An Independent Mineral Asset Valuation Report on the ... · Mineral Resources and Mineral Reserves...

An Independent Mineral Asset Valuation Report on the

Doornbosch Platinum Project and Kameelhoek Iron Ore Project,

South Africa

Effective Date: 26 March 2010 Minxcon Reference: M10-21

Competent Valuator:

NJ Odendaal (Director Minxcon): B.Sc. (Geol.), B.Sc. (Min. Econ.), M.Sc. (Min. Eng.), Pr. Sci. Nat., FSAIMM, MGSSA, MAusIMM.

Competent Person:

CJ Muller (Director Minxcon): B.Sc. (Hons) (Geol.), Pr. Sci. Nat.

Suite 5, Coldstream Office Park

Cnr Hendrik Potgieter & Van Staden Streets

Little Falls, Roodepoort, South Africa

Tel: +27 11 958 2899 │ Fax: +27 958 2105

www.minxcon.co.za

Directors: NJ Odendaal, D Van Heerden, C Muller Registration No. 2004/029587/07

12.9 a T1.1 i, ii

Mineral Asset Valuation Report on the Doornbosch and Kameelhoek Projects

Prepared by Minxcon (Pty) Ltd

i

DISCLAIMER AND RISKS This Report was prepared by Minxcon (Pty) Ltd (“Minxcon”). In the preparation of the report, Minxcon has 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. Minxcon and its directors accept no liability for any losses arising from reliance upon the information presented in this Report.

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.



ii

Mineral Asset Valuation Report on the Doornbosch Platinum Project and Kameelhoek Iron Ore Project,

South Africa

TABLE OF CONTENTS

1 Executive Summary .................................................................................................... 1

2 Introduction and Scope ............................................................................................... 5

2.1 Scope of the Report ............................................................................................... 5

2.2 Competent Persons’ Declaration ................................................................................ 6

3 Identity of Tenure ...................................................................................................... 6

3.1 Project Description and Location ............................................................................... 6

3.1.1 Access and Infrastructure ............................................................................... 7

3.1.2 Topography and Climate .............................................................................. 10

3.1.3 Adjacent Properties ................................................................................... 10

3.2 Prospecting Rights ............................................................................................... 10

3.3 Surface Rights .................................................................................................... 11

3.4 Property Boundaries and Survey Certificates................................................................ 11

3.5 Environmental Aspects .......................................................................................... 12

3.6 Agreements ....................................................................................................... 12

3.7 Summary of Legal Aspects and Tenure ....................................................................... 12

4 History and Future Exploration ..................................................................................... 13

4.1 Current Exploration ............................................................................................. 13

4.2 Further Work ..................................................................................................... 13

5 Geological Setting ..................................................................................................... 15

5.1 Regional Geology ................................................................................................ 15

5.2 Local Geology .................................................................................................... 20

5.3 Project Geology .................................................................................................. 20

6 Mineral Resources ..................................................................................................... 25

7 Modifying Factors ...................................................................................................... 31

8 Valuation Approaches ................................................................................................ 31

8.1 Market Approach ................................................................................................. 31

8.1.1 Value per Ounce - Doornbosch Project ............................................................. 31

8.1.1.1 Price Adjustment .............................................................................................. 32

8.1.1.2 Project Specific Valuation Parameters .................................................................... 32

8.1.2 Market Approach - Kameelhoek Project ............................................................ 33

8.2 Cost Approach .................................................................................................... 33

T1.1 i



iii

9 Valuation Date ......................................................................................................... 33

10 Valuation Summary and Conclusions .............................................................................. 34

10.1 Principal Project Risk ........................................................................................... 34

10.1.1 Doornbosch Project .................................................................................... 34

10.1.2 Kameelhoek Project ................................................................................... 34

10.2 Valuations of the farms Doornbosch and Kameelhoek ..................................................... 35

10.2.1 Doornbosch .............................................................................................. 35

10.2.2 Kameelhoek ............................................................................................. 36

11 Sources of Information ............................................................................................... 36

12 Previous Valuation .................................................................................................... 36

13 Competent Persons and Other Experts ........................................................................... 37

14 Competent Valuator and Competent Person..................................................................... 38

15 Range of Values ........................................................................................................ 40

15.1 Doornbosch ....................................................................................................... 40

15.2 Kameelhoek ....................................................................................................... 41

16 Identifiable Component Asset values .............................................................................. 42

17 Historic Verification .................................................................................................. 42

18 Market Assessment .................................................................................................... 43

Commodity Market Assessment ...................................................................................... 43

18.1 Platinum ........................................................................................................... 43

Outlook ...................................................................................................................... 44

Palladium ......................................................................................................... 44

Outlook ...................................................................................................................... 45

Rhodium ........................................................................................................... 45

18.2 Iron Ore ............................................................................................................ 47

18.2.1 Supply .................................................................................................... 47

18.2.2 Demand .................................................................................................. 49

18.2.3 Iron Ore Prices .......................................................................................... 50

18.2.4 Prices .................................................................................................... 50

19 Audits and Reviews ................................................................................................... 51

20 Glossary of Terms ..................................................................................................... 52



iv

FIGURES Figure 1: Corporate Structure of Randgold .............................................................................. 5

Figure 2: General Location of the Doornbosch and Kameelhoek Project Areas in South Africa ................ 7

Figure 3: Topo-Cadastral Map of the Doornbosch and Kameelhoek Project Areas ................................ 8

Figure 4: Aerial Photograph of the Doornbosch Farm ................................................................. 9

Figure 5: Location of Doornbosch Project Area in Relation to the Bushveld Igneous Complex ................ 17

Figure 6: Section through Sishen South Pit neighbouring the Kameelhoek Project .............................. 19

Figure 7: General Geology of the Doornbosch Project ............................................................... 21

Figure 9: General Geological Cross Section of the Doornbosch Project ........................................... 22

Figure 10: Grade Profile for the UG2 DBH1 Intersection on Doornbosch Property ............................... 23

Figure 11: General Geology of the Kameelhoek Project Area....................................................... 24

Figure 12: Structures of the Kameelhoek Project Area .............................................................. 24

Figure 13: Doornbosch UG2 Mineral Resource Area ................................................................... 25

Figure 14: Modikwa Mineral Resources Classification and Drill Hole Locality Plan .............................. 30

Figure 15: Value Range for the Doornbosch Project .................................................................. 41

Figure 16: Value Range for the Kameelhoek Project ................................................................. 42

Figure 17: Platinum Supply and Demand ............................................................................... 43

Figure 18: Platinum Monthly Prices 2000-Jan 2010 ................................................................... 44

Figure 19: Platinum Consensus Forecasts .............................................................................. 44

Figure 20: Palladium Supply and Demand .............................................................................. 45

Figure 21: Palladium Monthly Prices 2000-Jan 2010 .................................................................. 45

Figure 22: Palladium Consensus Forecasts ............................................................................. 45

Figure 23: Rhodium Supply and Demand ............................................................................... 46

Figure 24: Rhodium Monthly Prices 2000-Jan 2010 ................................................................... 47

Figure 25: Geographical Spread of Iron Ore Production - 2009 ..................................................... 48

Figure 26: Market Share by Company ................................................................................... 49

Figure 27: Iron Ore, 67.55% Iron Content, Fine, Contract Price to Europe, FOB Ponta da Madeira ........... 51

Figure 28: Industry Consensus Forecasts ............................................................................... 51



v

TABLES Table 1: Prospecting Rights Pertaining to the Doornbosch and Kameelhoek Projects .......................... 11

Table 2: Surface Rights for Doornbosch 294 ........................................................................... 11

Table 3: Surface Rights for Kameelhoek 477........................................................................... 11

Table 4: Summary of the SG values for Doornbosch DBH1 Intersection ........................................... 27

Table 5: Mining Width Indicated Mineral Resource Estimate for Doornbosch .................................... 28

Table 6: Mining Width Inferred Mineral Resource Estimate for Doornbosch ...................................... 29

Table 7: Acceptable Methods of Mineral Project Valuation ......................................................... 31

Table 8: Economic Parameters used in the Comparative Analysis ................................................. 32

Table 9: Valuation Risk Associated Parameter Matrix – Platinum Industry Standards ........................... 33

Table 10: Principal Risk – Doornbosch Project ......................................................................... 34

Table 11: Principal Risk – Kameelhoek Project ........................................................................ 34

Table 12: Doornbosch Project Valuation Modifying Indices (Also refer to Table 9) ............................. 35

Table 13: Doornbosch Project Value .................................................................................... 36

Table 14: Doornbosch Mineral Asset Valuation based on Comparative Analysis .................................. 40

Table 15: Kameelhoek Mineral Assets Valuation based on Comparative Analysis ................................ 41

Table 16: World Mine Production ........................................................................................ 48

APPENDICES Appendix 1: Minxcon JSE Listing Requirements and SAMREC Code Audit Checklists ............................ 61



1

11 EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

Minxcon (Pty) Ltd (“Minxcon”) was commissioned by Rand Gold and Exploration Company Limited (“Randgold”) to provide an Independent Mineral Asset Valuation Report on the mineral assets of the Doornbosch Platinum Project, located north of the town of Steelpoort, Mpumalanga Province, and Kameelhoek Iron Ore Project, located south of the town of Postmasburg, Northern Cape Province, South Africa. The Report is fully compliant with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (“the SAMREC Code”), the South African Code for the Reporting of Mineral Asset Valuation (“the SAMVAL Code”) and Section 12 of the JSE listing requirements, with the exception of sections pertaining to developed operations as this Project is still in the exploration phase. The Competent Person of the Valuation Report deems this summary to be a true reflection of the content of the full Report. The Doornbosch Project comprises an area of 3,629 ha of the farm Doornbosch 294 KT and lies adjacent to Anglo Platinum’s Modikwa Mine. The Kameelhoek Prospecting Area comprises the Remainder of farm Kameelhoek 477, with mineral rights extending for around 974 ha and neighbouring Kumba’s Sishen South Mine. The Doornbosch Area is located within the Bushveld Igneous Complex, the main target horizon being the UG2. The Kameelhoek Project comprises a Superior-type banded iron formation of the Transvaal Supergroup. The Kameelhoek Project is regarded as an exploration target and no Mineral Resources have been delineated across this interest. A Mineral Resource evaluation by Geo-Consult International (Pty) Ltd (“Geo-Consult”) placed the asset in an Indicated category. However, based on the available data Minxcon is satisified that the Doornbosch Mineral Resource represents an Inferred Mineral Resource.

