Post on 11-Sep-2021
Directors: D v Heerden, NJ Odendaal, U Engelmann
Company Registration No.: 2004/029587/07
Miranda Mineral Holdings
Limited
An Independent Competent Person’s
Report on the Rozynenbosch Project,
Northern Cape Province, South Africa
Mineral Resource & Mineral Asset
Valuation Report
COMPETENT PERSON:
U Engelmann
BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat., MGSSA
Minxcon Reference: M2017-027a
Effective Date: 31 January 2018
Version: Final 20180622
Issue Date: 12 March 2018
Prepared by Minxcon (Pty) Ltd
Suite 5 Coldstream Office Park,
Little Falls, Roodepoort, South Africa
Tel: +2711 958 2899
Miranda Mineral Holdings Limited
An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource &
Mineral Asset Valuation Report i
DATE AND SIGNATURE PAGE
This Report titled “An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape
Province, South Africa, Mineral Resource & Mineral Asset Valuation Report” prepared for Miranda Mineral
Holdings Limited has an effective date of 31 January 2018, and has been prepared and signed on 12 March
2018 by the following authors:-
COMPETENT PERSON
U Engelmann (Director, Minxcon)
BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat., MGSSA
Miranda Mineral Holdings Limited
An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource &
Mineral Asset Valuation Report ii
CONTRIBUTING AUTHORS
L Hope (Senior Resource Geologist)
NHD (Econ. Geol.), Pr.Sci.Nat.
J Scholtz (Mining Engineer & Valuator)
B Eng Hons (Min.), ASAIMM
PG Obermeyer (Mineral Resource Manager)
BSc Hons (Geol.), Pr.Sci.Nat.
AM Deiss (Associate Geologist)
BSc Hons (Geol.), Pr.Sci.Nat., SAIMM
M Antoniades (Geologist)
BSc Hons (Geol.), Cand.Sci.Nat., MGSSA
DS Rathogwa (Exploration Geologist)
BSc (Geol. & Math.), BSc Hons (Geol.), MGSSA
JW Knight (Senior Process Engineer)
B Eng (Chem.), B Eng Hons (MOT), Pr.Eng., MSAIMM
COMPETENT VALUATOR
NJ Odendaal (Director, Minxcon)
BSc (Geol.), BSc Hons (Min. Econ.), MSc (Min. Eng.), Pr.Sci.Nat., FSAIMM, MGSSA
Miranda Mineral Holdings Limited
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DISCLAIMER AND RISKS
This Report was prepared by Minxcon (Pty) Ltd (“Minxcon”). In the preparation of the Report, Minxcon
utilised information relating to operational methods and expectations provided to them by various sources.
Where possible, Minxcon has verified this information from independent sources after making due enquiry
of all material issues that are required in order to comply with the requirements of the SAMREC Code and
SAMVAL Code. Minxcon and its directors accept no liability for any losses arising from reliance upon the
information presented in this Report. The authors of this report are not qualified to provide extensive
commentary on legal issues associated with rights to the mineral properties and relied on the information
provided to them by the issuer. No warranty or guarantee, be it express or implied, is made by the authors
with respect to the completeness or accuracy of the legal aspects of this document.
OPERATIONAL RISKS
The business of mining and mineral exploration, development and production by their nature contain
significant operational risks. The business depends upon, amongst other things, successful prospecting
programmes and competent management. Profitability and asset values can be affected by unforeseen
changes in operating circumstances and technical issues.
POLITICAL AND ECONOMIC RISK
Factors such as political and industrial disruption, currency fluctuation and interest rates could have an
impact on future operations, and potential revenue streams can also be affected by these factors. The
majority of these factors are, and will be, beyond the control of any operating entity.
FORWARD LOOKING STATEMENT
Certain statements contained in this document other than statements of historical fact, contain forward-
looking statements regarding the operations, economic performance or financial condition, including,
without limitation, those concerning the economic outlook for the mining industry, expectations regarding
commodity prices, exchange rates, production, cash costs and other operating results, growth prospects
and the outlook of operations, including the completion and commencement of commercial operations of
specific production projects, its liquidity and capital resources and expenditure, and the outcome and
consequences of any pending litigation or enforcement proceedings.
Although Minxcon believes that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to be correct. Accordingly, results
may differ materially from those set out in the forward-looking statements as a result of, among other
factors, changes in economic and market conditions, changes in the regulatory environment and other State
actions, success of business and operating initiatives, fluctuations in commodity prices and exchange rates,
and business and potential risk management.
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EXECUTIVE SUMMARY
Minxcon (Pty) Ltd was commissioned by Miranda Mineral Holdings Limited to complete a compliant
Independent Competent Person’s Mineral Resource Report with a full mineral asset valuation on the
Rozynenbosch Project, located in the Northern Cape Province, South Africa.
The Report was commissioned in order to comply with regulations of the Johannesburg Stock Exchange for
listed companies. The purpose of the valuation is to comply with the JSE Section 12 disclosure requirements
for Mineral Companies. The Report is compiled in compliance with the South African Code for Reporting of
Exploration Results, Mineral Resources and Mineral Reserves (2016 Edition) (or SAMREC Code), and in terms
of the specifications embodied in the Standards of the South African Code for the Reporting of Mineral Asset
Valuation (2016 Edition) (or SAMVAL Code). All requirements of the JSE Section 12.9 Listing Requirements
and the SAMREC Code (including Table 1) and SAMVAL Code have been complied with. The Report has an
effective date of 31 January 2018.
The purpose of the CPR is to comply with continuing obligations as required by the JSE Listings Requirements,
comply with the Listings Requirements with regard to the publication of the CPR on the Company’s website,
and comply with lifting of the suspension of the trading in the Company’s shares. The CPR will be used to
provide an update the Company shareholders, and the information presented will be utilised in the
Company’s Integrated Report.
The Competent Person deems this summary to be a true and accurate reflection of the full CPR.
PROPERTY DESCRIPTION
The Rozynenbosch Project is an exploration project that targets a lead-silver-zinc and copper deposit on the
farm Rozynenbosch 104 in the Kenhardt District of the Northern Cape. In the 1970s and 1980s, the property
was extensively explored by Phelps Dodge Corporation and Goldfields South Africa.
The Project Area is located some 38 km due southeast of the town of Kakamas in the Northern Cape Province
of South Africa. The larger town of Upington lies 78 km due northeast and the village of Klein Koegab lies 2
km northwest. The seasonal Hartbees River forms the western boundary of the Project Area.
Location Map
The location of the Project is shown in the following figure.
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Location of Project Area
Location of Project Area January 2018
Ownership
The currently active South African Mining Charter (2010) requires a minimum of 26% Black Economic
Empowerment (“BEE”) shareholding. On fulfilment of the conditions precedent set out in the agreement
regulating the Miranda Minerals (Pty) Ltd BEE transaction, Kwanda Minerals Holdings (Pty) Ltd, together with
a trust established by Miranda for the benefit of the mining community situated in and around the
Rozynenbosch area, will constitute the BEE component of Miranda Minerals (Pty) Ltd with a 30% share capital.
The proposed corporate structure as it relates to Rozynenbosch is illustrated in the figure to follow.
Proposed Corporate Structure
Proposed Corporate Structure January 2018
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Rozynenbosch is held under executed prospecting right NC 30/5/1/1/2/0533 PR (“533 PR”), issued over
portions 4 and 5 of the farm Rozynenbosch 104, to Miranda Minerals (Pty) Ltd on 5 February 2018 in respect
of copper ore, cobalt, zinc and lead. The 533 PR encompasses an area of 6,483.37 ha and is valid for three
years, expiring on 4 February 2021. It is noted that silver is not currently included as a commodity
encompassed by this 533 PR. Silver is present in sufficient quantities to be included as a material Mineral
Resource and a value placed thereupon. An amendment to the original 533 PR to include silver is currently
under preparation by Miranda.
No surface rights or environmental permits are held over the property by Miranda or its subsidiaries. The
Competent Person is not aware of any environmental risks relating to the Project.
GEOLOGY AND MINERALISATION
Regional Geology
The Namaqua-Natal Metamorphic Complex, or NMC (refer to the figure to follow), is a tectonostratigraphic
province that stretches 1,400 km across South Africa and Namibia, is approximately 400 km wide and is
truncated by the ~600 Ma Pan-African Gariep and Saldania belts in the west and south respectively.
Location of the Tectonostratigraphic Namaqua-Natal Metamorphic Complex in Relation to the Kaapvaal Craton
Source: adapted from Sithole 2013 and Cornell, 2006
Location of the Tectonostratigraphic Namaqua-Natal Metamorphic Complex in Relation to the Kaapvaal Craton
January 2018
The NMC represents a transpressional tectonic environment that formed by a combination of compressional
and strike slip tectonics which is associated with uplift and the formation of thrusts.
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The regional-scale faulting subdivides the western belt of the NMC into a number of tectonic domains and
subprovinces of distinct tectonometamorphic history. These include the Richtersveld Subprovince (to the
northwest), Bushmanland Subprovince (consisting of the Bushmanland and the Garies Terranes), Gordonia
Subprovince (Kakamas Terrane, Areachap Terrane) and the Kheis Subprovince or Kaaien Terrane, as depicted
in the figure to follow.
Subprovinces and Main Shear Zones of the Namaqua-Natal Metamorphic Complex
Source: Adapted from Lambert, et al. (2017)
Subprovinces and Main Shear Zones of the Namaqua-Natal Metamorphic Complex
January 2018
Local Geology
The Rozynenbosch deposit is located within the Kakamas Terrane of the Gordonia Subprovince which extends
westwards from the TSZ to the Hartbees River Thrust and is subdivided into two terranes, namely the
Areachap and Kakamas terranes.
The Areachap Terrane to the east comprises the Areachap and Korrannaland groups and also the granites of
the Keimoes Suite. The Kakamas Terrane occupies the western portion of the sub-province and consists
predominantly of augen gneisses which underlie the Korrannaland Group.
The Gordonia Subprovince was subjected to high-grade regional metamorphism of upper amphibolite to lower
granulite facies due to several thermal events associated with the intrusion of the Keimoes Suite granitoids.
The Kakamas Terrane is dominated by numerous intrusions along with lesser metasedimentary rocks of the
Korannaland Group and has been subjected to varying degrees of deformation. The metasedimentary rocks
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include highly deformed granulite to amphibolite gneiss, calc-silicate and feldspathic quartzite and
charnockites.
Property Geology
NMC metamorphic lithologies of the Rozynenbosch Formation as well as later intrusives belonging to the
Keimoes and Eendoorn suites outcrop on Rozynenbosch, as depicted in the figure below.
Surface Geology at Rozynenbosch
Source: Miranda Mineral Holdings Limited (2012)
Surface Geology at Rozynenbosch January 2018
The Rozynenbosch Pb-Zn-Cu-Ag deposit is located within the Rozynenbosch Formation just east of the
Hartbees River Thrust on the western boundary of the Kakamas Terrane which forms part of the Vyfbeker
Metamorphic Suite of the Hartbees River Fragment or Complex. The Formation comprises two main rock types
groups, namely a felspathic (arkosic) unit consisting of quartz / feldspar / biotite gneiss and a calc-silicate
unit comprising amphibole, metadolomite, marble and calc-silicate rocks with minor granitic gneiss and
biotite gneiss. The lenticular-shaped stratabound orebodies of disseminated sulphides are hosted mainly by a
garnetiferous leucogneiss.
At least four phases of deformation have been recognised at Rozynenbosch. The phases of deformation are
characterised by plastic folding events and are labelled from F2 through to F5. The F3 fold axes trend
northwest to southeast with a mean stratigraphic strike approximating east to west and form the dominant
regional fabric. The F2 structures are located within the limbs of the F3 fold structures. Both F2 and F3
structures have been interpreted as asymmetric isoclinal structures. The F4 and F5 deformational events
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overprinted the F2 and F3 events in the form of flexural folding, resulting in the F2 and F3 structures forming
open-ended doubly-plunging features.
Mineralisation
The Rozynenbosch deposit is classified as a sedimentary exhalative, or SEDEX, deposit but mineralisation was
later remobilised and tectonically displaced during thrusting of the Hartbees River Thrust event and/or the
final stages of northward convergence related to the main Kibaran-aged Namaqua event.
SEDEX deposits are products of dewatering and metamorphism of the piles of accumulated sediments within
ocean basins with anoxic conditions by means of venting hydrothermal solutions into a submarine
environment. Metals are carried in solution as chloride/sulphide complexes and precipitate out of solution
with the decrease in temperature when the hydrothermal fluid mixes with the ocean water.
SEDEX deposits form where anoxic (lacking oxygen) conditions occur, requiring several kilometres of
sediment, and are heat driven primarily by depth of burial rather than through intrusions, thus explaining the
lack in copper that is usually associated with mafic intrusions. Lead, zinc and silver mineralisation is purely
derived from leaching of the sediments themselves.
The mineralogy of the sulphides includes galena, sphalerite, chalcopyrite and pyrite. Grades in the
disseminated ore are up to 2% Pb and 18 g/t Ag. Copper and zinc values are negligible.
STATUS OF EXPLORATION
All exploration data for the Project is historical in nature, dating from the early 1970s and mid-1980s and
undertaken predominantly by Phelps Dodge, and later by Goldfields South Africa when they entered into a
JV with Phelps Dodge. This data includes geophysical surveys, geochemical soil sampling, geochemical
stream sampling, mineralogical work, geological mapping and drilling (68 drillholes in total). The drilling
samples were analysed for lead, zinc, silver and specific gravity. Unfortunately, not all the information is
available.
Further exploration or infill drilling will be required to increase the confidence of the Mineral Resource and
upgrade the Mineral Resource classifications. No budgets have been calculated for further exploration.
KEY MODIFYING FACTORS
The Mineral Resource was declared at a lead equivalent grade of 1.9% and also tested for reasonable
prospects for eventual economic extraction by testing a depth cut-off to the Mineral Resource. The depth
cut-off (including the extended Exploration Target model and silver in the Pb equivalent equation) was 240
m and the therefore included the entire Inferred Mineral Resource which has a maximum depth of 140 m
and therefore falls within this limit.
Owing to the fact that silver is not included in the current prospecting right but is in the process of being
applied for, Minxcon ran another test for reasonable prospects for eventual economic extraction by
excluding the silver from the pit optimisation runs and Pb equivalent equation. This does have an effect on
the pit depth. The pit excluding silver only goes to 100 m and therefore a depth cut-off of 100 m is also
applied to the Mineral Resource excluding silver.
A recovery factor of 80% was also applied in the cut-off calculations.
A geological loss factor of 15% was applied to the Mineral Resource.
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No socio-economic factors were applied to the Mineral Resource.
DEVELOPMENT AND OPERATIONS
Mining
To date no mining has taken place at the Rozynenbosch Project and the Competent Person is not aware of
any mining related studies that have been completed to date. The mineralisation, however, extends from
near-surface and therefore could lend itself to open pit mining.
Processing
The Competent Person is not aware of any metallurgical studies that have been completed to date.
However, the recovery of lead and zinc concentrates from ores containing galena and sphalerite will take
place by means of flotation processes. It is anticipated that the Rozynenbosch orebody would be treated by
means of crushing, milling and a differential flotation potentially producing separate lead-silver and zinc
concentrates depending on the plant feed grades.
MINERAL RESOURCES
Geological Model
The geological model was created using historic sections and drillholes to create a 3D geological model. The
main horizons modelled were the amphibolites and pegmatites. The image below shows the historic sections.
Typical Hand Drawn Geological Section - Section 240 Looking West
Typical Hand Drawn Geological Section - Section 240 Looking West January 2018
These sections were georeferenced and used as guidelines for the creation of the wireframes. The
georeferenced sections of Rozynenbosch are illustrated in the figure to follow.
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Geological Sections and Plans Referenced into 3D Space
Geological Sections and Plans Referenced into 3D Space January 2018
The model for the amphibolites and the pegmatites is shown in the image below.
Geological Model of the Amphibolites and Pegmatites
Geological Model of the Amphibolites and Pegmatites January 2018
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The ore mineralisation was created using grade shells based on a 0.5% Pb natural cut-off. The shape and
direction of the shells was based on the plunge of the folding and the relationship of the lead values when
plotted using variography of the values. The final grade shells are shown in the following figure.
Mineralised Halo using a 0.5% Pb shown with the Drillholes used to Inform the Halo
Mineralised Halo using a 0.5% Pb shown with the Drillholes used to Inform the Halo
January 2018
Estimation Technique
Inverse distance squared was used in the estimation and two separate runs were conducted. The raw drillhole
assays were used for the estimation of the Inferred Mineral Resource, and an Exploration Target estimation
was carried out on a historical USD4 cut value based on the lead. The Exploration Target estimation is used
as an indicative estimation of the target zone as none of the original assay values are available for the
estimation.
The search ranges for the estimation are based on an omnidirectional variogram range of the lead values and
a minimum of two drillholes were used for the estimation. A minimum of five samples and a maximum of 20
samples were used to inform the estimation.
The omnidirectional variogram with a range of 88 m for the lead and 95 m for the zinc was used in the search
parameters of the estimation.
The silver was not estimated as too few samples are available for the estimation. A good correlation of 94%
between silver and lead is displayed and a regression of the silver values was done based on this correlation.
Mineral Resource Classification
Categorisation of the Mineral Resource could only be classified as Inferred due to the lack of QAQC,
uncertainty of the exact position of the drillholes and the absence of all available raw assay information.
Although the QAQC was not necessary as code compliance when drilled, the reputation of the companies that
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conducted the drilling has lead the Competent Person to accept that necessary steps were taken to ensure
quality assays. Where only the estimation of the raw samples was done, this was included in the Inferred
classification. Where only cut-off values were used, this was classified as an Exploration Target.
Mineral Resource Statement
Mineral Resources are stated at a 1.9% Pb equivalent cut-off and no depth cut-off as the Datamine Maxipit
optimisation runs resulted in a maximum pit depth of 240 m (including the extended Exploration Target
model), which includes the entire Inferred Mineral Resource which has a depth of 140 m. The Mineral
Resources for Rozynenbosch as estimated by Minxcon and signed off by the Competent Person as at 31 January
2018. The equation for the Pb equivalent, including silver, is as follows:- PbEq% = Pb% + (Zn% x 1.14) + (Ag
ppm x 0.0313).
Rozynenbosch Mineral Resources, Including Silver, as at 31 January 2018
Mineral Resource Classification Tonnes (Less Geol. Losses) Pb Zn Ag
Mt % % g/t
Inferred 3.10 2.17 0.31 36.47
Notes:
1. Cut-off of 1.9% Pb equivalent (including silver).
2. The entire resource falls within the economic open pit depth cut-off.
3. Ag is a regressed value.
4. Ag is not covered by the current PR.
5. A geological loss of 15 % has been applied to the Mineral Resource.
6. The Inferred Mineral Resources have a large degree of uncertainty as to their existence and whether they can be mined
economically. It cannot be assumed that all or any part of the Inferred Mineral Resource will be upgraded to a higher
confidence category.
7. All reported Mineral Resources are limited to fall within the property boundaries of the Project Area.
8. A density of 2.84 t/m3 was utilised.
Miranda is in the process of applying for the silver rights to be included in the prospecting right and Minxcon
believes that there are reasonable prospects for them to obtain the silver rights as the project will not be a
standalone silver operation and therefore would not make sense to award the silver rights to another entity.
However, Minxcon has included a Mineral Resource for Rozynenbosch excluding the silver in the Pb equivalent
cut-off (PbEq% = Pb% + (Zn x 1,14), as illustrated in the following table.
Rozynenbosch Mineral Resources, Excluding Silver, as at 31 January 2018
Mineral Resource Classification Tonnes (Less Geol. Losses) Pb Zn
Mt % %
Inferred 1.79 2.78 0.37
Notes:
1. Cut-off of 1.9% Pb equivalent (excluding silver).
2. The economic open pit depth cut-off of 100m has been applied.
3. A geological loss of 15 % has been applied to the Mineral Resource.
4. The Inferred Mineral Resources have a large degree of uncertainty as to their existence and whether they can be mined
economically. It cannot be assumed that all or any part of the Inferred Mineral Resource will be upgraded to a higher
confidence category.
5. All reported Mineral Resources are limited to fall within the property boundaries of the Project Area.
6. A density of 2.84 t/m3 was utilised.
Upside Potential
An Exploration Target has been estimated for the down dip extension of the Inferred Mineral Resource. This
portion of the project could possibly be an Inferred Mineral Resource if all the historical data was available
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and was of a sufficient quality. However, due to the lack of data, the Competent Person has qualified it as
an Exploration Target. The Exploration Target ranges are indicated below.
Rozynenbosch Exploration Target as at 31 January 2018
Target at a Cut-off at 1% Pb Tonnes Pb Zn Ag
Mt % % g/t
Maximum 4.4 2.25 0.53 36.01
Minimum 3.6 1.95 0.43 18.17
The potential tonnage and grade of the above Exploration Target ranges are conceptual in nature; there is
insufficient exploration data to estimate a Mineral Resource and it is uncertain if further exploration will
result in the estimation of a Mineral Resource.
The image to follow illustrates the licence boundary and the mineralised area within the Project Area.
Area of Interest
Area of Interest January 2018
VALUATION
Rozynenbosch is a polymetallic orebody consisting of lead, zinc, copper and silver, with the possibility of
gold. However, the diamond drillhole samples dispatched to the laboratory were only analysed for lead, zinc,
copper and silver; and not for gold. The figure below illustrates the value spread for Rozynenbosch,
demonstrating that the most value lies in lead (59%), followed by silver (24%) and zinc (17%), respectively. It
is noted that silver could be the second largest revenue contributor, and although the current prospecting
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right excludes silver, an amendment application is under preparation to include this commodity in the right.
The valuation includes the contribution for silver.
Value Spread of Rozynenbosch Mineral Resources
The two approaches used were the Market approach and Cost approach. The effective shareholding of
Miranda Mineral Holdings Limited in the project is currently 100% and the valuation therefore represent the
full mineral asset value.
Primary Valuation
The market comparable approach was the primary valuation method used to determine the market value of
the asset and was applied on the total Zinc Mineral Resources (including the Zn equivalent) and Exploration
Target. The Project has a compliant Mineral Resource that was available for use in the valuation.
Four values were calculated for the comparative valuation based on the total Zinc Equivalent Mineral
Resource and upper and lower range for the Exploration Target, as displayed in the tables to follow. This
was done inclusive of silver and excluding silver, respectively.
The values calculated inclusive of silver were ZAR33 million including the lower estimate of the Exploration
Target and ZAR39 million including the upper estimate of the Exploration Target.
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Market Approach Valuation on Rozynenbosch Including Silver (Lower Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 3.1 2.65% 20.26 23.03
Rozynenbosch Exploration Target 3.6 2.26% 9.17 10.25
Combined 6.7 2.44% 14.76 33.28
Attributable Value at Proposed 70% Ownership 23.30
Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
Market Approach Valuation on Rozynenbosch Including Silver (Upper Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 3.1 2.65% 20.26 23.03
Rozynenbosch Exploration Target 4.4 2.92% 9.17 16.20
Combined 7.5 2.81% 13.51 39.22
Attributable Value at Proposed 70% Ownership 27.46 Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
The values calculated excluding silver was ZAR21 million including the lower estimate of the Exploration
Target and ZAR25 million including the upper estimate of the Exploration Target.
Market Approach Valuation on Rozynenbosch Excluding Silver (Lower Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 1.8 2.51% 20.26 12.58
Rozynenbosch Exploration Target 3.6 1.93% 9.17 8.74
Combined 5.4 2.12% 13.54 21.32
Attributable Value at Proposed 70% Ownership 14.93
Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
Market Approach Valuation on Rozynenbosch Excluding Silver (Upper Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 1.8 2.51% 20.26 12.58
Rozynenbosch Exploration Target 4.4 2.26% 9.17 12.54
Combined 6.2 2.33% 12.63 25.12
Attributable Value at Proposed 70% Ownership 17.58
Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
Secondary Valuation
The Project is in the exploration stage and therefore the valuator considered the cost approach as a suitable
method to determine a range of values. This historical value was used in the cost approach to derive a full
market value (not attributable) of ZAR42 million.
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Mineral Asset Valuation Report xvii
Rozynenbosch Cost Approach Project Valuation
Highest Phase of Project
PEM Historical
Cost Low Value Median Value High Value
Low Medium High ZAR million ZAR million
Historical Expenditure
Core Drilling 1.08 1.25 1.43 11.82 12.71 14.77 16.84
Classification of Inferred Mineral Resources
1.68 1.85 2.03 14.56 24.39 26.94 29.49
Total 26.38 37.10 41.72 46.33
Attributable Value at Proposed 70% Ownership 25.97 29.20 32.43 Note: ZAR/USD exchange rate of 13.83 used.
Range of Values
The Competent Valuator calculated a range of values using the upper and lower value of the market
approach and the values derived from the cost approach. The market approach is based on Mineral Resource
results coupled with acquisition information of various similar operations. The Competent Valuator’s
confidence in the market approach leads the Competent Valuator to prefer the results of the Market
Approach versus the Cost Approach.
The Competent Valuator derived a final market value, inclusive of silver, of ZAR36 million (ZAR25 million
attributable value at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR31
million (ZAR21 million attributable value at proposed 70% ownership) and upper range of ZAR42 million
(ZAR29 million attributable value at proposed 70% ownership).
Final Mineral Asset Market Value Range (Inclusive of Silver)
Approach Lower Value Median Value Upper Value
ZAR million
Market Approach 30.53 36.25 42.04
Market Value 30.53 36.25 42.04
Attributable Value at Proposed 70% Ownership 21.37 25.38 29.43
The Competent Valuator derived a final market value, excluding silver, of ZAR23 million (ZAR16 million
attributable value at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR20
million (ZAR14 million attributable value at proposed 70% ownership) and upper range of ZAR27 million
(ZAR19 million attributable value at proposed 70% ownership).
Final Mineral Asset Market Value Range (Excluding Silver)
Approach Lower Value Median Value Upper Value
ZAR million
Market Approach 19.80 23.22 26.69
Final Market Value 19.80 23.22 26.69
Attributable Value at Proposed 70% Ownership 13.86 16.26 18.68
RISKS
The Competent Person completed a risk analysis for the Project. No major risks were identified, although
all geological data used in this CPR is historical in nature.
COMPETENT PERSONS’ CONCLUSIONS
The following conclusions are made by the Competent Person for the Project:-
JSE 12.9 (h) (x)
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An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource &
Mineral Asset Valuation Report xviii
Mineral Resources
The wealth of historical data that has been collated has made it possible to compile a 3D model or the
orebody. The historic data was of sufficient quality and quantity to declare an Inferred Mineral Resource, it
is the Competent Person’s opinion that if the historical data was more complete, the Inferred Mineral
Resource could be Indicated and that a portion of the Exploration Target could be classified as an Inferred
Mineral Resource. The Competent Person has estimated an Inferred Mineral Resource, including silver, of
3.10 Mt at grades of 2.17% Pb, 0.31% Zn and 36.47 g/t Ag. The Inferred Mineral Resource excluding silver is
limited to 100 m depth and has 1.79 Mt at grades of 2.78% Pb and 0.37% Zn. The estimated Exploration
Target down dip of the Inferred Mineral Resource ranging between 3.6 Mt and 4.4 Mt and 1.95% Pb and 2.25%
Pb. The mineralised zones are from close to surface and are open ended at depth within the plunge of the
fold and the geology of the Rozynenbosch Project lends itself to open pit mining.
Valuation
The Competent Valuator derived a final value inclusive of silver of ZAR36 million (ZAR25 million attributable
value at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR31 million and upper
range of ZAR42 million (ZAR21 million and ZAR29 million respectively at proposed 70% ownership).
The average value per Zn Eq. Mineral Resource tonne calculated for Rozynenbosch is between USD13.51/Zn
Eq. t. and USD14.76/Zn Eq. t inclusive of silver, and between USD12.63/Zn Eq. t and USD13.54/Zn Eq. t
excluding silver, which is lower than similar historic arm’s length transaction values. The values are however
in-line with the median value of USD14.59/Zn Eq. t of similar transactions.
The lower value is attributable to the current level of exploration on the Project and Mineral Resource
category: the resource is 100% Inferred and a significantly lower USD/Zn Eq. t value was also attributable
to the Exploration Target.
COMPETENT PERSONS RECOMMENDATIONS
The following recommendations are made by the Competent Person regarding the Project:-
Mineral Resources
It is imperative that Miranda secures silver as part of their prospecting right.
Further exploration drilling is required to improve the confidence in the Mineral Resource and upgrade the
Mineral Resource classifications. Future drilling assaying should include the assay for silver to compile a larger
database for silver and more specific gravity testwork is required if additional drilling is to be completed. All
future drilling programmes should include and address the needs of current code QAQC.
Valuation
The valuation includes the contribution from silver. It is recommended that the amendment application to
include silver in the prospecting right be lodged in compliance with all regulations of the MPRDA and DMR in
order to facilitate approval of the amendment.
