Tanfield Group PLC

("Tanfield" or the "Company")

Notice of General Meeting, proposed issue of shares and update on investments

Tanfield announces that a General Meeting ("GM") will be held at 11:00 a.m. (UK time) on 16 March 2016 at Sandgate House, 102 Quayside, Newcastle-upon-Tyne, NE1 3DX.  Information on the resolutions can be found in the Notice of General Meeting circular that will be sent to shareholders and made available on the Company's website www.tanfieldgroup.com on 22 February 2016.

The Company also announces that it has, subject to shareholder approval at the GM, raised a total of £400,000 through the placing of 2,758,620 ordinary shares ("the Placing Shares") at a price of 14.5 pence per share ("the Placing") from existing investors and new investors via Peterhouse Corporate Finance. The placing price represents a premium of 6% on the closing market share price on 15 February 2016 and the funds will be used to meet the ongoing running costs of the Company. 

The Placing Shares will, if approved by Shareholders and when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 5 pence each in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares.

It is expected that, if approved at the GM, the Company will apply for admission of the Placing Shares to trading on AIM, a market operated by the London Stock Exchange plc (the "Admission") and that Admission will take place and that trading in the Placing Shares will commence on or around 22 March 2016.  The Placing is conditional upon Admission becoming effective.

Following Admission, the Company's enlarged issued share capital will comprise 153,712,693 Ordinary Shares. The Company holds no shares in treasury. Therefore the total number of Ordinary Shares with voting rights is 153,712,693, which figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Jon Pither, a director of the Company, has participated in the Placing and subscribed for 48,276 shares and, following Admission, through Management Services Cambridge Limited will be interested in 1,451,524 Ordinary Shares, representing approximately 0.94% of the Company's enlarged issued share capital. Daryn Robinson, a director in the Company, has also participated in the Placing and subscribed for 20,690 shares and, following Admission, will be interested in 567,430 Ordinary Shares, representing approximately 0.37% of the Company's enlarged issued share capital.

Investments

Snorkel International Holdings LLC ("Snorkel") - As announced on 2 December 2015, based on information provided by Snorkel, Tanfield estimated that Snorkel sales in 2015 would be approximately 30% higher compared to 2014 as the business continues to progress year on year.  The carrying value of the 49% holding and the preferred interest holding (Loan note) is $60.1 million as set out in the Company's interim accounts which, based on the current exchange rate, is around £41.5 million.  This represents approximately 27 pence per share of the proposed enlarged issued share capital.

Smith Electric Vehicles US ("Smith") - The composition of the Board of Smith has recently changed with the appointment of two Directors, including a new Chairman (www.smithelectric.com).  Following the announcement on 14 October 2015, in which it was announced that Smith had secured a loan of $2.9m, Smith has informed Tanfield that it is still seeking to raise further funding that is required to implement its growth plan and that this funding may now take the form of convertible debt in place of the originally proposed Subscription Rights Offering . The carrying value of Smith in the interim balance sheet of the Company at 30 June 2015 was £4.8m, amounting to approximately 3.1 pence per share of the proposed enlarged issued share capital.  The board of Tanfield is currently reviewing the position of the investment in Smith and its carrying value and will update shareholders in due course.

For further information:

Tanfield Group Plc

Daryn Robinson                                                                                0700 349 7489

WH Ireland Limited - Nominated Advisor

James Joyce / Nick Prowting                                                      020 7220 1666

Peterhouse Corporate Finance - Broker

Peter Greensmith / Duncan Vasey                                          020 7220 9797