MINXCON DOORNBOSCH UG2 INFERRED MINERAL RESOURCE STATEMENT UG2

Inferred Mineral

Resource Estimate for Doornbosch

Total Area

on Dip (m2)

Ave Stoping Width (m)

Calculated Volume

(m3)

Ave UG2

Density (t/m3)

Tonnage (Mt)

Tonnage After

Geological Loss (20%) (Mt)

Ave UG2

Grade (4E) (g/t)

Content 4E

(Grams)

Content 4E

(Moz)

Unoxidised Zone 212,862 1.02 217,119 3.66 0.795 0.636 4.67 2,970,120 0.095 Total 212,862 1.02 217,119 3.66 0.795 0.636 4.67 2,970,120 0.095

• Effective Date 26 March 2010;

• No cut off grades were used;

• The tonnages and grades are quoted as mining width tonnes;

• Regolith Zone (Oxidised Zone) excluded from Resource tabulation – no data to attest to grade and specific gravity of this zone; the estimated cubic metres for this zone is 84,500 m3; and

• Mineral Resources are inclusive of Mineral Reserves.

T1.2 i SV T1.1 12.9 h i 12.9 h xi 12.9 h iii 12.9 h ii 12.9 h v 12.9 ix 12.9 iv



2

Randgold (or subsidiaries of Randgold) currently hold Prospecting Rights for the Doornbosch and Kameelhoek Project Areas. A legal review report by the Company’s attorneys (Esme Ferreira Attorneys) has highlighted key risks with regards to these Rights. Minxcon have reviewed the risks and are satisfied that security of legal tenure for the Projects is of an acceptable level. As per the December 2009 Amended Prospecting Work Programme (“PWP”), a feasibility study is to be conducted by a firm appointed by Randgold to evaluate the potential of development of Doornbosch into a stand-alone operation versus incorporating it into the adjacent Modikwa operation. Future exploration at the Project is thus to a degree dependent on extending negotiations with Anglo Platinum. Financial modelling will be carried out. Trenching, bulk sampling and metallurgical testwork may be conducted if deemed necessary by the outcome of the modelling. A dual phase programme has been set out by Randgold. Total expenditure for future exploration for Doornbosch has been estimated at ZAR 2.2 million. Minxcon recommends the drilling of additional boreholes to increase the confidence in the Mineral Resource category to Indicated. A chrome mine is active on the same farm as on which the Doornbosch Project lies. The environmental impact of any operations regarding platinum prospecting or extraction will thus be intimately linked with any rehabilitation programmes set forth by the chrome operation. Exploration as per a 2006 PWP for Kameelhoek is well into Phase 3 with the drilling campaign, which had an estimated budget of ZAR 1.5 million. A pre-feasibility study will be conducted after completion of drilling, with an estimated expenditure for the fourth and final phase, including drilling completion and the pre-feasibility study, of ZAR 800,000. No account of any modifying factors such as mining methods, metallurgical treatment processes and parameters, taxation, socio-economic, marketing or political factors have been taken into account. Kameelhoek lies adjacent to a wildlife reserve established by the adjacent Kumba operation. Environmental conservation will thus be a high priority for any developments for the Kameelhoek Project. VALUATION OF THE PROJECTS Doornbosch The valuation of the project area was based on the market approach for which Minxcon used their valuation curve, constructed from historical transactions of properties of a similar nature. A range of values was provided together with a fair value for both the Mineral Resource figures produced by Geo-Consult and Minxcon. The values provided were as follows:-

• Value 1: Valuation based on Minxcon reported Inferred Resources (excludes Oxidised Zone);

• Value 2: Valuation based on Minxcon Mineral Resources assuming they are Indicated Resources (excludes Oxidised Zone), for comparison; and

• Value 3: Valuation based on Geo-Consult Indicated Resources (includes Oxidised Zone). The three valuations above were provided because of the valuators opinion that a fair project value for Doornbosch will very much depend on the potential buyer of the mineral asset:-

• Should it be treated on a stand- alone basis, the Project will be valued on a much lower unit value and the total value have to be determined on the Inferred Mineral Resource ounces reported by Minxcon and hence a fair value of ZAR 2.098 million only; or

12.9 h vii 12.9 h viii 12.9 h xii

12.9 xii

12.9 vi



3

• If the Project is consolidated with neighbouring Modikwa, which has a Measured Mineral Resource surrounding the Doornbosch area, then Doornbosch could attract a higher value of ZAR 15 million to ZAR 20 million.

Market Approach Total Lower Price

Risk Adjusted

Price Upper Price

Lower Value Fair Value Upper

Value

EXPLORATION PROPERTIES WITH RESOURCES

3 PGE + Au ('000) USD/oz ZAR'000

Geo-Consult Indicated Resource 169 9.66 18.09 25.54 12,544

23,492

33,179

Minxcon Inferred Resource 95 0.57 2.86 6.49 416

2,098

4,761

Kameelhoek The Kameelhoek Project does not have any estimated Mineral Resources, and no information is available which could be used to apply the historical cost method of valuation. Hence the Project was valued using a value per hectare approach. A range of values was provided together with a fair value. The lower and upper valuation range was established at between ZAR 5.865 million and ZAR 25.588 million respectively. The valuation represents a total value for the Kameelhoek Project.

Approach Total Lower Price:

Median Vaue

Upper Price: Lower Value Fair Value Upper Value

EXPLORATION PROPERTIES WITHOUT RESOURCES Ha ZAR/ha ZAR'000

Market Approach (Comp.) 974 R 1,874 R 6,021 R 26,271 R 1,825 R 5,865 R 25,588 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. 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. CONCLUSIONS Minxcon have reached the following conclusions regarding the Doornbosch Platinum Project and Kameelhoek Iron Ore Project:-

• The Doornbosch Project is targeting extraction of the UG2 seam at shallow depths;

• The Doornbosch Project is likely going to be an exception to the rule in terms of the valuation of the Mineral Resource;

• Three valuations were provided due to the valuator’s opinion that a fair project value for Doornbosch will very much depend on the potential buyer of the mineral asset which could either be:-

o On a stand-alone basis; or o Consolidation of the area with the surrounding Modikwa mine.

• This places a wide range of values on the Project which range from just over ZAR 2 million to ZAR 20 million.

12.9 x



4

• Minxcon commented on the risk associated with the Geo-Consult declaration of an Indicated Mineral Resource with the opinion that current information represents an Inferred Mineral Resource;

• Detailed evaluation of the Mineral Resource could reveal oxidation in the shallower unexplored areas of the resource and oxidised tonnes were excluded from the resource;

• It is Minxcon’s opinion that an agreement with the neighbouring mine would make the best sense. The consolidation of the area in the Modikwa Resource would lift the value beyond the upper USD/oz range of the current valuation;

• Banded iron formation contains the Mineral Resource for Kameelhoek;

• Iron Ore indicative grades for the Kameelhoek property is high and therefore will likely attract the interest from neighbouring operation;

• The Kameelhoek Project does not have any estimated Mineral Resources, and no information is available which could be used to apply the historical cost method of valuation;

• Minxcon valued the Kameelhoek Project on a value/ha basis and derived a value between of ZAR between ZAR 5.865 million and ZAR 25.588 million for the project; and

• Both the Doornbosch and Kameelhoek properties are small in size and will likely be uneconomical on a stand-alone basis.



5

22 IINNTTRROODDUUCCTTIIOONN AANNDD SSCCOOPPEE

Minxcon (Pty) Ltd (“Minxcon”) was commissioned by Randgold and Exploration Company Limited (“Randgold”) to compile an Independent Mineral Asset Valuation Report (“the Report”) on the mineral assets of the Doornbosch Platinum Project (“Doornbosch” or “Doornbosch Project”), located north of the town of Steelpoort, Mpumalanga Province, and Kameelhoek Iron Ore Project (“Kameelhoek” or “Kameelhoek Project”), located south of the town of Postmasburg, Northern Cape Province, South Africa. The Kameelhoek Project is classified as an exploration target where no formal Mineral Resources have been estimated. An Inferred Mineral Resource has been estimated for Doornbosch. Minxcon is independent of the issuer.

2.1 Scope of the Report

The scope of work is to complete a mineral asset valuation of the Doornbosch and Kameelhoek projects. This Report has been compiled in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (“the SAMREC Code”) and the South African Code for the Reporting of Mineral Asset Valuation (“the SAMVAL Code”). In order to describe the mineral assets in accordance with the JSE Listings Requirements, Section 12.9, the information recorded on each property was compiled according to a checklist that incorporated the compliance reporting requirements for the SAMREC Code, prepared under the auspices of the South African Institute of Mining and Metallurgy (“SAIMM”). The checklist is attached as Appendix 1 to this Report. The corporate structure of Randgold is illustrated in the diagram below:-

Figure 1: Corporate Structure of Randgold

SV T1.2 T1.1 ii 12.9 c T8 ii 12.8 a 12.9 e T1.1 iii



6

The following persons are listed on the register of Directors of Randgold:-

• Mr Marais Steyn;

• Mr David Chaim Kovarsky;

• Ms Mosehoa Brenda Madumise; and

• Mr John Hulme Scholes. None of the directors has or had any direct or indirect interest, beneficial or non-beneficial in the Doornbosch or Kameelhoek projects.