Miranda Mineral Holdings Limited
An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource &
Mineral Asset Valuation Report xix
TABLE OF CONTENTS
Executive Summary....................................................................................................... iv
1 Introduction ............................................................................................................. 1
1.1 Terms of Reference and Scope of Work ..................................................................... 1
1.2 Independence of the Issuer .................................................................................... 1
1.3 Sources of Information ......................................................................................... 2
1.4 Units and Currency .............................................................................................. 2
1.5 Competent Persons Site Inspection / Field Involvement ................................................. 2
1.6 Disclaimers and Reliance on Other Experts / Third Party Information ................................ 5
2 Project Outline ......................................................................................................... 6
2.1 Property Description ............................................................................................ 6
2.2 Property Location ............................................................................................... 6
2.3 Country Profile ................................................................................................... 7
2.4 Legal Aspects and Permitting ................................................................................. 9
2.4.1 Corporate Structure ..................................................................................... 9
2.4.2 Rights to Prospect ..................................................................................... 10
2.4.3 Surface Rights .......................................................................................... 10
2.4.4 Environmental Permits ............................................................................... 11
2.4.5 Government Requirements .......................................................................... 11
2.4.6 Water Use Licence .................................................................................... 11
2.4.7 Other Permits .......................................................................................... 11
2.4.8 Agreements ............................................................................................. 11
2.4.9 Security of Tenure .................................................................................... 11
2.4.10 Legal Proceedings ..................................................................................... 12
2.5 Royalties and Liabilities ...................................................................................... 12
2.5.1 Government Royalty .................................................................................. 12
2.5.2 Rehabilitation Guarantees ........................................................................... 12
3 Accessibility, Physiography, Climate, Local Resources and Infrastructure ................................ 13
3.1 Topography, Elevation and Vegetation .................................................................... 13
3.2 Climate and Weather ......................................................................................... 13
3.3 Property Access ................................................................................................ 14
3.4 Proximity to Population Centres and Nature of Transport ............................................. 14
3.5 General Infrastructure ........................................................................................ 15
4 Project History ....................................................................................................... 16
4.1 Previous Ownership ........................................................................................... 16
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4.2 Previous Exploration .......................................................................................... 16
4.3 Previous Mineral Resource Estimates and Compliance.................................................. 16
4.4 Previous Mineral Reserve Estimates and Compliance ................................................... 17
4.5 Previous Production ........................................................................................... 17
5 Geological Setting, Mineralisation and Deposit Types ........................................................ 18
5.1 Geological Setting ............................................................................................. 18
5.1.1 Regional Geology ...................................................................................... 18
5.1.2 Local Geology .......................................................................................... 19
5.1.3 Property Geology ...................................................................................... 23
5.2 Nature of, and Controls on, Mineralisation ............................................................... 26
5.3 Nature of Deposits on Property ............................................................................. 27
5.4 Geological Models ............................................................................................. 28
6 Exploration Data / Information ................................................................................... 32
6.1 Satellite / Aerial Photo Interpretation .................................................................... 32
6.1.1 Regional Photo-geological Study of an Area between Kenhardt and Kakamas ............. 32
6.2 Geophysics ...................................................................................................... 32
6.2.1 Regional Aeromagnetic Survey ...................................................................... 32
6.2.2 Induced Polarization and Ground Magnetic Surveys at Rozynenbosch Central ............. 33
6.2.3 Induced Polarization and Ground Magnetic Surveys at Rozynenbosch South ............... 33
6.2.4 Induced Polarization and Ground Magnetic Surveys at Rozynenbosch North ............... 33
6.2.5 Transient Electromagnetic Survey (1985) ......................................................... 33
6.3 Mapping ......................................................................................................... 34
6.3.1 Detailed Mapping on Rozynenbosch Central ...................................................... 34
6.3.2 Detail Mapping on Rozynenbosch South ........................................................... 34
6.4 Structural Studies ............................................................................................. 35
6.5 Drilling Programmes .......................................................................................... 35
6.5.1 Type of Drilling ........................................................................................ 35
6.5.2 Logging .................................................................................................. 37
6.5.3 Downhole Surveys ..................................................................................... 37
6.6 Geological Data ................................................................................................ 37
6.7 Sampling ........................................................................................................ 37
6.7.1 Sample Method, Collection, Capture and Storage ............................................... 37
6.7.2 Sample Preparation and Analysis ................................................................... 41
6.7.3 Sampling Governance ................................................................................. 42
6.7.4 Quality Control and Assurance Procedures ....................................................... 42
6.7.5 Bulk Density ............................................................................................ 43
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6.7.6 Bulk-sampling and/or Trial-mining ................................................................. 43
6.8 Database Management ........................................................................................ 43
6.9 Spatial Data .................................................................................................... 43
6.10 Data Verification, Audits and Reviews ..................................................................... 44
6.10.1 Laboratory Audit/Review ............................................................................ 44
6.11 Exploration Expenditure...................................................................................... 44
6.11.1 Exploration Expenditure Incurred to Date ........................................................ 44
6.11.2 Planned Exploration Expenditure ................................................................... 44
7 Mineral Resource Estimates ........................................................................................ 45
7.1 Mineral Resource Estimation and Modelling Technique ................................................ 45
7.1.1 Geological Drillholes and Statistics ................................................................ 45
7.1.2 Block Model Creation ................................................................................. 49
7.1.3 Estimation Technique................................................................................. 51
7.1.4 Model Verification ..................................................................................... 55
7.2 Mineral Resource Classification Criteria ................................................................... 59
7.3 Reasonable and Realistic Prospects for Eventual Economic Extraction .............................. 60
7.4 Key Modifying Factors and Assumptions, By-products or Deleterious Elements .................... 61
7.5 Mineral Resource Statement ................................................................................. 62
7.6 Mineral Resource Reconciliation ............................................................................ 64
8 Technical Studies .................................................................................................... 66
8.1 Introduction .................................................................................................... 66
8.1.1 Study Level ............................................................................................. 66
8.1.2 Modifying Factors Used to Convert Mineral Resource to Mineral Reserve ................... 66
8.2 Geotechnical and Geohydrology ............................................................................ 66
8.3 Mine Design and Schedule.................................................................................... 66
8.4 Recovery Methods ............................................................................................. 66
8.5 Market Studies and Contracts ............................................................................... 66
8.5.1 Market Studies ......................................................................................... 66
8.5.2 Contracts ................................................................................................ 79
8.6 Environmental Studies ........................................................................................ 79
8.7 Legal and Permitting .......................................................................................... 80
8.8 Taxation ......................................................................................................... 80
8.9 Social or Community Impact ................................................................................. 80
8.10 Mine Closure .................................................................................................... 80
8.11 Capital and Operating Costs ................................................................................. 80
8.12 Financial Analysis .............................................................................................. 80
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8.12.1 Introduction ............................................................................................ 80
8.12.2 Previous Valuation .................................................................................... 81
8.12.3 Valuation Approaches and Methods ................................................................ 82
8.12.4 Valuation Date ......................................................................................... 84
8.12.5 Valuation Results ...................................................................................... 84
8.12.6 Sources of Information ............................................................................... 96
8.12.7 Range of Values ........................................................................................ 97
8.12.8 Competent Valuator .................................................................................. 98
8.12.9 Identifiable Component Asset Values ............................................................. 101
8.12.10 Historic Verification ............................................................................... 101
8.12.11 Market Studies and Contracts .................................................................... 101
8.12.12 Reviews .............................................................................................. 101
9 Mineral Reserve Estimates ........................................................................................ 102
10 Other Relevant Data and Information ........................................................................... 103
10.1 Adjacent Properties .......................................................................................... 103
10.2 Upside Potential .............................................................................................. 103
10.3 Audits and Reviews ........................................................................................... 104
10.4 Risk Assessment ............................................................................................... 104
10.4.1 Risk Assessment Methodology ...................................................................... 104
10.4.2 Risk Assessment Outcome ........................................................................... 105
11 Interpretation and Conclusions ................................................................................... 108
12 Recommendations .................................................................................................. 109
13 References ........................................................................................................... 110
14 Appendices ........................................................................................................... 112
LIST OF FIGURES
Figure 1: Drillhole Collar RB58 Identified in the Field ..................................................................3
Figure 2: Finely Disseminated Pyrite and Chalcopyrite in Grey “Ore Zone” Gneiss ...............................4
Figure 3: Potential Upside Areas ............................................................................................5
Figure 4: Location .............................................................................................................6
Figure 5: Topo-cadastral Map ...............................................................................................7
Figure 6: Proposed Corporate Structure ................................................................................. 10
Figure 7: Kakamas Temperature Graph .................................................................................. 14
Figure 8: Location of the Tectonostratigraphic Namaqua-Natal Metamorphic Complex in Relation to the
Kaapvaal Craton ............................................................................................................. 18
Figure 9: Subprovinces and Main Shear Zones of the Namaqua-Natal Metamorphic Complex ................. 19
Figure 10: Surface Geology at Rozynenbosch ........................................................................... 23
Figure 11: Structural Interpretation Over a Portion of Rozynenbosch ............................................. 25
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An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource &
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Figure 12: Idealised Section Through the Lithologies in Relation to Geological Structure at Rozynenbosch 26
Figure 13: Genetic Model for the Formation of SEDEX Deposits ..................................................... 27
Figure 14: Typical Hand Drawn Geological Section - Section 240 Looking West ................................. 28
Figure 15: Geological Sections and Plans Referenced into 3D Space ............................................... 29
Figure 16: Section with Geological Drillholes Comparison ........................................................... 30
Figure 17: Geological Model of the Amphibolites and Pegmatites .................................................. 31
Figure 18: Phase 1 and 2 Drillhole Collars ............................................................................... 36
Figure 19: Pb Log Probability Plot of the Raw Assays ................................................................. 46
Figure 20: Zn Log Probability Plot of the Raw Assays ................................................................. 46
Figure 21: Pb4 Capping at 20.7% .......................................................................................... 47
Figure 22: Downhole Variogram showing correlation up to 10 m ................................................... 47
Figure 23: Directional Variogram showing a Long and Short Range of 161 m and 42 m, Respectively ....... 48
Figure 24: Omnidirectional Variogram of the Pb showing a Range of 88 m ....................................... 48
Figure 25: Omnidirectional Variogram of the Zn showing a Range of 95 m ....................................... 49
Figure 26: Mineralised Halo using a 0.5% Pb shown with the Drillholes used to Inform the Halo ............. 50
Figure 27: Base Mineralisation Model with the Pegmatites and Amphibolites Removed ........................ 51
Figure 28: Exploration and Inferred Model .............................................................................. 52
Figure 29: A Correlation Co-efficient of 94% shown with regards Ag and Pb+Zn ................................. 53
Figure 30: Pb Estimated Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb .............. 53
Figure 31: Zn Estimated Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb .............. 54
Figure 32: Ag Regressed Value Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb ....... 54
Figure 33: Visual Check of the Estimate and the Raw Assay Values ................................................ 55
Figure 34: Pb 100 m Swath Plots from West to East ................................................................... 55
Figure 35: Pb Vertical Swath Plots ....................................................................................... 56
Figure 36: Zn 100 m Swath Plots from West to East ................................................................... 56
Figure 37: Zn Vertical Swath Plots........................................................................................ 57
Figure 38: West to East 100 m Swaths (Grade Model is for Pb) ..................................................... 57
Figure 39: Vertical 10 m Swaths (Grade Model is for Pb) ............................................................. 58
Figure 40: Pb Estimates Value versus Average Pb Value .............................................................. 59
Figure 41: Zn Estimated Value versus Average Zn Value ............................................................. 59
Figure 42: Mineral Resource Classification .............................................................................. 60
Figure 43: Optimised Pit with Inferred (Including Silver) and Exploration Target Model Optimised - Model
Shown at >1% Pb ............................................................................................................. 61
Figure 44: Grade Tonnage Curve of the Pb Equivalent, Including Silver, for Pb and Zn ........................ 63
Figure 45: Value Spread of Rozynenbosch Mineral Resources (Including Silver) ................................. 67
Figure 46: Global Zinc Reserves (2016) .................................................................................. 68
Figure 47: Global Mine Production of Zinc (2017) ..................................................................... 69
Figure 48: Historical Zinc Prices .......................................................................................... 70
Figure 49: Global Lead Reserves (2017) ................................................................................. 72
Figure 50: Global Lead Production (2017) ............................................................................... 73
Figure 51: Historical Lead Prices.......................................................................................... 74
Figure 52: Global Silver Reserves (2017) ................................................................................ 76
Figure 53: Global Mine Production of Silver (2016) .................................................................... 77
Figure 54: Historic Silver Prices ........................................................................................... 78
Figure 55: Zinc Equivalent Valuation Curve ............................................................................. 86
Figure 56: Weighting of Valuation Risk Associated Parameter Matrix .............................................. 87
Figure 57: Proposed Drillhole Programme for the Twinning and Exploration .................................... 104
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LIST OF TABLES
Table 1: Units of Measurement..............................................................................................2
Table 2: South African Profile ...............................................................................................7
Table 3: Rozynenbosch Prospecting Right Summary .................................................................. 10
Table 4: Mineral Resources as per Phelps Dodge as at 1974 ......................................................... 17
Table 5: Mineral Resources as per GFSA as at 1985 ................................................................... 17
Table 6: Stratigraphy Pertaining to the Kakamas Terrane (adapted from Boelema, 1994) .................... 21
Table 7: Lithostratigraphic Succession at Rozynenbosch ............................................................. 24
Table 8: Significant Drill Intercepts > 1% Pb ............................................................................ 36
Table 9: Classical Statistics of the Drillhole Database ................................................................ 45
Table 10: Block Model Definition ......................................................................................... 51
Table 11: Rozynenbosch Cut-off Based on Recoveries ................................................................ 61
Table 12: Mineral Resource Statement, Including Silver, for Rozynenbosch as at 31 January 2018 .......... 62
Table 13: Mineral Resource Statement, Excluding Silver, for Rozynenbosch as at 31 January 2018 ......... 63
Table 14: Results of the Grade Tonnage Analysis Based on a Pb Equivalent Cut-off (Including Silver) ...... 64
Table 15: Reconciliation of the Phelps Dodge 1974 and Minxcon 2017 Mineral Resource Estimation ........ 65
Table 16: Zinc Production and Consumption of Top Countries and Globally ...................................... 70
Table 17: Zinc Price Forecasts ............................................................................................ 71
Table 18: Lead Production and Consumption of Top Countries and Globally ..................................... 74
Table 19: Lead Price Forecasts ............................................................................................ 75
Table 20: Silver Supply and Demand ..................................................................................... 78
Table 21: Silver Price Forecasts ........................................................................................... 79
Table 22: Phelps Dodge Data - Merlin Resources Valuation, 2006 .................................................. 81
Table 23: GFSA-Phelps Dodge JV Data - Merlin Resources Valuation, 2006 ....................................... 82
Table 24: Acceptable Methods of Mineral Project Valuation ........................................................ 82
Table 25: Price Used for Current Day Unit Value Adjustment ....................................................... 85
Table 26: Transactions Considered for the Valuation Curve ......................................................... 86
Table 27: Principal Valuation Modifying Factors for Rozynenbosch ................................................ 88
Table 28: Recoveries and Payabilities used to Calculate Zinc Equivalents ........................................ 91
Table 29: Market Approach Valuation on Rozynenbosch Including Silver (Lower Estimate for Exploration
Target) ......................................................................................................................... 92
Table 30: Market Approach Valuation on Rozynenbosch Including Silver (Upper Estimate for Exploration
Target) ......................................................................................................................... 92
Table 31: Transactions of a Similar Nature ............................................................................. 93
Table 32: Market Approach Valuation on Rozynenbosch Excluding Silver (Lower Estimate for Exploration
Target) ......................................................................................................................... 94
Table 33: Market Approach Valuation on Rozynenbosch Excluding Silver (Upper Estimate for Exploration
Target) ......................................................................................................................... 94
Table 34: Rozynenbosch Exploration Expenditure to Date (Estimation) ........................................... 95
Table 35: Prospectivity Rating and Exploration Phase ................................................................ 95
Table 36: Rozynenbosch Project Value (Cost Approach) ............................................................. 96
Table 37: Input Ranges ..................................................................................................... 97
Table 38: Market Value Derived (Inclusive of Silver) .................................................................. 98
Table 39: Market Value Derived (Excluding Silver) .................................................................... 98
Table 40: Final Mineral Asset Market Value Range (Inclusive of Silver) ............................................ 98
Table 41: Final Mineral Asset Market Value Range (Excluding Silver) .............................................. 98
Table 42: Exploration Target Potential at a Cut-off of 1% Pb ...................................................... 103
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Table 43: Estimated Drilling Budget ..................................................................................... 104
Table 44: Minxcon Risk Matrix ............................................................................................ 106
Table 45: Risk Assessment ................................................................................................ 107
LIST OF EQUATIONS
Equation 1: Pb Equivalent Including Silver .............................................................................. 62
Equation 2: Zn Equivalent Including Silver .............................................................................. 62
Equation 3: Pb Equivalent Excluding Silver ............................................................................. 62
Equation 4: Zn Equivalent Excluding Silver ............................................................................. 62
Equation 5: Zn Eq. Grade for Lead ....................................................................................... 91
Equation 6: Zn Eq. Grade for Silver ...................................................................................... 91
LIST OF APPENDICES
Appendix 1: Glossary of Terms ........................................................................................... 112
Appendix 2: Abbreviations ................................................................................................ 114
Appendix 3: Compliance Statement, Certificate of Competence and Key Technical Staff .................... 115
Appendix 4: Drillhole Collar .............................................................................................. 119
Appendix 5: Checklists: JSE Listings Requirements, SAMREC Compliance, SAMVAL Compliance ............. 121
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1 INTRODUCTION
1.1 TERMS OF REFERENCE AND SCOPE OF WORK
Minxcon (Pty) Ltd (“Minxcon”) was commissioned by Miranda Mineral Holdings Limited (“Miranda”, “the
Company” or “the Client”) to complete an Independent Competent Person’s Mineral Resource Report (“CPR”
or the “Report”) with a mineral asset valuation on the Rozynenbosch Project (“Project”), located in the
Northern Cape Province, South Africa.
The Report was commissioned in order to comply with regulations of the Johannesburg Stock Exchange
(“JSE”) for listed companies. The Report is compiled in compliance with the South African Code for
Reporting of Exploration Results, Mineral Resources and Mineral Reserves (2016 Edition) (“SAMREC Code”),
and in terms of the specifications embodied in the Standards of the South African Code for the Reporting of
Mineral Asset Valuation (2016 Edition) (“SAMVAL Code”). All requirements of the JSE Section 12.9 Listing
Requirements and the SAMREC Code (including Table 1) and SAMVAL Code have been complied with.
The purpose of the CPR is to comply with continuing obligations as required by the JSE Listings Requirements,
with regard to the publication of the CPR on the Company’s website and comply with lifting of the suspension
of the trading in the Company’s shares. The CPR will be used to provide an update for the Company
shareholders, and the information presented will be utilised in the Company’s Integrated Report.
This CPR consolidates all known geological information on Rozynenbosch into a single report which can be
used as a basis for planning additional work on the Project. Further Mineral Resource development work will
be completed in future in order to obtain more information on the Project. The objective of Miranda is to
complete a Preliminary Economic Assessment of the Project within the first year on which the Board can
make a decision as to the future of the Project. A budget and work schedule have been prepared and it is
intended to use the capital structure/listed vehicle to raise sufficient capital to complete the
abovementioned work.
Minxcon was mandated to complete the Report with the following scope of work:-
1. Review Project history;
2. Produce key plans and maps for Report;
3. Describe topography and climate;
4. Review legal aspects and security of tenure;
5. Review Project data, which includes:-
a. Sampling Governance; and
b. Sample method, collection, validation, preparation & storage;
6. Do geological modelling, interpretation and estimation;
7. Do the Mineral Resource estimation;
8. Do market study and project valuation based on two valuation methodologies; and
9. Prepare SAMREC-compliant Mineral Resource Report.
The Report has an effective date of 31 January 2018.
1.2 INDEPENDENCE OF THE ISSUER
The Competent Person is independent of the issuer. Neither Minxcon nor its staff have or have had any interest
in Miranda or its subsidiaries capable of affecting their ability to give an unbiased opinion, and, have not and
will not, receive any pecuniary or other benefits in connection with this assignment, other than normal
JSE 12.9 (d)(e) SAMVAL T1.4
JSE 12.9 (a)
JSE 12.9 (c)
SAMVAL T1.3
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An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource &
Mineral Asset Valuation Report 2
consulting fees. Neither Minxcon, nor any of the authors of the CPR, hold any share capital in Miranda or its
subsidiaries.
1.3 SOURCES OF INFORMATION
The plans and sections were supplied by the Client (Miranda Mineral Holding Limited) along with available
reports. Other sources include academic references listed in Section 13 of this Report.
1.4 UNITS AND CURRENCY
The units used in this CPR are in metric terms. Unit symbols as displayed in Table 1 are used.
Table 1: Units of Measurement
Unit Definition
% Per cent
± or ~ Approximately
° Degrees
°C Degrees Celsius
g Grams
g/t Grams per tonne
ha Hectare
km Kilometre
km2 Square kilometres
m Meter
Ma million years
mm millimetre
Mt Million tonnes (1,000,000 t)
Moz Million ounces
oz Ounces
ppm Parts per million
t Tonne
t/m3 Tonnes per cubic meters
x By/Multiplied by
The South African Rand (“ZAR”) is used as the main currency in this Report. The United States Dollar (“USD”)
is also presented in some instances.
1.5 COMPETENT PERSONS SITE INSPECTION / FIELD INVOLVEMENT
The Competent Person of this Report is Mr Uwe Engelmann, who undertook a site visit to the Rozynenbosch
property on 8 March 2018, accompanied by Miss Maria Antoniades (Geologist, Minxcon).
The farm owner, Mr Sarel Bruwer Snr, met with the Minxcon personnel at the Rozynenbosch farm house,
where after he accompanied them to the Mineral Resource area as defined by previous work.
A number of historic drillhole collars were identified (an example is shown in Figure 1), and their collar
coordinates verified by handheld GPS. In addition to these, a number of historic collars (e.g. RB33) were
found for which Minxcon has no information and are not in the database used for this Mineral Resource
estimation.
SAMREC 1.1 (iii)
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Figure 1: Drillhole Collar RB58 Identified in the Field
Drillhole Collar RB58 Identified in the Field January 2018
The mineralised target area was traversed and outcrop inspected. The lithologies as described in this report
were verified. Disseminated sulphides (chalcopyrite, pyrite) with grain sizes of less than a millimetre, were
identified in grey “ore zone” gneiss, as shown in Figure 2.
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Figure 2: Finely Disseminated Pyrite and Chalcopyrite in Grey “Ore Zone” Gneiss
Finely Disseminated Chalcopyrite in Grey “Ore Zone” Gneiss January 2018
Prior to the field visit, Mr Engelmann had identified possible further target areas for investigation, as depicted
in Figure 3, in which the current Mineral Resource outcrops are encircled in yellow within the farm boundary,
and further upside areas are bounded in green and red lines. The green target areas, which are based on the
historical surface mapping, were traversed and the surface outcrop that was observed is believed to be the
correct lithology for possible mineralisation.
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Figure 3: Potential Upside Areas
Potential Upside Areas January 2018
1.6 DISCLAIMERS AND RELIANCE ON OTHER EXPERTS / THIRD PARTY INFORMATION
The Competent Person has additionally relied on the following report:-
• Mossom, R.J. (2006). Resource Estimate of the Pb-Ag-Zn-Cu Deposit Located on the Farm
Rozynenbosch 104, Kenhardt District, Northern Cape Province, South Africa. Compiled on behalf of
Miranda Minerals (Pty) Ltd. Merlin Resources. 8 August 2006. 45pp.
The Competent Person has verified the information as far as possible.
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2 PROJECT OUTLINE
2.1 PROPERTY DESCRIPTION
The Rozynenbosch Project is an exploration project that targets a lead-silver-zinc and copper deposit on the
farm Rozynenbosch 104 in the Kenhardt District of the Northern Cape. In the 1970s and 1980s, the property
was extensively explored by Phelps Dodge Corporation (“Phelps Dodge”) and Goldfields South Africa (“GFSA”).
2.2 PROPERTY LOCATION
The Project Area is located some 38 km due southeast of the town of Kakamas in the Northern Cape Province
of South Africa and is centred on the following co-ordinates (WGS 84):-
• Latitude: 29°02’52”S
• Longitude: 20°50’48”E
The larger town of Upington lies 78 km due northeast and the village of Klein Koegab lies 2 km northwest of
Rozynenbosch. The seasonal Hartbees River forms the western boundary of the Project Area.
The following Figure 4 illustrates the regional location of Rozynenbosch.
Figure 4: Location
Location January 2018
The parent farm shown in Figure 5 is located on Government 1:50,000 topo-cadastral sheet 2920BB which is
published by the Chief Directorate, Surveys and Mapping (Private Bag X10, Mowbray 7705, South Africa,
Phone: +27 21 658 4300, Fax: +27 21 689 1351 or e-mail: cdsm@sli.wcape.gov.za).
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Figure 5: Topo-cadastral Map
Topo-cadastral Map January 2018
2.3 COUNTRY PROFILE
The profile of South Africa is discussed in detail in Table 2.
Table 2: South African Profile
Economic -
overview
South Africa is a middle-income, emerging market with an abundant supply of natural resources;
well-developed financial, legal, communications, energy, and transport sectors and a stock
exchange that is Africa’s largest and among the top 20 largest in the world.
Economic growth has decelerated in recent years, slowing to an estimated 0.3% in 2016.
Unemployment, poverty, and inequality - among the highest in the world - remain a challenge.
Official unemployment is roughly 26% and runs significantly higher among black youth. Even
though the country's modern infrastructure supports a relatively efficient distribution of goods to
major urban centres throughout the region, unstable electricity supplies have retarded growth in
recent years. Eskom, the state-run power company, is building two new power stations and is
installing new power demand management programmes to improve power grid reliability. Load
shedding and resulting rolling blackouts gripped many parts of South Africa in late 2014 and early
2015 because of electricity supply constraints due to technical problems at some generation units,
unavoidable planned maintenance, and an accident at a power station in Mpumalanga province.
The rolling blackouts were the worst the country faced since 2008. Eskom has since successfully
reversed the electricity deficit to a significant surplus. Plant availability has improved from 69.9%
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in 2015 to 77.3% at the end of March, 2017, primarily as a result of new generating capacity added
from Medupi, Ingula and Kusile power stations.
The South African Reserve Bank’s policies have focused on controlling inflation; however, the
country faces structural constraints that also limit economic growth, such as skills shortages, poor
corporate governance, inefficiencies and high debt levels at State owned enterprises, declining
global competitiveness, and frequent work stoppages due to strike action. The South African
government faces growing pressure from urban constituencies to improve the delivery of basic
services to low-income areas and to increase job growth.
GDP
(purchasing
power parity)
USD736.3 billion (2016 est.), ZAR4,453 billion
USD735.4 billion (2015 est.), ZAR4,149 billion
USD726.3 billion (2014 est.), ZAR3,905 billion
Note: data are in 2016 US dollars
GDP - real
growth rate
0.90% (2017 est.)
0.28% (2016 est.)
1.3% (2015 est.)
1.7% (2014 est.)
Unemployment
rate
26.8% (2016 est.)
25.4% (2015 est.)
Budget Revenues: USD76.62 billion
Expenditures: USD86.45 billion (2016 est.)
Budget surplus
(+) or deficit (-)
-3.5% of GDP (2016 est.)
Inflation rate
(consumer
prices)
Commercial
bank prime
lending rate
10.25% (31 December 2017 est.)
10.6% (31 December 2016 est.)
9.42% (31 December 2015 est.)
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Agriculture -
products
Corn, wheat, sugarcane, fruits, vegetables; beef, poultry, mutton, wool, dairy products.
Industries Mining (world's largest producer of platinum, and chromium), automobile assembly, metalworking,
machinery, textiles, iron and steel, chemicals, fertilizer, foodstuffs, commercial ship repair.
Imports -
partners
China 17.6%, Germany 11.2%, US 6.7%, Nigeria 5.0%, India 4.7% Saudi Arabia 4.1%, (2015).
Exchange rates
Fiscal year 1 April - 31 March
2.4 LEGAL ASPECTS AND PERMITTING
The nature of the issuer’s rights and the right to use the surface of the properties to which these Project
Areas relate are described in the following sections. The farm boundaries are clearly defined by existing
fencing and other boundary markers and depicted on Surveyor General and topographical maps.
2.4.1 Corporate Structure
The Rozynenbosch Project is held under rights by Miranda Minerals (Pty) Ltd, a direct and wholly-owned
subsidiary of Miranda Mineral Holdings Limited.
The currently active South African Mining Charter (2010) requires a minimum of 26% meaningful economic
participation by the historically disadvantaged South Africans (“HDSAs”) reflected as a Black Economic
Empowerment (“BEE”) shareholding. On fulfilment of the conditions precedent set out in the agreement
regulating the Miranda Minerals (Pty) Ltd BEE transaction, Kwanda Minerals Holdings (Pty) Ltd, together with
a trust established by Miranda for the benefit of the mining community situated in and around the
Rozynenbosch area, will constitute the BEE component of Miranda Minerals (Pty) Ltd with a 30% share capital.
The proposed corporate structure of Miranda is shown in Figure 6.
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Figure 6: Proposed Corporate Structure
Proposed Corporate Structure January 2018
2.4.2 Rights to Prospect
All mining and prospecting rights in the Republic of South Africa are issued by the Department of Mineral
Resources (“DMR”) in accordance with the Mineral and Petroleum Resources Development Act, No 28 of
2002 (“MPRDA”).
Rozynenbosch is held under new order prospecting right NC 30/5/1/1/2/0533 PR (“533 PR”), issued over
portions 4 and 5 (previously remainder) of the farm Rozynenbosch 104, to Miranda Minerals (Pty) Ltd on 5
February 2018. This right is valid for three years expiring on 4 February 2021.
The 533 PR, which encompasses an area of 6,483.37 ha, is issued in respect of copper ore, cobalt, zinc and
lead.
The following Table 3 provides a summary of the prospecting right that encompasses the Rozynenbosch
Project.
Table 3: Rozynenbosch Prospecting Right Summary Right
Number Holding
Company Farm
Area Commodity Issue Date Expiry Date
ha
533 PR Miranda Minerals (Pty) Ltd
Rozynenbosch 104
6,483.37 Copper,
cobalt, zinc and lead.
5 February 2018
4 February 2021
It is noted that silver is not currently included as a commodity encompassed by this 533 PR. The Competent
Person is not aware of another body holding the silver rights over the farm Rozynenbosch 104. Silver is
present in sufficient quantities to be included as a material Mineral Resource and a value placed thereupon.
Currently, a Section 102 application in terms of the MPRDA is in preparation to include silver in the 533 PR.
2.4.3 Surface Rights
The Remaining Extent and portion 3 of the farm Rozynenbosch 104 was consolidated into the current portion
5. Surface rights are currently held by Witvlei Boerdery Trust.
There are currently no surface rights agreements in place.
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In terms of the MPRDA, the holder of a prospecting right may enter the land to which such right relates, bring
his or her employees onto the land and bring any plant, machinery or equipment or build or construction or
lay down any surface or underground infrastructure which may be required for the purposes of exploration,
and may prospect, remove and dispose of such mineral, use water in relation to prospecting activities, and
carry out any other activity incidental to exploration (ALB, 2017).
The holder of a prospecting right has duties towards the landowner or lawful occupier in terms of consultation,
and the holder of a prospecting right has to compensate the landowner for loss or damage suffered as a result
of the conduct of prospecting activities. It is not necessary for the holder of a prospecting right to purchase
land or even enter into an agreement to use the land with the surface owner (ALB, 2017).
2.4.4 Environmental Permits
The Rozynenbosch Project is currently held under a prospecting right. The 533 PR was previously issued on
10 June 2013 but never registered and executed. In support of this previous application, an environmental
management plan (“EMP”) was submitted and approved. A new application was made for the licence in 2017
based on the 2013 application, which was then granted. As such, an updated and amended EMP may be
required.
Should the Project progress to mining stage, the prospecting right will have to be converted to a mining
right. Environmental permits will be issued as part of the One Environmental System OES implemented on 8
December 2014, which aims to streamline the licencing process for conclusion within 300 days of submission
of a mining right application. As part of the approval for a mining right, the DMR requires approval of an
Environmental Authorisation.
2.4.5 Government Requirements
All governmental requirements as may be required have been approved, or there is reasonable basis to
believe that all governmental requirements required for the Project can be obtained. The reader is referred
to Section 2.4.9 regarding execution of the prospecting right.
Further, Miranda adheres to environmental and sustainability principles as set out in the MPRDA.
2.4.6 Water Use Licence
The Rozynenbosch Project is currently held under a prospecting right. At this stage, no water use licences
are required for exploration work. However, should the right be superseded in the future by a mining right,
a water use licence will have to be obtained in terms of the OES for specific water uses as identified.
2.4.7 Other Permits
Currently, to The Competent Person’s knowledge, no further permits are required for the Rozynenbosch
Project as it stands.
2.4.8 Agreements
There are no agreements in place as yet for the Project.
2.4.9 Security of Tenure
Neither the Competent Person nor any other Minxcon employee is not authorised to provide opinion on legal
aspects and tenure but has had sight of the executed 533 PR and is satisfied with its authenticity and validity.
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Through its wholly owned subsidiary Miranda Minerals (Pty) Ltd, Miranda holds the right to exercise the
licence subject to conditions as stipulated in the notarially executed right.
2.4.10 Legal Proceedings
The Competent Person is not aware of any further legal proceedings relating to the tenure of the Project.
There are no current legal proceedings relating to the Project.
2.5 ROYALTIES AND LIABILITIES
2.5.1 Government Royalty
The current Mineral and Petroleum Resources Royalty Act came into effect on 1 March 2010. The law requires
all companies extracting minerals in South Africa to pay royalties at a rate of between 0.5% and 7% based
on gross sales. Companies are taxed on either the refined or unrefined formula:-
• Refined mineral formula = 0.5 + [EBIT/Gross sales x 12.5] x 100
• Unrefined Mineral Resource formula =0.5 + [EBIT/Gross sales x 9] x 10
Miranda is not currently extracting or transferring any Mineral Resources, therefore no royalty is payable.
2.5.2 Rehabilitation Guarantees
Currently, a Guardrisk shortfall insurance policy of ZAR70,000 is in place for the Project under Miranda
Minerals (Pty) Ltd. In terms of Regulation 54(2) of the MPRDA, Miranda must make financial provision for the
interim and final rehabilitation activities on the site. The provision must be reviewed annually for adequacy
and amended to compensate for new activities and/or inflation.
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3 ACCESSIBILITY, PHYSIOGRAPHY, CLIMATE, LOCAL RESOURCES AND
INFRASTRUCTURE
3.1 TOPOGRAPHY, ELEVATION AND VEGETATION
Elevations across the Project Area rise gently eastwards across a broad plain away from the depression of the
river valley, from some 725 m amsl to 860 m amsl over a distance of 15 km. A few NNW-SSE trending, rugged
mountainous outcrops occur to the east. The topography does not pose major hindrances to exploration and
mining activities.
The Hartbees River flows roughly north-westwards as a tributary to the Orange River, which flows roughly
westwards and lies only 30 km north of Rozynenbosch. The region is arid, and a few minor peripheral drainage
lines are evident in satellite images running westwards down the property gradient towards the Hartbees
River.
The region falls within the Nama-Karoo biome. Vegetation is sparse and reflects the arid environment. Some
hardy grasses and low shrubs are scattered across the local landscape, with a few trees and marginally denser
vegetation overall occurring at the rocky outcrops. In the Kakamas region, intensive farming drives the local
economy, with irrigation water sourced from the Orange River. Export grapes, raisins, peaches, dried fruit
and dates amongst others are produced.
The Project lies within the Riemvasmaak Community Conservancy.
3.2 CLIMATE AND WEATHER
The Project Area falls within a region classified as a desert climate that is characteristically hot and arid with
virtually no rainfall during the year. The summer months of November to February see temperatures averaging
over 30°C, and also receive the most precipitation. The drier winter months of May to August see average
temperatures of about 20°C. The average annual rainfall recorded in the nearby town of Kakamas is 134 mm.
The following Figure 7 shows the annual temperature as recorded at Kakamas.
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Figure 7: Kakamas Temperature Graph
Source: www.worldweatheronline.com
There are no known associated weather or climatic risks that may affect exploration or future mining
operations at the Project.
3.3 PROPERTY ACCESS
Rozynenbosch is directly accessible via a northwest-southeast arterial road that branches off the R359 at
Kakamas, traverses the Project Area in the west, and links to the R27 near Kenhardt. Numerous tracks and
gravel roads provide access to the entire Project Area.
3.4 PROXIMITY TO POPULATION CENTRES AND NATURE OF TRANSPORT
Kakamas town is located 37 km northwest of the Project and Kenhardt 45 km southeast. Upington lies 78
km due northeast and the village of Klein Koegab lies 2 km northwest. Kakamas hosts schools, shops, police
station and a hospital.
A network of reasonably well-maintained tar and gravel roads connect towns and farms in the area. The
national road N14 linking Johannesburg to Springbok runs along the northern border of the Orange River at
Kakamas, while the R359 runs along the southern border and links to the N14 just east of Kakamas.
A branch line extension from a main line railway connection at Upington is located in Kakamas. The Spoornet
Sishen-Saldanna iron ore railway line passes through Kenhardt but is essentially a private line with common
user status not guaranteed (Mossom, 2006). Upington is served by a scheduled air service to the Upington
Airport, and the small Kakamas aerodrome mainly hosts small charters.
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The Competent Person is not aware of any conditions that may affect possible prospecting or mining
activities.
3.5 GENERAL INFRASTRUCTURE
There is currently no major infrastructure at Rozynenbosch. The closest Eskom electricity grid is located at
Kakamas. The region is semi-arid and the only permanent water supply will be from the Orange River,
supplemented by the seasonal Hartbees River and possibly water boreholes. A few buildings and associated
structures are evident on Google Earth imagery, located in a minor area around the arterial main road
through the property.
There are numerous potential waste disposal sites, heap leach pad areas and potential processing plant sites
across the Project Area. A buffer zone will likely be necessary around the Hartbees River course to avoid
contamination of the river.
No surface rights are currently required for prospecting activities, as per the MPRDA.
All necessary logistics have been considered in this Report for the Project.
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4 PROJECT HISTORY
4.1 PREVIOUS OWNERSHIP
Rozynenbosch, also referred to as Red Hill, was initially explored by Phelps Dodge in the 1970s, as part of a
regional exploration programme. Phelps Dodge later entered into a joint venture agreement with GFSA.
Phelps Dodge later withdrew and GFSA restructured their portfolio.
In November 1999, the Rozynenbosch mineral rights were ceded from GFSA to Miranda excluding the rights
to gold, silver and precious stones. Miranda applied for conversion of this old order prospecting right over
the farm Rozynenbosch 104 to a new order prospecting right, of which the application was submitted to the
former Department of Minerals and Energy (“DME”, now DMR) on 28 April 2005. The conversion was not
approved in a decision made by the DME in July 2006, leading to third party interest in the Project. The DMR
decision was appealed much later following lack of correspondence during ownership and management
changes. The decision was successfully overturned and the prospecting right granted in July 2013
(miningweekly.com). However, this right was never executed and was subsequently re-awarded to Miranda
subsidiary Miranda Minerals (Pty) Ltd in February 2018, as discussed in Section 2.4.2 of this Report.
4.2 PREVIOUS EXPLORATION
The Northern Cape Province was the subject of extensive exploration interest in the 1960s following the
discovery and exploitation of the Copperton Zn-Cu deposit. Phelps Dodge was a significant explorer and
carried out regional surveys in search of similar deposits. During an aerial reconnaissance survey in the
Kenhardt district conducted in 1972, a prominent fold structure was identified close to the western boundary
of the farm Rozynenbosch 104. Follow-up ground exploration revealed a number of old prospecting trenches
containing galena as well as a prominent gossan containing significant lead and silver values. Some 11,812 ha
of ground in and around Rozynenbosch was acquired for prospecting purposes (Mossom, 2006).
Phelps Dodge carried out extensive exploration work from 1972 to 1983, and to 1987 under the GFSA joint
venture (“JV”). The JV information was donated by GFSA to the open file system maintained by the Council
for Geoscience. The Rozynenbosch Project consisted of geophysics, grid surveying, detailed geological
mapping, soil sampling, geochemical chip sampling and diamond core drilling, logging, sampling and assaying.
Some 15,000 m of diamond drilling over 68 drillholes were completed from which geological sections and
grade profiles were compiled (Mossom, 2006).
No exploration has been conducted by Miranda and as such, all exploration information available for the
Project is historical in nature and presented in Section 6 of this Report.
4.3 PREVIOUS MINERAL RESOURCE ESTIMATES AND COMPLIANCE
Mineral Resources for the Project were historically stated by both Phelps Dodge and GFSA.
The Phelps Dodge estimate is presented in Table 4 at 1% Pb-Zn over a width of 5 m. The estimate is based on
60 diamond drillholes over 13,309 m.
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Table 4: Mineral Resources as per Phelps Dodge as at 1974
Combined Pb+Zn Tonnes Pb Zn Pb+Zn Ag
Cut-off Mt % % % g/t
1 6.99 2.56 0.54 3.09 43.09
1.5 6.15 2.77 0.57 3.34 47.74
2 4.84 3.19 0.64 3.83 51.58
2.5 3.19 3.88 0.88 4.75 44.06
3 2.58 4.28 1.07 5.35 52.93
Later, in 1985, GFSA re-estimated the Mineral Resources based on additional mapping, drilling, geophysical
and geochemical surveys using a computerised inverse distance with a distance limit of 60 m. The estimate
as presented below is at a zero cut-off over a width of 3 m.
Table 5: Mineral Resources as per GFSA as at 1985
Combined Pb+Zn Tonnes Pb Zn Cu Ag
Cut-off Mt % % % g/t
0 14 1.72 0.46 0.03 34.1
These Mineral Resources were presented again by RJ Mossom of Merlin Resources in 2006. No supporting
information was presented.
The historical Mineral Resources for Rozynenbosch are not deemed to be in compliance with any current
mineral reporting codes, including the SAMREC Code.
4.4 PREVIOUS MINERAL RESERVE ESTIMATES AND COMPLIANCE
No Mineral Reserves have previously been states for Rozynenbosch.
4.5 PREVIOUS PRODUCTION
There has not been any production from the Project Area to date.
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5 GEOLOGICAL SETTING, MINERALISATION AND DEPOSIT TYPES
5.1 GEOLOGICAL SETTING
5.1.1 Regional Geology
The Namaqua-Natal Metamorphic Complex (“NMC”) (Figure 8) is a tectonostratigraphic province (Stockwell
et al, 1970) that stretches 1,400 km across South Africa and Namibia, is approximately 400 km wide and is
truncated by the ~600 Ma Pan-African Gariep and Saldania belts in the west and south respectively (Franson,
2008). The NMC forms a large area of contiguous structural fabric with well-defined boundaries which
formed during a particular, geochronologically defined, tectono-metamorphic event. It contains igneous and
metamorphic rocks formed or metamorphosed during the Namaqua Orogeny at ~1,200-1,000 Ma (Franson,
2008).
Figure 8: Location of the Tectonostratigraphic Namaqua-Natal Metamorphic Complex in Relation to the Kaapvaal Craton
Source: Adapted from Sithole 2013 and Cornell, 2006
Location of the Tectonostratigraphic Namaqua-Natal Metamorphic Complex in Relation to the Kaapvaal Craton
January 2018
The terranes of the Namaqua Orogeny are composed of “ocean island arcs, fragments of older continental
crust, ocean floors and sediments” which are added onto an “older stable crustal block” such as cratons
(Sithole, 2013 and Petterson et al, 2007).
The NMC represents a transpressional tectonic environment that formed by a combination of compressional
and strike slip tectonics which is associated with uplift and the formation of thrusts. This is known as oblique
convergence and occurs when one landmass indents the other and continued compression introduces a strike
slip component and results in lateral escape (Sithole, 2013 after Marshak and Van der Plujim, 2004).
The regional-scale structural discontinuities subdivide the western belt of the NMC into a number of tectonic
domains and subprovinces of distinct tectonometamorphic history. These, from west to east, include the
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Richtersveld Subprovince (to the northwest), Bushmanland Subprovince (consisting of the Bushmanland and
the Gariep Terranes), Gordonia Subprovince (Kakamas Terrane, Areachap Terrane) and the Kheis
Subprovince or Kaaien Terrane (Foulkes, 2014 and Sithole, 2013) as depicted in Figure 9 (Lambert et al,
2017).
The main structural features are the Neusspruit (“NSZ”), Boven Rugzeer (“BoSZ”), Straus Heim, Cnydas and
Trooilapspan shear zones (“TSZ”) (Moen, 2007; Stowe, 1986; Thomas et al, 1994).
Figure 9: Subprovinces and Main Shear Zones of the Namaqua-Natal Metamorphic Complex
Source: Adapted from Lambert et al. (2017)
Subprovinces and Main Shear Zones of the Namaqua-Natal Metamorphic Complex
January 2018
5.1.2 Local Geology
Owing to the structural, metamorphic and stratigraphic complexity of the NMC, only the structurally bound
subprovinces will be covered and their respective main stratigraphic formations will be mentioned in the
paragraphs below, with the exception of the Kakamas Terrane within the greater Gordonia Subprovince,
which will be covered in more detail and in which the Rozynenbosch Project is located.
5.1.2.1 Bushmanland Subprovince
The westernmost Bushmanland Subprovince (Figure 9), adjacent to the Gordonia Subprovince, is characterised
by an anticlinal structure. The Rietput Formation is located in the core area and is structurally overlain by
the Kameel Puts Formation. The anticlinal structure is bounded by the Hartbees River Thrust to the east and
the Vogelstruisleegte Fault to the west (Moen, 2007).
