Arabian American Development Company Announces Key New Investment Partner; Arab Mining Company Invests US $37.3 Million for 10% Ownership

Arabian American Development Co. (Nasdaq: ARSD) today announced that the Arab Mining Company (ARMICO) has invested US $37.3 million, acquiring five million shares, or 10% interest in Al-Masane Al-Kobra Mining Company (AMAK). This capital provides AMAK with the financing necessary to start full production in early 2012. ARMICO acquired a seat on AMAK's board which will be held by Mr. Sultan Al-Shawli, Saudi Deputy Minister for Petroleum and Minerals. Mr. Al-Shawli's election increases the total number of board members to nine.Arabian American is the original developer of the Al-Masane mining project, now known AMAK, which is in the final stages of development in Najran Province of southwestern Saudi Arabia.ARMICO paid 28 Saudi riyals per share for their 10% stake in the AMAK joint stock company. With 50 million shares now outstanding, this investment now values the Company at 1.4 billion Saudi riyals, or US $373 million. AMAK's Saudi partners now own 53% (previously 59%) and Arabian American now owns 37% (previously 41%). Further, this values the Saudi partners' stake at $198 million compared to their initial investment of $60 million, and ARSD's stake is now valued at $138 million or $107 million more than the amount currently carried on ARSD's balance sheet. As a result of this equity infusion, AMAK's cash flow projections indicate adequate funds available for the commencement of operations and the start of operating cash flows assuming successful operational testing of the mill beginning in the fall of 2011 and production in early 2012.