2.2 Competent Persons’ Declaration

In the preparation of the Report, Minxcon has utilised technical information as provided by Randgold and its affiliates.

In the execution of our mandate, Minxcon has reviewed information concerning:-

• The strategic location of the properties relative to existing operating mines and advanced projects, known mineral occurrences, exploration or project development activities and infrastructure; and

• The geological setting and general exploitability of the properties. Further:-

• Minxcon has not sought independent legal opinion on the effective rights and obligations of Randgold and have used the shareholding structure provided by Randgold;

• Minxcon did not perform a full scale due diligence on the available information and Minxcon and its directors accept no liability for any losses arising from reliance upon the information presented in this Report.

Minxcon is an independent advisory company. Its consultants have had extensive experience in preparing technical and economic advisors’ and valuation reports for mining and exploration companies. Neither Minxcon nor its staff have any interest capable of affecting its ability to give an unbiased opinion, and will not receive any pecuniary or other benefits in connection with this assignment, other than normal consulting fees.

33 IIDDEENNTTIITTYY OOFF TTEENNUURREE

3.1 Project Description and Location

Doornbosch Project

The Doornbosch Project is located in a relatively remote area to the north of the town of Steelpoort and

falls within the Mpumalanga provincial boundary of South Africa (Figure 2 and Figure 3). The mineral rights pertain to the farm Doornbosch 294 KT of the Lydenburg Municipal District, neighbouring Anglo Platinum’s Modikwa Mine. The target area encompasses only the north western corner of the farm, as shown in Figure 4. Kameelhoek Project

Kameelhoek lies in the Northern Cape Province, some 6 km to the south of the town of Postmasburg. The Project Area encompasses the Remaining Extent of the farm Kameelhoek 477 (formerly called Weltevreden 477), Hay District (Figure 3). Vegetation comprises sparse grass and scrub thorn bushes.

12.8 b

SV T1.3 T1.5



7

Figure 2: General Location of the Doornbosch and Kameelhoek Project Areas in South Africa

3.1.1 Access and Infrastructure

Doornbosch Project

Access to Doornbosch interest is via the adjacent Modikwa Mine along tracks used by Anglo Platinum for their own prospecting purposes. Beyond a certain point on this track, only off-road vehicles are able to navigate the landscape. Infrastructure on the Doornbosch farm as a whole includes the Samancor Chrome Limited (“Samancor”) Wintersveld Section and Eastern Chrome Mines operations, as shown in Figure 4. A main road transects the farm on a north-south traverse while a railway line borders the southern farm boundary. Powerlines are available along a north-south and east-west servitude through the farm. A village and recreational centre are also present, with a portion of the Steelpoort residential area encroaching the southern boundary of the farm.

T1.5 ii



8

Figure 3: Topo-Cadastral Map of the Doornbosch and Kameelhoek Project Areas

T1.6 ii



9

Figure 4: Aerial Photograph of the Doornbosch Farm

Kameelhoek Project

The general Kameelhoek area is accessible via the main gravel road south from Postmasburg. With the development of the adjacent Sishen South Mine (Figure 3), the roads to the Kameelhoek 477 farm and to the Witsand Nature Reserve would have been intersected by open cast mining. Kumba undertook to construct new access roads, which would lie outside their own mine security area, to the Kameelhoek farm from the north (instead of the south) and to Witsand to the far south of the mine boundary. The Kameelhoek Project Area remains accessible through the mine development security area as well as through the main farm road. A new rail link from the Sishen South Mine to the Sishen-Saldhana iron ore railway has been constructed to the west of the Kameelhoek Project Area. Mine infrastructure and surface development at surrounding mines is extensive and well advanced. Construction material has been excavated at various places within sight of the Project and a significant open cast operation will be mounted close to its southern boundary. Extensive geological drilling has been undertaken by Kumba on both its own and the Kameelhoek holdings. The degree of environmental responsibility in managing this work is very high.



10

3.1.2 Topography and Climate

Doornbosch Project

The Doornbosch Project lies within the greater Drakensberg escarpment region of the Mpumalanga Province, which is characterised by a sub-tropical climate, with high levels (over 1,000 mm) of summer rainfall. Summers are generally hot, with winters being mild on average but often dropping to extreme temperatures. Mountainous topography defines the Project Area. Drilling has identified the most prospective site as a small plateau of moderate slope between two hills. Mining operations could continue throughout the year. Kameelhoek Project

The Northern Cape experiences low levels of rainfall and is largely classified as a semi-desert. Around the Kameelhoek Project Area, rainfall is most likely to occur in the summer months. Typical of semi-desert regions, temperature fluctuations are pronounced between day and night, and winters are relatively warm. The surface topography of the area is characterised by low, gently rolling hills. Mining operations could continue throughout the year.

3.1.3 Adjacent Properties

Doornbosch Project

The Modikwa Mine lies adjacent to the north-northwest of the Doornbosch target area and all ground to the north and west of the site is under prospecting rights to Anglo Platinum. The remainder of the farm is under a mining right to Samancor Chrome Limited (“Samancor”), producing chrome. The LG6 chromitite (currently being mined by Samancor for ferrochrome) outcrops on Doornbosch some 2,300 m to the east of the UG2 outcrop and some 780 metres stratigraphically below the UG2. Kameelhoek Project

All property surrounding the Kameelhoek Project Area, excluding the remainder of farm Kameelhoek 477, and the unprospective area 478, forms part of Sishen South Mine development of Kumba Iron Ore Limited (“Kumba”).

3.2 Prospecting Rights

The status of the relevant Prospecting Rights held by Randgold were documented in a report compiled by Esme Ferreira Attorneys, entitles “Legal Status Of Prospecting Rights Held By Randgold & Exploration Company Limited”, dated 22 February 2010. Minxcon have relied on this report for the legal tenure of each of the Kameelhoek and Doornbosch Projects and the table below details the Prospecting Rights for each of the projects.

T1.7 i

T1.6 i



11

Table 1: Prospecting Rights Pertaining to the Doornbosch and Kameelhoek Projects

Project Farm Name PR Number Applicable Minerals

Holding Company

Effective Date

Expiry Date

Doornbosch Doornbosch 294 KT

MP 305/1/1/2/255

PR

Platinum Group Metals, Copper Ore and Cobalt

Randgold and Exploration Company Limited

11 November

2006

10 November

2011

Kameelhoek Kameelhoek 477 (Re)

NC30/5/1/1/2/192 PR Iron Ore Doornrivier

Minerals Limited

11 December

2007

10 December

2010 Prospecting Right 55PR pertains to the Doornbosch Project, and covers an area of 3,629.1746 ha. Prospecting Right 92PR pertains to the Kameelhoek Project, and covers an area of 973.79 ha. The entire Doornbosch farm, including the Rangold portion, is held under a Mining Right for chrome ore and associated minerals by Samancor. Concurrently, Randgold holds a Prospecting Right over the entire farm for Platinum Group Metals, copper ore and cobalt as shown in the previous table.

3.3 Surface Rights

Randgold does not hold the surface rights to the Doornbosch or Kameelhoek Project Areas. The ownerships of the various farm portions are tabulated below:-

Table 2: Surface Rights for Doornbosch 294

Portion Size (ha) Title Deed No. Owner 0 1257.8240 T25231/1971 Republic of South Africa 1 268.6579 T84360/2007 Samancor Chrome Ltd 2 960.1337 T84360/2007 Samancor Chrome Ltd 3 21.4133 T84360/2007 Samancor Chrome Ltd 4 480.0669 T133491/1997 Samancor Chrome Ltd 5 68.5226 T1333491/1997 Samancor Chrome Ltd 6 572.5562 T84360/2007 Samancor Chrome Ltd

Table 3: Surface Rights for Kameelhoek 477

Portion Size (ha) Title Deed No. Owner

0 973.5443 T2865/2000 Rudolph Phillip Botha

Erasmus

3.4 Property Boundaries and Survey Certificates

The farms relating to the Project Areas can be located on Government 1:50,000 Topo-cadastral sheets (March 2005):-

• Doornbosch: 2430CA Steelpoort; and

• Kameelhoek: 2822BD Beeshoek. The Prospecting Right areas were determined as per relevant surveyor general diagrams.

T1.7 i



12

3.5 Environmental Aspects

Environmental Management Plans (“EMPs”) for the Doornbosch and Kameelhoek projects have been submitted to the DMR. The EMP for the Doornbosch Project has been approved by the Regional Manager, Mpumalanga Region of the DME, Witbank on the 15th July 2005. Funding for the environmental rehabilitation of the Doornbosch Project has been proposed in the overall project budget and a Bank Guarantee (as required by the regulations to the Mineral and Petroleum Resources Development Act 28 of 2002, “MPRDA”) in the amount of ZAR10,000 has been lodged with the DMR. The Kameelhoek EMP has been approved by the Regional Manager, Northern Cape Region of the DMR, Kimberly on the 4th April 2005. Funding for the environmental rehabilitation of the Kameelhoek Project has been proposed in the overall project budget and a Bank Guarantee (as required by the regulations to the MPRDA) in the amount of ZAR5,000 has been lodged with the DMR.

3.6 Agreements

For Doornbosch, the only formal agreement is the Black Economic Empowerment (“BEE”) agreement, giving Lembede Resources (Pty) Ltd a 26 % right to the net proceeds of the Project now or should it develop into a mine or be sold. There are currently management or service agreements in place relating to the Kameelhoek Project Area.