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The Kameel Puts Formation is structurally overlain by the Dröeboom Group which is bound by the
Vogelstruisleegte and Swartland faults (Moen, 1999 and 2007).
The characteristic lithologies of the Bushmanland Subprovince consist of supracrustal successions, calc-
silicate, gneisses, granitoids, amphibolite and marble.
5.1.2.2 Gordonia Subprovince
The Gordonia Subprovince extends westwards from the TSZ to the Hartbees River thrust (“HRZ”) (Figure 9)
and is subdivided into two terranes, namely the Areachap and Kakamas Terranes (Moen, op.cit).
The Areachap Terrane to the east comprises the Areachap and Korrannaland Groups and also the granites of
the Keimoes Suite (Moen, 1999 and 2007).
The Kakamas Terrane occupies the western portion of the sub-province and consists predominantly of augen
gneisses which underlie the Korrannaland Group (Sithole, 2013). There are also supracrustal successions within
this high-grade terrane which are indicated by the calc-silicate rocks of the Arribees Group and migmatitic
metapelites of the Hartbees River Complex (Moen, 1999 and 2007; Sithole, 2013).
The Gordonia Subprovince was thrust eastwards at 1.24-1.20 Ga (Eglington, 2006) over the Kheis Subprovince
onto the western margin of the Kaapvaal Craton at the onset of the 1.2 - 1.0 Ga Namaquan Orogeny, with the
accretion of the Areachap Group volcanic arc onto the western margin of the Kaapvaal Craton (Moen, 2007).
The thrust faults were later steepened due to late dextral transpression into sub-vertical shears such as the
TSZ and Brakbosch Shear Zone and fault (Petterson et al, 2007; Bailie et al., 2012).
The Gordonia Subprovince was subjected to high-grade regional metamorphism of upper amphibolite to lower
granulite facies due to several thermal events associated with the intrusion of the Keimoes Suite granitoids
(Van Bever Donker, 1980; Stowe, 1983 and 1986; Geringer et al, 1994; Bailie et al, 2012; Sithole, 2013).
Four main metamorphic events were recognised by Cornell et al (1992), with the peak of metamorphism being
contact metamorphism due to the intrusion of the syntectonic granitoids of the Keimoes Suite (Bailie et al,
2011; Cornell et al, 1992). Peak metamorphism was accompanied by peak deformation giving rise to large
scale tight to isoclinal subvertical folds with northwest trending axial traces. Later metamorphism was
retrograde to isothermal regional contact metamorphism coinciding with folding and intrusion of late- to post-
tectonic granitoids of the Keimoes Suite. The area is transected by several shear zones from west to east that
indicate regional retrograde late metamorphism (Bailie et al, 2011; Geringer et al, 1986).
The Areachap Terrane consists of volcano-sedimentary material of the Areachap Group, which were subjected
to amphibolite to granulite facies metamorphism during the continental collision between the Kaapvaal
Craton and Namaqua province (Bailie et al, 2011; Cornell et al, 1990, 1992; Petterson et al, 2007).
The rocks of the Areachap Group are exposed from Upington to Kleinbegin in a northwest trending belt which
is terminated by the BoSZ (Moen, 2007). Geringer et al (1994) indicate that the lithostratigraphy of the
Areachap succession consists of four volcanic centres, namely the Copperton, Boksputs-Vanwykspan,
Kleinbegin, and Upington volcanic centres, each distinguished according to the volcanism and type of
sediment occurring within them. The metamorphosed sedimentary units are a variety of gneisses occurring
with calc-silicate and banded iron formation (Geringer et al, 1994). The Areachap Group contains stratiform,
volcanogenic Cu-Zn sulphide mineralisation.
The Kakamas Terrane is dominated by numerous intrusions along with lesser metasedimentary rocks of the
Korannaland Group, and has been subjected to varying degrees of deformation. The metasedimentary rocks
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include highly deformed granulite to amphibolite gneiss, calc-silicate and feldspathic quartzite and
charnockites (Bailie et al, 2012; Sithole 2013).
A summary of the stratigraphic units as well as the intrusives is presented below in Table 6 after Boelema
(1994). Owing to the structural complexity of the area, the intrusive units are not necessarily placed in
chronological sequence.
Table 6: Stratigraphy Pertaining to the Kakamas Terrane (adapted from Boelema, 1994) Group Formation Age Lithology
Sout River Formation Banded biotite gneiss, muscovite gneiss and sillimanite gneisses
Goedhoop Formation Quartzite, sericitic and/or feldspathic, with lenses of conglomerate
Korannaland Sequence
Valsvlei Formation
1,800-,2300 Ma for the Korannaland Sequence
Feldspathic quartzite with minor interlayered calc-silicates
Ganzenmond Formation
Quartz-feldspar-biotite +/- sillimanite +/- garnet gneiss, quartz-feldspar-biotite gneiss, massive quartzite and quartz-feldspar gneiss
Puntsit Formation diopside-epidote-hornblende-quartz-feldspar rock, massive garnet calc-silicate, marble and amphibole-quartz-feldspar gneiss and wollastonite
Toeslaan Formation Kinzigite, pelitic gneiss, biotite gneiss and leucocratic paragneiss
Sandputs Formation Quartzite with varying feldspar and calc-silicate minerals
Omdraai Formation Leucocratic quartz-feldspar gneiss, amphibolite and quartzite
Piet Rooisberg Formation
weakly foliated quartz-feldspar gneiss
Renosterkop Gneiss Quartz-topaz gneiss
Koekoepkop Formation Quartz-feldspar-amphibole gneiss
Venterskop Formation Kinzigite
Sandnoute Formation Aluminous gneiss interbedded with quartzite, amphibole rich feldspathic quartzite, amphibole gneiss, amphibolite, calc-silicates
Jacomynspan Group Aluminous metapelitic gneiss with interbanded quartzite, leucocratic quartz-feldspar gneiss, amphibolite calc-silicate and marble
Koelmanskop Metamorphic Sequence
Collinskop Formation Kinzigite
Bok-se-puts Formation Quartz-feldspar gneiss with quartz-rich and pelitic rich zones
Koukop Formation Migmatitic leucogneiss and biotite, garnetiferous gneiss and amphibole gneiss
Witwater Gneiss Garnetiferous mica-poor gneiss and pegmatite
Twakputs Gneiss Megablastic garnetiferous biotite gneiss
Hartbees River Complex (Vyfbeker Metamorphic Suite)
Wolfkop Formation Dolomitic marble, interbanded quartz-feldspar gneiss, amphibolite and calc-silicates
Hugosput Formation Quartz-feldspar gneiss with layers of garnet-sillimanite aluminous gneiss, biotite gneiss, amphibolite, quartzite and calc-silicates
Rozynenbosch Formation
Dominantly feldspathic unit with a dominantly calc-silicate unit: The feldspathic unit constitutes a quartz-feldspar +/- biotite gneiss, with interbanded migmatitic biotitic gneiss and calc-silicates close to the upper contact. The calc-silicate unit comprises of amphibolite, granoblastic calc-silicate with minor quartz-feldspar gneiss and biotite gneiss
Dreyer's Put Formation Granoblastic quartz-feldspar gneiss with banded and massive quartzite
Kenhardt Migmatite Interbanded biotite gneiss, quartz-feldspar +/- biotite gneiss with lenses of amphibolite, calc-silicate, marble and aluminous gneiss
Piet Rooi's Puts Gneiss Quartz-feldspar +/- biotite gneiss with amphibolite lenses
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Group Formation Age Lithology
Mottels River Formation
Banded quartz-feldspar +/- biotite +/- sillimantite +/- cordierite gneiss. Abundant pegmatites
Aasvogelkop Gneiss Leucocratic thinly banded gneiss
Putsies Gniess Quartz-feldspar +/- biotite gneiss
Driehoek Formation Dominantly amphibolite (hornblende) associated with interlayerd calc-silicate, marble, quartz-feldspar +/- sillimanite gneiss, biotite gneiss or schist
Intrusive Rocks
Keimoes Suite 1,200-1,054 Ma.
Calc-alkali with dominantly I-type affinity - Syn- to post-tectonic granites
Unnamed mafic and ultramafic rocks
Serpentinites, dunites, gabbros
Eendoorn Suite Biotite rich occasionally garnetiferous granite gneisses
Kalkwerf Gneiss Coarse grained granite gneiss
Augrabies Gneiss Granite gneiss
Kakamas Suid Gneiss Augen gneiss
Riemvasmaak Gneiss Granite gneiss with granular or augen texture
Dyasons Klip Gneiss Porphyroblastic to megacrystic gneiss
Klip Bakken Gneiss Coarse to megacrystic quartz feldspar gneiss
Curries Camp Gneisss Coarse to megacrystic quartz feldspar gneiss
Banks Vlei Gneiss Biotite rich and biotite poor granite of gneiss
Lutzputs Gneiss Granite gneiss with sillimanite and garnet Derived mainly from Slabbert et al (1994) and Moen (1988). Due to the structural complexity of the area, the table is not necessarily arranged in chronological order (Source: Boelema, R., 1994)
The Korannaland Group is restricted to the Gordonia Subprovince and outcrops as a northwest trending belt
from north of Kenhardt to the eastern boundary of Riemvasmaak where it disappears under undeformed
sediments of the Neoproterozoic Nama Group (Moen, 1999 and 2007).
The Korannaland Group consists of metamorphosed psammitic and semipelitic with calc-silicate and marble
horizons. These rocks are grouped together as the older Biesje Poort Subgroup and the younger micacous
quartzite of the Goede Hoop Formation (Moen, 1999 and 2007).
The Reimvasmaak augen gneiss locally intrudes the lower parts of the Korannaland Group in the Central and
Melkboom domes. The Korannaland Group outcrops are fragmented by the granitoids of the Keimoes Suite. \
The age of the Korannaland Group is debatable but Barton and Burger (1983) established an age which
predates the Keimoes Suite of ~1.2 Ga (Moen, 1999 and 2007; Sithole, 2013).
5.1.2.3 Kheis Subprovince
The boundaries, age and lithostratigraphy of the Kheis Subprovince (Moen, 2007) are viewed as being
controversial as the region consists of a unique lithostratigraphy, metamorphic grade and structural grain.
The lithologies consist of thick successions of arenitic and metavolcanic rocks which have been
metamorphosed to greenschist facies and overlain by unfolded lavas and arenaceous sediments of the Koras
Group, with the metamorphic rocks being subjected to polyphase deformation.
The eastern boundary is a major steepened thrust known as the Dabep Fault (“DT”) (Figure 9) which marks
the boundary between the Kheis Subprovince and the Kaapvaal Craton (Moen, 1999 and 2007). The western
boundary is taken as the Brakbosch fault and forms the western limit of the quartzitic successions in the
Namaqua foreland between Copperton and Kleinbegin (Moen, 2007, and Stowe, 1986).
Sedimentological data suggests that the arenites were deposited on a westward-expanding passive margin at
the onset of a collision with a continental block ~1.35 Ga ago (Moen, 1999 and 2007).
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During the final convergence, the Kheis rocks were folded and thrust back onto the craton. Considerable
erosion took place before the final episode of deposition of the bimodal Koras volcano-sedimentary succession
(Moen, 1999 and 2007; Sithole, 2013).
The Vaalkoppies Group of the Kheis Subprovince is the only group of rocks which is “extensively invaded” by
the Keimoes Suite granites (Moen, 2007). These rocks form a linear southeast-trending belt which is truncated
by the Brakbosch fault, to the east of which the rocks form a prominent range of hills defining a complex
antiformal structure, and to the west of which it forms a belt of low hills with the basal conglomerate of the
Areachap Group found along most of the groups western boundary (Moen, 2007; Sithole, 2013).
5.1.3 Property Geology
NMC metamorphic lithologies of the Rozynenbosch Formation as well as later intrusives belonging to the
Keimoes and Eendoorn Suites outcrop on Rozynenbosch as depicted in Figure 10.
Figure 10: Surface Geology at Rozynenbosch
Source: Miranda Mineral Holdings Limited (2012)
Surface Geology at Rozynenbosch January 2018
The Rozynenbosch Pb-Zn-Cu-Ag deposit is located within the Rozynenbosch Formation just east of the
Hartbees River Thrust on the western boundary of the Kakamas Terrane which forms part of the Vyfbeker
Metamorphic Suite of the Hartbees River Fragment or Complex (Table 6) (Boelema, 1994). The Formation
comprises two main rock types groups, namely a felspathic (arkosic) unit consisting of quartz / feldspar /
SAMREC 2.1 (ii) (vi)
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biotite gneiss and a calc-silicate unit comprising amphibole, meta-dolomite, marble and calc-silicate rocks
with minor granitic gneiss and biotite gneiss (Mossom, 2006). The main lithotypes in the interpreted sequence
are presented below in Table 7.
Table 7: Lithostratigraphic Succession at Rozynenbosch Rock Type
Group Lithology Description
Arkosic Unit
Pink Gneiss medium-grained quartz-feldspar-biotite gneiss
Grey "Ore Zone" Gneiss
medium/fine-grained, probably altered arkose, and finely-disseminated sulphides
Garnet Gneiss garnet-rich, plus epidote. Associated with the ore zone
Calc-silicate Unit
Calc-silicates erratic garnet-epidote rock
Dolomite locally micaceous, white to green/grey dolomite
Amphibolite well laminated dark grey-green plagioclase/ hornblende/epidote rock
Biotite Gneiss well-laminated biotite-rich, grading upwards into amphibolite
Sheared unconformity
Basement Basement Gneiss Pink to grey, coarse-grained, sometimes sillimanite-bearing
The lenticular-shaped stratabound orebodies of disseminated sulphides are hosted mainly by a garnetiferous
leucogneiss.
At least four phases of deformation have been recognised at Rozynenbosch. The phases of deformation are
characterised by plastic folding events and are labelled from F2 through to F5. The F3 fold axes trend
northwest to south east with a mean stratigraphic strike approximating east to west and form the dominant
regional fabric. The F2 structures are located within the limbs of the F3 fold structures. Both F2 and F3
structures have been interpreted as asymmetric isoclinal structures. The F4 and F5 deformational events
overprinted the F2 and F3 events in the form of flexural folding, resulting in the F2 and F3 structures forming
open-ended doubly-plunging features.
An original structure plan of Rozynenbosch with fold axes populations plotted is presented in Figure 11.
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Figure 11: Structural Interpretation Over a Portion of Rozynenbosch
Source: Miranda Mineral Holdings Limited (2012)
Structural Interpretation Over a Portion of Rozynenbosch January 2018
An idealised schematic section through the lithologies in relation to the geological structure is presented in
Figure 12.
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Figure 12: Idealised Section Through the Lithologies in Relation to Geological Structure at Rozynenbosch
Source: Adapted from Pearson (1985)
Idealised Section Through the Lithologies in Relation to Geological Structure at Rozynenbosch
January 2018
5.2 NATURE OF, AND CONTROLS ON, MINERALISATION
The modelled Pb isotope ages for the Rozynenbosch deposit are between 1,200-1,150 Ma (Koppel, 1980) and
lies within a fault-bounded crustal fragment, just east of the basal thrust within the Hartbees River Thrust
Belt within the Gordonia Subprovince (Refer to Figure 9), therefore occurring in a zone of thrusting and along
a "line" of SEDEX deposits as defined by the Aggeneys, Putsberg and adjoining Geelvloer deposits.
SEDEX deposits are not primarily driven by intrusions below but are instead products of dewatering and
metamorphism of the piles of accumulated sediments within ocean basins with anoxic conditions by means of
venting hydrothermal solutions into a submarine environment. The mineralising fluids were then controlled
by normal faulting which defined the edges of these basins and precipitated the sulphides synchronously with
the influx of sediments, which Moore et al (1986) defined as having been deposited in continental, lagoon-
shallow marine and marine environments.
A schematic diagram of a typical SEDEX formation mechanism is presented in Figure 13.
SAMREC 2.1 (ii)
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Figure 13: Genetic Model for the Formation of SEDEX Deposits
Source: Briskey (1986)
Genetic Model or the Formation of SEDEX Deposits January 2018
Metals in solution are mainly carried in chloride/sulphide complexes and precipitate out of solution with the
decrease in temperature when the hydrothermal fluid mixes with the ocean water.
For SEDEX deposits to form, basins require several kilometres of sediment (lacking oxygen) and heat driven
primarily by depth of burial rather than through intrusions, thus explaining the lack in copper which is usually
associated with mafic intrusions. Lead, zinc and silver mineralisation is purely derived from leaching of the
sediments themselves (Briskey, 1986).
5.3 NATURE OF DEPOSITS ON PROPERTY
The Rozynenbosch orebody is thought to have been deposited through sedimentary exhalation and was later
remobilised and tectonically displaced during thrusting of the Hartbees River Thrust event and/or the final
stages of northward convergence related to the main Kibaran-aged Namaqua event (Pearson, 1985).
Sulphide mineralisation currently appears to have been emplaced along antiformal axes of F4 and F5 events
within the arkosic metasediments in the formation of lenzoid orebodies as depicted in Figure 12 (Pearson,
1985).
The mineralogy of the sulphides includes galena, sphalerite, chalcopyrite and pyrite. Grades in the
disseminated ore are up to 2% Pb and 18 g/t Ag. Cu and Zn values are negligible (Boelema, 1994).
SAMREC 2.1 (ii) (v)
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5.4 GEOLOGICAL MODELS
No 3D geological model has previously existed for the Project. The only available geological information was
derived from the drillhole information that was captured by Minxcon staff from historical logs and assay
sheets. The available historical sections and plans were scanned into digital format and used as a reference
for the geological modelling. The Figure 14 shows an example of the sections plan used to inform the 3D
geological modelling.
Figure 14: Typical Hand Drawn Geological Section - Section 240 Looking West
Typical Hand Drawn Geological Section - Section 240 Looking West January 2018
All interpreted lithologies were digitised and captured in 3D space once the sections were georeferenced in
GIS. Figure 15 shows all the sections and plans as displayed in georeferenced space.
SAMREC 2.1 (iii)(iv)(vii) SAMREC 3.3 (iv) SAMREC 4.1 (i)(ii)(iii)(v)(vi)
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Figure 15: Geological Sections and Plans Referenced into 3D Space
Geological Sections and Plans Referenced into 3D Space January 2018
The drillholes were included and were used as a reference to the sections to ensure the referencing of the
sections were correct (Figure 16). It should be noted that not all the drillholes that appear on the section
have geological logs that could be captured into digital format. Where the drillholes appear on the sections
these were used to guide the geological interpretation of the orebody.
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Figure 16: Section with Geological Drillholes Comparison
Section with Geological Drillholes Comparison January 2018
From the plans and sections, it is apparent that the mineralised zone occurs in the gneiss and is terminated
on the amphibolites. The decision was therefore made to model the amphibolite layers to constrict the
mineralised zone. Further lithologies that cut-off or removed the mineralised zone were the pegmatites and
the thrust faulting. Figure 17 is the geological model of the pegmatites and the amphibolite created in
Datamine software.
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Figure 17: Geological Model of the Amphibolites and Pegmatites
Geological Model of the Amphibolites and Pegmatites January 2018
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6 EXPLORATION DATA / INFORMATION
Note that the imperial units have been converted to metric units.
6.1 SATELLITE / AERIAL PHOTO INTERPRETATION
6.1.1 Regional Photo-geological Study of an Area between Kenhardt and Kakamas
Between January 1973 and June 1973, R.F. Loxton Hunting was commissioned by Phelps Dodge to undertake
photo-geological mapping 7,500 km2 comprising a rectangular area of 80 km wide and 90 km long and
encompassing the towns Kenhardt, Kakamas, Kiemoes and Louisvale.
To facilitate the study, Aircraft Operating Company was also commissioned by Phelps Dodge to undertake the
flying of colour air photographs at a scale of 1:20,000 and to prepare mosaics from black and white contact
prints.
The study was done in order to prepare photo-geological maps and to relate the known geology and
mineralisation on the project area to the regional geological settings. This was done by analysis and
annotation of the air photographs, compilation of the interpreted data onto the mosaics and adequate
checking of the geology in the field.
This survey was undertaken in order to delineate the supracrustal rocks (schist belt or Kheiss system) over
the basement. The mapped structural elements include foliation, jointing and folding. The lithological
subdivisions of the supracrustal rocks include the following:-
• amphibolite quartzite facies:-
o lower schists;
o middle schist; and
o upper schists.
• pink gneiss facies; and
• quartzite facies.
The recommendations following this study suggested that the volcano-sedimentary marine associations of the
middle schists (arkoses and marbles) of the amphibolite quartzite facies should be mapped in detail and
examined geochemically.
6.2 GEOPHYSICS
6.2.1 Regional Aeromagnetic Survey
In July 1973, Loxton Hunting and Associates was awarded a contract, and subsequent to that approximately
11,000 line kilometres were flown over an area of about 4,662 km2 with a Gulf fluxgate total fields
magnetometer. Four channel gamma ray spectrometer coverage was obtained concurrently with the
aeromagnetic data. The height of the magnetic sensor was approximately 76.2 m above the ground.
Favourable aeromagnetic anomalies as presented to Phelps Dodge by Loxton Hunting and Associates were
field checked with a portable scintillometer and were interpreted as resulting from lithological changes rather
than from significant amounts of uranium. Aeromagnetic contour maps were produced on a scale of 1:25,000
and 1:50,000.
SAMREC 3.1 (i)(iii)(iv)(v) (vi)(vii) SAMREC 4.1 (iv) SAMVAL T1.8
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6.2.2 Induced Polarization and Ground Magnetic Surveys at Rozynenbosch Central
Reconnaissance 100 m dipole-dipole induced polarization lines were run over the central portion of
Rozynenbosch early in 1973 to attempt to trace the possible extension of the orebody to the east. The results
of these induced polarization lines were disappointing in comparison with drilling results.
As the drilling programme progressed and the mineralisation zone became better defined, a small detailed
induced polarization survey utilizing 50 m dipoles was initiated in an attempt to trace the orebody and to
correlate the induced polarization data with known mineralisation. Preliminary information shows that the
detailed induced polarization survey has been successful in delineating the plunging orebody to the northeast
within the limits of the depth penetration of the dipole spacing used. A new anomaly was detected by the
detailed survey which correlates with a small fold closure near grid coordinates 720 W, 1640 N. Evaluation of
the induced polarization data was not completed because of electronic computer calculation delays.
Examination of the aeromagnetic coverage at Rozynenbosch Central revealed a magnetically flat area relative
to the northern and southern portions of the farm.
6.2.3 Induced Polarization and Ground Magnetic Surveys at Rozynenbosch South
Extension to the south of the original 100 m dipole-dipole induced polarization survey at Rozynenbosch Central
found a significant anomalous zone which is called Rozynenbosch South. Subsequent ground magnetic and
detailed induced polarization surveys (50 m dipoles) were performed in this area to aid in the location of drill
sites. A noteworthy 500 gamma aeromagnetic anomaly occurs at Rozynenbosch South. This anomaly is part of
the same aeromagnetic ridge which extends to the 500 gamma Rozynenbosch North anomaly. Ground
magnetic anomalies of approximately 5,000 gamma occur at two locations where some of the best induced
polarization results have been obtained. Excellent geophysical and geological correlation exists at
Rozynenbosch South.
6.2.4 Induced Polarization and Ground Magnetic Surveys at Rozynenbosch North
A 500 gamma aeromagnetic anomaly occurs at this area. Seven ground magnetic anomalies occur within the
geochemical grid which exceed 2,500 gamma each. The largest amplitude of the seven selected anomalies is
9,340 gamma, while the smallest amplitude is 2,810 gamma. The anomalies appear to be small in area and
of possible isolated sources. Additional ground magnetic work is required to enhance the magnetic
interpretation and to field locate the source of the aeromagnetic anomaly. Two induced polarization lines
were run over the grid which were anomalous. Additional geophysical work was required during 1974 to
complete the evaluation of this portion of the farm.
6.2.5 Transient Electromagnetic Survey (1985)
In September 1985, a transient electromagnetic survey was conducted on the project area. The objective
of the survey was:-
• to detect and map possible conductors in the survey area;
• where possible, to determine as many parameters of such conductors as possible; and
• to recommend drillhole locations for the final conductor identification and evaluation.
A total of seven grids were surveyed on the farm Rozynenbosch and for each of this grid, a 400 m x 400 m
transmitter loop was used carrying 30 hertz step function current with a peak amplitude of between 15 amp
and 17 amp. A 50 m station spacing and 200 m line spacing were utilised throughout.
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Two set of measurements were done at every station, i.e. the electromagnetic field induced by the time
derivative of the vertical magnetic field component and that induced by the field component parallel to the
survey line. The measurements were made using a Geonics EM37 transient system.
A set of measurements consisted of values of the induced electromagnetic field at each of 20 channels or
time-gates. The data was entered on a line by line basis on HP9816 micro-computer and field plots were
generated. These were used for quality control as well as preliminary interpretation and given to the local
representative of GFSA on a weekly basis. Final plots with selected decays were generated from the field
data.
The anomalies occurred on grid 7 and only line 0 E, centred at 150 N.
6.3 MAPPING
6.3.1 Detailed Mapping on Rozynenbosch Central
In 1973, mapping in detail to a scale of 1:1,000 was recommenced and completed on the enlarged grid, adding
to the previously completed map for December 1972.
The grid, covering the gossanous outcrop and vicinity, now measures 1,280 m x 760 m and has surveyed
beacons at 80 m intervals. Subsequent grid positions at 40 m intervals were captured with an alidade and
plane table. The grid has also been covered by aerial photographs at 1:3,400 scale from which an orthophoto
at a scale of 1:1,000 has been prepared. Mapping was done graphically and with tapes, each block mapped
individually measured 80 m x 40 m. Very little plane table mapping was done on the western area where the
gradient was too steep and precipitous for tape work.
Mapped areas were re-plotted from the field sheets onto the working transparency directly and a colour code
(Derwent colour pencils) used to differentiate the various rock types. All fabric measurements were plotted
according to magnetic north. No geological interpretation was plotted on the 1:1,000 map produced and areas
covered with scree and sand have been left blank.
In most of the area mapped, outcrops were found of the highly metamorphosed meta-sediments found in the
schist belts of the region. The gossanous and ore horizon being a highly feldspathic meta-arkose carrying
chiefly galena and zinc in the mineralised zones, minor copper and silver is also found in the ore horizon.
Another non-mineralised meta-arkose was also identified, a much harder and sometimes quartzitic rock. A
very significant and easily recognisable marker horizon, namely the amphibolite/dolomite band proved most
useful in distinguishing and separating (visually) the two meta-arkoses. Only in the extreme west and
southwest was the characteristic pink basement gneiss recorded.
6.3.2 Detail Mapping on Rozynenbosch South
Mapping of the Rozynenbosch South on a scale of 1:1,000 was started during August 1973 and completed
during November 1973. Portion of the original grid was also extended eastwards across the main
Kakamas/Kenhardt road to follow up the conspicuous soil geochemical anomaly.
The stratigraphic column adopted was similar to that for Rozynenbosch Central with the essential difference
that the grey mineralised meta-arkoses is not present, intermittent magnetite quartzite or meta-quartzite
being the probable equivalent. Fold styles recognised are similar to those on Rozynenbosch Central, although
the F2 folds are not of the same magnitude. A feature of the area was the appreciable shearing of the
supracrustal rocks.
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6.4 STRUCTURAL STUDIES
The Competent Person is not aware of any structural studies conducted on the Project Area.
6.5 DRILLING PROGRAMMES
6.5.1 Type of Drilling
Drilling on the Rozynenbosch Project was conducted in two phases. Phase 1 drilling programme was
conducted by Phelps Dodge in 1973. A total of 60 diamond drillholes totalling 13,309 m were drilled during
this phase. All drillholes were drilled using BX core barrel (approximately 42 mm core diameter) but no
information is available pertaining to the drilling company.
Phase 2 drilling programme was conducted by GFSA and Phelps Dodge joint venture between 1984 and 1985.
A total of eight diamond drillholes totalling 2,083 m were drilled during this phase. All drillholes were drilled
using BQ size core barrel (36.5 mm core diameter), and the drilling was carried out by GFSA owned drilling
company. Details pertaining to the drill core orientation is not available.
It is the Competent Person’s opinion that there should be very little bias with respect to the drilling
technique and sampling utilised.
Acknowledgement is hereby made for the historical exploration done Phelps Dodge and GFSA between 1973
and 1985.
The coordinate system used for diamond drillholes is na/-e3 (unknown to the Competent Person, however, it
is assumed to be a historical local coordinate system). The historical local coordinates were projected in GIS
to Hartebeeshoek 94/WG21. The distribution of drillhole collars is shown in Figure 18. The detailed summaries
of drillhole easting, northing and elevation of the drillhole collars, as well the dip and azimuth of the holes
and final drillhole depth are listed in Appendix 4.
SAMREC 3.1 (viii)
SAMREC 3.2 (i)
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Figure 18: Phase 1 and 2 Drillhole Collars
Phase 1 and 2 Drillhole Collars January 2018
Significant mineralised drillhole intercepts (>1% Pb) are presented in Table 8 below. It should be noted that
the significant drillhole intercepts represent core length results and are not corrected widths.
Table 8: Significant Drill Intercepts > 1% Pb
BHID From To Width Pb Zn Ag
m m m % % ppm
RB2 21.64 33.00 11.36 7.89 4.55 103.09
RB5 23.00 46.00 23.00 4.02 - -
RB6 8.45 14.00 5.55 2.53 0.01 -
RB6 21.00 26.00 5.00 2.06 0.01 -
RB7 36.00 49.00 13.00 2.07 0.47 -
RB8 30.50 40.00 9.50 1.98 0.16 -
RB9 0.00 7.00 7.00 5.57 0.03 -
RB9 24.00 29.00 5.00 2.11 2.10 -
RB9 45.00 58.00 13.00 1.98 0.01 -
RB10 22.00 36.32 14.32 1.16 1.65 -
RB12 32.30 57.50 25.20 6.78 0.64 -
RB23 68.36 94.00 25.64 2.22 0.01 -
RB23 130.00 138.00 8.00 1.16 2.02 -
RB25 60.55 65.00 4.45 4.19 0.01 -
RB25 65.50 78.31 12.81 4.84 0.11 -
RB25 113.11 121.75 8.64 4.22 0.48 -
RB28 25.47 58.10 32.63 1.08 0.65 -
RB31 6.00 11.00 5.00 1.17 1.86 -
RB35 107.00 119.50 12.50 1.46 0.24 -
RB37 103.87 113.50 9.63 2.36 2.08 -
RB37 161.00 174.00 13.00 2.30 0.36 -
RB43 21.00 60.50 39.50 3.50 0.04 50.33 Note: Measured as downhole length, true widths have not been measured or calculated.
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6.5.2 Logging
All drillholes drilled by Phelps Dodge and GFSA were logged by geoscientists with relevant qualifications. All
drillholes including relevant intersections were geologically logged to a level of detail to support appropriate
Mineral Resource estimation.
Drill core logging was both qualitative and quantitative in nature. The Competent Person is not aware if all
drillholes were photographed during logging.
In 1985, five drillholes - namely RB61, RB62, RB64, RB66, and RB67 - were re-logged by C.V. Pearson and the
procedure adopted for re-logging was as follows:-
• Rotating the core from the start of the BX core to the end of the drillhole, maintaining (as closely as
possible) the same orientation. By this method it was hoped to determine the meso- and macro- fold
structures which may otherwise have been missed, unless recognised by means of correlating similar
lithologies.
• Foliation measurements were taken at regular intervals along the core (between two and six
measurements per metre depending upon structural and/or lithological complexity). True foliation
attitude was measured, though the apparent foliation was often also recorded.
6.5.3 Downhole Surveys
No downhole surveys were carried out by Phelps Dodge during phase 1 drilling programme. During phase 2
drilling programme, downhole survey was carried out on all drillholes drilled by GFSA and on those drilled
by Phelps Dodge during phase 1 drilling programme however, downhole survey results are not available. The
downhole instrument utilised was Sperry-Sun.
Some of the deeper drillholes have been found to register deflections of up to 80 m southward off vertical
and the lateral (east/west) deflections was minimal.
6.6 GEOLOGICAL DATA
Refer to Sections 6.5.1, 6.5.2, 6.7.1.4 and 6.7.1.1.
6.7 SAMPLING
6.7.1 Sample Method, Collection, Capture and Storage
6.7.1.1 Nature and Quality of Sampling
6.7.1.1.1 Lithogeochemistry
A total of 10 ore samples of core taken from RB5 drillhole were examined mineralogically by the Lakefield
Research of Canada Limited. Eighteen specimens of rock types around Rozynenbosch Central, were
microscopically and geochemically examined by S. Williams of the Phelps Dodge Western Exploration Office,
and one specimen was examined microscopically by J.E.E. Jacobsen of the Witwatersrand University.
6.7.1.1.1.1 Ore
The metamorphic grade was found to be mezozonal (amphibolite grade). The sulphide assemblage and the
presence of fluorite suggest that this rock is of volcanic origin as opposed to the overlying meta-arkoses (pink
gneiss). The ore zone has a limited distribution or surface, has developed a typical pink-orange leaching
capping appearance, is very friable and gives anomalous rock chip geochemical values. Rounded pebble-sized
concretions, typically developed in the weathered capping, are thought to be areas of “superior cohesion”
formed during metamorphism. In fresh core, the rock is distinctly lighter in colour, probably due to the higher
SAMREC 3.3 (i)(ii)(iii)(iv)(v)(vi)(vii)
SAMREC 3.2 (ii)(iii)
SAMREC 3.2 (v)
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quartz content, and microcline is porphyroblastic and contrasts strongly to the meta-arkoses. Aside from the
feldspar and occasional garnet porphyroblasts, the ore zone minerals are equigranular and medium to fine
grained. Jacobsen suggested the excessive potash-rich nature of the rock is more compatible with an acid
volcanic than an arkosic sediment.
The sulphides consist mainly of galena (0.01% to 17.0% Pb averaging 2.4% Pb), sphalerite (0.01% to 9.0% Zn,
averaging 0.6% Zn), silver (0-470 g/t Ag, averaging 60 g/t), chalcopyrite (usually less than 0.1% Cu) and pyrite.
The average grain size of 70% of the galena was found to be 20 microns to 25 microns ranging from a maximum
of 340 microns to less than five microns. Approximately 95% of the galena was associated with the non-opaque
minerals such as:-
• interstitial grains and crystals;
• fracture fillings; and
• inclusions in grains of gangue.
The remaining galena was present as inclusions in pyrite and sphalerite, usually less than 10 microns in size.
The average grain size of 70% of the sphalerite was found to be 20 microns to 40 microns, ranging from a
maximum of 400 microns to less than 10 microns. More than 95% of the sphalerite occurred with gangue
minerals in association similar to those listed for galena. Many grains of sphalerite contained fine grained
exsolved chalcopyrite.
More than 90% of the chalcopyrite was present as fine grained exsolutions within sphalerite. The remaining
chalcopyrite occurred with gangue minerals as fracture fillings and interstitial grains. Silver was found both
as minute particles in the galena and also as discrete grains between galena and quartz.
Lakefield Research concluded that the average grain size of the galena and sphalerite indicated that a fine
grind may be required to achieve a satisfactory liberation of these minerals and that cyanidation may be
required for the recovery of the silver.
6.7.1.1.1.2 Garnet Tactite (GNES)
Light orange to brown coloured garnet-rich calcareous arkose, often highly mineralised in lead and zinc,
usually containing abundant epidote and with minor amounts of hornblende, quartz and calcite. The rock is
typically developed on the contact of the ore zone and dolomite.
6.7.1.1.1.3 Calc-silicate (CASI)
A dark grey to black (occasionally light coloured, especially on fresh surface) weathering rock, coarse grained
and usually developed in close proximity to the dolomite-market horizon. The main rock forming minerals are
hornblende, garnet, pyroxene and carbonate, with minor biotite and quartz.
6.7.1.1.1.4 Amphibolite (DIAB)
A black rock with light grey specks, medium grained and occasionally well laminated, showing a well-
developed foliation, lineation (and especially well-developed rodding in the F2 hinge zones), and consisting
essentially of plagioclase and hornblende with minor amounts of quartz, biotite, magnetite and sericite
(retrograde after plagioclase). S. Williams (Phelps Dodge, USA) was of the opinion that the composition is
compatible with material derived from basic volcanic debris.
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6.7.1.1.1.5 Meta-arkose (SASN & ARKS)
Two essentially similar meta-arkoses, separated stratigraphically by dolomite and amphibolite. The ARKS
meta-arkose is distinctly darker coloured (more iron staining) than the pink weathering SASN meta-arkose,
which overlies the ore body and is probably the equivalent of the so-called “pink gneiss” which is very
prevalent further to the east. The ARKS meta-arkose is thought to be the equivalent of the biotite gneiss
immediately above the basement gneiss contact on the western side of the Rozynenbosch schist belt. The
rocks contain quartz, microcline, and mica with minor amounts of epidote, garnet and magnetite with
accessory amounts of sphene, zircon, apatite and pyrite.
6.7.1.1.2 Regional Geochemical Stream Sediments and Soil Sampling
A total of 38 farms in the Kenhardt/Kakamas area were sampled by geochemical stream sediment sampling
techniques. Over 15 of these farms which displayed negative geochemical responses and geologically of little
promise, were allowed to lapse during 1973. Of these, the most noteworthy concentration of barely
anomalous Ni, Zn and Cu values occur on the farms De Tuin Zuid and Klein Swart Bast. It is thought that these
anomalies are associated with known dolerite intrusives in Karroo sediments that begin outcropping near the
southern boundaries of these farms.
