ongoing discussions with third parties remains uncertain, we have
decided on the write-down as a precautionary measure," said IGE's acting
CEO Thomas Carlsson.

A full review of IGE's diamond strategy has been initiated. The Company
holds licenses totalling more than 12 million carats of diamonds
(verified and additional resources combined) across three countries in
Sub-Saharan Africa.

An updated preliminary economic assessment of the Rönnbäcken nickel
project in Sweden presented in the first quarter suggests significantly
increased project value compared to previous assessments and
demonstrates that Rönnbäcken is a commercially viable nickel project.
IGE is preparing an IPO of the subsidiary holding the Rönnbäcken asset,
Nickel Mountain Resources, in June.

IGE Resources is currently in the process of strengthening its financial
basis. Cash outflow is being significantly reduced following the closure
of the Luxinge, Angola, mine and the investment halt in Cassanguidi as
well as the planned IPO of Nickel Mountain Resources. Furthermore, a
cost reduction programme is being implemented and the share offering
completed on 30 May 2011 has provided additional equity.

For additional information, please contact:

Thomas Carlsson

CFO and acting CEO, IGE Resources AB   

Tel: +46 8 402 28 05 / +46 70 552 26 22

E-mail: thomas.carlsson@ige.se (thomas.carlsson@ige.se)

IGE Resources AB (publ) is a Scandinavian company mainly focusing on
diamonds exploration and production in Southern Africa. IGE's portfolio
also includes one of Northern Europe's largest nickel deposits and gold
exploration projects in Kenya. IGE is headquartered in Stockholm and its
shares are listed on the Oslo Stock Exchange (ticker: IGE). Please refer
to www.ige.se (http://www.ige.se/) for more detailed information.