3.7 Summary of Legal Aspects and Tenure

According to the legal review report, the following risks pertain to the Doornbosch and Kameelhoek Projects:-

Doornbosch Project

Randgold is, in terms of Clause 16 of the Prospecting Right, bound by the provisions of an agreement dated 18 August 2006 concluded with Lembede Resources (Pty) Ltd (incorrectly stated in the prospecting right as “Lemede Resources (Pty) Ltd”). An application in terms of Section 6(1) (b) of the Mining Titles Registration Act 16 of 1967 was duly lodged and registered at the Mineral and Petroleum Titles Registration Office (“MTO”) to rectify the aforesaid error. Minxcon is satisfied that no legal or permitting issues are outstanding or will hamper operations. Kameelhoek Project

For purposes of maintaining this prospecting right, Doornrivier Minerals Limited will have to follow up on the registration of this Prospecting Right at the MTO, comply with the provisions of its prospecting works programme (“PWP”), alternatively lodge an application in terms of Section 102 of the MPRDA to indicate the actual prospecting activities done and intended to be done, and furthermore to lodge an application for the renewal of this prospecting right sixty working days prior to 10 December 2010. The Competent Person is satisfied with the status of all legal aspects. All government requirements have been approved, pending acceptance of the amended Kameelhoek EMP.

T1.7 ii

12.8 d, e T1.7 iii,

iv

T5.2 i, ii

T5.1 i



13

44 HHIISSTTOORRYY AANNDD FFUUTTUURREE EEXXPPLLOORRAATTIIOONN

Doornbosch Project

In 1974, Rand Mines Limited disposed of almost all its platinum rights to Rustenburg Platinum Mines. Doornbosch 294 KT was omitted, as were some properties with potential on the northern limb of the Bushveld Complex. The chrome rights were later sold to Samancor, who are currently mining for chrome at Winterveld Section as part of their Eastern Chrome Mines (ECM) operations. Randgold acquired the Doornbosch target from Rand Mines through a notarial cession. Although a portion of the farm is actively being mined for chrome by Samancor, no active work for the prospecting for platinum was previously carried out. Kameelhoek Project

During the 1950s, small scale artisanal mining for manganese occurred at the Kameelhoek interest. A heritage investigation indicated a widespread occurrence of stone artifacts, but there is no compulsion to preserve the site for archaeological reasons. Consolidated African Mines in conjunction with Anglo American undertook various unsuccessful exploration projects in the area in the 1970s, mainly on the adjacent farm Kameelhoek 478, and later, with more success, on Weltevreden 477 (now Kameelhoek 477). Randgold acquired the mineral rights through Rand Mines using its subsidiary, Doornrivier Minerals Limited (“DRM”), to acquire a New Order Prospecting Right. Assay results from work around 1980 indicate manganese and iron grades ranging from low (about 18 %) to in excess of 60 %, the higher grades being located in the area held under this prospecting right.

4.1 Current Exploration

Doornbosch Project

Field outcrop mapping has been carried out, followed by the diamond drilling of one borehole. This borehole intersected UG2 chromitite reef at a depth of about ~135 m. Kameelhoek Project

Kumba, at its Sishen South operation, has delineated an outcrop in excess of 10 Mt of high grade (>60 % Fe), which appears to continue below surface into the Kameelhoek Project Area. Under an agreement with Doornrivier Minerals Limited, Kumba are currently drilling the 1.5 km ore body strike to explore this and, due to the high grade expected, are interested in acquiring the mineral rights. To date, seven percussion boreholes have been drilled by Kumba with two holes returning good iron grades. Mapping and trenching is also currently underway.

4.2 Further Work

Doornbosch Project

A feasibility study is to be conducted to evaluate the potential of development of the Project into a stand-alone operation versus incorporating it into the adjacent Modikwa operation. Future exploration at Doornbosch is thus to a degree dependent on extending negotiations with Anglo Platinum. For a stand alone project, more drilling appropriately located would be required as well as sampling of the regolith (oxidised) zone to establish the estimated grade and specific gravity of this zone, in order to incorporate this zone into the Mineral Resource tabulation.

SV T1.4

T1.3

12.9 e



14

Financial modelling will be carried out. Trenching, bulk sampling and metallurgical testwork may be conducted if deemed necessary by the outcome of the modelling. A dual phase programme has been set out by Randgold, as per the December 2009 Amended Prospecting Work Programme (“PWP”). Total expenditure for future exploration for Doornbosch as per this PWP, has been estimated at ZAR 2.2 million. Kameelhoek Project

A PWP was compiled by DRM for Kameelhoek in July 2006. Exploration as per this programme is well into Phase 3 with the drilling campaign, which had an estimated budget of ZAR 1.5 million. A pre-feasibility study will be conducted after completion of drilling, with an estimated expenditure for the fourth and final phase, which will include drilling completion and commissioning of the pre-feasibility study, of ZAR 800,000.



15

55 GGEEOOLLOOGGIICCAALL SSEETTTTIINNGG

5.1 Regional Geology

The regional geology was summarised from Wilson & Anhaeusser, 1998.

Doornbosch Project

The project area falls within the Eastern Limb of the Bushveld Igneous Complex (“BIC”), which is a world renowned deposit for its Platinum Group Metal (“PGM”) content. The BIC is dated at between 2.06 Ga to 2.058 Ga and is the largest layered igneous complex in the world. Situated within the north-central Kaapvaal Craton, this massive Proterozoic intrusive body, or more likely a series of interconnected intrusives, has a surface area of approximately 67,000 km2 and consists of a mafic-ultramafic succession of layered and massive rocks known as the Rustenburg Layered Suite (“RLS”), a penecontemporaneous series of granitic rocks, termed the Lebowa Granite Suite (“LGS”) and felsic extrusive rocks of the Rooiberg Group (“RG”). The true thickness of the mafic-ultramafic layered rocks in the BIC varies from 7,000 m to 12,000 m. The BIC was intrusively emplaced within and exhibits a transgressive relationship to the Transvaal Supergroup, a large sedimentary basin of late Archaean-Proterozoic age located within the north-central Kaapvaal Craton. The mafic-ultramafic layered rocks of the RLS outcrop in three main arcuate complexes or limbs, namely the Western, Eastern and Northern Limbs. The three limbs of the BIC have been further subdivided into a set of geographic sectors, based on the major geological characteristics of the RLS. The magmatic layering of the ultramafic-mafic rocks is remarkably consistent and can be correlated throughout most of the BIC. It is generally accepted that, rather than being a single body, the BIC comprises several overlapping lopolith-shaped intrusions. The similarity of geology across large areas within each of the three limbs, particularly the sequence of igneous layering that includes both the Merensky Reef and the Upper Group Number Two (“UG2” ) chromitite seam, is probably indicative of simultaneous differentiation and replenishment of a basaltic magma under essentially identical conditions. The dip of the igneous layering is generally shallow and towards the centre of the complex. The Eastern and Western Limbs of the BIC show a broad ellipse when viewed in plan, measuring approximately 200 km N-S and 370 km E-W. Granites and related felsic volcanics occur in the central area between these limbs. Post BIC sedimentary successions of the Waterberg Group and Karoo Supergroup, as well as more recent alluvial deposits of Holocene age, cover large parts of the BIC. PGE mineralization (as well as chromium and vanadium mineralization) is hosted within the RLS. The RLS stratigraphy is divided into five major units, which are, from deepest to shallowest, described below:-

• The Marginal Zone (“MZ”) comprises a heterogeneous succession of generally unlayered basic rocks dominated by norites. These rocks contain quartz and hornblende believed to be a result of contamination of the basic magmas by the enclosing host rocks. The MZ ranges in thickness from several metres to several hundred metres, and field exposures of this zone are generally poor.

• The Lower Zone (“LZ”) is dominated by ultramafic rocks. The most complete exposure is in the north-eastern part of the Eastern Limb of the Bushveld Igneous Complex (“BIC”). In this area, the LZ occurs as a series of dunite-harzburgite cyclically layered units. The unit varies in thickness,

T4.1 i

T4.1 SV T1.5



16

having a trough-like geometry with the thinnest succession developed over structural highs in the basin floor.

• The Critical Zone (“CZ”) is particularly remarkable for containing the largest resources of chromium and PGE’s in the world. The Critical Zone is subdivided into the Lower Critical Zone (“LCZ”) and the Upper Critical Zone (“UCZ”) and is made up of cyclic units consisting of chromitite, pyroxenite, norite and anorthosite. Cycles in the LCZ are entirely ultramafic in character and are dominated by pyroxenite with interlayered harzburgite and chromitite layers. The UCZ represents a mixed mafic-ultramafic cyclic unit comprising layered pyroxenites, norites, anorthosites and chromitites. The base of the UCZ is marked by the appearance of cumulus plagioclase and the zone comprises norites. The igneous layering within the CZ is remarkably uniform over much of the BIC and occurs on a variety of scales, with individual layers traceable for tens to hundreds of kilometres, and may also be locally regular to highly irregular in aspect. The LCZ is restricted to the central part of the Eastern Limb, in contrast to the UCZ, which is recognisable throughout the Eastern and Western Limbs of the RLS. Chromitite layers occur throughout the Critical Zone, usually at the base of crystallization cycles. The chromitite layers have been classified into lower, middle and upper groups, with the lower group occurring in the pyroxenitic LCZ, the upper group in the anorthositic UCZ and the middle group straddling the boundary between lower and upper divisions. The layers are identified according to their location within the layered succession, with numbers commencing from the bottom up. The lowermost group is known as the LG1 (Lower Group 1), followed by LG2, LG3 to LG7. This sequence progresses upwards from the MG1 (Middle Group 1) through to the MG4 and, finally, to the UG1 (Upper Group 1), UG2, UG3. The thickness of these chromitite layers ranges from several millimetres to several metres. The chromitite layers may comprise multiple layers of chromitite separated by intercalated silicate rocks. The thickest chromitite layers, specifically the LG6 and MG1, are mined for their chromite content. All of the chromitite layers in the BIC contain anomalous concentrations of PGE’s, with a general increase in PGE content upward in the sequence, with the UG2 Chromitite Layer currently the only reef of commercial interest for its PGE content. The other main PGE layer, the Merensky Reef, occurs above the UG chromitites, close to the top of the Upper Critical Zone. The distance between the UG2 Reef and the Merensky Reef is variable across the BIC. In the Eastern Limb it can attain thicknesses of between 170 - 400m.