Stream sediment had proved to be a powerful tool in this area and certainly indicated the mineralised
outcrops on Rozynenbosch. The Cu, Pb, Zn dilution trains were surprisingly short and easily obliterated when
entering larger drainage channels. Samples taken within metres of leached capping gave values of ±600 ppm
Pb and ±250 ppm Zn, where threshold values were calculated to be 40 ppm for Pb and 53 ppm for Zn.
Follow-up soil geochemistry on close spaced grids on the five farms, Rozynenbosch, Koegab, Ganzeniaond,
Witvlei and Dreyers Puts – Marys Rust, had provided several substantial anomalous areas.
The close space follow-up soil sampling grids on the farm Rozynenbosch, Koegab, Ganzeninond, Dreyers Puts
and Marys Rust and Witvlei had provided several interesting targets. The statistical treatment of the data
shows that the threshold values obtained for soil sampling geochemistry between Kenhardt and Kakamas were
almost twice those obtained in the Rok Optel and Putsonderwater region. The values in the Klein Brpaal,
Brulkolk area are similar to those of Kenhardt/Kakamas.
6.7.1.1.3 Geochemical Rock Chip Sampling at Rozynenbosch Central
Geochemical rock chip sampling was performed by Loxton Hunting and Associates and also Phelps Dodge
personnel. The purpose of the exercise was to ascertain the distribution of mineralisation in areas where
mainly solid (rock) outcrop is encountered, rendering geochemistry of soil samples less effective. A sum total
to 1,276 samples were taken on Rozynenbosch Central.
6.7.1.1.4 Geochemical Rock Chip Sampling at Rozynenbosch South
Almost the entire Rozynenbosch South area was rock chip sampled on a 20 m square grid. To summarize,
copper shows sporadic anomalous values with erratic highs over much of the grid and does not appear to be
restricted to any particular rock type. Well defined zinc and lead anomalies, showing good coincidence, are
confined essentially to the southeast portion of the area and continue across the Kakamas/Kenhardt road.
They are confined to the amphibolite-dolomite-calc-silicate suite, show reasonable strike extension and
provided significant drilling targets.
6.7.1.1.5 Geochemical Rock Chip Sampling at Rozynenbosch North
Rock chip samples were taken on an 80 m grid at 20 m intervals. Approximately 20 chips samples were taken
in a 2 m radius at each sample station. Where no rock outcrop was available, soil samples were taken instead
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and clearly labelled “s”. A total of 4,416 samples were collected on Rozynenbosch North and Rozynenbosch
South.
6.7.1.1.6 Diamond Drillholes
Limited data pertaining to the nature quality of sampling is available.
A total of 68 diamond drillholes were drilled between 1973 and 1985 by two reputable companies. All drillholes
were logged in detail and sampled. Sample recoveries were properly recorded on sampling sheet noting the
“from” and “to” depth and metres recovered and then expressed as percentage. Drillhole core was halved by
means of diamond cutting saw. One half split core was dispatched to the McLachlan & Lazar Laboratory for
analysis and the remainder was stored on six-inch corrugated iron sheet.
The Competent Person is of the opinion that the nature and quality of samples generated is acceptable.
6.7.1.2 Sampling Process
6.7.1.2.1 Geochemical Rock Chip Sampling
Rock chips samples were collected over a circular area with 2 m radius at 20 m intervals, on a pre-surveyed
grid. The mass of a sample was approximately 200 g. Assaying was done on pulverized material by A.A. reading
on an aqueous solution or by solvent extraction completed by McLachlan & Lazar, Analytical Services and
Aggeneys Laboratory.
The rock chip sampling on Rozynenbosch Central has very effectively delineated the orebody and also shows
other areas of potential mineralisation. It can be safely stated that this is a profitable and speedy tool in
mineral exploration and identification.
6.7.1.2.2 Regional Soil Sampling
A regional soil sampling program was performed by Loxton Hunting and Associates which included
Rozynenbosch farm. A standard type of soil sampling was carried out according to a surveyed grid whereby
±200 g of material was collected, sieved, packaged, numbered according to the grid coordinates, labelled
and submitted for assay
Assaying was done by McLachlan & Lazar using the A.A. and colourimetric methods. The results were plotted
on plan which indicated a major anomaly on Rozynenbosch Central and smaller anomaly to the north.
6.7.1.2.3 Diamond Drillholes
Limited data pertaining to the diamond drillhole sampling process is available.
All drillholes drilled were diamond drillholes and the drill core was split in halve by means of two diamond
cutting saw. One of the diamond cutting saw was driven by electric motor and the other one by a diesel
engine. One half split core was dispatched to the McLachlan & Lazar Laboratory for analysis and the remainder
was stored on six-inch corrugated iron sheet.
In 1985, five drillholes - namely RB61, RB62, RB64, RB66, and RB67 - were re-logged and re-assayed by one
C.V. Pearson. The halved drill core was quartered, however, the data with respect to how the core was
quartered is unavailable.
6.7.1.3 Data Sets
Refer to sections 6.7.1.1 and 6.7.1.2.
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6.7.1.4 Geometry of Mineralisation
The drillhole intercepts are downhole length. However, the geometry of the stratigraphy and mineralised
zone is evident from the plotted sections and the true width can be obtained either graphically or by
calculation. Significant drill intercepts >1% Pb are presented in Table 8. The later downhole surveys completed
by GFSA indicated that some of the deeper drillholes have been found to register deflections of up to 80 m
southward of vertical and the lateral (east/west) deflections was minimal. The geometry of the mineralisation
is also considered in the geological modelling (see Section 5.4) and estimation process (see Section 7).
6.7.1.5 Retention Policy and Storage of Physical Samples
Owing to the historical nature of the data, data pertaining to the retention policy and storage of physical
samples were not available. However, it was stated in the monthly report that the halve split core was sent
to McLachlan & Lazar in Johannesburg for analysis and the remainder stored on six-inch corrugated iron
sheets.
6.7.1.6 Recording of Sample Recoveries and Results
Sample recoveries were properly recorded on sampling sheet noting the “from” and “to” depth and metres
recovered and then expressed as percentage. The sample recoveries were maximised through the drilling
techniques.
The relationship between sample recoveries and grade was not assessed.
6.7.1.7 Splitting of Samples
All drillholes drilled were diamond drillholes and the drill core was split in halve by means of two diamond
cutting saw. One of the diamond cutting saws was driven by electric motor and the other one by a diesel
engine. One half split core was dispatched to the McLachlan & Lazar Laboratory for analysis and the remainder
was stored on six-inch corrugated iron sheet.
In 1985, five drillholes namely RB61, RB62, RB64, RB66, and RB67 were re-logged and re-assayed by one C.V.
Pearson. The halve drill core was quartered however the data with respect to how the core was quartered is
unavailable.
6.7.2 Sample Preparation and Analysis
6.7.2.1 Laboratory Location and Accreditation
Samples were dispatched to McLachlan & Lazar located in Johannesburg, Analytical Services, Aggeneys
Laboratory located in Springbok (Northern Cape), Lakefield Research located in Canada and Phelps Dodge
Western Office located in USA. The accreditation of the laboratories at the time of drilling and sampling is
unknown.
6.7.2.2 Analytical Method
All the diamond drillhole samples dispatched to the laboratory were analysed for copper, zinc, lead and silver,
however data pertaining the analytical method utilised at the laboratory is unavailable.
6.7.2.3 Sample Preparation Technique
Owing to the historical nature of the data in question, data pertaining to the sample preparation techniques
are not available. Although there was no data available, the Competent Person is of the opinion that sample
preparation techniques may have been done to industry best practice as the companies were reputable mining
and exploration companies.
SAMREC 3.4 (ii)
SAMREC 3.4 (iii)
SAMREC 3.4 (i)
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6.7.3 Sampling Governance
6.7.3.1 Sampling Campaign and Process
Limited data pertaining to the sampling campaign and process is available.
All drillholes that were drilled during phase 1 were drilled using BX core barrel (approximately 42 mm core
diameter) whereas phase 2 was completed using BQ size core barrel (36.5 mm core diameter). Samples
recoveries were properly recorded on the sampling sheet noting the “from” and “to” depth and metres
recovered and then expressed as percentage. All drillholes drilled were diamond drillholes and the drill core
was split in halve by means of two diamond cutting saw. One half-split core was dispatched to the McLachlan
& Lazar Laboratory for analysis and the remainder was stored on six-inch corrugated iron sheet.
Details pertaining to the internal and external quality control and quality assurance (“QAQC”) are not
available. However, it is assumed standard industry practice were applied as the geological logging and
sampling was conducted by Phelps Dodge and later by Goldfields which were both major mining and
exploration companies at the time. These companies, as standard practice, had standard operating
procedures in place to maintain quality, as the majors do these days too. The basic sampling and logging
procedures would not have changed much since then. What would have changed is that there is more focus
on the QAQC samples introduced into the sampling stream such as CRMs, blanks and standards. Also, based
on the quality of the historical geological data it is evident that there was a focus on geology and that the
standard was of a high quality. It is for these reasons that the CP deems the data to be of sufficient quality,
albeit incomplete, to use in an inferred Mineral Resource.
6.7.3.2 Sample Security and Chain of Custody
Details pertaining to the sample security and the chain of custody are not readily available. It is assumed
standard industry practice was applied as drilling was conducted by two reputable companies.
6.7.3.3 Validation Procedures
Details pertaining to the historical validation procedures are not available.
Minxcon was provided with geological reports, geological map and cross section and drillhole data such
lithological logs and assay data in a pdf format. Minxcon staff then captured all lithological logs and assay
data into Microsoft Excel™ as well as digitising scanned geological section in ArcView™ GIS software. The data
was cross checked and validated in Datamine Studio EM™ software as far as possible with the data that was
available.
6.7.3.4 Audit and Risks
No records are available pertaining to the audit and risk processes. All exploration activities were conducted
by two major reputable companies, it is likely that audits may have been conducted.
6.7.4 Quality Control and Assurance Procedures
Details pertaining to the QAQC procedures utilised are not available. It is assumed standard industry practice
were applied during sampling and at the respective laboratories used. QAQC processes at the time of the
exploration programme were not necessarily a requirement and not as stringent as they are today.
Downhole surveys were carried out on all drillholes. The downhole instrument utilised was Sperry-Sun. Some
of the deeper drillholes have been found to register deflections of up to 80 m southward of vertical and the
lateral (east/west) deflections was minimal.
SAMREC 3.5 (i)
SAMREC 3.5 (ii)
SAMREC 3.5 (iii)
SAMREC 3.5 (iv)
SAMREC 3.6 (i)
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6.7.5 Bulk Density
It was reported in the CPR compiled by R.J. Mossom, 2006 (Merlin Resources) that an average density of 2.85
t/m3 was determined at the laboratory for the ore rock type on drillhole core samples, however no supporting
documents were available. The Competent Person did however have density readings for eight samples in
drillhole RB25. This data had an average density of 2.84 t/m3.
6.7.5.1 Method of Bulk Density Determination
Details pertaining to the method of bulk density determination are not available.
6.7.5.2 Representivity
More density work might have been completed at the time of the exploration programme but is not available
anymore. The value of 2.85 t/m3 that is being utilised does seem reasonable as it is similar to other copper
and lead projects.
6.7.5.3 Adequacy of Bulk Density Determination Methods
Details pertaining to the method of bulk density determination is not available. The Competent Person has
however completed studies on similar copper and lead deposits and the bulk densities are similar, ranging
from 2.78 t/m3 to 4.21 t/m3. More work is however required going forward.
6.7.6 Bulk-sampling and/or Trial-mining
The Competent Person is not aware of any bulk-sampling and/or trial-mining conducted on Rozynenbosch
Project Area. Hence, the following sections are not applicable.
6.7.6.1 Sample Location and Description
Not applicable.
6.7.6.2 Mining Method and Treatment
Not applicable.
6.7.6.3 Sample Representivity
Not applicable.
6.8 DATABASE MANAGEMENT
Although valuable information on the Rozynenbosch Project was obtained from the early 1970s, the data
was not captured in a digital format. Minxcon was provided with geological reports, geological map and
cross section as well as drillhole data such lithological logs and assay data in a pdf format. Minxcon staff has
subsequently captured all available lithological logs and assay data into Microsoft Excel™ as well as digitising
scanned geological section in ArcView™ software. The data was cross checked and validated in Datamine
Studio EM™ software as far as possible.
6.9 SPATIAL DATA
Sampling grids, mapping grids and drillhole collars were surveyed in by theodolite producing both coordinates
and elevations by dedicated survey personnel.
In the case of diamond drillholes, a square grid was surveyed in by means of a theodolite with a base line
bearing of 111° True along which drillholes were sited according to target area outlined by the rock chip
SAMREC 3.1 (ii)
SAMREC 3.8 (i)(ii)(iii)(iv)
SAMREC 3.7 (i)(ii)
SAMREC 3.7 (iii)
SAMREC 3.7 (iv)
SAMREC 3.7
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sampling survey combined with geophysical surveys (magnetometer and induced polarization), however data
pertaining to the drillhole collar surveys is not available.
Drillhole collar positions were therefore digitised from plans and cross sections, showing the location of the
drillholes at Rozynenbosch Central. The drillholes were drilled along the section lines and on odd occasion,
between the two section lines. The section lines were planned 120 m apart. The average grid was
approximately 120 m x 40 m. It is the Competent Person’s opinion that data density and distribution is
adequate for the purpose of conducting meaningful Mineral Resource estimation.
6.10 DATA VERIFICATION, AUDITS AND REVIEWS
GFSA conducted the verification of the exploration results conducted by Phelps Dodge at the commencement
of the JV agreement between the two parties.
As part of data verification and audits, five drillholes (RB61, RB62, RB64, RB66, and RB67) were re-logged
and re-sampled by C.V. Pearson in 1985, however these results are not available.
No record of twinned drillholes and no deflections were drilled on the property.
6.10.1 Laboratory Audit/Review
Details pertaining to laboratory audits/reviews are not available.
6.11 EXPLORATION EXPENDITURE
6.11.1 Exploration Expenditure Incurred to Date
Limited data pertaining to the exploration expenditure incurred to date is available. It was reported that
approximately USD2 million had already been spent on the project and it must be noted that the amount
excludes geochemical assay, geophysics, and travel and accommodation.
This figure could not be verified and the Competent Person has estimated the replacement costs of the
drillhole metres drilled and exploration normally associated with such a project to be ZAR26.38 million. These
costs described in Section 8.12.5.1.5 and shown in Table 34.
6.11.2 Planned Exploration Expenditure
It is uncertain what exploration budget is available but the Competent Person has compiled a drilling
programme for what is required to upgrade the Mineral Resource that has been estimated by Minxcon and
signed off by the Competent Person. As a minimum 2,200 m of diamond core drilling will be required as a
twinning exercise and an additional 1,700 m of diamond core drilling will be required to improve the
confidence of the exploration target and potentially upgrade it to an Inferred Mineral Resource. The detail
for this drilling is discussed in Section 0.
JSE 12.9 (e)
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7 MINERAL RESOURCE ESTIMATES
7.1 MINERAL RESOURCE ESTIMATION AND MODELLING TECHNIQUE
7.1.1 Geological Drillholes and Statistics
A total of 68 drillholes were captured from historical information, no QAQC was available and, where possible,
grade values were captured. A further analysis of the section shows grade values at a cut-off of USD4 and
USD8 (PB4 and PB8 below) in the 1970s; these are stretch values and have been captured as a single point for
analysis. A total of 19 drillholes had raw assay sampling and of these 13 had both raw and stretch values. Of
the total of 31 drillholes with stretch values, a total of 18 were exclusively stretch values. Table 9 provides
a summary of the classical statistics from the drillholes. PB, ZN and AGPPM are the individual Pb, Zn and Ag
sample data points dataset whereas the fields with the suffix of “4” are the stretch values at a USD4 cut-off
and with a suffix of “8” are the stretch values at a cut-off of USD8.
Table 9: Classical Statistics of the Drillhole Database
FIELD Total No. Samples Missing Min Max Mean Variance Std Deviation Geo Mean
PB 501 392 109 0.5 17.3 3.04 10.39 3.22 1.30
ZN 501 360 141 0.5 12.96 0.83 2.84 1.69 0.12
AGPPM 501 67 434 0.5 240 67.83 3450.36 58.74 37.73
PB4 501 323 178 0.01 25.7 5.55 44.64 6.68 3.31
ZN4 501 323 178 0.5 6.89 1.43 5.62 2.37 0.28
AGPPM4 501 323 178 0.64 234 43.95 1111.14 33.33 26.66
PB8 501 201 300 0.41 17 6.07 17.44 4.18 4.80
ZN8 501 201 300 0.5 8.38 1.98 9.26 3.04 0.42
AGPPM8 501 201 300 0.01 394 60.90 2984.71 54.63 31.16
LENGTH 501 501 0 0.01 38.44 1.40 5.50 2.35 0.90
Capping of the zinc values was set at 10.4% as this is the only significant outlier identified in the data analysis;
the lead values were not capped as no significant outliers were identified. The drillholes have been
composited to 1 m. Limited number of density samples were available from the historic drilling as only
drillhole RB25 had eight density readings, and the average density was determined to be 2.84 t/m3. This is in
line with the 2.85 t/m3 that was used historically.
Figure 19 shows the log probability plot with no significant outliers with regards the lead and the zinc log
probability plot (Figure 20) shows non-trend high values after 10.4% in the probability plots.
SAMREC 4.2 (i)(ii)(iii)(iv)(v) SAMREC 4.5 (i)
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Figure 19: Pb Log Probability Plot of the Raw Assays
Figure 20: Zn Log Probability Plot of the Raw Assays
Capping of the Pb4 values was necessary and was set as 20.7%. Figure 21 shows the log probability of the lead
values based on a cut-off of USD4 (1974).
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Figure 21: Pb4 Capping at 20.7%
The composited database was used to create direction variograms and downhole variograms were
investigated. The downhole variogram gives an indication of the correlation of the lead values down the
drillholes and the Figure 22 shows the variogram correlation of approximately 10 m.
Figure 22: Downhole Variogram showing correlation up to 10 m
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A set of variograms were created in a 22.5° angle spacing (based on the geological model) to check for
correlation and direction of the lead values. The experimental variogram below shows a long-range correlation
in the 45° of 161.9 m with a short range in the 135° of 42.7 m (Figure 23). These ranges and directions were
used to inform the grade shell used for the estimation. The directional variograms were not used in the
estimation and only used for the creation of the grade shells.
Figure 23: Directional Variogram showing a Long and Short Range of 161 m and 42 m, Respectively
The omnidirectional variogram has a range of 88 m for the lead and 95 m for the zinc variogram. These
variograms are represented in the following Figure 24 and Figure 25.
Figure 24: Omnidirectional Variogram of the Pb showing a Range of 88 m
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Figure 25: Omnidirectional Variogram of the Zn showing a Range of 95 m
The variogram ranges were used for the search ranges of the estimation only.
7.1.2 Block Model Creation
A mineralised halo was created in Datamine software that honours the ranges identified in the variogram
analysis. These ranges give an indication of the extent of the mineralisation along the dip and plunge of the
orebody. A natural cut-off of 0.5% Pb was used to limit the mineralised zone. Figure 26 shows the mineralised
halo created using the variogram ranges and the raw assay values.
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Figure 26: Mineralised Halo using a 0.5% Pb shown with the Drillholes used to Inform the Halo
Mineralised Halo using a 0.5% Pb shown with the Drillholes used to Inform the Halo
January 2018
A further mineralised halo was created using the PB4 (lead values at a USD4 cut-off, stretch value) to develop
the Exploration Target halo.
The block model was created using the mineralised halos (within the gneiss) and the amphibolite and
pegmatites were removed from the model. Figure 27 shows a cross-section of the base block model where
the pegmatites and amphibolites have been removed. This base model was used to estimate into to ensure
no non-mineralised zones were estimated.
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Figure 27: Base Mineralisation Model with the Pegmatites and Amphibolites Removed
Base Mineralisation Model with the Pegmatites and Amphiboles Removed January 2018
The block model is based on a block size of 10 m x 10 m x 1 m. The 1 m block size was used to better define
the grade estimation and to create definition of the estimation. Table 10 shows the block model parameters.
Table 10: Block Model Definition
Block Model Origin Cell Size No. Cells
X direction -880 10 148
Y direction 300 10 200
Z direction 150 1 780
7.1.3 Estimation Technique
The estimation was carried out in two separate areas based on the drillhole assay type and informing
drillholes. Where the drillholes included raw assay and stretch values, these were highlighted and a perimeter
was created around them. The remainder of the holes where only stretch values were available were classed
as a target area and estimated as such. The split in the estimation model is shown in the Figure 28.
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Figure 28: Exploration and Inferred Model
Exploration and Inferred Model January 2018
Inverse distance squared (“ID2”) was used in the estimation and two separate runs were conducted. The raw
drillhole assays were used for the estimation of the Inferred Mineral Resource, and an Exploration Target
estimation was carried out on a USD4 cut value based on the lead. The Exploration Target estimation is used
as an indicative estimation of the Exploration Target zone as none of the original assay values are available
for the estimation.
The search ranges for the estimation are based on an omnidirectional variogram range of the lead values and
a minimum of two drillholes were used for the estimation. A minimum of five samples and a maximum of 20
samples were used to inform the estimation.
The omnidirectional variogram with a range of 88 m for the lead and 95 m for the zinc was used in the search
parameters of the estimation.
The silver was not estimated as too few samples are available for the estimation. A good correlation of 94%
between silver and the combined lead-zinc is displayed and a regression of the silver values was done based
on this correlation. The correlation is shown in the Figure 29.
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Figure 29: A Correlation Co-efficient of 94% shown with regards Ag and Pb+Zn
The estimated model is shown in the following Figure 30 where the lead value is shown above the cut-off of
1.9% Pb. Both the Exploration Target and the Inferred model are shown.
Figure 30: Pb Estimated Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb
Pb Estimated Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb
January 2018
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The following Figure 31 shows the zinc estimate of the Exploration Target and inferred estimated models at
a cut-off of 1.9% Pb.
Figure 31: Zn Estimated Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb
Zn Estimated Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb
January 2018
Figure 32 shows the regressed silver value based on the combined lead-zinc value, also at a 1.9% Pb cut-off.
Figure 32: Ag Regressed Value Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb
Ag Regressed Value Model of the Exploration Target and Inferred at a Cut-off of 1.9% Pb
January 2018
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7.1.4 Model Verification
The Mineral Resource model was checked with regards 100 m swath plots from east to west and 10 m swath
plots in the vertical. The estimated values of the raw drillhole assay data were visually checked with the ID2
estimate. The swaths are shown in the following figures and represent a reasonable estimate.
Figure 33: Visual Check of the Estimate and the Raw Assay Values
Visual Check of the Estimate and the Raw Assay Values January 2018
The following Figure 34 and Figure 35 show the correlation of the lead values of the model versus the lead
values of the sampling data.
Figure 34: Pb 100 m Swath Plots from West to East
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Figure 35: Pb Vertical Swath Plots
Figure 37 and Figure 38 show the zinc estimated values versus the raw values.
Figure 36: Zn 100 m Swath Plots from West to East
232
42
272 273
348
5141
10
0
50
100
150
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250
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mb
er o
f Sa
mp
les
Zn %
Swath X Co- Ordinate
Zn 100m Swath West To East
No Samples Sample Zn Model Zn
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Figure 37: Zn Vertical Swath Plots
The swaths for Pb and Zn were carried out on 100 m west to east swath and 10 m vertical as shown in the
Figure 38 and Figure 39 respectively.
Figure 38: West to East 100 m Swaths (Grade Model is for Pb)
West to East 100 m Swaths (Grade Model is for Pb) January 2018
10 12 1421 20
16
28
47 48
30
12
32
45
57
108
132
153
142149
104
62
27
0
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485535545555565575585595605615625635645655665675685695705715725735745755765775
Nu
mb
er o
f Sa
mp
les
Zn %
Swath X Co- Ordinate
Zn 10m Vertical Swath
No Samples Sample Zn Model Zn
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Figure 39: Vertical 10 m Swaths (Grade Model is for Pb)
Vertical 10 m Swaths (Grade Model is for Pb) January 2018
A final check of the estimation was carried out with regards scatter plot of the estimated values versus the
average value block for block. The correlation between the estimate and the average block value yielded a
correlation of 89% for the lead estimate and a 90% for the zinc. These are shown in the Figure 40 and Figure
41 respectively.
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Figure 40: Pb Estimates Value versus Average Pb Value
Figure 41: Zn Estimated Value versus Average Zn Value
7.2 MINERAL RESOURCE CLASSIFICATION CRITERIA
Categorisation of the Mineral Resource could only be classified as Inferred due to the lack of QAQC,
uncertainty of the exact position of the drillholes and the absence of all available raw assay information.
Although the QAQC was not necessary as code compliance when drilled, the reputation of the companies that
SAMREC 4.4 (i)
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conducted the drilling has lead the Competent Person to accept that necessary steps were taken to ensure
quality assays. Where only the estimation of the raw samples was done, this was included in the Inferred
classification (Figure 42). Where only stretch cut-off values were used, this was classified as an Exploration
Target.
Figure 42: Mineral Resource Classification
Mineral Resource Classification January 2018
7.3 REASONABLE AND REALISTIC PROSPECTS FOR EVENTUAL ECONOMIC EXTRACTION
The Mineral Resource model, including silver, was tested on an optimisation run in Datamine Maxipit software
to determine an eventual final pit to limit the Mineral Resource with regards an economic depth cut-off. The
optimisation on this pit when included with the Exploration Target model shows that the pit could be
economically extracted to a depth of 140 m below surface. This depth is beyond the depth of the Inferred
Mineral Resource and it was therefore concluded that no depth cut-off for the Inferred Mineral Resource
would be used. The Figure 43 shows the ultimate pit with the Inferred Mineral Resource, including silver, fully
accessible to the depth of the estimation.
In the scenario excluding silver, the pit optimisation only extends to a depth of 100 m and therefore the
Mineral Resource excluding silver has a depth cut-off of 100 m.
SAMREC 4.3 (i)-(ix)
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Figure 43: Optimised Pit with Inferred (Including Silver) and Exploration Target Model Optimised - Model Shown at >1% Pb
Optimised Pit with Inferred (Including Silver) and Exploration Target Model Optimised - Model Shown at >1 % Pb
January 2018
The potential capital costs requirement was calculated as follows: The Project is still at early exploration
stage, and hence it is too pre-mature to calculate capital costs with a reasonable degree of confidence. The
Minxcon team instead calculated the maximum capital ability of the project. The maximum capital carrying
ability (calculated as present value of the EBITDA) can be back-calculated by applying assumptions for life of
project and reasonable expected returns. A life of 10 years at a return of 10% was applied yielding a maximum
capital ability of ZAR700 million, at a monthly production of 25 ktpm.
7.4 KEY MODIFYING FACTORS AND ASSUMPTIONS, BY-PRODUCTS OR DELETERIOUS ELEMENTS
The Mineral Resource cut-off is based on a lead price of USD2,326/t; zinc price of USD2,647/t and silver
price of USD22.5/oz, which is the 80th percentile for the Pb and Zn and the 90th percentile for Ag, of the
historical real term commodity prices since 1980, and a ZAR/USD exchange rate of 14.43.
The processing assumptions that have been applied are shown in Table 11. These are based on a similar
copper, lead and zinc deposit in Namibia for which metallurgical information exists. These factors were
utilised due to the fact that no metallurgical testwork has been conducted on the Rozynenbosch Project as
yet.
For the open pit calculations, the processing costs for the plant were calculated at USD12.06/t and the
mining cost of USD1.68/t and mining overhead costs of USD35.51 were applied. This has resulted in a cut-
off of 1.9% Pb for the Mineral Resource open pit shell. A pay limit calculation using the same parameters
will be 2.1% Pb. This is to be expected as a cut-off grade is lower than a pay limit grade.
Table 11: Rozynenbosch Cut-off Based on Recoveries
Description Zn Recovery Pb Recovery Ag Recovery Pb Eq Cut-off Zn Eq Cut-off
Rozynenbosch Costs 80% 80% 80% 1.9% 1.68%
SAMREC 4.2 (vi) SAMREC 5.2 (i)
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If all three commodities are mined and processed, a Pb equivalent is applied to the Mineral Resources for a
combined potential. The equation for the Pb equivalent, based on the parameters above, is as follows:-
Equation 1: Pb Equivalent Including Silver
𝑃𝑏𝐸𝑞% = 𝑃𝑏% + (𝑍𝑛% 𝑥 1.14) + (𝐴𝑔 𝑝𝑝𝑚 𝑥 0.0313)
The equation for the Zn equivalent, based on the parameters above, is as follows:-
Equation 2: Zn Equivalent Including Silver
𝑍𝑛𝐸𝑞% = 𝑍𝑛% + (𝑃𝑏% 𝑥 0.88) + (𝐴𝑔 𝑝𝑝𝑚 𝑥 0.0277)
With respect to the reasonable prospects of eventual economic extraction, the timeframe for eventual
extraction for a bulk commodity is within 50 years. Therefore, it is the Competent Person’s opinion that the
80th percentile covers the reasonableness in terms of commodity price for a period of 50 years as history
shows that the commodity price has reach these prices before in the last 37 years.
However, the Competent Person has also run a scenario excluding silver due to the fact that silver is still in
the process of being applied for. In this scenario the Pb equivalent equation only includes Pb and Zn, as does
the Zn equivalent equation.
Equation 3: Pb Equivalent Excluding Silver
𝑃𝑏𝐸𝑞% = 𝑃𝑏% + (𝑍𝑛% 𝑥 1.14)
Equation 4: Zn Equivalent Excluding Silver
𝑍𝑛𝐸𝑞% = 𝑍𝑛% + (𝑃𝑏% 𝑥 0.88)
7.5 MINERAL RESOURCE STATEMENT
Mineral Resources are stated at a 1.9% Pb equivalent cut-off and no depth cut-off. The Mineral Resources for
Rozynenbosch as calculated by the Minxcon Mineral Resource department and signed off by the Competent
Person as at 31 January 2018 are presented below in Table 12. A geological loss of 15% has been applied to
the Mineral Resource.
Table 12: Mineral Resource Statement, Including Silver, for Rozynenbosch as at 31 January 2018
Mineral Resource Classification Tonnes (Less Geol, Losses) Pb Zn Ag
Mt % % g/t
Inferred 3.10 2.17 0.31 36.47
Notes:
1. Cut-off of 1.9% Pb equivalent (including silver).
2. The entire resource falls within the economic open pit depth cut-off.
3. Ag is a regressed value.
4. Ag is not covered by the current PR.
5. A geological loss of 15 % has been applied to the Mineral Resource.
6. The Inferred Mineral Resources have a large degree of uncertainty as to their existence and whether they can be mined
economically. It cannot be assumed that all or any part of the Inferred Mineral Resource will be upgraded to a higher
confidence category.
7. All reported Mineral Resources are limited to fall within the property boundaries of the project area.
8. A density of 2.84 t/m3 was utilised.
The above Mineral Resource tonnage is the same whether expressed as a PbEq at or as a ZnEq (Table 11).
Miranda is in the process of applying for the silver rights to be included in the prospecting right and Minxcon
believes that there are reasonable prospects of them obtaining the silver rights as the project will not be a
standalone silver operation and therefore would not make sense to award the silver rights to another entity.
SAMREC 4.5 (ii)(iii)(iv)(v)(vii) SAMVAL T1.9
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However, Minxcon has included a Mineral Resource for Rozynenbosch excluding the silver in the Pb equivalent
cut-off (PbEq% = Pb% + (Zn x 1,14)) which is illustrated in Table 13.
Table 13: Mineral Resource Statement, Excluding Silver, for Rozynenbosch as at 31 January 2018
Mineral Resource Classification Tonnes (Less Geol. Losses) Pb Zn
Mt % %
Inferred 1.79 2.78 0.37
Notes:
1. Cut-off of 1.9% Pb equivalent (excluding silver).
2. The economic open pit depth cut-off of 100m has been applied.
3. A geological loss of 15 % has been applied to the Mineral Resource.
4. The Inferred Mineral Resources have a large degree of uncertainty as to their existence and whether they can be mined
economically. It cannot be assumed that all or any part of the Inferred Mineral Resource will be upgraded to a higher
confidence category.
5. All reported Mineral Resources are limited to fall within the property boundaries of the Project Area.
6. A density of 2.84 t/m3 was utilised.
A combined grade tonnage curve for the lead and zinc based on the Pb equivalent, including silver, cut-off is
shown in the following Figure 44. The associated Table 14 broken down into 0.2% increments, is included for
the reader to better analyse this table with regards the declared 1.9% Pb equivalent, including silver, used in
the declaration.
Figure 44: Grade Tonnage Curve of the Pb Equivalent, Including Silver, for Pb and Zn
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Table 14: Results of the Grade Tonnage Analysis Based on a Pb Equivalent Cut-off (Including Silver)
PbEq Cut-off Tonnes Less Geological Loss Pb Zn Ag
% Mt % % g/t
0.0 9.49 0.90 0.16 17.95
0.2 7.32 1.17 0.19 22.54
0.4 6.53 1.30 0.21 24.62
0.6 6.18 1.36 0.21 25.59
0.8 5.58 1.48 0.23 27.33
1.0 4.89 1.64 0.24 29.52
1.2 4.30 1.79 0.26 31.59
1.4 3.96 1.89 0.27 32.88
1.6 3.52 2.03 0.29 34.65
1.9 3.10 2.17 0.31 36.47
2.0 2.99 2.22 0.31 37.00
2.2 2.63 2.37 0.33 38.74
2.4 2.43 2.46 0.34 39.78
2.6 2.14 2.61 0.35 41.44
2.8 1.86 2.77 0.37 43.20
3.0 1.72 2.86 0.38 44.24
3.2 1.52 3.00 0.39 45.77
3.4 1.35 3.14 0.41 47.20
3.6 1.24 3.24 0.41 48.15
3.8 1.10 3.37 0.42 49.47
4.0 1.02 3.46 0.43 50.34
4.2 0.90 3.60 0.44 51.69
4.4 0.82 3.69 0.45 52.54
4.6 0.72 3.83 0.45 53.81
4.8 0.66 3.93 0.44 54.65
5.0 0.52 4.18 0.46 56.89
5.2 0.46 4.32 0.46 58.15
5.4 0.40 4.46 0.48 59.41
5.6 0.35 4.62 0.49 60.83
5.8 0.29 4.81 0.51 62.55
6.0 0.24 4.99 0.55 64.40
6.2 0.22 5.12 0.56 65.53
6.4 0.20 5.21 0.58 66.39
6.6 0.17 5.35 0.61 67.64
6.8 0.14 5.56 0.65 69.63
7.0 0.13 5.69 0.67 70.77
7.2 0.11 5.80 0.71 71.90
7.4 0.11 5.84 0.73 72.39
7.6 0.10 5.89 0.74 72.85
7.8 0.09 6.08 0.77 74.51
8.0 0.07 6.34 0.81 76.79
7.6 MINERAL RESOURCE RECONCILIATION
Mineral Resources were declared for Rozynenbosch by Merlin Resources in 2006 based on the estimates of
Phelps Dodge and GFSA and are summarised in the previous Table 4 and Table 5, respectively. For comparison
purposes the Mineral Resource including silver was used as the historical Mineral Resources also included
silver. A comparison of the historical Mineral Resources to the current Mineral Resource, including silver, has
been done and the total tonnes above 1% Pb+Zn are comparative when including the upside potential of the
Exploration Target (Section 10.2). Although previous estimations and reviews were confident in placing the
Mineral Resource in an Indicated category, it is the Competent Person’s view that due to changes in the
SAMREC 4.5 (vi)
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SAMREC Code and the nature of the historic drilling and assay results available, only an Inferred Mineral
Resource and an Exploration Target upside potential can be declared.
When comparing the declared 1974 Phelps Dodge results and Minxcon’s 2017 estimate, it should be noted that
almost half the Mineral Resource previously declared has been downgraded to an Exploration Target and this
would account for a difference of 3.34 Mt. The decrease in grade is a result of estimation and modelling
techniques that differ for the original block listing approach as well as the fact that Minxcon did not have
possession of the full original database. This difference is shown in the Table 15.
Table 15: Reconciliation of the Phelps Dodge 1974 and Minxcon 2017 Mineral Resource Estimation
Mineral Resource Mineral
Resource Classification
In Situ Tonnes Tonnes (Less Geol. Losses) Pb Zn Ag
Mt Mt % % g/t
Minxcon 2017 Inferred 3.65 3.10 2.17 0.31 36.47
Phelps Dodge 1974 Indicated 6.99 2.56 0.54 43.09
Difference 3.34 0.39 0.23 6.62
Notes:
1. Minxcon 2017 cut-off is @ 1.9% Pb equivalent including silver.
2. Phelps Dodge 1974 cut-off is @ 1% Pb.
3. Minxcon 1.9%Pb equivalent, including silver, is very similar to a 1% Pb cut-off (gives almost identical Mineral Resource).
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8 TECHNICAL STUDIES
8.1 INTRODUCTION
8.1.1 Study Level
The Project is currently in exploration phase.
8.1.2 Modifying Factors Used to Convert Mineral Resource to Mineral Reserve
No Mineral Reserves have been estimated for this CPR.
8.2 GEOTECHNICAL AND GEOHYDROLOGY
No geotechnical or geohydrological information has been considered in this Mineral Resource CPR.