• The Main Zone (“MZ”) is the thickest unit within the RLS. In general, approximately half the RLS stratigraphic interval is occupied by this zone. The Main Zone consists of gabbro-norites with some anorthosite and pyroxenite layering. Layering is not as well developed as in the Critical and Lower Zones.

• The Upper Zone (“UZ”) is dominated by gabbros. However, layered anorthosite and magnetite sequences are also present. There is no chilled contact with the roof rocks, which comprise rhyolites and granophyres.

The extent of the BIC is illustrated graphically in Figure 5.



17

Figure 5: Location of Doornbosch Project Area in Relation to the Bushveld Igneous Complex



18

Kameelhoek Project

The Kameelhoek Iron Ore Project is summarised as forming part of the Superior-type banded iron formations of the Transvaal Supergroup. Sishen Mine, which neighbours Kameelhoek to the east and southwest, is a prime example of this mineralisation type. The Gamagara Formation (Olifantshoek Supergroup) and the Asbestos Hills Subgroup (Manganore Iron Formation & Wolhaarkop Breccia) of the Ghaap Group (Griqualand West/Transvaal Supergroup) are the primary ore bearing units. A geological section and general stratigraphic subdivisions for the Sishen South Mine immediately adjacent to the Kameelhoek Project Area are shown in Figure 6. The ore bearing units can be summarised as follows: the iron-rich conglomerates of the Gamagara Formation unconformably overlie the supergene-enriched iron formation of the Asbestos Hills Subgroup (Kuruman Formation). Within the Asbestos Hills Subgroup, the ferruginous material, which is highly deformed, comprises lenses of high-grade ore, typically known as the Manganore Iron Formation. The mineralisation in this unit is locally enriched to laminated and massive iron ore. This enriched iron formation is typically underlain by the Wolhaarkop Breccia (Tsineng Formation / Manganese marker), a ferrugineous chert breccia. These ferrugineous units are unconformably underlain by the Campbell Rand Subgroup. In areas where the Gamagara Formation, which strikes north-south, overlies the enriched iron formations of the Asbestos Hills Subgroup, considerable iron-ore deposits are established, for example the Sishen and Beeshoek Mines. The typical grades and dominant ore type mined from Sishen and Beeshoek Mines which are located in the aforementioned stratigraphy, typically average > 60 % Iron (“Fe”) and comprise haematitic ore. The Gamagara Formation comprises clastic sediments with iron-ore conglomerate lenses locally developed near the base of this unit. Typically, to the west of Sishen, the Gamagara Formation dips at 10 – 12° westwards underneath the Ongeluk Formation. The regional structure of the area is typified by multiple phases of folding and faulting; typically anticlines, synclines, domes and basins and graben structures prevail. The stratigraphy of the area is cross-cut by younger diabase dykes. The Kalahari Formation overlies much of the stratigraphy in this regional area, and at Sishen this cover measures up to 100 m in thickness and is stripped as waste in the open-case mining operations. The iron-ore in this area is comprised of three dominant ore types:-

o Thabazimbi type (same stratigraphic horizon as the Thabazimbi Mine); o Conglomeratic Gamagara type; and o Massive Gamagara type.

The Thabazimbi type is characterized by lenticular and irregular iron-rich formations which typically are up to 25 m by 460 m within banded iron formation (“BIF”). The ore is typically massive (ferruginised jaspilite), laminated (ferruginised BIF) or brecciated (ferruginised ‘Blinkklip breccia’) ore. The Conglomeratic Gamagara type comprises supergene-enriched ferruginious conglomerate and/or grit which have a typical thickness of 5 – 15 m. This type originally comprised pebbles of Thabazimbi type and ferruginised iron formation now set in a fine-grained haematitic matrix. This type overlies the Thabazimbi type. The Massive Gamagara type comprises ferruginised haematitic sandstone and shale. This type is akin in appearance to the laminated Thabazimbi type but is stratigraphically distinct from the Thabazimbi type.



19

Figure 6: Section through Sishen South Pit neighbouring the Kameelhoek Project



20

5.2 Local Geology

Doornbosch Project

The project is located on the eastern limb of the BIC. The location of the project area in relation to the geology of the eastern limb of the BIC is illustrated in Figure 5. The general strike on in the area is north-northeast and the layering dips westward at 10° to 15°. Close to the Transvaal floor the BIC has been folded into a series of domes and basins. Kameelhoek Project

Potential iron ore associated with the Manganore Iron Formation (Blinkklip Breccia), the underlying Wolhaarkop Breccia (Managanese marker) and the overlying Doornfontein Conglomerate of the Gamagara Formation outcrop over about 1.5 km in the southeast of the property and dips to the east towards Sishen

5.3 Project Geology

Doornbosch Project

The Project area is underlain by the UG2 of the RLS. The average thickness of the main band of the UG2 is reported to be on average ~0.6 m with the presence of at least three chromatic layers/stringers above the main band. The UG2 can attain thicknesses of approximately 1.2 m in the area. The footwall of the UG2 is typically a coarse-grained pegmatoidal feldspathic pyroxenite. The hangingwall typically comprises chromitite stringers hosted by pyroxenite; this interlayered succession is typically overlain by pyroxenite or pegmatite and leuconorite units. The PGE mineralisation is concentrated within the main band, however, the chromitite stringers do contain mineralisation, although at a lower grade. The main band has the classical bimodal vertical grade distribution characteristic of the UG2. Within the Project area and surroundings the UG2 strikes north northwest to south southeast and dips on average 10° to 12° to the southwest. The dip of the stratigraphy has local variations up to 20°. There appears to be no major structures that will negatively affect the UG2 horizon on the Project area.



21

Figure 7: General Geology of the Doornbosch Project



22

Figure 8: Generalised Stratigraphic Column for the UG2

Figure 9: General Geological Cross Section of the Doornbosch Project



23

The following figure summarises the grade profile for the UG2 Intersection in DBH1. The reader is referred to Table 4 for a breakdown of the prill grades for the UG2 intersection of drill hole DBH1.

Figure 10: Grade Profile for the UG2 DBH1 Intersection on Doornbosch Property

Kameelhoek Project

The Kameelhoek Project is located on the Wolhaarkop Anticline in the Campbellrand Group dolomites. The Wolhaarkop Anticline lies to the southwest of the Maremane Anticline, trending sub-parallel to this anticline. The Maremane Anticline hosts the iron and manganese deposits of the Postmasburg metallogenic province. Dolomites and limestones of the Lime Acres Formation are exposed in the anticline with the Wolhaarkop breccias overlying this sequence in the east and west. The Wolhaarkop breccia iron and manganese mineralization on Kameelhoek Project, which is situated on the anticline, appears to be controlled by northeast parallel trending structures. The breccia is overlain by the Manganore Iron formation (Blinkklip Breccia). The Blinkklip Breccia has a potential strike of 1.5 km to the southeast of the Project and dips to the east. The Blinkklip Breccia is overlain by the Gamagara Formation. Economic iron mineralisation is known to occur in the Doornfontein conglomerate at the base of the Gamagara Formation. Hence, the potential from this unit should be investigated on Kameelhoek Project.



24

Figure 11: General Geology of the Kameelhoek Project Area

Figure 12: Structures of the Kameelhoek Project Area

T2.2 ii



25

66 MMIINNEERRAALL RREESSOOUURRCCEESS

Doornbosch Project

Geo-Consult has undertaken the Mineral Resource estimation of Doornbosch Project. The Competent Person being Mr George van der Walt (Pr. Sci. Nat. 400306/07). Randgold under the guidance of Geo-Consult drilled a single drill hole (DBH1), the location of which is shown in Figure 13, with the related cross section shown in Figure 9, intercepting the UG2 on Doornbosch at a depth of approximately 134 m below surface. The drilling was undertaken by a reputable drilling company, namely Drillcorp Africa (Pty) Ltd. Two deflections were drilled from the mother hole which intersected the UG2 mineralised horizon. The UG2 Mineral Resource area for Doornbosch is illustrated in the underlying figure. The Merensky Reef is not intersected on the Doornbosch property as it outcrops some 1.5 to 2.0 km to the west of Doornbosch on the Modikwa property. About 31.2 hectares of the 3,629.1746 hectare property (approximately 0.86%) is underlain by UG2 chromitite.

Figure 13: Doornbosch UG2 Mineral Resource Area

T2.4

SV T1.6 T4.1 T8 iii



26

The following has been extracted from the aforementioned report (“SAMREC Compliant Resource estimate for a UG2 Chromitite Occurrence on Doornbosch 294 KT, March 2010”, pp 21-22): “Two sets of grade “cuts” are presented for DBH1: one only covers the reef chromitite, which would be too narrow to mine underground, while the “optimal stoping cut” includes the immediate hanging wall and footwall units for a potentially mineable underground cut (see earlier comment about hangingwall chromitite stringers). The top and bottom limits of the “stoping cut” are governed by the sampled intervals, which are governed by geological controls and include the entire footwall pegmatoid and hangingwall pyroxenite with its chromitite stringers, which are also seen to carry some”. The mining width of 102 centimetres (“cm”) was determined from the mining width assumed at the neighbouring Modikwa Mine. The average width of the UG2 chromitite main band from DBH1 is reported as 50.5 cm and the average main band width reported from the surrounding areas varies between 56 cm to 60 cm. It is interpreted by the CP that the intersected dip corrected width from DBH1 is in line with the thicknesses established in the neighbouring areas. The average SG for the mining width of 102 cm is in keeping with that expected from the lithological horizon reported on. It is reported that 100% core recovery was achieved with regard to the mineralised units. The reported drilling and sampling campaigns indicate that a high level of quality was maintained in the drilling of the UG2 mineralised horizon. A high level of quality control and quality assurance (“QAQC”) was undertaken by Geo-Consult in assaying of the drill hole samples. For this project three blanks and three certified reference material standards (AMIS0027 – certified grade of 4.61 (+-0.59) g/t 4E and AMIS0010 – certified grade of 3.89 (+-0.44) g/t 4E), grade applicable) were inserted into the sample stream. A set of referee samples were also sent to an umpire laboratory. The results from the QAQC exercise are reported to be within acceptable limits. The primary laboratory used was Set Point Laboratory (SANAS, ISO 17025 accredited) and the umpire laboratory was SGS Lakefield (SANAS ISO 17025 accredited). This results in the average reported grade for DBH1 as 4.67 g/t 4E over 102 cm, including 7.85 g/t 4E over 50.5 cm. Although deposit grade information for Doornbosch is derived from only one borehole, SAMREC requires that, for an Indicated Mineral Resource, 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 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 close enough for continuity to be assumed. Considering the proximity of Doornbosch to the Modikwa property and the level of confidence of geological data from there, it can be considered reasonable to assume that the average values from Modikwa, as used for calculating their resources, continue into Doornbosch. The nearby Modikwa Mine utilises an average UG2 chromitite width of 56 cm and a recommended stoping profile of 102 cm, which are similar to the averages derived for Doornbosch from DBH1, and confirm that the values obtained do indeed reflect the local means. This allows a resource estimate for the UG2 at Doornbosch to be calculated on the basis of a tabular deposit using a dip-corrected area at an average grade of 5.86 g/t (3PGE + Au) over the recommended stoping profile of 102 cm as reported by Modikwa for their combined Measured and Indicated Resources. “The depth of regolith/oxidation is estimated at around 40 m, and the Resource calculation has been split into “oxidized” and “fresh” portions for the final combined Resource total. A 20% loss has also been applied to account for any potential geological losses yielding a total Indicated Resource of some 760,000 tonnes. A geological loss of 20% has been applied to accommodate any potential geological losses. This is considered to be a conservative figure as no major geological features apart from one possible minor fault have been identified that would impact on the resource. In addition, it is widely accepted that

T3.1 T3.2 T3.3

T3.4



27

mining losses due to potholing in the UG2 amount to around 15% on average (for example, Lonmin Platinum uses an overall geological loss of 17% for UG2 in their Resource statements). The prill ratio (%) reported from the Doornbosch Project assaying results is in line with the prill ratios reported from the neighbouring mines and projects, although the stated prill ratio for Modikwa Mine as at 31st December 2009 is lower on platinum (“Pt”) and higher on palladium (“Pd”) (44:46:9:1). The prill ratio for the Doornbosch drill results is:-

• Pt:Pd:Rh:Au – 50:40:9:1 No wireframe modelling, block modelling or geostatistics (kriging or variograms) has been applied for the estimate, but it is based on a reasonable assumption of continuity of high confidence data from the neighbouring property and, which is applied over a small area. No audits or reviews have been carried out on the data or reporting. The specific gravity for the DBH1 UG2 drill hole samples was undertaken at the laboratory used to assay the samples, by means of a gas pycnometer and recorded for each sample submitted. The following tale is a summary of the SG data as stated in the Geo-Consult Competent Persons technical report. The SG for the stoping width used in the tonnage calculation is typical of the SG obtained for the UG2 mining width across the BIC. The SG used by Modikwe for the mining cut of 102 cm is reported as 3.72 g/cm3, hence the value reported by Geo-Consult appears realistic. In borehole DBH1, the average SG of the hangingwall pyroxenite was found to be 3.27 g/cm3, and that of the UG2 chromitite was 4.08 g/cm3, while that of the footwall pegmatoidal feldspathic pyroxenite was 3.29 g/cm3. The average of these values, making up the stoping width of 102 cm, is 3.68 g/cm3. This compares favourably with average SG quoted for the Modikwa Mine UG2 stoping cut in their resource statements as 3.72 g/cm3. No data has been gathered as to the differences between the density of the regolith zone and the unoxidised ground and as such, no correction has been applied in this regard. It is expected that the SG difference will be determined and accounted for during feasibility study drilling work at later stage.” In this regard, Minxcon has excluded this zone from the Mineral Resource tabulation until such time as definitive values for both grade and SG are determined.

Table 4: Summary of the SG values for Doornbosch DBH1 Intersection

DBH1 Analytical Results

Width* (cm)

3PGE+Au(g/t)

Au(g/t)

Pt(g/t)

Pd(g/t)

Rh(g/t)

Cu (%)

Ni (%)

SG(g/cm3)

Average UG2 Optimal Stoping Width

102 4.67 0.05 2.35 1.87 0.39 0.01 0.02 3.66

Average UG2 Chromitite Reef Cut

50.5 7.85 0.08 3.97 3.18 0.64 0.01 0.03 4.05

1. *Width corrected for 13o dip; and 2. Source: Geo-Consult March 2010.

In summary, the following assumptions made by Geo-Consult were used when defining the classification of an Indicated Mineral Resource:-

• There is only information from one drill hole available from Randgold drilling, however Doornbosch is unlikely to ever be considered as a standalone UG2 operation and must be treated as part of the “bigger picture”;

• Modikwa Platinum Mine has combined Measured and Indicated Mineral Resources right up to the boundary north and west of the Doornbosch UG2 area and the results obtained from the drill hole DBH1 are shown to be within reasonable range of the average values quoted by the mine and confirm that there is continuation of ore body onto Doornbosch; and



28

• It is therefore reasonable to use the local average values from Modikwa as a basis for the Mineral Resource calculation rather than defining the Mineral Resource on the values from the one borehole only, which would constitute an under-estimate in real terms.

Table 5: Mining Width Indicated Mineral Resource Estimate for Doornbosch

UG2 Indicated Mineral Resource

Estimate for Doornbosch*

Total Area on Dip

(m2)


Calculated Volume

(m3)

Ave UG2 Density (t/m3)

Ave UG2 Grade (3PGE+Au)

(g/t)

Calculated Tonnage

(t)

Regolith Zone 82,868 1.02 84,525 3.72 5.86 314,435 Unoxidised Zone 212,862 1.02 217,120 3.72 5.86 807,685 Total 295,730 1.02 301,645 3.72 5.86 1,122,119

Tonnes after 20% geological loss: 897,6951. *Average width, density and grade values sourced from ARM/Anglo Platinum Resource Statement – as at 31st December

2009 Annual Report Mineral Resource tabulations; and 2. Source: Geo-Consult March 2010.

It is Geo-Consult’s opinion that the Mineral Resource classification of Indicated is fair and reasonable based on the assumptions stated by Geo-Consult in the SAMREC compliant technical report (March 2010). The reader is cautioned by Minxcon that there are risks associated with the classification of the Indicated Mineral Resource, and is of the opinion that the Mineral Resource status is that of an Inferred Mineral Resource, based on the risks stated below:-

• The drill holes from the adjacent Modikwe property are not available for use together with DBH1 to estimate the Doornbosch Project Mineral Resource;

• Minxcon cautions against using the 4E grades of DBH1 in isolation to declare the Mineral Resource of the Project area as this may result in the grade and 4E content quoted to be either an over- or under-representation of the 4E content of the Doornbosch Project Area; as no other information is available the extent of the under or over estimation cannot be quantified, hence the Inferred status;

• Minxcon is of an opinion in the absence of any other information regarding the UG2, that the Mineral Resource tabulation in this instance can only reflect the grade of the DBH1 intersection diluted over a stoping width; this is due to the absence of the drill holes of the surrounding areas; although there are risks associated with this in that the value may Represent either an over- or under-estimation of the UG2 grade on Doornbosch; hence, the Mineral Resource is classified as Inferred;

• Although the only available information for Doornbosch was drilled at the down-dip extent of the property, the UG2 grade and tonnages should be declared across a mining width as it is impractical to mine at an in situ width of 50 cm; in addition, the close proximity of the chromitite stringers in the hanging wall of the UG2 main band would cause the mining of the UG2 main band in isolation to be impractical as it would result in an unstable hanging wall environment and negate economic mining of the seam. Hence, the mining of the UG2 where the presence of the stringers are in close proximity of the main band necessitates the Mineral Resource to be stated of a mining width and not over in situ width of the main band. On the Doornbosch property, three chromitite stringers (“the triplets”) are located within 60 cm above the UG2 main band. The triplets in addition contain additional grade which will be mined together with the main band, hence reporting an in situ grade does not summarise the grades that will mined from the UG2 horizon;

• It is not stated in the reports and information supplied to Minxcon whether the geological losses have not been quantified from interpretation of the reef intersections on Doornbosch Project area; the amount of reef interruptions, eliminations and alterations have not been noted in any reports with regard to the Doornbosch property geology; however, based on other operations mining the UG2 horizon, 20 % reflects a fair approximation of the geological losses that are encountered, in light of the Inferred status of the Mineral Resource;

• Drill hole DBH1 was drilled at the Doornbosch lease edge and it is well established that the weathered zone in general negatively affects the grades of the mineralised units; best practise would cause this area is removed from Mineral Resource tabulations until such time as detailed



29

assaying of the 4E grades and SG are undertaken and modelled; on Doornbosch Project this depth of weathering is reported to be approximately 40 m from surface;

• 4E Grades do vary across the UG2 based on facies; no facies work has been presented to Minxcon indicating that facies work has been undertaken on the Doornbosch Project; hence the representativity of the single drill hole with regard to facies is uncertain, hence the Inferred status;

• Geo-Consult has mapped the outcrop of the UG2 on Doornbosch, however, there exists discrepancies between Modikwa’s and Geo-Consult’s location of the UG2 outcrop; the methodology that Modikwa used to model the UG2 outcrop is unknown, hence there is risk associated with the areas, and hence tonnages, quoted, hence the Inferred status;

• Geo-Consult has noted that additional boreholes should be drilled on the Project Area; • The Modikwa model grades and thicknesses and the valid data in the vicinity of Doornbosch

Project area has not been referred to by Geo-Consult as this data is not available; however, Minxcon reviewed the data locality plot of the data available for the Mineral Resource models (ARM Annual Report, 2009) (Figure 14) and it is uncertain if the drill holes represented in Figure 9 all intersected the UG2 chromitite layer; and

• Minxcon has restated the Mineral Resources as in Table 6 for the UG2 mining width utilising the DBH1 mining width intersection for the UG2 horizon, utilising the values quoted in the Geo-Consult Competent Persons technical report.