8.3 MINE DESIGN AND SCHEDULE
This CPR is intended as a Mineral Resource report and does not investigate or consider mining parameters.
8.4 RECOVERY METHODS
Recovery of lead and zinc concentrates from ores containing galena and sphalerite will take place by means
of flotation processes. It is anticipated that the Rozynenbosch orebody would be treated by means of crushing,
milling and a differential flotation potentially producing separate lead-silver and zinc concentrates depending
on the plant feed grades. The technology and processing methods are well established, understood and
appropriate for the Rozynenbosch orebody.
It is expected that there will be no significant metallurgical or processing factors that could have a material
impact on the eventual economic extraction.
8.5 MARKET STUDIES AND CONTRACTS
8.5.1 Market Studies
8.5.1.1 Introduction
Rozynenbosch is a polymetallic orebody consisting of lead, zinc, copper and silver, with the possibility of
gold, however the diamond drillhole samples dispatched to the laboratory were only analysed for lead, zinc,
copper and silver; and not for gold. Figure 45 illustrates the value spread for Rozynenbosch, demonstrating
that the most value lies in lead (59%), followed by silver (24%) and zinc (17%), respectively. Market research
therefore was undertaken on the zinc, lead and silver industry. It is noted that silver could be the second
largest revenue contributor. It was recommended in Section 2.4.2 that an application be submitted to include
silver in the prospecting right.
SAMREC 5.1 (i)
SAMVAL T1.18
SAMREC 5.2
SAMREC 5.1 (ii)
SAMREC 5.3 (iii)(vi)
SAMREC 5.6 (i)(ii)
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Figure 45: Value Spread of Rozynenbosch Mineral Resources (Including Silver)
8.5.1.2 Zinc
Zinc is currently the fourth most widely consumed metal after iron, aluminium and copper. Its strong
anticorrosive properties and ability to bond well with other metals make its primary use to galvanise other
metals to prevent rusting, with approximately 50% of zinc mined used for this purpose. Zinc is also used to
form alloys such as brass or bronze, in die-casting, and in the rubber, chemical, paint, and agricultural
industries. From a health perspective, zinc is a vital element for growth and human development and is the
second most common trace metal found in the human body, after iron. It is ordinarily associated with lead
and other metals, including, but not limited to copper, gold and silver.
8.5.1.2.1 Reserves
Figure 46 shows that the global zinc metal reserves estimated as of 2017 is approximately 232.7 Mt. Australia
houses the largest reserve, followed by China, Peru and Mexico. South Africa’s reserves are not large, and
do not feature amongst the top 10 countries with regards to reserve size.
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Figure 46: Global Zinc Reserves (2016)
Source: USGS (2018)
8.5.1.2.2 Production
Global zinc production was approximately 13,200,000 t in 2017. China is the largest producer of zinc in the
world by a significant margin, with a production of between 3,800,000 t and 5,200,000 t each year from
2010 to 2016, producing a total of 5,100,000 t in 2017. Peru comes in at a distant second, having produced
1,400,000 t in 2016. Australia, the United States and Mexico are the world’s third, fourth and fifth largest
producers of zinc, respectively.
Figure 47 displays the global mine production of zinc in 2017, by major producing countries. Interestingly,
no African countries are represented. South Africa produced a total of 29,000 t in 2015, with data not yet
available for 2017.
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Figure 47: Global Mine Production of Zinc (2017)
Source: USGS (2018)
8.5.1.2.3 Zinc Supply and Demand
The zinc market was in deficit in 2016, with a decrease of 1 Mt produced by mines compared to 2015. When
comparing refined metal production versus refined metal consumption, a shortage of 294,000 t is observed.
This deficit was led by mine closures due to resource exhaustion and discretionary closures by primary
producers. Two large zinc mines, namely Century in Australia and Lisheen in Ireland, producing significant
quantities of zinc tonnes closed in 2015. This follows the closure of another two significant producers in
2013, Perseverance and Brunswick. These closures could see zinc inventories continue to decline. China, in
2016, ordered the shut-down of 26 lead and zinc mines for environmental reasons, further tightening supply.
Preliminary data compiled by the International Lead and Zinc Study Group (ILZSG, 2017) show that the global
market for refined zinc was in deficit by 174,000 t for the first five months of 2017. Reported refined zinc
inventories declined by 167,000 t over the same period.
Most large zinc-producing countries saw a year-on-year drop in production. China was the largest producer
in 2016, producing 4,630,000 t from mine production, down from 4,750,000 t in 2015. Australia, the third
largest primary producer, saw a drop of 754,000 t produced from mines, an almost 50% year-on-year
reduction, due to the Century mine closure. Peru, the United States and India also produced less primary
zinc tonnes in 2016 compared to 2015.
Demand, however, has remained fairly steady over the last five years, ranging from a low of 12,378,000 t
in 2012 to a high of 13,949,000 t in 2016. Total refined metal consumption increased by 154,000 t in 2016
year-on-year. Increased demand from China to support their infrastructure plans, was likely the largest
contributor to the increase in consumption. For the first five months of 2017, the United States’ apparent
demand for refined zinc rose by 19%, with global demand up by 1.1%.
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A summary of the highlights in 2016 are discussed below:-
• The zinc market was in deficit in 2016 with a shortage of 294,000 t.
• A number of mines closures in previous years, have contributed significantly to the shortages.
• Strong demand from China has driven increased consumption.
Table 16: Zinc Production and Consumption of Top Countries and Globally ‘000 tonnes 2013 2014 2015 2016
Mine Production
China 5,188 5,118 4,750 4,630
Peru 1,351 1,319 1,422 1,337
Australia 1,523 1,560 1,600 846
United States 784 832 808 798
Global Mine Production 13,663 13,622 13,265 12,231
Refined Metal Production
China 5,280 5,807 6,151 6,273
Korea, Rep. 895 915 935 992
Canada 652 649 683 687
India 773 700 817 612
Global Refined Metal Production 13,023 13,513 13,895 13,655
Refined Metal Usage
China 5,962 6,401 6,483 6,720
United States 935 962 931 789
India 640 638 612 672
Korea, Rep. 578 644 590 611
Global Refined Metal Usage 12,973 13,814 13,806 13,949
Source: World Bank (2017)
Notes:
1. The table shows the four top countries by production and consumption.
2. The totals in the table refer to the global totals and as such will not add up to the four countries presented.
8.5.1.2.4 Zinc Prices
The historical zinc prices are displayed in Figure 48.
Figure 48: Historical Zinc Prices
Source: Minxcon (Jan 2018)
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Zinc had a phenomenal year in 2016, rising 75% from an average price of USD1,520/t in January 2016 to an
average price of USD2665/t in December 2016. Prices continued to rise in 2017, reaching an average price
of USD3,195/t in December 2017.
The Energy and Metals Consensus Forecast surveys more than 30 energy and metals analysts every other
month for a range of commodity price forecasts. The real and nominal forecasts of zinc in USD/metric tonne
are displayed in below.
Table 17: Zinc Price Forecasts
Term Nominal Zn Price Forecast Real Zn Price Forecast
USD/t USD/t
2018 3,151 3,151
2019 2,876 2,812
2020 2,658 2,537
2021 2,606 2,430
Long term 2,236
Current price Jan 2018 3,589
Source: Minxcon (Jan 2018), Consensus Economics Inc.
8.5.1.2.5 Zinc Outlook
Currently the primarily use for zinc is as an anti-corrosion agent, accounting for approximately 50% of
demand. With China accounting for almost 50% of zinc demand, and industrial activity in that country being
a big driver of zinc for galvanising, the Chinese economy will be a big driver behind the demand for zinc in
the future. Zinc has been estimated to have the tightest supply of all metals. If steel demand remains
robust, then zinc demand will certainly follow suit.
A future use for zinc could be in the agriculture sector (McLeod, 2017). Robert Friedland, currently executive
chairman and founder of Ivanhoe Mines, has noted on zinc’s potential in the agriculture sector, commenting
that zinc “is now recognised, along with potash, as one of the most intense organic fertilisers.” According
to Friedland, China and India in particular may start looking to use zinc in fertilizers. “Some 60% of soils in
[those countries] have been depleted of zinc …so China has mandated that fertiliser should include zinc” -
this could affect the demand for zinc significantly. According to Stefan Schlag, director of specialty
chemicals at IHS Chemical, Zinc demand could rise as much as 400,000 t by 2018 to over 1,800,000 t on the
back of zinc fertilizers.
8.5.1.3 Lead
Lead is a very soft, easily worked metal with high corrosion resistance and poor electrical conductivity. It
has been used since Roman times for pipes, paint and alloys. It has also more recently been used in
insecticides, hair-dyes and as an anti-knocking additive in petrol. All these uses have, however, been banned
or are being phased out due to environmental concerns. The current major use of lead is the lead-acid
battery commonly used in car batteries, ammunition, colouring elements in ceramic glass, organ pipes,
electrodes, sheeting, cables, soldering, bearings, weights for sporting equipment, weight belts for diving
and in the glass of computer and television screens to shield viewers from radiation. Lead is typically
naturally occurring along with zinc, copper and silver.
8.5.1.3.1 Reserves
Figure 49 shows that the global lead metal reserves estimated as of 2016 is approximately 88 Mt. Australia
houses the largest reserve, followed by China, Russia and Peru. South Africa’s reserves are not significant,
containing approximately 300,000 t.
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Figure 49: Global Lead Reserves (2017)
Source: USGS (2017)
8.5.1.3.2 Production
World lead production was approximately 4,700,000 t in 2017. China is the largest producer of lead in the
world by a significant margin, with a production of between 2,200,000 t and 2,700,000 (rounded) t each
year from 2013 to 2017, producing a total of 2,400,000 t in 2017. Australia comes in at a distant second,
having produced 450,000 t in 2017. The United States, Peru and Mexico are the world’s third, fourth and
fifth largest producers of lead respectively. Figure 50 displays the global mine production of lead in 2017,
by major producing countries. No African countries are represented as a major producer. South Africa
produced a total of 40,000 t in 2016.
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Figure 50: Global Lead Production (2017)
Source: USGS (2018)
8.5.1.3.3 Lead Supply and Demand
Primary lead production decreased in 2016, with a decrease of 285,000 t produced by mines compared to
2015. However, when comparing refined metal production versus refined metal consumption, an excess of
131,000 t is observed. Preliminary data for 2017, however, does not follow this trend, with demand
exceeding supply of refined lead by 91,000 t for the first five months of 2017, and increased mine production
of 12.7% for the same period (ILZSG, 2017). According to the ILZSG, the increased mine production was led
by increased output by China and India, offsetting decreases from the likes of Australia and Peru, while a
rise in refined lead production was driven by increases from China, India, the Republic of Korea and the
United States.
The United States saw an apparent rise in demand of 23.3% for the first five months of 2017, driven by a
sharp increase in net imports (ILZSG, 2017). Over the same period, Chinese apparent demand rose 13.7%
and Europe’s apparent demand was up 1.7%. Global demand rose 10.3% year-on-year for the first five months
of 2017.
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Table 18: Lead Production and Consumption of Top Countries and Globally
‘000 tonnes 2013 2014 2015 2016
Mine Production
China 2,697 2,609 2,335 2,230
Australia 711 728 654 438
United States 343 381 371 347
Peru 266 278 316 314
Global Mine Production 5,294 5,268 4,995 4,710
Refined Metal Production
China 4,935 4,704 3,845 4,670
United States 1,308 1,020 1,100 1,070
Korea, Rep. 522 670 682 800
India 462 477 496 508
Global Refined Metal Production 11,313 10,933 10,198 11,122
Refined Metal Usage
China 4,927 4,682 3,804 4,660
United States 1,750 1,540 1,590 1,564
Korea, Rep. 550 601 602 592
India 428 521 539 567
Global Refined Metal Usage 11,302 10,919 10,213 11,253
Source: World Bank (2017)
Notes:
1. The table shows the four top countries by production and consumption.
2. The totals in the table refer to the global totals and as such will not add up to the four countries presented.
8.5.1.3.4 Lead Prices
The historical lead prices are displayed in Figure 51.
Figure 51: Historical Lead Prices
Source: Minxcon (Jan 2018)
Lead has also had a great year in 2016, rising 35% from an average price of USD1,647/t in January 2016 to
an average price of USD2,231/t in December 2016. Prices continued to rise in 2017 reaching an average
price of USD2,510/t in December 2017.
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The Energy and Metals Consensus Forecasts, surveys more than 30 energy and metals analysts every other
month for a range of commodity price forecasts. The real and nominal forecasts of lead in USD/t are
displayed in the table below.
Table 19: Lead Price Forecasts
Term Nominal Pb Price Forecast Real Pb Price Forecast
USD/t USD/t
2018 2,419 2,419
2019 2,277 2,255
2020 2,172 2,073
2021 2,183 2,035
Long term 2,211 1,966
Current price Jan 2018 2,635 Source: Minxcon (Jan 2018), Consensus Economics Inc.
8.5.1.3.5 Lead Outlook
Lead is the one of the most widely used metals in the world. As a non-ferrous metal, it can be recycled
indefinitely without losing its properties. Recycling therefore accounts for approximately 60% of refined
metal production.
Lead’s largest demand share, 80%, comes from the lead-acid battery industry. Even with the world shifting
ever more towards electric cars, in the form of lithium, these vehicles still require traditional 12-volt lead-
batteries to operate (Barrera, 2017). A rising demand for electric vehicles, will see a rise in demand for lead
on a global scale.
With regards to supply and demand levels, ILZSG anticipated that supply will exceed demand by 42,000 t in
2016, and by 23,000 t in 2017, indicating a tighter market. BMI Research has stated that “The global primary
lead market will shift into deficit by 2018 on the back of persistent supply cuts. Mined lead production will
be hit by a global slowdown in mining capital expenditure, which will have a knock-on effect on refined
lead supply growth.” The market has already shifted from an excess of refined lead to a deficit in the first
five months of 2017. The future seems to be looking brighter for lead in the long term.
8.5.1.4 Silver
Silver has been considered a precious element for thousands of years. It was first used as currency as early as
700 B.C. and has been used as trading metal ever since.
Today, silver is an important metal in a number of industries. This is due to silver possessing unique
characteristics in that it strong, malleable and ductile and is able to endure extreme temperature ranges.
Silver has the highest electrical and thermal conductivity of any known material. Silver is also highly reflective
of light.
Uses of silver vary but can broadly be categorised into three distinct categories namely industry, jewellery
and décor, and investment. In industry silver is used in batteries, bearings, many types of electrical contacts,
brazing alloys and solders, mirrors, ethylene oxide catalysts and many more applications. In the green energy
sector, 90% of all photovoltaic cells rely on silver paste. Jewellery demand is high for silver due to it being
lustrous, but resilient. It is also less expensive than gold.
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8.5.1.4.1 Reserves
Figure 52 shows that the global silver metal reserves estimated as of 2017 is approximately 530,000 t. Peru
houses the largest reserve, followed by Australia, Poland and Russia. South Africa’s reserves are not large,
and do not feature amongst the top countries with regards to reserve size.
Figure 52: Global Silver Reserves (2017)
Source: USGS (2018)
8.5.1.4.2 Production
Global silver production was approximately 774,000,000 oz in 2017. Mexico is the largest producer of silver
in the world, with a production of 174,000,000 oz in 2017. Peru follows Mexico in production, having
produced 140,000,000 oz in 2017. China, Russia and Poland are the world’s third, fourth and fifth largest
producers of silver, respectively. Figure 53 displays the global mine production of silver in 2017 by major
producing countries. South Africa produced a total of 1,600,000 oz in 2016. Interestingly, 35% of global silver
production in 2016, came from source metals lead and zinc.
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Figure 53: Global Mine Production of Silver (2016)
Source: USGS (2018)
8.5.1.4.3 Silver Supply and Demand
Global silver production declined 0.6% year-on-year in 2016 to a total of 885.8 Moz. A large portion of the
declined production was attributable to the slump in production in the lead-zinc sector and gold sector,
accounting for a drop of 15.9 Moz (The Silver Institute & Thomson Reuters, 2017). Global scrap was also
down by 1% year-on-year, this despite higher silver prices. The lower scrap volumes resulted largely due to
curbed Asian flows, in part caused by weaker industrial fabrication volumes, which weighed on process
remelt as stock levels were run down and liquidated. Hedging activities removed 18.4 Moz from the global
supply in 2016.
Global physical demand for silver fell year-on-year by 11% to 1,027.80 million oz in 2016 from 1,151.50 Moz
in 2015 with declines in all demand categories. The largest slump in demand was for coins and bars of silver,
with a drop of 206.8 Moz year-on-year. According to The Silver Institute & Thomson Reuters (2017), this 29%
drop was largely driven by decreased demand from India. Jewellery fabrication declined 9% in 2016 on the
back of higher silver prices and declining economic conditions. The higher silver prices also accounted for
the 17% fall in silverware fabrication. Industrial fabricator demand slipped 1% year-on-year, with declines
in electronics, brazing alloys & solders, and photography offset by a record 34% increased demand for
photovoltaic applications.
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Table 20: Silver Supply and Demand
‘000,000 oz 2013 2014 2015 2016
Supply
Mine Production 823.7 868.6 890.8 885.8
Net Government Sales 7.9 Scrap 191 165.3 141.1 139.7
Net Hedging Supply -34.8 16.8 7.8 -18.4
Total Supply 987.8 1,050.70 1,039.70 1,007.10
Demand
Jewellery 221.8 227.9 228.3 207
Coins & Bars 240.6 234 290.7 206.8
Silverware 58.8 60.7 62.9 52.1
Industrial Fabrication 604.5 595.7 569.6 561.9
Total Demand 1,125.80 1,118.30 1,151.50 1,027.80
Physical Surplus/Deficit -137.9 -67.6 -111.8 -20.7 Source: The Silver Institute & Thomson Reuters (2017)
8.5.1.4.4 Silver Prices
The historical silver prices are displayed in Figure 54.
Figure 54: Historic Silver Prices
Source: Minxcon (June 2017)
The silver price has not had a strong 2017. The first quarter of 2017 saw a 4% increase in the silver price,
but these gains were shed in the second quarter of 2017. The silver price averaged only USD16.16 in
December 2017.
The Energy and Metals Consensus Forecast surveys more than 30 energy and metals analysts every other
month for a range of commodity price forecasts. The real and nominal forecasts of silver in USD/oz are
displayed in Table 21.
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Table 21: Silver Price Forecasts
Term Nominal Ag Price Forecast Real Ag Price Forecast
USD/oz USD/oz
2018 17.6 17.6
2019 18.4 18.0
2020 19.1 18.3
2021 19.8 18.5
Long term 21.8 19.4
Current price Jan 2018 17.07
Source: Minxcon (Jan 2018), Consensus Economics Inc.
8.5.1.4.5 Silver Outlook
Demand for one of the major uses of silver, i.e. in photovoltaic (“PV”) cells, is forecasted to increase
steadily over the coming years despite less silver used per cell (The Silver Institute, 2016). This increase in
demand is due to a combination of carbon emissions legislation, government policies, and the cost per
gigawatt of electricity generated using PV cells decreasing. 2018 Is predicted to be an exceptionally good
year for PV cell silver demand, with silver use in PV cells in 2018, predicted to be 75% higher than in 2015.
Demand for ethylene oxide (EO), used in a large number of plastic and chemical products, most notably
ethylene glycol used in antifreeze and polyethylene terephthalate (PET) used in clothing fibres, plastic
bottles and food containers, is also expected to increase over the coming years through 2020. Slowdown in
economic growth of global powerhouses like China may, however, offset these increases in demand in other
industrial applications.
Jewellery demand along with industrial demand depend on a strong economy, while investor demand follows
the opposite trend. Silver, like gold, continuous to be a safe-haven investment metal, and will benefit from
global political uncertainty. Investment demand will continue to hinge on global political events.
2016 recorded first mine production decline since 2002. Quarter 2 of 2017 saw labour disputes disrupt
production at four of the world’s top silver producers, sharply reducing output. This could further increase
the silver deficit in 2017. However, the market price may not react to the fundamental shortages as the
majority of silver produced remains theoretically available to the market in the form of above-ground stock.
A strong metal price may see an increase in scrap supply as more existing silver jewellery, coins, and other
products tend to be sold and melted down for addition to the market supply of silver.
8.5.2 Contracts
The Company does not have any current contracts in place.
8.6 ENVIRONMENTAL STUDIES
The Rozynenbosch Project is currently held under a prospecting right. The 2013 EMP for the Project states
that no waste material from operations will be accumulated. Diesel will be stored in a tank provided with a
proper bund wall. All other hazardous fluids will be stored in a specially erected storage facility. Dust will
be liberated from excavating operations but will be restricted to the site area and noise will be at a tolerable
level. Topsoil will be stored for the purpose of final rehabilitation. The current and use is subsistence
farming (agriculture and livestock) and the land will be rehabilitated to grazing land. No heritage sites are
identified on the property.
Per the MPRDA, more detailed environmental studies are required when application is made for a mining
right. The studies, including an Environmental Impact Assessment (“EIA”) are consolidated into a
SAMREC 5.5 (i)(iii)
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comprehensive EMP report. Cognisance will have to be taken of the aridity of the region as well as the Project
location within the Riemvasmaak Community Conservancy.
8.7 LEGAL AND PERMITTING
An overview and discussion of the legal and permitting items pertaining to Rozynenbosch are presented in
Section 2.4 of this Report.
The Competent Person is not aware of any due diligence or other such studies, audits or reviews of the legal
aspects and tenure of Rozynenbosch being undertaken.
8.8 TAXATION
No company tax was applied to the valuation as only a mineral asset valuation was completed. The normal
company tax formula of 28% would apply if an Income Approach valuation is required. For all mines, capital
expenditure incurred may be redeemed immediately against mining profits.
8.9 SOCIAL OR COMMUNITY IMPACT
The Rozynenbosch Project is currently held under a prospecting right. Per the MPRDA, social studies are
required when application is made for a mining right, to be presented in the format of a Social and Labour
Plan (“SLP”). As required in Section 3 of the MPRDA, Public Participation Process with interested and
affected parties (“IAPs”) must be conducted for the Project. A company requires approval of the project
SLP before the DMR can issue a mining right. As such, no social studies for the Project Area have been
commissioned at this stage, however, the SLP process will have to be followed once a mining right for
Rozynenbosch is applied for.
8.10 MINE CLOSURE
Mining companies are required to make financial provision for mining-related environmental rehabilitation.
Upon closure, the mine area will need to be monitored and rehabilitated as per the EMP/EIA.
The current financial guarantee to the value of ZAR70,000 is in place through Guardrisk for future
environmental rehabilitation after completion of the prospecting programme.
Environmental risk mitigation, monitoring and rehabilitation measures will have to be conceived and
presented in the EMP documentation once a mining right is applied for.
8.11 CAPITAL AND OPERATING COSTS
This Report is intended as a Mineral Resource CPR. As such, no capital and operating costs have been
calculated.
8.12 FINANCIAL ANALYSIS
8.12.1 Introduction
The Competent Valuator relied upon the Mineral Resources and information compiled by Mr Uwe Engelmann,
a Competent Person who is registered with SACNASP as a Professional Natural Scientist and is a Member of
the Geological Society of South Africa, included in a list of recognised organisations promulgated by the SSC
from time to time. The Competent Valuator is satisfied with the manner in which the Mineral Resources have
been stated and supports the methodology followed. No Mineral Reserves were declared.
JSE 12.9 (f) SAMREC 5.6 (iii) SAMREC 5.8
SAMREC 5.5 (iv)(v)
SAMREC 5.6 (vii)
SAMVAL T1.2 T1.3
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The Report is compiled in compliance with the terms of the specifications embodied in the SAMVAL Code. All
requirements of the JSE Section 12.9 Listing Requirements and the SAMREC Code (including Table 1) and
SAMVAL Code have been complied with. Sections T1.0 to Sections T1.9 of the SAMVAL Code compliance
checklist are covered earlier in this Report.
Minxcon was mandated to complete a SAMVAL-compliant market valuation for the Rozynenbosch Project.
According to the SAMVAL Code, two valuation approaches should be used to complete the valuation. As such,
Minxcon applied the Market Approach and Cost Approach to complete the market valuation as no Mineral
Reserve was available for use.
As stated in Section 1.1, the purpose of the CPR is to comply with continuing obligations as required by the
JSE Listings Requirements with regard to the publication of the CPR on the Company’s website, and comply
with lifting of the suspension of the trading in the Company’s shares. The CPR will be used to provide an
update for the Company shareholders, and the information presented will be utilised in the Company’s
Integrated Report. As such, the valuation will be used in support of the beforementioned purpose.
The market valuation for the Rozynenbosch Project was done on a 100% basis (not attributable). As stated in
Section 2.4.1, the Rozynenbosch Project is currently held under rights by Miranda Minerals (Pty) Ltd, a direct
and wholly-owned subsidiary of Miranda Mineral Holdings Limited. The Miranda Minerals (Pty) Ltd BEE
transaction will see 30% of the share capital of Miranda Minerals (Pty) Ltd transferred to Kwanda Minerals
Holdings (Pty) Ltd, together with a trust established by Miranda for the benefit of the mining community in
the surrounding area.
8.12.2 Previous Valuation
Two valuations of Rozynenbosch mineral assets were completed by Merlin Resources in August 2006.
8.12.2.1 Phelps Dodge Valuation
One valuation was based on exploration work done by Phelps Dodge, and the other exploration work done
by both Phelps Dodge and GFSA. The first valuation was carried out using a combined zinc and lead cut-off
grade of 1% over a width of 5 m. A resulting Mineral Resource of 6.99 Mt of ore was estimated with grades
of:-
• Pb: 2.56%;
• Zn: 0.54%;
• Cu: 0.08%; and
• Ag: 43.09g/t.
Commodity prices effective 4 August 2006 were applied to the Mineral Resource estimate with a ZAR/USD
exchange rate of 6.70 and a valuation of ZAR3.29 billion was obtained (Table 22). It is important to note
that this value reflects in situ values (no mining factor assumptions and metallurgical factors or recoveries
applied) and are therefore not compliant to any of the major valuation codes, i.e. SAMVAL, VALMIN and
CIMVal.
Table 22: Phelps Dodge Data - Merlin Resources Valuation, 2006
Commodity In Situ Metal Content Commodity Price In Situ Value
USD ZAR
Pb 176,640 t 1,130/t 1,337,341,440
Zn 37,260 t 3,383/t 844,538,886
Cu 5,592 t 7,820/t 292,987,248
Ag 9,739,871 oz 12.43/oz 811,146,226
Total 3,286,013,801 Source: Merlin Resources (Aug 2006).
SAMVAL T1.11
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The second valuation was carried out using GFSA and Phelps Dodge data with no cut-off grades applied. A
total in situ Mineral Resource of 14 Mt was estimated over a width of 3 m at the following grades:-
• Pb: 1.72%;
• Zn: 0.46%;
• Cu: 0.03%; and
• Ag: 34.1 g/t.
The non-compliant valuation on in situ Mineral Resource tonnes is shown in Table 23.
Table 23: GFSA-Phelps Dodge JV Data - Merlin Resources Valuation, 2006
Commodity In Situ Metal Content Commodity Price In Situ Value
USD ZAR
Pb 240,800 t 1,130/t 1,823,096,800
Zn 64,400 t 3,383/t 1,459,696,840
Cu 4,200 t 7,820/t 220,054,800
Ag 15,350,482 oz 12.43/oz 1,278,403,517
Total 3,502,861,224 Source: Merlin Resources (Aug 2006)
8.12.2.2 Miranda Valuation
In 2011 Miranda placed a value of ZAR284.5 million on the asset and made the decision to derecognise the
Rozynenbosch Project asset from their financial statements due to an appeal process regarding an
application for a prospecting right in respect of an unused, old order right, subsequent to the
implementation of the MPRDA. According to the Miranda Mineral Holdings Ltd Annual Report 2012, the value
of ZAR284.5 million is applied to the Rozynenbosch Project based on a Mineral Resource classification of 14
Mt of Indicated Mineral Resources.
8.12.3 Valuation Approaches and Methods
The following valuation approaches are three internationally accepted methods of valuing mineral projects,
and are summarised below as well as illustrated in Table 24:-
• Cost Approach: used to value early-stage exploration properties. The valuation is dependent on the
historical and future exploration expenditure.
• Market Approach: used to value exploration and development properties, based on the relative
comparisons of similar properties for which a transaction is available, in the public domain. The
market approach relies on the principle of “willing buyer, willing seller” and requires that the amount
obtainable from the sale of the mineral asset is determined as if in an arm’s-length transaction.
• Income Approach: used to value development and production properties in the production phase.
This method relies on the “value-in-use” principle and requires determination of the present value of
future cash flows over the useful life of the mineral asset.
Table 24: Acceptable Methods of Mineral Project Valuation
Valuation Approach
Early Stage Exploration
Advanced Stage
Exploration
Development Properties
Production Properties
Dormant Properties Defunct
Properties Economically Viable
Not Viable
Income Not generally
used Less widely
used Widely used Widely used Widely used
Not generally
used
Not generally
used
Market Widely used Widely used Less widely
used Quite widely
used Quite widely
used Widely used Widely used
Cost Widely used Widely used Not generally
used Not generally
used Not generally
used Less widely
used Quite widely
used
Income Approach
The discounted cash flow (“DCF”) valuation is based on future free cash flow discounted to present value.
This analysis is widely used within investment banking and company valuation. The DCF is based on the
SAMVAL T1.12
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Production Schedule and all costs associated to develop, mine and processing the Reserve. Relevant taxation
and other operating factors, such as recoveries, stay-in-business costs and contingencies are incorporated
into the valuation to produce a cash flow over the life cycle of the project.
It is generally acceptable to use Mineral Resources in the cash flow approach if Mineral Reserves are also
present. These Mineral Resources and Mineral Reserves must be signed off by a Competent Person in
accordance with SAMREC (or other required Reporting Code). Additionally, Mineral Reserves must be based
on a life of mine plan for an operating (going concern) mine, or at least a pre-feasibility study for a mine
project.
Market Approach
The market approach was considered for this Project, as per SAMREC/SAMVAL Code requirements. The
market approach requires the comparison of the Project with relatively recent transactions of Mineral
Resource assets that have similar characteristics to those of the asset being valued. It is generally based
upon a monetary value per unit of the Mineral Resource (where available), or per unit of defined tonnes
(Measured, Indicated and Inferred). Typically, the comparable method uses the transaction price of
comparable assets to establish a value for the specific asset to be valued. The difficulty of this approach
within the mining industry is that there are no true comparables, as each asset is unique with respect to
key factors such as geology, mineralisation, costs, stage of exploration, infrastructure, as well as peripheral
issues such as social, political and environmental aspects.
When transactions of mineral assets do occur, they rarely involve strictly cash, leaving the valuator the task
of converting blocks of shares, royalties or option terms into present-day monetary equivalents. In the first
cases, the defined value of the share (inclusive of whether it is transacted at a premium or discount), at
the time of the transaction, is applied to convert the share volume into a cash value. The same principle is
applied to royalties and option terms to convert these transaction preferences into a cash basis.
Cost Approach
The cost approach relies on historical and/or future expenditure on the property and involves estimation of
the depreciated cost of reproducing or replacing the asset and improvements. Reproduction cost refers to
the cost at a given point in time of reproducing a replica asset, whereas replacement cost refers to the cost
of reproducing improvements of equal utility. In cases where insufficient confidence exists in the technical
parameters of the mineral asset, valuation methods rely almost entirely on the principle of historical cost,
implying that an asset’s value is correlated to the money spent on its acquisition, plus a multiple of
expenditures. A prospectivity enhancement multiplier (“PEM”) is a factor applied to the total cost of
exploration, the magnitude of which is determined by the level of sophistication of the exploration for which
positive exploration results have been obtained.
8.12.3.1 Methodology Justification
The Project is in the exploration phase and no feasibility has been completed on the Project. Information is
restricted to drilling information, Mineral Resource estimation and project geology.
The market comparable approach was applied on the total Zinc Resources (including the Zn equivalent) and
Exploration Target as the primary valuation methodology in determining the value of the asset. The Project
has a compliant Mineral Resource that was available for use in the valuation.
The Mineral Resource Statements include the silver content and zinc content as the secondary minerals to
the lead, however the lead and silver content present in the Mineral Resource were included as a zinc
equivalent in the valuation due to Zn-Pb orebodies of most mines containing predominantly zinc. Lead mine
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transactions are also few and far between. For comparison purposes, it therefore made more sense to
compare zinc equivalent tonnes rather than lead equivalent tonnes.
Zinc equivalents are generally based on the value of the lead and silver commodity relative to the zinc
price. At the valuation date of the Report the prices that were used to calculate the equivalent content
were (Minxcon, 2018; Consensus Economics Inc., 2018):-
• Zinc price: USD3,191/t;
• Lead price: USD2,454/t; and
• Silver price: USD17.16/oz.
These prices are based on the average between the three-month historic prices and the one-year forecast
prices, as reported by Consensus Economics Inc. It should be noted that these prices are not used directly in
the valuation but is rather used as an index price to adjust historic transaction values to align with current
market expectation. In addition, a ZAR/USD exchange rate of 13.83 was used for the Market Approach and
Cost Approach to convert the USD values to ZAR values.
Based upon review of technical data, the cost approach was selected as the secondary valuation
methodology. Although historical costs estimates were not available, replacement costs associated with the
work completed were sourced from Minxcon’s Exploration division.
8.12.4 Valuation Date
The valuation date of this Report is 31 January 2018. The Competent Valuator is not aware of any material
changes that occurred between the valuation date and report date.
8.12.5 Valuation Results
8.12.5.1 Market Approach
8.12.5.1.1 Methodology
The following methodology was employed:-
• Industry transactions based on arm’s-length transactions were sourced and expressed as a unit value
(USD/t) per metal content. Where transactions include additional minerals to zinc, Zn equivalent
resources were calculated (as per Equation 5 in Section 8.12.5.1.5 in the case of Pb) based on the
prevailing commodity prices, recoveries and smelter/refinery terms at the date the transaction took
place.
• The Mineral Resource category ratios for the population in the database must be calculated to assign
unit values for each transaction per resource category. These are calculated by first taking all
transactions in the database within a specific Mineral Resource category and plotting a distribution
curve of the unit values (total transaction value divided by total attributable Mineral Resources)
against the proportion for a specific Mineral Resource category of total Mineral Resources. The
resultant outcome is a curve which illustrates the values of a specific category given a specific
proportion of the Mineral Resource category to total Mineral Resources. The ratio between
Measured, Indicated and Inferred could therefore be determined and applied to each transaction
based on the distribution of Inferred, Indicated and Measured tonnes.
• Each of the unit values were then adjusted for the specific economic price environment to construct
a database in today’s money terms for the Zn-Pb industry and subsequently a value curve and unit
values for the different Mineral Resource categories.
SAMVAL T1.14 SAMVAL T1.15
SAMVAL T1.13
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• A Sigmoid curve calculation is utilised to arrive at a value for each Mineral Resource category based
on the unit values for each transaction per Mineral Resource category. This is tested against the mean
and median values derived for each Mineral Resource category.
• Main industry risk criteria that influence market price were identified. The risk for Rozynenbosch
Project was then measured against the industry risk scale.
• Subsequently, unit values for the different Mineral Resource categories were increased or lowered,
based on the project-specific risk after considering the deviation of the Rozynenbosch valuation
indices below or above the industry mean.
8.12.5.1.2 Transaction Price Adjustment for Current Day Terms
The transactions used to construct the valuation curve for this Report occurred at a specific point in time
and, therefore, at a specific USD-denominated zinc equivalent price. The value a buyer is prepared to pay
and the seller is prepared to sell depends largely on the commodity price cycle. In order to report historic
transactions in current money terms and compare all transactions on the same economic level, the USD zinc
equivalent price was determined for each historic transaction at the time it took place. Historic transaction
values were then adjusted to current terms, by determining the difference in USD zinc equivalent price
from the time of these historic transactions to the current prices.
The current price was determined by using the historic prices for the three months preceding the valuation
date of this Report, together with the twelve-month forecast for the prices, to calculate an appropriate
price level as at the valuation date of the Project valuation shown in Table 25. This approach to selecting
appropriate prices is followed based on sentiment towards buying and selling early stage exploration
properties, where the demand is strongly driven by the short-term outlook on the commodity price and the
short-term historic price performance. Forecasts prices were sourced from Consensus Economics Inc., which
reports consensus prices from a number of analysts and banks. It should be noted that these prices are not
used directly in the valuation but is rather used as an index price to adjust historic transaction values to
align with current market expectation.
Table 25: Price Used for Current Day Unit Value Adjustment Description Unit Value
Lead USD/t 2,454
Zinc USD/t 3,191
Silver USD/oz 17 Source: Minxcon (Jan 2018), Consensus Economics Inc.
Subsequent to the normalisation of each transaction to a current transaction value, the Competent Valuator
plotted the values of historical transactions, which took place on an arm’s-length basis, in relation to their
specific stage of Mineral Resource classification, i.e. Inferred, Indicated and Measured Mineral Resources.
This methodology, when applied to exploration and resource transactions, provides guidance in terms of a
range of transaction values for the property, asset or project being analysed and valuated. This principle is
used to reflect the current market expectation that is likely to drive the calculated market value. Figure 55
demonstrates the valuation curve adjusted for zinc equivalent Mineral Resources, while Table 26 shows the
project transactions considered in the valuation curve. Each of the transactions considered were
polymetallic orebodies with at least lead and zinc. The square points on the graph indicates the value
ascribed per Mineral Resource category for each transaction. The diamond shapes indicate the mean Sigmoid
derived values, representing base unit values applied to the project before the modifying factors are
applied. The Rozynenbosch Inferred unit value was calculated by applying the modifying factors described
in Section 8.12.5.1.4 to the Sigmoid derived Inferred unit value in the graph below. Similarly, the
Rozynenbosch Exploration Target unit value was calculated by applying the modifying factors to the Sigmoid
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derived Inferred unit value and applying a 50% discount to address the inherent risk of using Exploration
Target tonnes in the place of Inferred Mineral Resources.
Figure 55: Zinc Equivalent Valuation Curve
Table 26: Transactions Considered for the Valuation Curve
Project Date of Transaction Status Commodities
Pering Mine 01-Jul-09 Closed Operation Zn, Pb
Lisheen Zinc Mine 15-Feb-11 Operating Mine Zn, Pb
Black Mountain Mines 04-Feb-11 Operating Mine Zn, Pb, Cu, Ag
Gamsberg Project 04-Feb-11 Advanced Exploration Stage Zn, Pb, Mn, S
Rosh Pinah Mine 01-Jun-12 Operating Mine Zn, Pb
Paguanta Project 28-Jul-16 Advanced Exploration Stage Zn, Pb
Kipushi Project 28-Nov-11 Closed Operation Zn, Pb
Berg Aukas Mine 26-Jun-11 Closed Operation Zn, Pb, V2O5
Campo Morado Mine 14-Jun-17 In Development Zn, Pb, Cu, Ag, Au
Coricancha Mine 03-Jul-17 Closed Operation Zn, Pb, Cu, Ag, Au
El Toqui Mine 03-Nov-16 Operating Mine Zn, Pb, Ag, Au
Contonga Mine 19-Jul-10 Operating Mine Zn, Pb, Cu, Ag
Pucarrajo Mine 19-Jul-10 Operating Mine Zn, Pb, Ag
8.12.5.1.3 Modifying Factors and Material Issues
According to the SAMVAL Code, a statement of modifying factors should be included, separately summarising
material issues relating to each applicable modifying factor which include but may not be limited to premises,
assumptions, restrictions, mining, metallurgical, economic, marketing, legal, environmental, social and
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governmental considerations. These modifying factors are normally applied when converting Mineral
Resources to Mineral Reserves.
From industry, CIM derived a list of principal project risks, which Minxcon utilised to create a valuation
parameter matrix for determining mining project risk, weighing different criteria such as depth, geology,
mining process, legal tenure, etc. The Competent Valuator adopted this matrix, and modified classification
and ratings to suit parameters that are sensitive to this commodity. The parameters used to determine a
risk-associated weighted index for the global lead and zinc industry also indicated in Figure 56.
Figure 56: Weighting of Valuation Risk Associated Parameter Matrix
8.12.5.1.4 Principal Valuation Modifying Factors
Table 27 to follow summarises the Project modifying factors used in the valuation for the total zinc and lead
Mineral Resources of Rozynenbosch. This allows for a more calculated decision-making process rather than a
wholly subjective decision on the project risk position on the valuation curve. The parameter ranges are
described in the table and are based on research on the specific industry. A database of global Pb-Zn projects
collected act as a basket of projects at various development stages. The numbers are indicative of the risk
of each item compared to that of the industry. The higher the number, the lower the risk and therefore the
willingness of a buyer to place a premium on the project or operation. Each modifying factor is given a score
out of ten for the first four categories listed, out of six for the next three categories and out of three for the
remaining categories, as illustrated in the table to follow. Subsequently the project value is adjusted by the
ratio of the total scores of the project compared to the industry norm.
SAMVAL T1.10
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Table 27: Principal Valuation Modifying Factors for Rozynenbosch
Lead-Zinc Modifying Factors
Description
Depth
The largest, most profitable zinc-lead mines are open-pit operations, with some extending to both open-pit and underground operations. Shallower (<100 m) orebodies usually have less overburden to remove and hence smaller stripping ratios. The average open pittable Zn-Pb mines seem to average a pit depth of 120 m - 420 m. The deepest underground mine is the Kidd Creek Mine in Canada, with a depth of 2.9 km. The average underground mining depth seems to be between 900 m - 1,500 m. The Rozynenbosch Resource does not extend beyond a depth of circa 150 m and can therefore be considered open-pittable.
Scale of Project (Resource)
Mineral Resources of the largest Zn-Pb mines exceed 5 Mt of equivalent zinc content. The average Zn-Pb mine seems to have Mineral Resources with zinc equivalent content between 1.0 Mt - 5 Mt. A number of smaller Zn-Pb mines have Mineral Resources with Zn equivalent tonnes less than 200,000 tonnes. Rozynenbosch has an Inferred Mineral Resource estimate of 88,573 t ZnEq with an Exploration Target of approximately 150,000 t ZnEq therefore ranking it as a small-scale project.
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Mining Method The largest, most profitable Zn-Pb mines have been open-pit operations, although underground mines are more common. Rozynenbosch has an orebody at an open-pittable depth. The Exploration Target was however rated at a higher risk in the mining method category due to its depth relative to the Inferred Mineral Resource.
Operation Infrastructure
A project's risk can be ranked according to the available infrastructure that is available. A project with nothing available has a higher risk than a project that already incurred major infrastructure costs. The establishment capital associated with Zn-Pb mines is significant and a well-advanced project is regarded as less risky. There is currently no major infrastructure at Rozynenbosch, indicating a higher risk compared to other operations. There is however access to the property via roads.
Confidence in Data Source
Categorisation of the Mineral Resource could only be classified as Inferred due to the lack of QAQC, uncertainty of the exact position of the drillholes and the absence of all available raw assay information. Although previous estimations and reviews were confident to place the Mineral Resource in an Indicated category, it is the Competent Valuator’s view that due to changes in the SAMREC Code and the nature of the historic drilling and assay results available, only an Inferred Mineral Resource and an Exploration Target up-side potential can be declared at this stage. This is not to say that the data is of poor quality, however. To the contrary, both Goldfields and Phelps Dodge were large mining or exploration companies with standards and procedures which would have ensured quality. This is evident in the good quality of detailed geological data (when available). Data of sufficient quality was available for the Minxcon team to build a geological model, wireframes and complete a Mineral Resource estimation.
Title Ownership The Rozynenbosch Project is currently held under a prospecting right. No surface right is in place. The Rozynenbosch Project is held under rights by Miranda Minerals (Pty) Ltd, a direct a wholly-owned subsidiary of Miranda Mineral Holdings Limited. The MPRDA requires a minimum of 26% BEE shareholding. Currently, Miranda Minerals (Pty) Ltd is not BEE compliant and the Company is addressing this status.
Geological Complexity
The distribution of faults and lithological boundaries as a function of scale can be measured by the geological complexity. At least four phases of deformation have been recognised at Rozynenbosch. The phases of deformation are characterised by plastic folding events and are labelled from F2 through to F5. The F3 fold axes trend northwest to south east with a mean stratigraphic strike approximating east to west and form the dominant regional fabric. The F2 structures are located within the limbs of the F3 fold structures. Both F2 and F3 structures have been interpreted as asymmetric isoclinal structures. The F4 and F5 deformational events overprinted the F2 and F3 events in the form of flexural folding, resulting in the F2 and F3 structures forming open-ended doubly-plunging features. The geological complexity is thus high indicating increased risk.
Orebody Characteristics
The three main lead-zinc deposit types are Carbonate hosted or Mississippi Valley-type (MVT), Sedimentary-exhalative (SEDEX) deposits, deposits and Volcanogenic Massive Sulphide type deposits. MVT deposits account for 24% of the global resources for Pb and Zn. MVT Pb-Zn deposits are high grade lead and zinc deposits that are hosted in soft sedimentary rock like limestone or dolostone, making them particularly easy to mine. Grades in MVT deposits typically range between 4-15 % lead-zinc, where zinc grades are very similar to SEDEX deposits, but lead grades are typically lower. SEDEX deposits account for more than 50% of the world's zinc and lead reserves and account for more than 25% of the world’s production. SEDEX Pb-Zn ores are highly desirable Exploration Targets with high grades, ranging up to as high as 30% Pb+Zn and averaging between 10%-12%. SEDEX deposits are usually associated with significant Ag and minor Cu VMS deposits are also a major global source of lead, zinc, and copper. VMS deposits generally have significantly lower grades compared to SEDEX and MVT deposits. High-grade MVT deposits in the Competent Valuator’s opinion are the most desirable due to being easier to mine, followed by the high-grade SEDEX deposits and then VMS deposits. The Rozynenbosch deposit is classified as a sedimentary exhalative, or SEDEX deposit but mineralisation was later remobilised and tectonically displaced during thrusting of the Hartbees River Thrust event and/or the final stages of northward convergence related to the main Kibaran-aged Namaqua event.
Stage of development The higher the stage of development of a Project the less risk is associated with it due to the improved accuracy of a Project. Rozynenbosch is still in the exploration stage.
Strategic Not a strategic project.
Ability to increase resource
In addition to the Mineral Resource estimates declared above, an Exploration Target exists for Rozynenbosch. The current drilling was focused on a specific block and depth. The geological model developed indicates further extension down-dip which could potentially increase the Mineral Resources. The Exploration Target could also potentially be upgraded to a higher Mineral Resource category adding value.
Political, Social & Environment
According to the Southern African Minerals Environmental, Social and Governance Guideline (“SAMESG”), a high-level analysis of the environmental, social (internal and external) and external political context within which the project is located should be included when reporting on Mineral Resources, highlighting material risks and issues that may affect the project. According to the EMP document supplied by the Client, Rozynenbosch is located in an area surrounded by open veld with no protected areas in close vicinity. Water will be sourced from boreholes and the project is located in excess of 60
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m form the nearest open water source. No major environmental issues have been identified with a rehabilitation guarantee in place. The short-term social impact is low, with only 33 people planned to be employed for the prospecting license, and the project exceeding a distance of 1 km to the nearest residential area. In terms of the macro-political environment, the ANC elected Cyril Ramaphosa as its new President in December 2017, who expressed opposition to the Mining Charter III, fostering some positive sentiment in the mining industry. If Ramaphosa’s sentiments are more than politicking, and the ANC leadership build a more efficient, less corrupt administration, investment could be revitalised in the mining industry of South Africa. A significant risk has also emerged from the ANC Elective Conference, in the form of a resolution to amend the Constitution to allow for expropriation of land without compensation. Although this resolution is meant to redress the wrongs of the Apartheid government in relocation of indigenous peoples, the Government has not provided any clarity on how the resolution would be implemented and whom it will affect. The uncertainty could negatively impact on investor confidence. Rozynenbosch should have a low environmental and social impact, and being in remote location with little prospect for farming, it is unlikely to be affected by the expropriation without compensation resolution.
Note: As the valuation parameter increases, the Project value will increase and the risk profile will decrease.
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The analysis above rates Rozynenbosch at a slightly higher risk in comparison to industry criteria and the
unit value was therefore adjusted downward.
8.12.5.1.5 Valuation Summary and Conclusion
Four mineral asset values were calculated for Rozynenbosch using the market approach. The first includes
the current Mineral Resource and the lower estimation of the Exploration Target, while the second includes
the current Mineral Resource and the upper estimation of the Exploration Target. This was done including
and excluding silver content.
It should be noted that although the current Prospecting Right does not encompass silver. The Competent
Person is not aware of another body holding the silver rights over the farm Rozynenbosch 104, and silver is
present in sufficient quantities to be included as a material Mineral Resource and a value placed thereupon.
In addition, a Section 102 application in terms of the MPRDA is currently in preparation to include silver in
the 533 PR. The silver was therefore included in the valuation, with the zinc equivalent values attributed
to the silver content highlighted in the footnotes of the tables following.
Table 28 highlights the expected recoveries and payabilities for determining zinc equivalent grades. These
are based on a similar copper, lead and zinc deposit in Namibia for which metallurgical information and off-
take agreements exist. The recoveries, payabilities and grades were used to determine Zn equivalent grades
as shown in Equation 5 and Equation 6. The zinc equivalent grades were then multiplied by the ore tonnes
to determine the zinc equivalent content in the Mineral Resource.
Table 28: Recoveries and Payabilities used to Calculate Zinc Equivalents
Commodity Recovery Payability
% %
Zinc 80% 85%
Lead 80% 85%
Silver 80% 90%
Equation 5: Zn Eq. Grade for Lead
𝑍𝑛 𝐸𝑞. 𝐺𝑟𝑎𝑑𝑒 = (𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 × 𝑃𝑎𝑦𝑎𝑏𝑖𝑙𝑖𝑡𝑦 × 𝑃𝑟𝑖𝑐𝑒) 𝑃𝑏
(𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 × 𝑃𝑎𝑦𝑎𝑏𝑖𝑙𝑖𝑡𝑦 × 𝑃𝑟𝑖𝑐𝑒)𝑍𝑛
× 𝑃𝑏 𝐺𝑟𝑎𝑑𝑒
Equation 6: Zn Eq. Grade for Silver
𝑍𝑛 𝐸𝑞. 𝐺𝑟𝑎𝑑𝑒 = (𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 × 𝑃𝑎𝑦𝑎𝑏𝑖𝑙𝑖𝑡𝑦 × 𝑃𝑟𝑖𝑐𝑒 ∗ 32.15076/1000) 𝐴𝑔
(𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 × 𝑃𝑎𝑦𝑎𝑏𝑖𝑙𝑖𝑡𝑦 × 𝑃𝑟𝑖𝑐𝑒)𝑍𝑛
× 𝐴𝑔 𝐺𝑟𝑎𝑑𝑒
As Exploration Target grades and tonnes must be expressed in ranges, a lower and upper estimate for the
Exploration Target was determined (Section 0). Two separate valuations were conducted on the lower and
upper estimate respectively. The values excluding the silver equivalent content have also been reported for
clarity.
Valuation Inclusive of Silver
The first valuation of the Rozynenbosch Mineral Resource and Exploration Target (lower estimate) has an
average mineral asset value of USD14.76/t as 100% of the Mineral Resource is in the Inferred Mineral Resource
category. Based on the current Mineral Resource and Exploration Target, the best estimated value of ZAR33
million was calculated.
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Table 29: Market Approach Valuation on Rozynenbosch Including Silver (Lower Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 3.1 2.65% 20.26 23.03
Rozynenbosch Exploration Target 3.6 2.26% 9.17 10.25
Combined 6.7 2.44% 14.76 33.28
Attributable Value at Proposed 70% Ownership 23.30
Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
The second valuation of the Rozynenbosch Mineral Resource and Exploration Target (upper estimate) has an
average asset value of USD13.51/t as 100% of the Mineral Resource is in the Inferred category. Based on the
current Mineral Resource and Exploration Target, the best estimated value of ZAR39 million was calculated.
Table 30: Market Approach Valuation on Rozynenbosch Including Silver (Upper Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 3.1 2.65% 20.26 23.03
Rozynenbosch Exploration Target 4.4 2.92% 9.17 16.20
Combined 7.5 2.81% 13.51 39.22
Attributable Value at Proposed 70% Ownership 28.71 Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
A comparison of transactions similar to the Project was also completed (see Table 31). Transactions include
projects ranging from early exploration stage to projects that are in the development stage, with a number
of operational mines that were closed and require significant additional investment before re-opening. The
values over the total Mineral Resources includes Inferred, Indicated and Measured Mineral Resources and
range from USD11.75/Zn Eq. t to USD44.92/Zn Eq. t. The average values calculated for Rozynenbosch of
USD14.76/Zn Eq. t. and USD13.51/Zn Eq. t is towards the lower end when compared to values of similar
transactions, however the values are in-line with the median of USD14.59/Zn Eq. t.
The reason for the values being towards the lower end of the similar transactions is because Rozynenbosch
has 100% Inferred Mineral Resources and a significantly lower USD/Zn Eq. t value was also attributable to
the Exploration Target. Some of the similar transactions will also require less investment due to already
having some infrastructure in place, demanding a premium in price. Rozynenbosch thus compares closest to
the Coricancha Mine (Peru) transaction of USD11.95/Zn Eq. t.
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Table 31: Transactions of a Similar Nature
Date Buyer Seller Company/Mine Status
Stake Purchase
Price
Total Mineral
Resource
% Inferred
Adjusted Constant
Term Value
% USDm Zn Eq. t % USD/Zn Eq.
Mineral Resource t
01-Jul-09 Metmar Minéro Pering Mine Closed Operation 20% 10.0 425,342 18% 44.92
13-Jul-17 Solitario
Zazu Metals Corporation
Lik Zinc-Lead-Silver Deposit
Early Exploration 50% 16.7 1,274,943 24% 14.59
04-Feb-11 Vedanta Resources
plc Anglo American
Gamsberg and Blackmountain Mines
Early Exploration Stage Project and Operating Mine
74% 346.0 4,712,836 49% 20.94
28-Jul-16 Golden Rim
Herencia Resources
Paguanta Project Advanced Exploration
Stage 70% 2.3 238,541 30% 11.75
26-Jun-11 East China China
Africa Resources plc Weatherly
International plc Berg Aukas Closed Operation 65% 7.7 469,010 0% 21.52
14-Jun-17 Telson Resources and
Reynas Minas Nyrstar NV Campo Morado Mine In Development 100% 20.0 1,773,434 13% 12.74
03-Jul-17 Great Panther Silver
Limited Nyrstar NV Coricancha Mine Closed Operation 100% 10.1 905,876 85% 11.95
Average 19.77
Median 14.59
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Valuation Excluding Silver
The third valuation of the Rozynenbosch Mineral Resource and Exploration Target (lower estimate) has an
average mineral asset value of USD13.54/t. Based on the current Mineral Resource and Exploration Target,
excluding silver, the best estimated value of ZAR21 million was calculated. It should be noted that the Inferred
Resource used corresponds with the stated Inferred Resource that excludes silver as per Table 13. The
Exploration Target ore tonnes excluding silver was unchanged from the Exploration Target ore tonnes used
inclusive of silver, with the only change being that the silver content was excluded from the valuation.
The Exploration Target as tabulated in Section 10.2 is presented as a range of values, as required by the
SAMREC Code. As such, the CP has only utilised the lower value of the Exploration Target (3.6 Mt) and the
upper value of the Exploration Target (4.4 Mt) in the valuation as the tonnage figures are only presented as
upside potential that should be investigated further. Minxcon has therefore not re-estimated the Exploration
Target to exclude silver due to the inherent high degree of uncertainty already associated with the Exploration
Target.
Table 32: Market Approach Valuation on Rozynenbosch Excluding Silver (Lower Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 1.8 2.51% 20.26 12.58
Rozynenbosch Exploration Target 3.6 1.93% 9.17 8.74
Combined 5.4 2.12% 13.54 21.32
Attributable Value at Proposed 70% Ownership 14.93
Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
The fourth valuation of the Rozynenbosch Mineral Resource and Exploration Target (upper estimate) has an
average asset value of USD12.63/t. Based on the current Mineral Resource and Exploration Target, excluding
silver, the best estimated value of ZAR25 million was calculated.
Table 33: Market Approach Valuation on Rozynenbosch Excluding Silver (Upper Estimate for Exploration Target)
Area Mineral Resource
Category
Tonnage Zn Equivalent
Grade Zn Equivalent
Value Best Estimated
Value
Mt % USD/t ZARm
Rozynenbosch Inferred 1.8 2.51% 20.26 12.58
Rozynenbosch Exploration Target 4.4 2.26% 9.17 12.54
Combined 6.2 2.33% 12.63 25.12
Attributable Value at Proposed 70% Ownership 17.58
Notes:
1. Totals may not add up due to rounding.
2. ZAR/USD exchange rate of 13.83 used.
8.12.5.2 Cost Approach
The Project is in the exploration stage and therefore the valuator considered the Cost approach, and more
specifically the Multiples of Exploration Expenditure (“MEE”) methodology, as a suitable second method to
determine a range of values. No historical costs associated with the project where available. Minxcon’s
exploration division calculated the replacement costs of the borehole metres drilled and exploration
normally associated with such a project. The historical calculated cost for the exploration of the Project
(as estimated by the competent person) amounted to ZAR26.4 million. The valuator was tentative to only
include historic warranted cost. Warranted future cost can be included, however, warranted future cost
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should only be limited to cost that will be incurred in the near future, i.e. the one-year budget of a company,
to avoid reporting inflated values. No budgeted costs were available for use.
Table 34: Rozynenbosch Exploration Expenditure to Date (Estimation)
Capitalised Expenditures Exploration Target Inferred Total
Number of Drillholes (No,) 38 19 57
Drilling Cost (ZAR) 10,135,280 12,706,220 22,841,500
Assaying Cost (ZAR) 684,131 857,670 1,541,801
Geological Mapping Costs (ZAR)
1,000,000 1,000,000 2,000,000
Total (ZAR) 11,819,411 14,563,890 26,383,301
Assumptions: 1. ZAR2,000/m all inclusive. 2. 30% of drill meters sampled for assaying. 3. ZAR450/sample for assaying costs. 4. Four months of mapping.
8.12.5.2.1 Basis of Estimation (Cost Approach)
The cost approach was applied for Rozynenbosch, using the multiples of valuation expenditure methodology.
Table 35 illustrates the Prospectivity rating and Exploration Phase which is used to calculate the PEM. This
matrix was constructed in consultation with Minxcon’s in-house exploration geologists and explains the PEM
factor increase from top left to bottom right for exploration projects based on the two criteria:-
• The first criterion (Exploration Phase) is the magnitude which is determined by the level of
sophistication of the exploration. Value enhancement of a project is dependent on the level of
sophistication of the exploration project, hence adding more clarity on the prospectivity of the
project. However, a project can go through various stages of development, without necessarily adding
value, hence a second criterion is required and that is the knowledge of a geologist on the orebody.
An exploration project does not necessarily go through each stage as illustrated in Table 35. Only the
highest level of exploration phase achieved is taken into consideration for this criterion.
• The second criterion (Prospectivity Rating) is determined by taking into consideration the geologists’
opinion on the potential prospectivity of the orebody. This can include a number of factors including,
but not limited to, the expectation of the potential depth, scale of the project, understanding of the
orebody characteristics of the project area, complexity, possible mining method and expected grades;
therefore, a subjective view gathered by the information available to the Project.
Table 35: Prospectivity Rating and Exploration Phase
EX
PL
OR
AT
ION
PH
AS
E →
PROSPECTIVITY RATING → Low Medium High
Unexplored Prospect 0.00 0.18 0.35 0.53
Greenfields entry and desktop historical literature research
1.00 0.48 0.65 0.83
Reconnaissance and follow-up stream sampling 1.20 0.54 0.71 0.89
Geophysical survey 1.50 0.63 0.80 0.98
Follow-up soil sampling 2.50 0.93 1.10 1.28
Core Drilling 3.00 1.08 1.25 1.43
Historical Mining 3.50 1.23 1.40 1.58
Classification of Inferred Resources 5.00 1.68 1.85 2.03
Classification of Indicated Resources 10.00 3.18 3.35 3.53
Classification of Measured Resources 15.00 4.68 4.85 5.03
The matrix was calculated using a formula based on the exploration phase (30% weighting) and prospectivity
rating (70% weighting). The PEM for the work to complete the Exploration Target and Inferred target is
highlighted in Table 35 above, with the highest category achieved being core drilling and classification of
Inferred Mineral Resources respectively.
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The PEM factor calculated for Rozynenbosch based on the above criteria ranges:-
• Exploration Target area: Diamond Drilling was completed in the area but data and information is
not enough for it to be classified as a Mineral Resource. The potential quantity, quality and content,
are conceptual in nature, and there has been insufficient exploration to define a Mineral Resource
and it is uncertain if further exploration could result in the determination of a Mineral Resource
and, hence as Exploration phase it was classified as a 3 (“three”) in Table 35. The PEM therefore
ranges from 1.08 to 1.43; and
• Inferred Mineral Resources area where a Mineral Resource was classified has been rated as an
Exploration Phase 5 and hence the PEM ranges from 1.68 to 2.03.
This PEM is then multiplied by the historical cost.
8.12.5.2.2 Value Based on Cost Approach
This historical value was used in the cost approach to derive a best-estimated full value (not attributable)
of ZAR42 million.
Table 36: Rozynenbosch Project Value (Cost Approach)
Highest Phase of Project
PEM Historical
Cost Low Value Median Value High Value
Low Medium High ZAR million ZAR million
Historical Expenditure
Core Drilling 1.08 1.25 1.43 11.82 12.71 14.77 16.84
Classification of Inferred Mineral Resources
1.68 1.85 2.03 14.56 24.39 26.94 29.49
Total 26.38 37.10 41.71 46.33
Attributable Value at Proposed 70% Ownership 25.97 29.20 32.43 Note: ZAR/USD exchange rate of 13.83 used.
The value calculated from the PEMs is higher than the comparative. This is because of the complexity of the
orebody and hence denser drillhole spacing. More importantly, however, is the fact that the Mineral
Resource was classified as Inferred due to the absence of QAQC procedures. The Competent Person mentions
in the Mineral Resource section (Section 7) that part of the Mineral Resource could have been converted to
indicated if the normal procedures existed.
8.12.6 Sources of Information
Other sources used to do the market studies and contracts include:-
• ABSA Bank, 2017. South African Morning Sheet. Accessed via: https://www.absa.co.za/corporate-
and-investment-banking/research/
• Barerra, P., 2017. Lead Outlook 2017: Surplus to Shrink. Investing News Network. Accessed on 7
August 2017. Accessed via: http://investingnews.com/daily/resource-investing/base-metals-
investing/lead-investing/lead-outlook/
• First National Bank, 2017. Accessed via: http://blog.fnb.co.za/category/economics/
• ICSG, 2017. Copper: Preliminary Data for April 2017. Press Release, 20 July, 2017. Accessed on 7
August 2017. Accessed via: http://www.icsg.org/index.php/press-releases/viewcategory/114-
monthly-press-release
• ILZSG, 2017. Press Release, 17 July, 2017. International Lead and Zinc Study Group. Accessed on 7
August 2017. Accessed via:
http://www.ilzsg.org/generic/pages/list.aspx?table=document&ff_aa_document_type=R&from=1
SAMVAL T1.19
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• Investec (Annabel Bishop), 2017. Week Ahead Articles. Accessed via:
https://www.investec.com/en_za/welcome-to-investec/news-and-views/economic-outlook.html
• Lawrence Devon Smith, Discounted Cash Flow Analysis Methodology and Discount Rates; p10 -11.
• McLeod, 2014. Zinc and Agriculture a Winning Combination. Investing News Network. Accessed on 7
August 2017. Accessed via: http://investingnews.com/daily/resource-investing/base-metals-
investing/zinc-investing/zinc-and-agriculture-a-winning-combination/Merlin Resources, 2006.
Resource Estimate of the Pb-Ag-Zn-Cu Deposit Located on the Farm Rozynenbosch 104, Kenhardt
District, Northern Cape Province, South Africa. CPR.
• Nedbank, 2017. Monthly Insights. Accessed via:
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/aboutus/economic-
insights/research.html
• Statista, 2017. Global zinc reserves by country 2016. Accessed on 4 August 2017. Accessed via:
https://www.statista.com/statistics/273639/global-zinc-reserves-by-country/
• Statista, 2017. Lead reserves worldwide by country 2016. Accessed on 4 August 2017. Accessed via:
https://www.statista.com/statistics/273652/global-lead-reserves-by-selected-countries/
• World Bank, 2017. Commodity Markets Outlook. Quarterly Report, April 2017, World Bank,
Washington.
• Shlag, S., 2014. Demand for Zinc as Micronutrient in Agriculture Grows as Global Population to
Exceed 9 Billion by 2050, Food Consumption to Increase 70 percent. IHS Markit. Accessed on 7 August
2017. Accessed via: http://news.ihsmarkit.com/press-release/agriculture/demand-zinc-
micronutrient-agriculture-grows-global-population-exceed-9-bil
8.12.7 Range of Values
A range of values was calculated for the comparative valuation by determining an upper and lower range.
The upper and lower ranges were determined by applying an industry acceptable variance to reflect the
confidence for the different resource category estimations. The following input parameters were used with
the lower confidence categories having a wider variance:-
• Inferred Industry Average (USD/t) – 50%; and
• Exploration Target Industry Average (USD/t) – Already accounted for in the range of values
calculated (i.e. upper and lower estimate of the Exploration Target).
In order to evaluate risk, a simulation was developed using a population of 5,000 simulations. This allows
the simulation of random scenarios to determine the effect thereof. The Competent Valuator simulated
various input parameters using a range in which a parameter is expected to vary because of the difference
in confidence levels of the reported categories. This is detailed in Table 37 with the inputs of the Zinc
Equivalent Mineral Resource Classification displayed in USD/t. The Exploration Target range of values will
be the lower Exploration Target value as calculated in Table 29 inclusive of silver and in Table 32 excluding
silver, with the upper Exploration value as calculated in Table 30 inclusive of silver and in Table 33 excluding
silver.
Table 37: Input Ranges
Min Max Current Min Max
Inferred (USD/ZnEq t) 75% 125% 20.26 15.20 25.33
By applying these ranges, a lower and upper value was determined for the total Zinc Equivalent Mineral
Resource model and Exploration Target as displayed in Table 38 and Table 39 inclusive of silver and excluding
silver, respectively. After applying the risk factors described above, a range was calculated for the
comparative approach of between ZAR31 million to ZAR42 million for the model including silver and between
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ZAR20 million to ZAR27 million for the model excluding silver. The median Exploration Target value was
calculated by taking the average between the lower value and upper value for the Exploration Target.
Table 38: Market Value Derived (Inclusive of Silver)
Mineral Resource Category Lower Value Median Value Upper Value
ZAR million
Inferred 20.28 23.03 25.84
Exploration Target 10.25 13.23 16.20
Combined 30.53 36.25 42.04
Attributable Value at Proposed 70% Ownership 21.37 25.38 29.43 Note: ZAR/USD exchange rate of 13.83 used.
Table 39: Market Value Derived (Excluding Silver)
Mineral Resource Category Lower Value Median Value Upper Value
ZAR million
Inferred 11.06 12.58 14.15
Exploration Target 8.74 10.64 12.54
Combined 19.80 23.22 26.69
Attributable Value at Proposed 70% Ownership 13.86 16.26 18.68 Note: ZAR/USD exchange rate of 13.83 used.
The Market Approach is based on Mineral Resource results coupled with acquisition information of various
similar operations. The Competent Valuator’s confidence in the Market Approach leads the Competent
Valuator to prefer the results of the Market Approach versus the Cost Approach.
The Competent Valuator derived a final market value, inclusive of silver, of ZAR36 million (ZAR25 million
attributable value at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR31
million (ZAR21 million attributable value at proposed 70% ownership) and upper range of ZAR42 million
(ZAR29 million attributable value at proposed 70% ownership).
Table 40: Final Mineral Asset Market Value Range (Inclusive of Silver)
Approach Lower Value Median Value Upper Value
ZAR million
Market Approach 30.53 36.25 42.04
Market Value 30.53 36.25 42.04
Attributable Value at Proposed 70% Ownership 21.37 25.38 29.43
The Competent Valuator derived a final market value, excluding silver, of ZAR23 million (ZAR16 million
attributable value at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR20
million (ZAR14 million attributable value at proposed 70% ownership) and upper range of ZAR27 million
(ZAR19 million attributable value at proposed 70% ownership).
Table 41: Final Mineral Asset Market Value Range (Excluding Silver)
Approach Lower Value Median Value Upper Value
ZAR million
Market Approach 19.80 23.22 26.69
Final Market Value 19.80 23.22 26.69
Attributable Value at Proposed 70% Ownership 13.86 16.26 18.68
8.12.8 Competent Valuator
8.12.8.1 Key Technical Staff
Mr Johannes Scholtz (B Eng Hons (Min.), ASAIMM), Mining Engineer and Valuator, Minxcon. A summary of
Mr Scholtz’s experience is provided in Appendix 3.
SAMVAL T1.0
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Mr Johan Odendaal (BSc (Geol.), BSc Hons (Min. Econ.), MSc (Min. Eng.), Pr.Sci.Nat., FSAIMM, MGSSA),
Director at Minxcon, is the Competent Valuator of this Report. His details are provided in Section 8.12.8.3.
8.12.8.2 Competent Valuator’s Relationship to the Issuer
I have no present or prospective interest in the subject property or asset and have no bias with respect to
the assets that are the subject of the Report, or to the parties involved with the assignment. My
compensation, employment or contractual relationship with the Commissioning Entity is not contingent on
any aspect of the Report. All facts presented are correct to the best of the Competent Valuator’s knowledge.
The analyses and conclusions are limited only by the reported forecasts and conditions.
8.12.8.3 Competent Person Signature Page
The certificate of the Competent Valuator is given on the following page.
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NJ ODENDAAL
BSc (Geol.), BSc Hons (Min. Econ.), MSc (Min. Eng.)
Pr.Sci.Nat., FSAIMM, MGSSA
CERTIFICATE of COMPETENT VALUATOR - NJ Odendaal
As the author of the report titled An Independent Competent Person’s Report on the Rozynenbosch Project, Northern
Cape Province, South Africa - Mineral Resource & Mineral Asset Valuation Report prepared for Miranda Mineral Holdings
Limited with an effective date of 31 January 2018 (“Report”), I hereby state:-
1. My name is Johan Odendaal and I am a Director of:-
Minxcon (Pty) Ltd
Suite 5, Coldstream Office Park,
2 Coldstream Street,
Little Falls, Roodepoort, South Africa
2. I am a Geoscientist affiliated with the following professional associations, which meet all the attributes of a
Professional Association or a Self-Regulatory Professional Association, as applicable (as those terms are defined in
the SAMREC Code):-
Class Professional Society Year of
Registration
Member Geological Society of South Africa (MGSSA Reg. No. 965119) 2003
Fellow South African Institute of Mining and Metallurgy (FSAIMM Reg. No. 702615) 2003
Professional Natural Scientist
South African Council for Natural Scientific Professions (Pr.Sci.Nat. Reg. No. 400024/04)
2003
3. I graduated with a BSc (Geology) degree from the Rand Afrikaans University in 1985. In addition, I obtained a BSc
Honours (Mineral Economics) from the Rand Afrikaans University in 1986 and an MSc (Mining Engineering) from the
University of the Witwatersrand in 1992.
4. I have worked as a Geoscientist for over 30 years. As a former employee of Merrill Lynch, I was actively involved in
advising mining companies and investment bankers on corporate-related issues, analysing platinum and gold
companies. I have completed a number of valuations on various commodities, including coal, using the valuation
approaches described by the SAMVAL Code.
5. I am a “Competent Person” as defined in the SAMREC Code and a “Competent Valuator” as described by the SAMVAL
Code.
6. I have not undertaken a personal visit to the subject property as a site inspection is not material at this stage of the
Project. I have relied on site visit findings of my colleagues and the Competent Person of this Report, as executed
on 8 March 2018.
7. I am responsible for sections 1, 2, 8, 11-14 of the Report.
8. I am not aware of any material fact or material change with respect to the subject matter of the Report, which is
not reflected in the Report, the omission of which would make the Report misleading.
9. I declare that this Report appropriately reflects the Competent Valuator’s view.
10. I am independent of Miranda Mineral Holdings Limited.
11. I have read the SAMREC Code (2016) and SAMVAL Code (2016) and the Report has been prepared in accordance with
the guidelines of the SAMREC Code and SAMVAL Code.
12. I do not have nor do I expect to receive a direct or indirect interest in the Rozynenbosch Project or Miranda Mineral
Holdings Limited.
13. I hereby give written consent that the valuation report can be published and used for purpose of complying with JSE
Section 12.9 disclosure requirements for Mineral Companies.
14. At the effective date of the Report, to the best of my knowledge, information and belief, the Report contains all
scientific and technical information that is required to be disclosed to make the Report not misleading.
Signed at Little Falls, Roodepoort on 12 March 2018.
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8.12.9 Identifiable Component Asset Values
According to the SAMVAL Code, in some valuations the valuation shall be broken down into Identifiable
Component Asset Values (an “ICA” valuation) equalling the Mineral Asset Value. This could be, for example,
due to the requirements of other valuation rules and legislative practices.
An identifiable asset is anything that has commercial or exchange value and can provide future economic
benefits. Identifiable assets can be tangible or intangible. If an asset is deemed to be identifiable, the
purchasing company records it as part of its assets on its balance sheet. If an asset is not deemed to be an
identifiable asset, then its value is considered part of the goodwill amount arising from the acquisition
transaction.
For these Project valuations, no ICA values were included as they are not applicable.
8.12.10 Historic Verification
No historical estimates regarding the adjacent properties have been included in this Report as it is not
relevant to the Project valuation.
8.12.11 Market Studies and Contracts
The suitability of the commodities to the market as well as the market availability is discussed in more
detail in Section 8.5.
8.12.12 Reviews
The Competent Valuator is not aware of any other reviews that were done for this Project.
SAMVAL T1.16
SAMVAL T1.17
SAMVAL T1.18
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9 MINERAL RESERVE ESTIMATES
This Report is intended as a Mineral Resource CPR. No Mineral Reserves have been estimated.
SAMREC 5.6 (v) SAMREC 6.1 SAMREC 6.2 SAMREC 6.3 SAMVAL T1.9
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10 OTHER RELEVANT DATA AND INFORMATION
10.1 ADJACENT PROPERTIES
There are no similar projects known that are located adjacent to or in the vicinity of Rozynenbosch.