Table 6: Mining Width Inferred Mineral Resource Estimate for Doornbosch

UG2 Inferred Mineral

Resource Estimate for Doornbosch

Total Area

on Dip (m2)


Calculated Volume

(m3)

Ave UG2

Density (t/m3)

Tonnage (Mt)

Tonnage After

Geological Loss (20%) (Mt)

Ave UG2

Grade (4E) (g/t)

Content 4E

(Grams)

Content 4E

(Moz)

Unoxidised Zone 212,862 1.02 217,119 3.66 0.795 0.636 4.67 2,970,120 0.095 Total 212,862 1.02 217,119 3.66 0.795 0.636 4.67 2,970,120 0.095

• Effective Date 26 March 2010;

• No cut-off grades were used;

• The tonnages and grades are quoted as mining width tonnes;

• Regolith Zone (Oxidised Zone) excluded from Resource tabulation – no data to attest to grade and specific gravity of this zone; the estimated cubic metres for this zone is 84,500 m3; and

• Mineral Resources are inclusive of Mineral Reserves.

Kameelhoek Project

Currently the Kameelhoek Project is classified as a prospecting target and no formal declaration of the Mineral Resources has occurred. The surface at the Project Area is liberally covered with black stones derived from the surface or near surface iron deposits; these constitute a significant Mineral Resource and will be collected as part of the mining operation.



30

Figure 14: Modikwa Mineral Resources Classification and Drill Hole Locality Plan



31

77 MMOODDIIFFYYIINNGG FFAACCTTOORRSS

No account of any modifying factors such as mining methods, metallurgical treatment processes and parameters, taxation, socio-economic, marketing or political factors have been taken into account.

88 VVAALLUUAATTIIOONN AAPPPPRROOAACCHHEESS

The methodologies used in valuing a mineral asset differ depending on the developmental stage of the project i.e. exploration, development and production properties. The following three valuation approaches are internationally accepted methods of valuing mineral projects, as illustrated in Table 7 and summarised below:-

• Cost Approach: used to value early stage exploration properties and which relies on the historical and future exploration expenditure;

• Market Approach: used to value exploration and development properties and which is 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; and

• Cash Flow Approach: used to value development and production properties and 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 7: Acceptable Methods of Mineral Project Valuation

VALUATION APPROACH

PROPERTIES

EXPLORATION DEVELOPMENT PRODUCTION ECONOMICALLY

VIABLE NOT VIABLE DEFUNCT

Cash Flow Not generally

used Widely used Widely used Widely used

Not generally used

Not generally used

Market Widely used Less widely used Quite widely

used Quite widely used Widely used Widely used

Cost Quite widely

used Not generally used

Not generally used

Not generally used Less widely

used Quite widely

used

The selection of an appropriate valuation approach is dependent on the availability of information on the property.

8.1 Market Approach

8.1.1 Value per Ounce - Doornbosch Project

The market approach relies on the principle of “willing buyer, willing seller” and requires that the amount obtainable from the sale of the asset is determined as if in an arm’s length transaction. The valuation method requires comparison with relatively recent transactions of assets that have similar characteristics to those of the asset being valued. It is generally based upon a monetary value per unit of resource (where available) or per unit of defined mineralisation. The comparable transaction method uses the transaction price of comparable assets to establish a value for the specific asset to be valued. The difficulty of this approach in the mining industry is that there are no true comparables, since each asset is

V T1.8

T5.7

SV T1.7 T5.4 T5.5



32

unique with respect to key factors such as geology, mineralisation, costs, stage of exploration and infrastructure. In addition, there are normally relatively few transactions for mineral assets. The movements in the mineral price and the USD/ZAR exchange rate are also reflected in the range of values. 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. Minxcon has plotted the total values transactions of properties of a similar nature, which took place on an arm’s length basis, in relation to their specific stage of exploration. This methodology, when applied to exploration transactions provides guidance in terms of a range of transaction values. The transactions used to construct the valuation curve occurred at a specific point in time and therefore at a specific ZAR denominated gold price, which have been adjusted to current gold prices and exchange rates. This current price adjustment was made using the average gold price and USD/ZAR exchange rate for the three months preceding the effective date of this report, together with the twelve month forecast, to calculate an appropriate price level. 8.1.1.1 Price Adjustment In order to report historic transaction in today terms and compare all transaction on the same economic level, economic parameters were determined for each historic transaction at the time when the historic transaction took place. Historic transaction prices were then adjusted to current day terms by determining the difference of parameters at the time of historic transactions to the current day parameters. Parameters were calculated on a 3 month historic average preceding the calculation date. The following gold prices and exchange rates were used in the price adjustment:-

Table 8: Economic Parameters used in the Comparative Analysis

Months R/USD Platinum Palladium Rhodium Au Nov-09 7.52 1401 353 2223 1127 Dec-09 7.49 1442 372 2266 1135 Jan-10 7.46 1563 434 2266 1118 3Mnth Historic 7.49 1469 387 2252 1127 2010 7.7 1535 397 2500 1137 Average 7.59 1502 392 2376 1132

Notes: Commodity values in USD/oz

This principle is used to reflect the current market expectation that is likely to drive the fair market value. 8.1.1.2 Project Specific Valuation Parameters There are specific project valuation parameters associated with each stage of project development. Initially, risk associated with the physical characteristics of an ore body is high. As a project moves past the feasibility stage and into detailed design, construction, start-up, and full operation, the uncertainty associated with the risk components is reduced. Uncertainty with regard to the Mineral Resources, LoM and grade continues until well into the operational life. Because of the inherent unknowns in geology, some uncertainty normally persists until the end of the LoM. The Canadian Institute of Mining have derived from industry, a valuation parameter matrix, for determining mining project risk, weighting different criteria such as depth, mining process, geology and legal tenure. Minxcon adopted this matrix and incorporated a single additional category, namely the Social and Environmental factor, and applied values applicable to the South African industry as summarised in Table 9. These parameters were used to determine a risk associated index for a project relative to that of the platinum industry:-



33

Table 9: Valuation Risk Associated Parameter Matrix – Platinum Industry Standards

PRINCIPAL PROJECT RISK DESCRIPTION INDEX DESCRIPTION INDEX DESCRIPTION INDEX

Depth <200m 10 >200m-1500m 6 >1500m 2 Scale of Project (Resource) >10Moz 10 >5Moz-10Moz 6 <5Moz 2 Mining/ Process Method Open Pit 10 Mechanised 6 Underground 2 Infrastructure Mining and Conc. 10 Mining 6 Roads,Electricity 2 Data Quality Well Understood 6 Neutral 4 Poorly understood 2 Title/Ownership Operating Mine 6 Mining Right 4 Exploration Right 2 Geological Complexity Highly Complex 6 Complex 4 Minor Structures 2 Deposit Type Western Bushveld 6 Eastern Bushveld/Platreef 4 Other 2 Stage of Development DFS 3 Pre-feasibility 2 Compliant

resource or < 1

Strategic Important - Premium 3 Neutral 2 Discount 1 Ability to Increase Resource High 3 Medium 2 Low 1 Social and Environmental Corporate with BEE 3 BEE 2 No BEE 1

8.1.2 Market Approach - Kameelhoek Project

An alternative market approach is to determine the monetary value per hectare (MVH) using relatively recent transactions of assets that have similar characteristics to those assets being valued. Kameelhoek is currently classified as an early stage exploration project and no resources have been declared. Exploration expenditure was not available to do a cost approach. The project was therefore valued per hectare

8.2 Cost Approach

No historical cost was available for the projects, and this method could not be used in the valuation of the projects

99 VVAALLUUAATTIIOONN DDAATTEE

The effective date of the valuation is 26 March 2010 while the effective date of the Report stands at 26 March 2010. Thus, no material changes to the valuation have occurred.

SV T1.9



34

1100 VVAALLUUAATTIIOONN SSUUMMMMAARRYY AANNDD CCOONNCCLLUUSSIIOONNSS

10.1 Principal Project Risk

10.1.1 Doornbosch Project

The following table summarises the Projects risks:-

Table 10: Principal Risk – Doornbosch Project

PRINCIPAL RISK COMMENT

Depth The average UG2 intersection depth of 134.89m, which when plotted on a dip profile section, reveals a reef dip of ±13° from the surface outcrop westward to the intersected depth.

Scale of Project (Resource) Very small – 95,000oz. Doornbosch is unlikely to ever be considered as a standalone operation unless it is mined by contractor and the ore sold to neighbouring Modikwa mine.