Numerous similar base metal deposits occur across the broader region, however. These include the Salt River
Zn-Cu-Pb-(Ag-Au) deposit located approximately 100 km southwest of Kakamas
(http://www.srr.co.za/salt_river.html) and Black Mountain Zn-Pb-Au-Cu Mine at Aggeneys 170 km west of
Rozynenbosch (http://www.vedanta-zincinternational.com/our-operations/black-mountain). Although the
mineralisation across these projects is similar, they are not indicative of mineralisation at Rozynenbosch.
Rather, they provide support for the geological provinces identified in the region.
10.2 UPSIDE POTENTIAL
Further potential has been identified with regards the historic drilling and is seen as an upside potential. This
Exploration Target is based on historic drilling that occurs further down dip from the Inferred Mineral
Resource.
The target was modelled in a similar manner to the Mineral Resource where a mineralised halo around the
Pb4 (stretch value based on a 1976 USD4 cut-off) was created and using a natural cut-off of 0.5% Pb. These
PB4 values do not represent a full raw assay interception, however they can be used as indication to the grade
distribution and can be used to quantify the target.
Lead and zinc were estimated and a regressed silver value was calculated. The 90% percentile for estimated
values are shown in the Table 42 where a geological loss of 15% has been applied to the tonnages. The
tonnages also represent a 10% variance around the estimated tonnages. It should be noted that when
compared to the Phelps Dodge report, the combined tonnages for the Mineral Resource with the target tonnes,
these compare favourably to the total tonnes declared in 1976.
This Exploration Target potential is stated in Table 42, at a 1% Pb cut-off.
Table 42: Exploration Target Potential at a Cut-off of 1% Pb
Target at a Cut-off at 1% Pb Tonnes Pb Zn Ag
Mt % % g/t
Upper 90 Percentile (Maximum) 4.4 2.25 0.53 36.01
Lower 90 Percentile (Minimum) 3.6 1.95 0.43 18.17
The potential tonnage and grade of the above Exploration Target ranges are conceptual in nature; there is
insufficient exploration data to estimate a Mineral Resource and it is uncertain if further exploration will
result in the estimation of a Mineral Resource.
To prove this potential and possibly upgrade the current Inferred Mineral Resource as presented in this Report,
a series of historic drillhole twinning is suggested. This would include a twinning of 20% of the Inferred Mineral
Resource drillholes (six drillholes) and 20% of the historic drillholes in the target area (four drillholes). An
additional five exploration drillholes are recommended to confirm the geology and grade of the Exploration
Target. Figure 57 shows the historic drilling with the proposed twinning and addition exploration. The
proposed drilling meters for the twinning are approximately 2,200 m and the additional exploration is
approximately 1,700 m.
SAMREC 1.3 (i)
SAMREC 8.1 (i)
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Figure 57: Proposed Drillhole Programme for the Twinning and Exploration
Proposed Drillhole Programme for the Twinning and Exploration January 2018
An estimated budget for the drilling was calculated using an all-in drilling cost of ZAR2,000/m, based on
current industry rates for similar projects. The total budget was estimated at ZAR7.8 million, as shown in
Table 43.
Table 43: Estimated Drilling Budget
Drilling Type Rate Length Total Cost
ZAR m ZAR
Twinning 2,000 2,200 4,400,000
Exploration 2,000 1,700 3,400,000
Total - 3,900 7,800,000
Unfortunately, the timing of this drilling is unknown at this stage as the budget is unknown which will be
dependent on fund raising. This drilling could however be completed within three months to six months
depending on the number of drilling rigs utilised during the drilling campaign.
10.3 AUDITS AND REVIEWS
With the exception of the procedures described in Section 6 of this Report, the Competent Person is not
aware of any audits or reviews that have been conducted for any aspect of the Project.
10.4 RISK ASSESSMENT
A risk assessment to consider and quantify risks within the Rozynenbosch Project was conducted by the
Competent Person based on a simplified approach. The result is not designed to be a definitive assessment
of the risks but is rather a tool to articulate and evaluate those risks as identified by persons present at the
risk assessment session.
10.4.1 Risk Assessment Methodology
All items were reviewed and assessed using the risk severity criteria shown below:-
SAMREC 5.7 (i)
SAMREC 7.1 (i)(ii)
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• Green – Low risk (score 1-5);
• Yellow – Medium risk (score 6-12);
• Orange - Significant risk (score 13-20); and
• Red – High risk (score greater than 21).
Once a high risk is identified, the project team is required to take remedial action to either resolve or
mitigate the risk. The identification and recording of corrective and remedial measures was beyond the
scope of this particular risk assessment exercise. The risk matrix table is detailed in Table 44.
10.4.2 Risk Assessment Outcome
The outcome of the risk assessment is provided in Table 45. No significant risks have been identified.
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Table 44: Minxcon Risk Matrix
1 - Insignificant 2 - Minor 3 – Moderate 4 - Major 5 - Catastrophic
Project ScheduleLess than 1% impact on overall project
timeline
May result in overall project timeline
overrun equal to or more than 1% and
less than 5%
May result in overall project timeline
overrun of equal to or more than 5%
and less than 20%
May result in overall project timeline
overrun of equal to or more than 20%
and less than 50%
May result in overall project timeline
overrun of 50% or more
CostLess than 1% impact on the budget of
the project
May result in overall project budget
overrun equal to or more than 1% and
less than 5%
May result in overall project budget
overrun of equal to or more than 5%
and less than 20%
May result in overall project budget
overrun of equal to or more than 20%
and less than 50%
May result in overall project budget
overrun of 50% or more
NPV Change Less than 1% impact on NPVEqual to or more than 1% to less than
5% change in NPV
Equal to or more than 5% to less than
20% change in NPV
Equal to or more than 20% to less than
50% change in NPVChange in NPV of 50% or more
Quality and Technical IntegrityNo significant impact on quality of
deliverables or effect on production
Quality issues that can be addressed
prior to handover or could affect
production by more than 1% and less
than 5%
Quality issues that can be addressed
during ramp-up or could affect
production by more than 5% and less
than 10%
Quality issues that require significant
intervention to maintain performance
or could affect production by more
than 10% and less than 20%
Quality issues that require significant
intervention to achieve performance or
could affect production by 20% or
more
Safety/HealthFirst aid case / Exposure to minor
health risk
Medical treatment case / Exposure to
major health risk
Lost time injury / Reversible impact on
health
Single fatality or loss of quality of life /
Irreversible impact on health
Multiple fatalities / Impact on health
ultimately fatal
EnvironmentMinimal environmental harm - L1
incident
Material environmental harm - L2
incident remediable short term
Serious environmental harm - L2
incident remediable within LOM
Major environmental harm - L2 incident
remediable post LOM
Extreme environmental harm - L3
incident irreversible
Legal & Regulatory Low level legal issueMinor legal issue; non compliance and
breaches of the law
Serious breach of law;
investigation/report to authority,
prosecution and or moderate penalty
possible
Major breach of the law; considerable
prosecution and penalties
Very considerable penalties and
prosecutions. Multiple law suits and jail
terms
Reputation/Social/CommunitySlight impact - public awareness may
exist but no public concernLimited impact - local public concern
Considerable impact - regional public
concern
National impact - national public
concern
International impact - international
public attention
90% Near Certainty: 90% chanceCannot avoid this risk with standard practices,
probably not able to mitigate.Medium - 11 Significant - 16 Significant - 20 High - 23 High - 25
75% Highly Likely: 75% chanceCannot avoid this risk with standard practices, but
a different approach may work.Medium - 7 Medium - 12 Significant - 17 High - 21 High - 24
50% Possible: 50% chance May avoid risk, but rework will be required. Low - 4 Medium - 8 Significant - 13 Significant - 18 High - 22
25% Unlikely: 25% chanceHave usually avoided this type of risk with minimal
oversight in similar cases.Low - 2 Low - 5 Medium - 9 Significant - 14 Significant - 19
15% Rare: 15% chanceWill effectively avoid this risk based on standard
practices.Low 1 Low - 3 Medium - 6 Medium - 10 Significant - 15
High A high risk exists that management’s objectives may not be achieved. Appropriate mitigation strategy to be devised immediately.
Consequence
Risk Level
Lik
elih
oo
d
Risk Level Guidelines for Risk Matrix
Significant A significant risk exists that management’s objectives may not be achieved. Appropriate mitigation strategy to be devised as soon as possible.
Medium A moderate risk exists that management’s objectives may not be achieved. Appropriate mitigation strategy to be devised as part of the normal management process.
Low A low risk exists that management’s objectives may not be achieved. Monitor risk, no further mitigation required.
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Table 45: Risk Assessment
Risk Category Risk Cause of Risk Risk (%)
Likelihood Impact 1 to 5
Risk Rating
Mitigation/Control
Financial Mineral Resource and mineral asset valuation estimates may be reduced.
The Prospecting Right 533 PR does not include silver as a commodity. An application is under preparation to include silver in the PR.
15% 4 Submit the application to the DMR in the prescribed manner.
Mineral Resource/Geology
Database is historical data
The data which forms the basis for the Mineral Resource estimation is historical exploration data from Goldfields and Phelps.
15% 3
The historical database was compiled by reputable mining companies and is assumed to have been conduct to industry best practices at the time. The is also a wealth of good geological information to back the drilling database.
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11 INTERPRETATION AND CONCLUSIONS
The following interpretations and conclusions are made by the Competent Person regarding the Project:-
Mineral Resources
• There is a wealth of historical data that has been collated and compiled into a 3D model by the
Minxcon Mineral Resource department.
• The historical data is of sufficient quantity and quality to declare an Inferred Mineral Resource.
• It is the Competent Person’s opinion that if the historical data was more complete, the Inferred
Mineral Resource could be Indicated and that a portion of the Exploration Target could be classified
as an Inferred Mineral Resource.
• The Competent Person has estimated an Inferred Mineral Resource, including silver, of 3.10 Mt at
grades of 2.17% Pb, 0.31% Zn and 36.47 g/t Ag, at a cut-off grade of 1.9% PbEq (including silver),
which has been signed off by the Competent Person.
• The Competent Person has also estimated an Inferred Mineral Resource, excluding silver, of 1.79 Mt
at grades of 2.78% Pb and 0.37% Zn, at a cut-off grade of 1.9% PbEq (excluding silver), which has
been signed off by the Competent Person. This scenario was also necessitated due to the fact that
Miranda does not have the prospecting right for silver as yet but such is under application.
• The Competent Person has also estimated an Exploration Target down dip of the Inferred Mineral
Resource ranging between 3.6 Mt and 4.4 Mt, with grade ranges between 1.95% and 2.25% for Pb,
0.43% and 0.53% for Zn and 18.17 g/t and 36.01 g/t for Ag, which has been signed off by the
Competent Person.
• The mineralised zones are from close to surface and are open ended at depth within the plunge of
the fold.
• The geology of the Rozynenbosch Project lends itself to open pit mining.
Valuation
• The Competent Valuator derived a final market value inclusive of silver of ZAR36 million (ZAR25
million at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR31 million
and upper range of ZAR42 million (ZAR21 million and ZAR29 million respectively at proposed 70%
ownership).
• The Competent Valuator derived a final market value excluding silver of ZAR23 million (ZAR16
million at proposed 70% ownership) for the Rozynenbosch Project with a lower end of ZAR20 million
and upper range of ZAR27 million (ZAR14 million and ZAR19 million respectively at proposed 70%
ownership).
• The average value per Zn Eq. Mineral Resource tonne for Rozynenbosch inclusive of silver is between
USD13.51/Zn Eq. t. and USD14.76/Zn Eq. t, and excluding silver between USD12.63/Zn Eq. t. and
USD13.54/Zn Eq. t, which is towards the lower end compared to other similar operations due to
100% of the Mineral Resources classified as Inferred Mineral Resources. The values are however in-
line with the median value of USD14.59/Zn Eq. t of similar transactions.
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12 RECOMMENDATIONS
The following recommendations are made by the Competent Person regarding the Project:-
Mineral Resources
• Further exploration drilling is required to improve the confidence in the Mineral Resource and upgrade
the classifications.
• Future drilling assaying should include the assay for silver to compile a larger database for silver.
• More specific gravity testwork is required if additional drilling is to be completed.
• QAQC needs to be addressed in the future drilling programmes.
• It is imperative that Miranda acquires the prospecting right for silver for the Rozynenbosch Project.
Valuation
• The valuation includes the contribution from silver. It is recommended that the prospecting right
amendment to include silver, which is currently in preparation, is lodged in accordance with all
MPRDA and DMR requirements.
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13 REFERENCES
• ABSA Bank, 2017. South African Morning Sheet. Accessed via: https://www.absa.co.za/corporate-
and-investment-banking/research/
• ALB (2017). African Law and Business, South Africa Mining Law 2017. Accessed on 05 May 2017.
Accessed via: https://www.africanlawbusiness.com/publications/mining-law/mining-law-
2017/south-africa/overview#chaptercontent7
• Barerra, P., 2017. Lead Outlook 2017: Surplus to Shrink. Investing News Network. Accessed on 7 August
2017. Accessed via: http://investingnews.com/daily/resource-investing/base-metals-investing/lead-
investing/lead-outlook/
• First National Bank, 2017. Accessed via: http://blog.fnb.co.za/category/economics/
• ICSG, 2017. Copper: Preliminary Data for April 2017. Press Release, 20 July, 2017. Accessed on 7
August 2017. Accessed via: http://www.icsg.org/index.php/press-releases/viewcategory/114-
monthly-press-release
• ILZSG, 2017. Press Release, 17 July, 2017. International Lead and Zinc Study Group. Accessed on 7
August 2017. Accessed via:
http://www.ilzsg.org/generic/pages/list.aspx?table=document&ff_aa_document_type=R&from=1
• ICSG, 2017. Copper: Preliminary Data for April 2017. Press Release, 20 July, 2017. Accessed on 7
August 2017. Accessed via: http://www.icsg.org/index.php/press-releases/viewcategory/114-
monthly-press-release
• Investec (Annabel Bishop), 2017. Week Ahead Articles. Accessed via:
https://www.investec.com/en_za/welcome-to-investec/news-and-views/economic-outlook.html
• McLeod, 2014. Zinc and Agriculture a Winning Combination. Investing News Network. Accessed on 7
August 2017. Accessed via: http://investingnews.com/daily/resource-investing/base-metals-
investing/zinc-investing/zinc-and-agriculture-a-winning-combination/
• Merlin Resources, 2006. Resource Estimate of the Pb-Ag-Zn-Cu Deposit Located on the Farm
Rozynenbosch 104, Kenhardt District, Northern Cape Province, South Africa. CPR.
• Miningweekly.com (2013). 23rd July 2013. Miranda receives Rozynenbosch prospecting right. Online
news article. Accessed on 05 May 2017. Accessed via:
http://www.miningweekly.com/article/miranda-receives-rozynenbosch-prospecting-right-2013-07-
23
• Mossom, R.J. (2006). Resource Estimate of the Pb-Ag-Zn-Cu Deposit Located on the Farm
Rozynenbosch 104, Kenhardt District, Northern Cape Province, South Africa. Compiled on behalf of
Miranda Minerals (Pty) Ltd. Merlin Resources. 8 August 2006. 45pp.
• Nedbank, 2017. Monthly Insights. Accessed via:
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/aboutus/economic-
insights/research.html
• Pearson, C.V. (1985). Regional Geological Report. Red Hill Mine Ltd. 12 August 1985.
• Phelps Dodge of Africa Limited. (1973). Rozynenbosch, Kenhardt, Gordonia and Prieska Exploration
Monthly Progress Report. July 1973.
• Phelps Dodge of Africa Limited. (1973). Rozynenbosch and Kenhardt Monthly Progress Report. October
1973.
• Shlag, S., 2014. Demand for Zinc as Micronutrient in Agriculture Grows as Global Population to
Exceed 9 Billion by 2050, Food Consumption to Increase 70 percent. IHS Markit. Accessed on 7 August
2017. Accessed via: http://news.ihsmarkit.com/press-release/agriculture/demand-zinc-
micronutrient-agriculture-grows-global-population-exceed-9-bil
Miranda Mineral Holdings Limited
An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa – Mineral Resource &
Mineral Asset Valuation Report 111
• Southern Geophysical Exploration. (1985). Transient Electromagnetic Survey, Rozynenbosch.
Prepared on behalf of Goldfields South Africa Ltd. November 1985.
• Statista, 2017. Global zinc reserves by country 2016. Accessed on 4 August 2017. Accessed via:
https://www.statista.com/statistics/273639/global-zinc-reserves-by-country/
• Statista, 2017. Lead reserves worldwide by country 2016. Accessed on 4 August 2017. Accessed via:
https://www.statista.com/statistics/273652/global-lead-reserves-by-selected-countries/
• The Silver Institute & Thomson Reuters, 2017. World Silver Survey 2017. Thomson Reuters, London.
• United States Geological Survey (USGS), 2018. Silver. Accessed on 12 February 2018. Accessed via:
https://minerals.usgs.gov/minerals/pubs/commodity/silver/mcs-2018-silve.pdf.
• United States Geological Survey (USGS), 2018. Lead. Accessed on 12 February 2018. Accessed via:
https://minerals.usgs.gov/minerals/pubs/commodity/lead/mcs-2018-lead.pdf.
• United States Geological Survey (USGS), 2018. Lead. Accessed on 12 February 2018. Accessed via:
https://minerals.usgs.gov/minerals/pubs/commodity/zinc/mcs-2018-zinc.pdf.
• World Bank, 2017. Commodity Markets Outlook. Quarterly Report, April 2017, World Bank,
Washington.
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14 APPENDICES
Appendix 1: Glossary of Terms
The following terms are used in this Report:-
Term Definition
Amphibolite Granular metamorphic rock consisting mainly of hornblende and plagioclase.
Arkose Detrital sandstone sedimentary rock, with at least 25% feldspar. Quartz is commonly the dominant mineral component, and some mica is often present.
Assay laboratory A facility in which the proportions of metal in ores or concentrates are determined using analytical techniques.
Biotite Black sheet silicate mineral with chemical formula K(Mg,Fe); 3(AlSi; 3O; 10)(F,OH); 2.
Charnockite Orthopyroxene-bearing quartz-feldspar rock, composed mainly of quartz, perthite or antiperthite and orthopyroxene formed at high temperature and pressure.
Diamond drilling An exploration drilling method, where the rock is cut with a diamond drilling bit, usually to extract core samples.
Dip The angle that a structural surface, i.e. a bedding or fault plane, makes with the horizontal. It is measured perpendicular to the strike of the structure.
Discounted Cash Flow (DCF)
In finance, discounted cash flow analysis is a method of valuing a project, company, or asset using the concepts of the time value of money. All future cash flows are estimated and discounted to give their present values – the sum of all future cash flows, both incoming and outgoing, is the net present value (NPV), which is taken as the value or price of the cash flows in question.
Exploration Prospecting, sampling, mapping, diamond drilling and other work involved in the search for mineralisation.
Facies The features that characterise rock as having been emplaced, metamorphosed or deposited in a sedimentary fashion, under specific condition. In the case of sediment host deposits, this infers deposition within a particular depositional environment.
Faulting The process of fracturing that produces a displacement within, of across lithologies.
Feldspar Tectosilicate mineral of pink, white, grey, brown colour with the chemical formula LiAlSi3O8 – NaAlSi3O8 – CaAl2Si2O8.
Gneiss Metamorphic rock with a banded or foliated structure, typically coarse-grained and consisting mainly of feldspar, quartz, and mica.
Grade The quantity of metal per unit mass of ore expressed as a percentage or, for gold, as grams per tonne of ore.
Granite Granular, crystalline, igneous rock consisting mainly of quartz, mica, and feldspar.
Igneous Relating to or involving volcanic or plutonic processes.
In situ In place, i.e. within unbroken rock.
Indicated Mineral Resource
An “Indicated Mineral Resource” is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on information from exploration, sampling and testing of material gathered from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological or grade continuity but are spaced closely enough for continuity to be assumed (SAMREC definition).
Inferred Mineral Resource
An “Inferred Mineral Resource‟ is that part of a Mineral Resource for which volume or tonnage, grade and mineral content can be estimated with only a low level of confidence. It is inferred from geological evidence and sampling and assumed but not verified geologically or through analysis of grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited in scope or of uncertain quality and reliability (SAMREC definition).
Kriging An estimation method that minimises the estimation error between data points in determining mineral resources. Kriging is the best linear unbiased estimator of a mineral resource.
Leucocratic Light-coloured igneous rock that are relatively poor in mafic minerals.
Lithology The general compositional characteristics of rocks.
Marble Crystalline metamorphic form of limestone.
Metamorphic Relating to rock that has been transformed under heat and pressure.
Metapelite Metamorphosed fine-grained sedimentary rock.
Mineral Reserve
A Mineral Reserve is the economically mineable material derived from a Measured or Indicated Mineral Resource or both. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a Pre-Feasibility Study for a project and a Life of Mine Plan for
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Term Definition
an operation must have been completed, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors (the modifying factors). Such modifying factors must be disclosed (SAMREC definition). Mineral reserves are reported as general indicators of the life of mineral deposits. Changes in reserves generally reflect:
i. development of additional reserves; ii. depletion of existing reserves through production; iii. actual mining experience; and iv. price forecasts.
Grades of mineral reserve actually processed from time to time may be different from stated reserve grades because of geologic variation in different areas mined, mining dilution, losses in processing and other factors. Neither reserves nor projections of future operations should be interpreted as assurances of the economic life of mineral deposits or of the profitability of future operations.
Mineral Resource
A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilised organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
Mineralisation The presence of a target mineral in a mass of host rock.
Mineralised area Any mass of host rock in which minerals of potential commercial value occur.
Net Present Value (NPV)
The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyse the profitability of an investment or project.
Ore A mixture of valuable and worthless minerals from which at least one of the minerals can be mined and processed at an economic profit.
Orebody A continuous well-defined mass of material of sufficient ore content to make extraction economically feasible.
Outcrop The exposure of rock on surface.
Pegmatite Coarsely crystalline igneous rock with crystals several centimetres in length.
Quartz Siliceous mineral with chemical formula SiO2.
Rehabilitation
The process of restoring mined land to a condition approximating to a greater or lesser degree its original state. Reclamation standards are determined by the South African Department of Mineral and Energy Affairs and address ground and surface water, topsoil, final slope gradients, waste handling and re-vegetation issues.
Sampling Taking small pieces of rock at intervals along exposed mineralisation for assay (to determine the mineral content).
Schist Coarse-grained metamorphic rock consisting of layers of different minerals and can be split into thin irregular plates.
Sedimentary Formed by the deposition of solid fragmental material that originates from weathering of rocks and is transported from a source to a site of deposition.
Shear Zone Structural planar discontinuity that forms in response to high strain.
Stratigraphic A term describing the chronological sequence in which bedded rocks occur that can usually be correlated between different localities.
Tonnage Quantities where the tonne is an appropriate unit of measure. Typically used to measure reserves of gold-bearing material in situ or quantities of ore and waste material mined, transported or milled.
Tuff Rock comprised of volcanic ash.
Unconformity A surface within a package of sedimentary rocks which may be parallel to or at an angle with overlying or underlying rocks, and which represents a period of erosion or non-deposition, or both.
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Appendix 2: Abbreviations
The following acronyms and abbreviations are used in this Report:-
Item Description
533 PR SNC 30/5/1/1/2/0533 PR
Ag Silver
amsl Above Mean Sea Level
BEE Black Economic Empowerment
BoSZ Boven Rugzeer Shear Zone
CPR Competent Persons’ Report
Cu Copper
DCF Discounted Cash Flow
DME Department of Minerals and Energy
DMR Department of Mineral Resources
DT Dabep Fault
EIA Environmental Impact Assessment
EMP Environmental Management Programme
GFSA Goldfields South Africa
HDSAs Historically Disadvantaged South Africans
HRZ Hartbees River Thrust
IAP Interested and Affected Parties
ID2 Inverse Distance Squared
JV Joint Venture
Minxcon Minxcon (Pty) Ltd
Miranda, Company or Client
Miranda Mineral Holdings Limited
MME Multiples of Exploration Expenditure
MPRDA Minerals and Petroleum Resources Development Act, 2002 (Act No 28 of 2002)
MPTRO Mineral and Petroleum Titles Registration Office
NMC Namaqua-Natal Metamorphic Complex
NPV Net Present Value
NSZ Neusspruit Shear Zone
OES One Environmental System
Pb Lead
PEM Prospectivity Enhancement Multiplier
Phelps Dodge Phelps Dodge Corporation
PPP Public Participation Processes
PR Prospecting Right
PV Photovoltaic (cells)
QAQC Quality Assurance and Quality Control
Report An Independent Competent Person’s Report on the Rozynenbosch Project, Northern Cape Province, South Africa - Mineral Resource Report prepared for Miranda Mineral Holdings Limited with an effective date of 31 January 2018
SAMESG Southern African Minerals Environmental, Social and Governance Guideline
SAMREC Code South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (2016 Edition)
SAMVAL Code South African Code for the Reporting of Mineral Asset Valuation (2016 Edition)
SEDEX Sedimentary Exhalative Deposit
SLP Social and Labour Plan
TSZ Trooilapspan Shear Zone
USD United States Dollar
ZAR South African Rand
Zn Zinc
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Appendix 3: Compliance Statement, Certificate of Competence and Key Technical Staff
The information in this Report that relates to Exploration Results and Mineral Resources are based on
information compiled by Mr Uwe Engelmann, a Competent Person who is registered with SACNASP and is a
Member of the GSSA included in a list of recognised organisations promulgated by the SSC from time to time.
Mr Uwe Engelmann is a full-time employee of Minxcon (Pty) Ltd.
Mr Uwe Engelmann has sufficient experience that is relevant to the style of mineralisation and type of
deposit under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2016 of the South African Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves. Mr Uwe Engelmann consents to the inclusion in the Report of the matters based on his
information in the form and context in which it appears.
SAMREC 9.1 (i)(ii)(iii)
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CERTIFICATE of COMPETENT PERSON – U Engelmann
As the author of the report titled An Independent Competent Person’s Report on the Rozynenbosch Project, Northern
Cape Province, South Africa - Mineral Resource & Mineral Asset Valuation Report prepared for Miranda Mineral Holdings
Limited with an effective date of 31 January 2018 (“Report”), I hereby state:-
1. My name is Uwe Engelmann and I am Director of:-
Minxcon (Pty) Ltd
Suite 5, Coldstream Office Park,
2 Coldstream Street,
Little Falls, Roodepoort, South Africa
2. I am a Geologist affiliated with the following professional associations, which meet all the attributes of a Professional
Association or a Self-Regulatory Professional Association, as applicable (as those terms are defined in the SAMREC
Code):-
Class Professional Society Year of
Registration
Member Geological Society of South Africa (MGSSA No. 966310) 2010
Professional Natural Scientist
South African Council for Natural Scientific Professions (Pr.Sci.Nat. Reg. No. 400058/08)
2008
3. I graduated with a BSc Honours (Geology) degree from the University of the Witwatersrand in 1991.
4. I have more than 20 years’ experience in the mining and exploration industry. This includes eight years as an Ore
Resource Manager at the Randfontein Estates Projects on the West Rand. I have completed a number of assessments
and technical reports pertaining to various commodities, including lead, zinc, copper and silver deposits, using
approaches described by the SAMREC Code.
5. I am a “Competent Person” as defined in the SAMREC Code.
6. I undertook a personal inspection of the property on 8 March 2018 to confirm the state of the land.
7. I am responsible for sections 1-7, 8.1-8.4, 8.6-8.10, 9-14 of the Report.
8. I am not aware of any material fact or material change with respect to the subject matter of the Report, which is
not reflected in the Report, the omission of which would make the Report misleading.
9. I declare that this Report appropriately reflects the Competent Person’s/author view.
10. I am independent of Miranda Mineral Holdings Limited.
11. I have read the SAMREC Code (2016) and the Report has been prepared in accordance with the guidelines of the
SAMREC Code.
12. I do not have nor do I expect to receive a direct or indirect interest in the Rozynenbosch Project or Miranda Mineral
Holdings Limited.
13. At the effective date of the Report, to the best of my knowledge, information and belief, the Report contains all
scientific and technical information that is required to be disclosed to make the Report not misleading.
Signed at Little Falls, Roodepoort on 12 March 2018.
U ENGELMANN
BSc (Zoo. & Bot.), BSc Hons (Geol.)
Pr.Sci.Nat., MGSSA
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Key Technical Staff
Mr Uwe Engelmann (Director, Minxcon): BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat. (Reg. No.
400058/08), MGSSA (Reg. No. 966310).
Uwe Engelmann has gained over 20 years’ experience in the mining and exploration industry working for
various mining companies in South Africa. During this time he was involved in research in Antarctica, held
various geological positions as well as an Ore Resource Manager for eight years where he was involved in the
production and exploration on the shafts, strategic planning, ore resources and reserves as well as the daily
management of the shafts. He has been heading up the exploration division of Minxcon Exploration (formerly
Agere Project Management) since 2007 where he has been involved in most aspects of exploration,
predominantly in Africa, in a wide range of commodities including gold, platinum, copper, coal, manganese,
chrome and iron ore.
Mr Johan Odendaal (Director, Minxcon): BSc (Geol.), BSc Hons (Min. Econ.), MSc (Min. Eng.), Pr.Sci.Nat.
(Reg. No. 400024/04), FSAIMM (Reg. No. 702615), MGSSA (Reg. No. 965119).
Johan Odendaal has over 30 years’ experience in the mining and financial industry. This includes 12 years
as independent mining consultant specialising in the valuation of Mining Projects and 12 years as a mining
analyst at two major stockbroking firms and investment bank. During this time he was rated one of the top
platinum and gold mining analysts and became a globally recognised industry specialist in a various
commodities. Regular contact with the mining, corporate and investment community allowed him to build
an extensive network of contacts around the globe specialising in valuation of mining companies. He
commands a wide range of knowledge on both local and international mining companies. As a former
employee of a Global Investment Bank, he was actively involved in Financial Analysis and advising mining
companies and investment bankers on corporate mining transactions. Johan has a vast experience in
fundamental analysis of commodity markets. His experience with regard to Mineral Asset Valuations,
Concept Studies, Competent Persons Reports, Due Diligence and Technical Reports includes precious metals,
ferrous and non-ferrous metals, coal, diamonds and a number of minor metals and commodities. Johan also
serves on the JSE Issuer Regulation Advisory Committee and SAMVAL Working Group.
Mr Paul Obermeyer (Mineral Resource Manager, Minxcon): BSc Hons (Geol.), Pr.Sci.Nat. (Reg. No.
400114/06).
Paul has over 20 years’ experience in the mining industry, where he has gained extensive experience in data
processing and ore body modelling using Datamine™, and the fields of sedimentology, stratigraphy, gold
exploration and QAQC. He has been involved in projects with commodities such as of gold, platinum, coal
and base metals. He was a Chief Geologist on one of South Africa’s most complex mines for four years. He
has worked in a production environment for 13 years, as well as in exploration. Owing to his experience,
Paul is also well-equipped to conduct due diligence exercises on operations for different commodities and
to conduct audits.
Mr Laurence Hope (Senior Resource Geologist, Minxcon): NHD (Econ. Geol.), Pr.Sci.Nat. (Reg. No. 200010/11).
Laurence has been involved in the mining industry for over 25 years in both production and consulting. As a
geologist, he has held managerial level positions for over 12 years, leading teams in numerous work
environments. He has extensive experience of over 18 years in 3D geological modeling and Mineral Resource
estimation for a variety of deposit types, including coal, gold and PGEs. He is proficient in many geological
modeling software programs, including Vulcan, Surpac, Datamine, Micromine and Leapfrog3D. He has
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worked as a production geologist on a variety of mines and conducted exploration programmes in the field.
As a consultant, a main function of his career has been in mine database management and QAQC.
Miss Maria Antoniades (Geologist, Minxcon): BSc Hons (Geol.), Cand.Sci.Nat. (Reg. No. 114426), MGSSA.
Maria has six years’ experience in the minerals industry. She started her career as a mineral projects analyst,
where she gained experience in the assessment of mineral projects across a variety of commodities. She has
worked as a sole in-house geologist, setting up company standards and assessing geological terrains. She
currently undertakes geological interpretations, editing and mining project co-ordination. She is actively
involved in the compilation of technical documentation in compliance with the main reporting codes
requirements and performs reviews of various mining and exploration projects to indicate their viability.
Her mineral experience includes gold, diamonds, platinum, building materials, heavy mineral sands and oil
and gas.
Mr Sherlock Rathogwa (Exploration Geologist, Minxcon): BSc (Geol. & Math.), BSc Hons (Geol.), MGSSA.
Sherlock has over six years’ experience in the mining industry. He graduated with a B.Sc. in Geology and
Mathematics from the University of Johannesburg in 2008. In 2009 he obtained his B.Sc. Honours in Geology
from the University of Johannesburg. His experience includes extensive field exploration geology in a wide
range of minerals and geological settings, GIS application in geology, 3D geological modelling. Sherlock has
gained excellent proficiency in geological field work as well as the associated and relevant office work. He
has worked on drilling projects where he monitored and supervised diamond drilling campaigns. His
commodity experience includes gold, coal, platinum, chrome and manganese.
Mr. Johannes Scholtz (Mining Engineer and Valuator, Minxcon): BEng Hons (Min. Eng.), ASAIMM.
Johannes joined the team of Mining Engineers at the financial side at Minxcon in August 2017. He is currently
working on a wide range of projects involved in market research, mine operating cost and capital cost
evaluation and financial estimations. Johannes completed his Honours Degree in mining engineering in 2015,
specialising in mineral economics and has since worked as a mining researcher. Research projects included
both technical and market research topics for the MHSC and private companies.
AM Deiss (Associate Geologist): BSc Hons (Geol.), Pr.Sci.Nat., SAIMM.
André has 22 years’ experience in geology and geostatistics and has worked for numerous large South African
and International mining companies as a geologist. Acting in a consulting capacity he has provided geological
and geostatistical services to mining companies in Southern and Eastern Africa, Europe, Asia, USA and
Australia, and has been active in a wide scope of commodities in the minerals extraction industry. He has
accumulated valuable experience in geological modelling, Mineral Resource estimation and auditing,
technical reporting, seismic interpretation, mine planning, geological mapping, drill hole core logging,
geological standards and procedures, QAQC protocols set-up, database administration and coaching.
Mr Julian Knight (Senior Process Engineer, Minxcon): B Eng (Chem.), B Eng Hons (MOT), Pr.Eng. (Reg. No. 20150289), MSAIMM.
Julian is a process engineer with eight years of experience in process control and optimisation as well as
project management of platinum and base metals commercial projects. Furthermore, Julian has an R&D
background in process control in the PGM and BM industries. He is currently responsible for leading process
engineering work with his skills directed at the metallurgical discipline in all projects that involve processing
or refining. He is currently working on a wide range of projects in various commodities, including gold, coal,
platinum, manganese and fluorspar, amongst others.
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Appendix 4: Drillhole Collar
BHID Easting Northing Elevation EOH Azimuth Dip
Year Phase Hartebeeshoek94/WG21 m m ° °
RB1 -20728 -3216837 751 210 0 -90 1973 Phase 1
RB10 -20741 -3216927 769 61 0 -90 1973 Phase 1
RB11 -20647 -3217061 754 163 0 -90 1973 Phase 1
RB12 -20715 -3216874 766 285 0 -90 1973 Phase 1
RB13 -20404 -3216802 700 304 0 -90 1973 Phase 1
RB14 -20661 -3217023 761 196 0 -90 1973 Phase 1
RB15 -20577 -3217249 780 136 0 -90 1973 Phase 1
RB16 -20675 -3216983 771 200 0 -90 1973 Phase 1
RB17 -20689 -3216945 778 228 0 -90 1973 Phase 1
RB18 -20742 -3216799 745 278 0 -90 1973 Phase 1
RB19 -20617 -3216795 758 277 0 -90 1973 Phase 1
RB2 -20704 -3216903 772 127 0 -90 1973 Phase 1
RB20 -20756 -3216761 744 263 0 -90 1973 Phase 1
RB21 -20223 -3216948 700 245 0 -90 1973 Phase 1
RB22 -20632 -3216756 758 201 0 -90 1973 Phase 1
RB23 -20542 -3216765 700 155 0 -90 1973 Phase 1
RB24 -20589 -3216871 775 255 0 -90 1973 Phase 1
RB25 -20534 -3216676 756 216 0 -90 1973 Phase 1
RB26 -20435 -3216599 744 231 0 -90 1973 Phase 1
RB27 -20504 -3216753 764 112 0 -90 1973 Phase 1
RB28 -20520 -3216714 761 117 0 -90 1973 Phase 1
RB29 -20547 -3216640 752 211 0 -90 1973 Phase 1
RB3 -20580 -3216780 758 109 0 -90 1973 Phase 1
RB30 -20559 -3216727 762 16 0 -90 1973 Phase 1
RB31 -20495 -3216662 700 31 0 -90 1973 Phase 1
RB32 -20449 -3216563 742 236 0 -90 1973 Phase 1
RB33 -20365 -3216444 748 220 0 -90 1973 Phase 1
RB34 -20463 -3216524 739 335 0 -90 1973 Phase 1
RB35 -20476 -3216485 738 193 0 -90 1973 Phase 1
RB36 -20324 -3216215 739 169 0 -90 1973 Phase 1
RB37 -20393 -3216370 752 358 0 -90 1973 Phase 1
RB38 -20310 -3216253 741 203 0 -90 1973 Phase 1
RB39 -20237 -3216102 700 261 0 -90 1973 Phase 1
RB4 -20474 -3216613 746 350 0 -90 1973 Phase 1
RB40 -20338 -3216176 737 169 0 -90 1973 Phase 1
RB41 -20267 -3216026 700 350 0 -90 1973 Phase 1
RB42 -20353 -3216137 734 190 0 -90 1973 Phase 1
RB43 -20927 -3216992 765 150 0 -90 1973 Phase 1
RB44 -20941 -3216952 760 168 0 -90 1973 Phase 1
RB45 -20856 -3216840 763 163 0 -90 1973 Phase 1
RB46 -20801 -3216988 782 Unknown 0 -90 1973 Phase 1
RB47 -20882 -3216765 754 226 0 -90 1973 Phase 1
RB48 -20828 -3216916 776 170 0 -90 1973 Phase 1
RB49 -20841 -3216878 770 Unknown 0 -90 1973 Phase 1
RB5 -20603 -3216833 766 62 0 -90 1973 Phase 1
RB50 -20770 -3216723 742 Unknown 0 -90 1973 Phase 1
RB51 -20815 -3216950 780 105 0 -90 1973 Phase 1
RB52 -20870 -3217146 774 12 0 -90 1973 Phase 1
RB53 -20759 -3217104 765 54 0 -90 1973 Phase 1
RB54 -20798 -3216649 737 304 0 -90 1973 Phase 1
RB55 -20365 -3216104 731 330 0 -90 1973 Phase 1
RB56 -20394 -3216026 730 324 0 -90 1973 Phase 1
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BHID Easting Northing Elevation EOH Azimuth Dip
Year Phase Hartebeeshoek94/WG21 m m ° °
RB57 -20294 -3216291 741 395 0 -90 1973 Phase 1
RB58 -20604 -3216487 736 370 0 -90 1973 Phase 1
RB59 -20687 -3216605 746 281 0 -90 1973 Phase 1
RB6 -20923 -3217120 700 66 0 -90 1973 Phase 1
RB60 -20504 -3216412 742 321 0 -90 1973 Phase 1
RB61 -20422 -3216978 747 Unknown 0 -90 1984/1985 Phase 2
RB62 -20475 -3216833 766 Unknown 0 -90 1984/1985 Phase 2
RB63 -20491 -3216791 766 Unknown 0 -90 1984/1985 Phase 2
RB64 -20531 -3216337 740 Unknown 0 -90 1984/1985 Phase 2
RB65 -20285 -3216200 700 Unknown 0 -90 1984/1985 Phase 2
RB66 -20253 -3216403 748 Unknown 0 -90 1984/1985 Phase 2
RB67 -20673 -3216299 731 Unknown 0 -90 1984/1985 Phase 2
RB68 -20587 -3216186 731 Unknown 0 -90 1984/1985 Phase 2
RB7 -20643 -3216847 757 69 0 -90 1973 Phase 1
RB8 -20680 -3216860 763 72 0 -90 1973 Phase 1
RB9 -20912 -3217033 771 117 0 -90 1973 Phase 1
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Appendix 5: Checklists: JSE Listings Requirements, SAMREC Compliance, SAMVAL Compliance
JSE SECTION 12.9 LISTING REQUIREMENTS
Section 12.9 JSE Contents Report Section
12.9 A Competent Person's Report must comply with the SAMREC and SAMVAL Codes and must:- -
(a) Have an effective date (being the date at which the contents of the Competent Person's Report are valid) less than six months prior to the date of publication of the pre-listing statement, listing particulars, prospectus or Category 1 circular.
1.1
(b) Be updated prior to publication of the pre-listing statement, listing particulars, prospectus or Category 1 circular if further material data becomes available after the effective date.
-
(c) If the Competent Person is not independent of the issuer, clearly disclose the nature of the relationship or interest. 1.2
(d) Show the particular paragraph of this section, the SAMREC Code (including Table 1) and SAMVAL Code complied with in the margin of Competent Person's Report. Throughout document; 1.1
(e) Contain a paragraph stating that all requirements of this section, the SAMREC Code (including Table 1) and SAMVAL Code have been complied with, or state that certain clauses were not applicable and provide a list of such clauses; and
1.1
Include a statement detailing: -
(i) exploration expenditure incurred to date by the applicant issuer and by other parties, where available; 6.11
(ii) planned exploration expenditure that has been committed, but not yet incurred, by the applicant issuer concerned; and 6.11
(iii) planned exploration expenditure that has not been committed to by the applicant issuer but which is expected to be incurred sometime in the future, in sufficient detail to fairly present future expectations;
6.11
(f) Contain a valuation section which must be completed and signed off by a Competent Valuator in terms of and in compliance with the SAMVAL Code; 8.12
(g) Be published in full on the applicant issuer's website; -
(h) Be included in the relevant JSE document either in full or as an executive summary. The executive summary must be approved by the JSE (after approval by the Readers Panel) at the same time as the Competent Person's Report is approved by the JSE and the Readers Panel. The executive summary should be a concise summary of the Competent Person's Report and must cover, at a minimum, where applicable:
Executive Summary
(i) purpose;
(ii) project outline;
(iii) location map indicating area of interest;
(iv) legal aspects and tenure, including any disputes, risks or impediments;
(v) geological setting description;
(vi) exploration programme and budget;
(vii) brief description of individual Key modifying factors;
(viii) brief description of key environmental issues;
(ix) Mineral Resource and Mineral Reserve Statement;
(x) reference to risk paragraph in the full Competent Person's Report;
(xi) statement by the Competent Person that the summary is a true reflection of the full Competent Person's Report; and
(xii) summary valuation table. Where the cash flow approach has been employed, the valuation summary must include the discount rate(s) applied to calculate the NPV(s) (net present value(s)) per share with reference to the specific paragraph in the Competent Person's Report. If inferred resources are used. Show the summary valuation with and without inclusion of such inferred resources.
JSE 12.4 (c)
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SAMREC 2016 TABLE 1 COMPLIANCE CHECKLIST
SAMREC TABLE 1 Exploration Results Mineral Resources Mineral Reserves Report Section
Section 1: Project Outline
1.1 Property Description
(i) Brief description of the scope of project (i.e. whether in preliminary sampling, advanced exploration, scoping, pre-feasibility, or feasibility phase, Life of Mine plan for an ongoing mining operation or closure).
2.1
(ii) Describe (noting any conditions that may affect possible prospecting/mining activities) topography, elevation, drainage, fauna and flora and vegetation, the means and ease of access to the property, the proximity of the property to a population centre, and the nature of transport, the climate, known associated climatic risks and the length of the operating season and to the extent relevant to the mineral project, the sufficiency of surface rights for mining operations including the availability and sources of power, water, mining personnel, potential tailings storage areas, potential waste disposal areas, heap leach pad areas, and potential processing plant sites.
3
(iii) Specify the details of the personal inspection on the property by each CP or, if applicable, the reason why a personal inspection has not been completed.
1.5
1.2 Location (i) Description of location and map (country, province, and closest town/city, coordinate systems and ranges, etc.). 2.2
(ii) Country Profile: describe information pertaining to the project host country that is pertinent to the project, including relevant applicable legislation, environmental and social context etc. Assess, at a high level, relevant technical, environmental, social, economic, political and other key risks.
2.3
(iii) Provide a general topo-cadastral map. Provide a topo-cadastral map in sufficient detail to support the assessment of eventual economics. State the known associated climatic risks.
Provide a detailed topo-cadastral map. Confirm that applicable aerial surveys have been checked with ground controls and surveys, particularly in areas of rugged terrain, dense vegetation or high altitude.
2.2
1.3 Adjacent Properties
(i) Discuss details of relevant adjacent properties If adjacent or nearby properties have an important bearing on the report, then their location and common mineralised structures should be included on the maps. Reference all information used from other sources.
10.1
1.4 History (i) State historical background to the project and adjacent areas concerned, including known results of previous exploration and mining activities (type, amount, quantity and development work), previous ownership and changes thereto.
4.1, 4.2
(ii) Present details of previous successes or failures with reasons why the project may now be considered potentially economic. 4.1, 4.2
(iii) Discuss known or existing historical Mineral Resource estimates and performance statistics on actual production for past and current operations.
4.3
(iv) Discuss known or existing historical Mineral Reserve estimates and performance statistics on actual production for past and current operations.
4.4
1.5 Legal Aspects and Permitting
Confirm the legal tenure to the satisfaction of the Competent Person, including a description of the following:- -
(i) Discuss the nature of the issuer's rights (e.g. prospecting and/or mining) and the right to use the surface of the properties to which these rights relate. Disclose the date of expiry and other relevant details.
2.4.2, 2.4.3
(ii) Present the principal terms and conditions of all existing agreements, and details of those still to be obtained, (such as, but not limited to, concessions, partnerships, joint ventures, access rights, leases, historical and cultural sites, wilderness or national park and environmental settings, royalties, consents, permission, permits or authorisations).
2.4.4, 2.4.8
(iii) Present the security of the tenure held at the time of reporting or that is reasonably expected to be granted in the future along with any known impediments to obtaining the right to operate in the area. State details of applications that have been made.
2.4.2, 2.4.9
(iv) Provide a statement of any legal proceedings for example; land claims that may have an influence on the rights to prospect or mine for minerals, or an appropriate negative statement.
2.4.8
(v) Provide a statement relating to governmental/statutory requirements and permits as may be required, have been applied for, approved or can be reasonably be expected to be obtained.
2.4.5
1.6 Royalties (i) Describe the royalties that are payable in respect of each property. 2.5
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SAMREC TABLE 1 Exploration Results Mineral Resources Mineral Reserves Report Section
1.7 Liabilities (i) Describe any liabilities, including rehabilitation guarantees that are pertinent to the project. Provide a description of the rehabilitation liability, including, but not limited to, legislative requirements, assumptions and limitations.
2.5
Section 2: Geological Setting, Deposit, Mineralisation
2.1 Geological Setting, Deposit, Mineralisation
(i) Describe the regional geology. 5.1
(ii) Describe the project geology including deposit type, geological setting and style of mineralisation. 5.1.3, 5.2, 5.3
(iii) Discuss the geological model or concepts being applied in the investigation and on the basis of which the exploration program is planned. Describe the inferences made from this model.
5.4
(iv) Discuss data density, distribution and reliability and whether the quality and quantity of information are sufficient to support statements, made or inferred, concerning the Exploration Target or Mineralisation.
5.4
(v) Discuss the significant minerals present in the deposit, their frequency, size and other characteristics. Includes minor and gangue minerals where these will have an effect on the processing steps. Indicate the variability of each important mineral within the deposit.
5.3
(vi) Describe the significant mineralised zones encountered on the property, including a summary of the surrounding rock types, relevant geological controls, and the length, width, depth, and continuity of the mineralisation, together with a description of the type, character, and distribution of the mineralisation.
5.1.3
(vii) Confirm that reliable geological models and / or maps and cross sections that support interpretations exist. 5.4
Section 3: Exploration and Drilling, Sampling Techniques and Data
3.1 Exploration (i) Describe the data acquisition or exploration techniques and the nature, level of detail, and confidence in the geological data used (i.e. geological observations, remote sensing results, stratigraphy, lithology, structure, alteration, mineralisation, hydrology, geophysical, geochemical, petrography, mineralogy, geochronology, bulk density, potential deleterious or contaminating substances, geotechnical and rock characteristics, moisture content, bulk samples etc.). Confirm that data sets include all relevant metadata, such as unique sample number, sample mass, collection date, spatial location etc.
6
(ii) Identify and comment on the primary data elements (observation and measurements) used for the project and describe the management and verification of these data or the database. This should describe the following relevant processes: acquisition (capture or transfer), validation, integration, control, storage, retrieval and backup processes. It is assumed that data are stored digitally but hand-printed tables with well-organized data and information may also constitute a database.
6.8
(iii) Acknowledge and appraise data from other parties and reference all data and information used from other sources. 6
(iv) Clearly distinguish between data / information from the property under discussion and that derived from surrounding properties. 6
(v) Describe the survey methods, techniques and expected accuracies of data. Specify the grid system used. 6
(vi) Discuss whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the estimation procedure(s) and classifications applied.
6
(vii) Present representative models and / or maps and cross sections or other two or three dimensional illustrations of results, showing location of samples, accurate drill-hole collar positions, down-hole surveys, exploration pits, underground workings, relevant geological data, etc.
6
(viii) Report the relationships between mineralisation widths and intercept lengths are particularly important, the geometry of the mineralisation with respect to the drill hole angle. If it is not known and only the down-hole lengths are reported, confirm it with a clear statement to this effect (e.g. 'down-hole length, true width not known').
6.5
3.2 Drilling Techniques
(i) Present the type of drilling undertaken (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Banka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).
6.5.1
(ii) Describe whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, technical studies, mining studies and metallurgical studies.
6.5.2
(iii) Describe whether logging is qualitative or quantitative in nature; indicate if core photography, (or costean, channel, etc.) was undertaken. 6.5.2
(iv) Present the total length and percentage of the relevant intersections logged. 6.6
(v) Results of any downhole surveys of the drill hole to be discussed. 6.5.3
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SAMREC TABLE 1 Exploration Results Mineral Resources Mineral Reserves Report Section
3.3 Sample method, collection, capture and storage
(i) Describe the nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.
6.7.1
(ii) Describe the sampling processes, including sub-sampling stages to maximize representivity of samples. This should include whether sample sizes are appropriate to the grain size of the material being sampled. Indicate whether sample compositing has been applied.
6.7.1
(iii) Appropriately describe each data set (e.g. geology, grade, density, quality, diamond breakage, geo-metallurgical characteristics etc.), sample type, sample-size selection and collection methods
6.7.1
(iv) Report the geometry of the mineralisation with respect to the drill-hole angle. State whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. State if the intersection angle is not known and only the downhole lengths are reported.
6.7.1
(v) Describe retention policy and storage of physical samples (e.g. core, sample reject, etc.). 6.7.1
(vi) Describe the method of recording and assessing core and chip sample recoveries and results assessed, measures taken to maximise sample recovery and ensure representative nature of the samples and whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.
6.7.1
(vii) If a drill-core sample is taken, state whether it was split or sawn and whether quarter, half or full core was submitted for analysis. If a non-core sample, state whether the sample was riffled, tube sampled, rotary split etc. and whether it was sampled wet or dry.
6.7.1
3.4 Sample Preparation and Analysis
(i) Identify the laboratory(s) and state the accreditation status and Registration Number of the laboratory or provide a statement that the laboratories are not accredited.
6.7.2.1
(ii) Identify the analytical method. Discuss the nature, quality and appropriateness of the assaying and laboratory processes and procedures used and whether the technique is considered partial or total.
6.7.22
(iii) Describe the process and method used for sample preparation, sub-sampling and size reduction, and likelihood of inadequate or non-representative samples (i.e. improper size reduction, contamination, screen sizes, granulometry, mass balance, etc.).
6.7.2.2
3.5 Sampling Governance
(i) Discuss the governance of the sampling campaign and process, to ensure quality and representivity of samples and data, such as sample recovery, high grading, selective losses or contamination, core/hole diameter, internal and external QA/QC, and any other factors that may have resulted in or identified sample bias.
6.7.3.1
(ii) Describe the measures taken to ensure sample security and the Chain of Custody. 6.7.3.2
(iii) Describe the validation procedures used to ensure the integrity of the data, e.g. transcription, input or other errors, between its initial collection and its future use for modelling (e.g. geology, grade, density, etc.).
6.7.3.3
(iv) Describe the audit process and frequency (including dates of these audits) and disclose any material risks identified. 6.7.3.4
3.6 Quality Control/Quality Assurance
(i) Demonstrate that adequate field sampling process verification techniques (QAQC) have been applied, e.g. the level of duplicates, blanks, reference material standards, process audits, analysis, etc. If indirect methods of measurement were used (e.g. geophysical methods), these should be described, with attention given to the confidence of interpretation.
6.7.4
3.7 Bulk Density (i) Describe the method of bulk density determination with reference to the frequency of measurements, the size, nature and representativeness of the samples.
6.7.5.1
(ii) If target tonnage ranges are reported state the preliminary estimates or basis of assumptions made for bulk density. 6.7.5.1
(iii) Discuss the representivity of bulk density samples of the material for which a grade range is reported. 6.7.5.2
(iv) Discuss the adequacy of the methods of bulk density determination for bulk material with special reference to accounting for void spaces (vugs, porosity etc.), moisture and differences between rock and alteration zones within the deposit.
6.7.5.3
3.8 Bulk-Sampling and/or trial-mining
(i) Indicate the location of individual samples (including map). 6.7.6
(ii) Describe the size of samples, spacing/density of samples recovered and whether sample sizes and distribution are appropriate to the grain size of the material being sampled.
6.7.6
(iii) Describe the method of mining and treatment. 6.7.6
(iv) Indicate the degree to which the samples are representative of the various types and styles of mineralisation and the mineral deposit as a whole. 6.7.6
Section 4: Estimation and Reporting of Exploration Results and Mineral Resources
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SAMREC TABLE 1 Exploration Results Mineral Resources Mineral Reserves Report Section
4.1 Geological model and interpretation
(i) Describe the geological model, construction technique and assumptions that forms the basis for the Exploration Results or Mineral Resource estimate. Discuss the sufficiency of data density to assure continuity of mineralisation and geology and provide an adequate basis for the estimation and classification procedures applied.
5.4
(ii) Describe the nature, detail and reliability of geological information with which lithological, structural, mineralogical, alteration or other geological, geotechnical and geo-metallurgical characteristics were recorded.
5.4
(iii) Describe any obvious geological, mining, metallurgical, environmental, social, infrastructural, legal and economic factors that could have a significant effect on the prospects of any possible Exploration Target or deposit.
5.4
(iv) Discuss all known geological data that could materially influence the estimated quantity and quality of the Mineral Resource.
6
(v) Discuss whether consideration was given to alternative interpretations or models and their possible effect (or potential risk) if any, on the Mineral Resource estimate.
5.4
(vi) Discuss geological discounts (e.g. magnitude, per reef, domain, etc.), applied in the model, whether applied to mineralised and / or un-mineralised material (e.g. potholes, faults, dykes, etc.).
5.4
4.2 Estimation and modelling techniques
(i) Describe in detail the estimation techniques and assumptions used to determine the grade and tonnage ranges.
7.1
(ii) Discuss the nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values (cutting or capping), compositing (including by length and/or density), domaining, sample spacing, estimation unit size (block size), selective mining units, interpolation parameters and maximum distance of extrapolation from data points.
7.1
(iii) Describe assumptions and justification of correlations made between variables. 7.1
(iv) Provide details of any relevant specialized computer program (software) used, with the version number, together with the estimation parameters used.
7.1
(v) State the processes of checking and validation, the comparison of model information to sample data and use of reconciliation data, and whether the Mineral Resource estimate takes account of such information.
7.1
(vi) Describe the assumptions made regarding the estimation of any co-products, by-products or deleterious elements.
7.4
4.3 Reasonable and realistic prospects for eventual economic extraction
(i) Disclose and discuss the geological parameters. These would include (but not be limited to) volume / tonnage, grade and value / quality estimates, cut-off grades, strip ratios, upper- and lower- screen sizes.
7.3
(ii) Disclose and discuss the engineering parameters. These would include mining method, dilution, processing, geotechnical, geohydraulic and metallurgical) parameters.
7.3
(iii) Disclose and discuss the infrastructural including, but not limited to, power, water, site-access. 7.3
(iv) Disclose and discuss the legal, governmental, permitting, statutory parameters. 7.3
(v) Disclose and discuss the environmental and social (or community) parameters. 7.3
(vi) Disclose and discuss the marketing parameters. 7.3
(vii) Disclose and discuss the economic assumptions and parameters. These factors will include, but not limited to, commodity prices and potential capital and operating costs.
7.3
(viii) Discuss any material risks. 7.3
(ix) Discuss the parameters used to support the concept of "eventual". 7.3
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4.4 Classification Criteria
(i) Describe and justify criteria and methods used as the basis for the classification of the Mineral Resources into varying confidence categories.
7.2
4.5 Reporting (i) Discuss the reported low and high-grades and widths together with their spatial location to avoid misleading the reporting of Exploration Results, Mineral Resources or Mineral Reserves.
7.1
(ii) Discuss whether the reported grades are regional averages or if they are selected individual samples taken from the property under discussion. 7.5
(iii) State assumptions regarding mining methods, infrastructure, metallurgy, environmental and social parameters. State and discuss where no mining related assumptions have been made.
7.5
(iv) State the specific quantities and grades / qualities which are being reported in ranges and/or widths, and explain the basis of the reporting.
7.5
(v) Present the detail for example open pit, underground, residue stockpile, remnants, tailings, and existing pillars or other sources in the Mineral Resource statement.
7.5
(vi) Present a reconciliation with any previous Mineral Resource estimates. Where appropriate, report and comment on any historic trends (e.g. global bias).
7.6
(vii) Present the defined reference point for the tonnages and grades reported as Mineral Resources. State the reference point if the point is where the run of mine material is delivered to the processing plant. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.
7.5
(viii) If the CP is relying on a report, opinion, or statement of another expert who is not a CP, disclose the date, title, and author of the report, opinion, or statement, the qualifications of the other expert and why it is reasonable for the CP to rely on the other expert, any significant risks and any steps the CP took to verify the information provided.
1.6
(ix) State the basis of equivalent metal formulae, if applied. -
Section 5: Technical Studies
5.1 Introduction (i)
Technical Studies are not applicable to Exploration Results.
State the level of study - whether scoping, prefeasibility, feasibility or ongoing Life of Mine.
State the level of study - whether prefeasibility, feasibility or ongoing Life of Mine. The Code requires that a study to at least a Pre-Feasibility level has been undertaken to convert Mineral Resource to Mineral Reserve. Such studies will have been carried out and will include a mine plan or production schedule that is technically achievable and economically viable, and that all Modifying Factors have been considered.
8.1.1
(ii) Provide a summary table of the Modifying Factors used to convert the Mineral Resource to Mineral Reserve for Prefeasibility, Feasibility or on-going life-of-mine studies.
8.1.2
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5.2 Mining Design (i)
Technical Studies are not applicable to Exploration Results.
State assumptions regarding mining methods and parameters when estimating Mineral Resources or explain where no mining assumptions have been made.
7.4
(ii) State and justify all modifying factors and assumptions made regarding mining methods, minimum mining dimensions (or pit shell) and internal and, if applicable, external) mining dilution and mining losses used for the techno-economic study and signed-off, such as mining method, mine design criteria, infrastructure, capacities, production schedule, mining efficiencies, grade control, geotechnical and hydrological considerations, closure plans, and personnel requirements.
8.1.2
(iii) State what mineral resource models have been used in the study.
8.3
(iv) Explain the basis of (the adopted) cut-off grade(s) or quality parameters applied. Include metal equivalents if relevant.
8.3
(v) Description and justification of mining method(s) to be used.
8.3
(vi) For open-pit mines, include a discussion of pit slopes, slope stability, and strip ratio.
8.3
(vii) For underground mines, discussion of mining method, geotechnical considerations, mine design characteristics, and ventilation/cooling requirements.
8.3
(viii) Discussion of mining rate, equipment selected, grade control methods, geotechnical and hydrogeological considerations, health and safety of the workforce, staffing requirements, dilution, and recovery.
8.3
(ix) State the optimisation methods used in planning, list of constraints (practicality, plant, access, exposed Mineral Reserves, stripped Mineral Reserves, bottlenecks, draw control).
8.3
5.3 Metallurgical and Testwork
(i)
Technical Studies are not applicable to Exploration Results.
Discuss the source of the sample and the techniques to obtain the sample, laboratory and metallurgical testing techniques.
N/A
(ii) Explain the basis for assumptions or predictions regarding metallurgical amenability and any preliminary mineralogical test work already carried out.
N/A
(iii) Discuss the possible processing methods and any processing factors that could have a material effect on the likelihood of eventual
Describe and justify the processing method(s) to be used, equipment, plant capacity, efficiencies, and personnel requirements.
8.4
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economic extraction. Discuss the appropriateness of the processing methods to the style of mineralisation.
(iv) Discuss the nature, amount and representativeness of metallurgical test work undertaken and the recovery factors used. A detailed flow sheet / diagram and a mass balance should exist especially for multi-product operations from which the saleable materials are priced for different chemical and physical characteristics.
N/A
(v) State what assumptions or allowances have been made for deleterious elements and the existence of any bulk-sample or pilot-scale test work and the degree to which such samples are representative of the orebody as a whole.
N/A
(vi) State whether the metallurgical process is well-tested technology or novel in nature.
8.4
5.4 Infrastructure (i)
Technical Studies are not applicable to Exploration Results.
Comment regarding the current state of infrastructure or the ease with which the infrastructure can be provided or accessed.
3.3
(ii) Report in sufficient detail to demonstrate that the necessary facilities have been allowed for (which may include, but not be limited to, processing plant, tailings dam, leaching facilities, waste dumps, road, rail or port facilities, water and power supply, offices, housing, security, resource sterilisation testing etc.). Provide detailed maps showing locations of facilities.
3.5
(iii) Statement showing that all necessary logistics have been considered.
3.5
5.5 Environmental and Social
(i)
Technical Studies are not applicable to Exploration Results.
Confirm that the company holding the tenement has addressed the host country environmental legal compliance requirements and any mandatory and/or voluntary standards or guidelines to which it subscribes.
2.4.4, 8.6
(ii) Identify the necessary permits that will be required and their status and where not yet obtained, confirm that there is a reasonable basis to believe that all permits required for the project will be obtained.
2.4.4
(iii) Identify and discuss any sensitive areas that may affect the project as well as any other environmental factors including l&AP and/or studies that could have a material effect on the likelihood of eventual economic extraction. Discuss possible means of mitigation.
8.6
(iv) Identify any legislated social management programmes that may be required and discuss the content and status of these.
8.9
(v) Outline and quantify the material socio-economic and cultural impacts that need to be mitigated, and their mitigation measures and where appropriate the associated costs.
8.9
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5.6 Market Studies and Economic criteria
(i)
Technical Studies are not applicable to Exploration Results.
Describe the valuable and potentially valuable product(s) including suitability of products, co-products and by products to market.
8.5.1
(ii) Describe product to be sold, customer specifications, testing, and acceptance requirements. Discuss whether there exists a ready market for the product and whether contracts for the sale of the product are in place or expected to be readily obtained. Present price and volume forecasts and the basis for the forecast.
8.5.1
(iii) State and describe all economic criteria that have been used for the study such as capital and operating costs, exchange rates, revenue / price curves, royalties, cut-off grades, reserve pay limits.
8.12
(iv) Summary description, source and confidence of method used to estimate the commodity price/value profiles used for cut-off grade calculation, economic analysis and project valuation, including applicable taxes, inflation indices, discount rate and exchange rates.
N/A
(v) Present the details of the point of reference for the tonnages and grades reported as Mineral Reserves (e.g. material delivered to the processing facility or saleable product(s)). It is important that, in any situation where the reference point is different, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.
9.1
(vi) Justify assumptions made concerning production cost including transportation, treatment, penalties, exchange rates, marketing and other costs. Provide details of allowances that are made for the content of deleterious elements and the cost of penalties.
N/A
(vii) Provide details of allowances made for royalties payable, both to Government and private.
N/A
(viii) State type, extent and condition of plant and equipment that is significant to the existing operation(s).
N/A
(ix) Provide details of all environmental, social and labour costs considered.
N/A
5.7 Risk Analysis (i) Technical Studies are not applicable to Exploration Results.
Report an assessment of technical, environmental, social, economic, political and other key risks to the project. Describe actions that will be taken to mitigate and/or manage the identified risks.
10.4
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5.8 Economic Analysis
(i)
Technical Studies are not applicable to Exploration Results
At the relevant level (Scoping Study, Pre-feasibility, Feasibility or on-going Life-of Mine), provide an economic analysis for the project that includes:-
8.12
(ii) Cash Flow forecast on an annual basis using Mineral Reserves or an annual production schedule for the life of the project.
8.12
(iii) A discussion of net present value (NPV), internal rate of return (IRR) and payback period of capital.
8.12
(iv) Sensitivity or other analysis using variants in commodity price, grade, capital and operating costs, or other significant parameters, as appropriate and discuss the impact of the results.
8.12
Section 6: Estimation and Reporting of Mineral Reserves
6.1 Estimation and modelling techniques
(i) Describe the Mineral Resource estimate used as a basis for the conversion to a Mineral Reserve. 9.1
(ii) Report the Mineral Reserve Statement with sufficient detail indicating if the mining is open pit or underground plus the source and type of mineralisation, domain or ore body, surface dumps, stockpiles and all other sources.
9.1
(iii) Provide a reconciliation reporting historic reliability of the performance parameters, assumptions and modifying factors including a comparison with the previous Reserve quantity and qualities, if available. Where appropriate, report and comment on any historic trends (e.g. global bias).
9.1
6.2 Classification Criteria
(i) Describe and justify criteria and methods used as the basis for the classification of the Mineral Reserves into varying confidence categories, based on the Mineral Resource category, and including consideration of the confidence in all the modifying factors.
N/A
6.3 Reporting (i) Discuss the proportion of Probable Mineral Reserves, which have been derived from Measured Mineral Resources (if any), including the reason(s) therefore.
N/A
(ii) Present details of for example open pit, underground, residue stockpile, remnants, tailings, and existing pillars or other sources in respect of the Mineral Reserve statement.
N/A
(iii) Present the details of the defined reference point for the Mineral Reserves. State where the reference point is the point where the run of mine material is delivered to the processing plant. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. State clearly whether the tonnages and grades reported for Mineral Reserves are in respect of material delivered to the plant or after recovery.
N/A
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(iv) Present a reconciliation with the previous Mineral Reserve estimates. Where appropriate, report and comment on any historic trends (e.g. global bias).
N/A
(v) Only Measured and Indicated Mineral Resources can be considered for inclusion in the Mineral Reserve.
N/A
(vi) State whether the Mineral Resources are inclusive or exclusive of Mineral Reserves.
N/A
Section 7: Audits and Reviews
7.1 Audits and Reviews
(i) State type of review/audit (e.g. independent, external), area (e.g. laboratory, drilling, data, environmental compliance etc), date and name of the reviewer(s) together with their recognized professional qualifications.
10.3
(ii) Disclose the conclusions of relevant audits or reviews. Note where significant deficiencies and remedial actions are required. 10.3
Section 8: Other Relevant Information
8.1 (i) Discuss all other relevant and material information not discussed elsewhere. 10
Section 9: Qualification of Competent Person(s) and other key technical staff. Date and Signature Page
9.1 (i) State the full name, registration number and name of the professional body or RPO, for all the Competent Person(s). State the relevant experience of the Competent Person(s) and other key technical staff who prepared and are responsible for the Public Report.
Appendix 3
(ii) State the Competent Person's relationship to the issuer of the report. Appendix 3
(iii) Provide the Certificate of the Competent Person (Appendix 2), including the date of sign-off and the effective date, in the Public Report. Appendix 3
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SAMVAL 2016 TABLE 1 COMPLIANCE CHECKLIST
Criteria Comments Report Section
T1.0 General The Valuation Report shall contain: The signature of the CV; The CV's qualifications and experience in valuing mineral properties, or relevant valuation experience; A statement that all facts presented in the report are correct to the best of the CVs knowledge; A statement that the analyses and conclusions are limited only by the reported forecasts and conditions; A statement of the CV's present or prospective interest in the subject property or asset; A statement that the CV's compensation, employment, or contractual relationship with the Commissioning Entity is not contingent on any aspect of the Report; A statement that the CV has no bias with respect to the assets that are the subject of the Report, or to the parties involved with the assignment; A statement that the CV has (or has not) made a personal inspection of the property; and A record of the CP's and experts who have contributed to the valuation. Written consent to use and rely on such Reports shall be obtained. Significant contributions made by such experts shall be highlighted individually.
8.12.9
T1.1 Illustrations There are numerous instances (especially in the non-listed environment) when a valuation is not accompanied by the CPR on which it is based. In these cases, especially, diagrams/illustrations are required and shall be in the required format. Diagrams, maps, plans, sections, and illustrations shall be legible and prepared at an appropriate scale to distinguish important features. Maps shall be dated and include a legend, author or information source, coordinate system and datum, a scale in bar or grid form, and an arrow indicating north. A location or index map and more detailed maps showing all important features described in the text, including all relevant cadastral and other infrastructure features, shall be included.
(Throughout document)
T1.2 Synopsis Provide the salient features of the report - a brief description of the terms of reference, scope of work, the Valuation Date, the mineral property; its location, ownership, geology, and mineralization; history of exploration and production, current status, Exploration Targets, mineralization and/or production forecast, Mineral Resources and Mineral Reserves, production facilities (if any); environmental, social, legal, and permitting considerations; valuation approaches and methods, valuation, and conclusions.
1-7, 8.12.1
T1.3 Introduction and Scope
Introduction and scope, specifying commissioning instructions including reference to the valuation, engagement letter, date, purpose and intended use of the valuation. The CV shall fully disclose any interests in the Mineral Asset or Commissioning Entity. Any restrictions on scope and special instructions followed by the C V, and how these affect the reliability of the valuation, shall be disclosed.
1.1, 8.12.1
T1.4 Compliance A statement that the report complies with SAMVAL shall be included. Any variations shall be described and discussed. 1.1
T1.5 Identity, Tenure and Infrastructure
The identity, tenure, associated infrastructure and locations of the property interests, rights or securities to be valued {i.e. the physical, legal, and economic characteristics of the property) shall be disclosed. 2
T1.6 History History of activities, results, and operations to date shall be included. 4
T1.7 Geological Setting
Geological setting, models, and mineralization shall be described. 5
T1.8 Exploration Results and Exploration Targets
Exploration programmes, their location, results, interpretation, and significance shall be described. Exploration Targets shall be discussed. 6
T1.9 Mineral Resources and Mineral Reserves
Mineral Resource and Mineral Reserve statements shall be provided. They shall be signed off by a Competent Person in compliance with the SAMREC Code or another CRIRSCO code. The CV shall set out the manner in which he has satisfied himself that he can rely upon the information in the CPR.
7.5, 9
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Criteria Comments Report Section
T1.10 Modifying Factors and Key Assumptions
A statement of Modifying Factors shall be included, separately summarizing material issues relating to each applicable Modifying Factor. The CV shall set out the manner in which he has satisfied himself that he can rely upon the technical information provided. (NOTE: All the Modifying Factors shall be listed, or references provided to relevant definitions). This shall include an explanation of all material assumptions and limiting factors. When reporting on environmental, social and governance modifying factors, reference should be made to the ESG reporting parameters as required by the Southern African Minerals Environmental. Social and Governance Guideline (SAMESG) or other recognised code, e.g. Equator Principles.
8.12.5.1.4
T1.11 Previous Valuations
The valuation shall refer to all available and relevant previous valuations of the Mineral Asset that have been performed in at least the previous two years, and explain any material differences between these and the present valuation. 8.12.2
T1.12 Valuation Approaches and Methods
The valuation approaches and methods used in the valuation shall be described and justified in full. 8.12.3
T1.13 Valuation Date
A statement detailing the Report Date and the Valuation Date, as defined in this Code, and whether any material changes have occurred between the Valuation Date and the Report Date. 8.12.4
T1.14 Valuation Results
For the Income Approach, the valuation cash flow shall be disclosed. For the Market Approach, the market comparable information shall be disclosed. For the Cost Approach, the relevant and applicable cost shall be disclosed. 8.12.5
T1.15 Valuation Summary and Conclusions
A summary of the valuation details, consolidated into single material line items, shall be provided. The Mineral Asset Valuation shall specify the key risks and forecasts used in the valuation. A cautionary statement concerning all forward-looking or forecast statements shall be included. The valuation's conclusions, illustrating a range of values, the best estimate value for each valuation, and whether the conclusions are qualified or subject to any restrictions imposed on the CV, shall be included.
8.12.5
T1.16 Identifiable Component Asset (ICA) Values
In some valuations, the valuation shall be broken down into Identifiable Component Asset Values (an ICA valuation) equalling the Mineral Asset Value. This could be. for example, due to the requirements of other valuation rules and legislative practices including taxation (i.e. fixed property, plant, and equipment relative to Mineral Asset Value allocations such as in recoupment or capital gains tax calculations or where a commissioned Mineral Asset Valuation specifies a need for a breakdown of the Mineral Asset Valuation). In such cases, the separate allocations of value shall be made by taking account of the value of every separately identifiable component asset Allocation of value to only some, and not all identifiable component assets is not allowed. This requires a specialist appraisal of each identifiable component asset of property, plant and equipment, with the 'remaining' value of the Mineral Asset being attributed to the Mineral Resources and Reserves. Such valuations shall be performed by suitably qualified experts, who may include the CV. If the Mineral Asset Valuation includes an ICA Valuation, the CV shall satisfy himself or herself that the ICA Valuation is reasonable before signing off the Mineral Asset Valuation.
8.12.9
T1.17 Historic Verification
A historic verification of the performance parameters on which the Mineral Asset Valuation is based shall be presented. 8.12.10
T1.18 Market Assessment
A comprehensive market assessment should be presented. 8.5, 8.12.11
T1.19 Sources of Information
The sources of all material information and data used in the report shall be disclosed, as well as references to any published or unpublished technical papers used in the valuation, subject to confidentiality. A reference shall be made to any other report that has been compiled, for the purpose of providing information for the valuation, including SAMREC-compliant reports and any other contributions or reports from experts.
8.12.6