Mining/ Process Method Open pit/Underground Infrastructure No infrastructure exists or any mining has taken place on the property

Data Quality Minxcon has stated several reasons for restating the resource to Inferred resources due to limited information that is available on the project (Refer to section 6).

Title/Ownership Prospecting Right 55PR pertains to the Doornbosch Project, and covers an area of 3,629.1746 ha. The exploration right expires 10 November 2011

Geological Complexity

Within the Project area and surroundings the UG2 strikes north northwest to south southeast and dips on average 10o to 12o to the southwest at shallow depth. The dip of the stratigraphy has local variations up to 20o. There appears to be no major structures that will negatively affect the UG2 horizon on the Project area..

Deposit type Eastern Bushveld Complex Stage of development Early stage Exploration Strategic Neutral/Premium

Ability to increase resource Limited, the Oxidised Zone (314 kt) was excluded in the Minxcon resource table and could be included in future following additional exploration and assaying

10.1.2 Kameelhoek Project

The following table summarises the Projects risks:-

Table 11: Principal Risk – Kameelhoek Project

PRINCIPAL RISK COMMENT

Depth Outcropping with a potential strike length of 1.5km. On the Sishen South Project area, outcrops of iron ore strike northeast-southwest, and comprise laminated and conglomeratic types which dip between 40° and 50° to the east.

Scale of Project (Resource) Currently the Kameelhoek Project is classified as a prospecting target and no formal declaration of the Mineral Resources has occurred. The property is small and unlikely to be operated on a standalone basis

Mining/ Process Method Opencast

Infrastructure All property surrounding the area, excluding the rest of farm 477 forms part of the Sishen South Mine development. No mining has yet taken place on the property. Old Manganese workings are scattered over the farm area.

Data Quality Geological information is inferred from the surrounding areas.

Title/Ownership

Prospecting Right 92PR pertains to the Kameelhoek Project, and covers an area of 973.79 ha. There is limited time (Expires 10 December 2010) in which the company has to either convert the exploration right to a mining right or enter into a transaction with a third party

Geological Complexity

Formation outcrop over about 1.5 km in the southeast of the property and dips to the east towards Sishen South Mine covering an area of about 90 ha. The Kameelhoek area is seen as an extension of the shallow, high-grade ore body to the south on the Sishen South Mine. The orebody appears to be in an anticline but is not structurally complex.

Deposit type The Kameelhoek Project is located on the Wolhaarkop Anticline in the Campbellrand Group dolomites.The Wolhaarkop breccia iron and manganese

SV T1.10

T6 i



35

PRINCIPAL RISK COMMENT mineralization on Kameelhoek Project, which is situated on the anticline, appears to be controlled by northeast parallel trending structures. The breccia is overlain by the Manganore Iron formation (Blinkklip Breccia). The Blinkklip Breccia has a potential strike of 1.5 km to the southeast of the Project and dips to the east. The Blinkklip Breccia is overlain by the Gamagara Formation. Economic iron mineralisation is known to occur in the Doornfontein conglomerate at the base of the Gamagara Formation. Hence, the potential from this unit should be investigated on Kameelhoek Project.

Stage of development Early stage exploration Strategic Neutral

Ability to increase resource No Resource currently exists but exploration could lead to a high grade resource being declared in the project area

10.2 Valuations of the farms Doornbosch and Kameelhoek

10.2.1 Doornbosch

The valuation of the project area was based on the market approach for which Minxcon used their valuation curve, constructed from historical transactions of properties of a similar nature. The methodology was as follows:-

• The Industry Valuation standards illustrated in Table 9 were used to estimate the project specific risk of the areas for which resources exists. The Project principal risk criteria (Table 10) were measured against the Industry Valuation standards in the decision making process to determine a project valuation index;

• A comparison of the project valuation index of 48 for the Doornbosch Inferred category, to that of the South African platinum industry (48), indicates that the project risk profile is on par with the South African platinum industry average (Table 12);

• Considering there is no deviation of the project valuation index above, from the industry mean of 48, the USD/oz industry value of USD2.86/oz for the Inferred Mineral Resources, was used for the Project;

• For the project value calculation, the sum of the individual products of the USD/oz x oz x ZAR7.59/USD for the Mineral Resource was determined (Table 13); and

• A value of ZAR2.098 million was determined for the Doornbosch Project.

Table 12: Doornbosch Project Valuation Modifying Indices (Also refer to Table 9)

Platinum Industry Doornbosch Depth 6 10 Scale of Project (Resource) 6 2 Mining/ Process Method 6 10 Infrastructure 6 2 Data Confidence 4 4 Title/Ownership 4 2 Geological Complexity 4 6 Deposit type 4 4 Stage of development 2 1 Strategic 2 2 Ability to increase resource 2 2 Social & Environmental 2 3

Average 48 48 Notes: As the valuation parameter increases, the project value will increase and the risk profile will decrease



36

Table 13: Doornbosch Project Value

Mineral Resource Category Farm/Resource Area

Contained Precious Metal 3PGE+Au USD/oz ZAR '000

kg Oz ('000) Indicated (Geo-Consult) Doornbosch 5,260 169 18.09 23,492 Inferred (Minxcon) Doornbosch 2,970 95 2.86 2,098

10.2.2 Kameelhoek

The Kameelhoek project does not have any estimated Mineral Resources, and no information is available which could be used to apply the historical cost method of valuation. Hence the Project was valued using a value per hectare approach. The best arms length example was:-

• A transaction concluded in May 2008, when Petmin acquired an iron-ore project in Mpumalanga Province from Framework Investments Limited (Framework), a 100%-held subsidiary of Kermas Limited (the Kermas Group);

• the valuation done by SRK in November 2006 for the pre-listing statement of the Kumba assets which included a number of the Sishen farms without resources; and

• Values were adjusted by using the ZAR iron ore price differences in 2006 and current. A sample of the valuations of a similar nature was used to determine a value of between ZAR 5.865 and ZAR25.588 million.

1111 SSOOUURRCCEESS OOFF IINNFFOORRMMAATTIIOONN

The following references were used in the compilation of the Mineral Asset Valuation Report on the Doornbosch and Kameelhoek Projects:-

Date Author Title 1998 Wilson, M.G.C. & Anhaeusser, C.

R. The Mineral Resources of south Africa, Sixth Edition, Handbook 16, pp402-407

July 2006 Doornrivier Minerals Limited Prospecting Works Programme - Kameelhoek December 2008 Shaw, M, Geo-consult

International (Pty) Ltd Report on the compilation and Interpretation of the data for the property of Kameelhoek 477 (Portion RE) in the Northern Cape for Doornrivier Mineral Limited.

December 2009 Randgold and Exploration Company Limited

Amended Prospecting Works Programme - Doornbosch

2009 Exxaro Web www.exxaro.com/pdf/icpr/a/geology/iron.htm 25 March 2010 Geo-Consult International (Pty) Ltd SAMREC Compliant Resource estimate for a UG2

Chromitite Occurrence on Doornbosch 294 KT

1122 PPRREEVVIIOOUUSS VVAALLUUAATTIIOONN

Minxcon is not aware of any previous valuations done for Doornbosch or Kameelhoek projects.

SV T1.11

SV T1.12



37

1133 CCOOMMPPEETTEENNTT PPEERRSSOONNSS AANNDD OOTTHHEERR EEXXPPEERRTTSS

The authors of this Report are members in good standing of appropriate professional institutions. The qualifications and professional registrations of the competent persons who have contributed to this evaluation are provided at the end of this report. The following persons made contributions to this report, and are qualified persons, as defined in SAMREC, SAMVAL and NI 43-101*:- Competent Valuator - Johan Odendaal (Director, Minxcon): B.Sc. (Geol.), B.Sc. (Hons) (Min. Econ.), M.Sc. (Min. Eng.), Pr. Sci. Nat. 400024/04, FSAIMM, MGSSA, MAusIMM. Johan Odendaal has 22 years experience in the mining and financial industry and 7 years as independent mining consultant specialising in the valuation of Mining Projects and Companies. He commands a wide range of knowledge on both the local and international mining companies. As a former employee of Merrill Lynch, he was actively involved in advising mining companies and investment bankers on corporate transactions. Johan worked for twelve years as a mining analyst and; rated one of the top platinum mining analysts; he became a globally recognised industry specialist. 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. Competent Person - Charles Muller (Director, Minxcon): B.Sc. (Hons) (Geol.), Pr. Sci. Nat. 400201/04 Charles has a wealth of knowledge in the field of geology and mineral resource evaluation. Charles is an expert in data processing, ore-body modelling and mineral resource evaluation using Datamine™, as well as the other major computer packages aimed at the minerals industry. During his 24 years in the mining industry, he has gained extensive experience in the fields of sedimentology, gold exploration and target generation of gold, platinum, diamonds, coal and base metal Projects. His skills in software development, customizing data systems and integration of databases are widely recognised in the mining industry. Charles has been involved with the modelling and geostatistical evaluation of various ore-bodies across the globe. He has presented papers on ore resource evaluation at international venues and has a number of publications to his credit. Key Technical Staff – Competent Person Geo-Consult (Consultant Geologist): M.Sc. (Expl. Geol.), Pr. Sci. Nat. 400306/07 George has 6 years experience in platinum exploration in South Africa. He has been involved with drilling and exploration management for several companies on the Northern and Eastern limbs of the Bushveld Complex. Key Technical Staff – Heather King (Mineral Resource Manager, Minxcon): M.Sc. (Econ. Geol.), Pr. Sci. Nat. 400116/01 Heather completed her Masters Degree thesis on the LG & MG chromitite seams of the Western Limb of the Bushveld Igneous Complex. Thereafter she joined the gold mining industry and worked initially as a Mine Geologist and then as a Mineral Resource Geologist on a number of operations on the Witwatersrand Goldfields. During her 10 years of working in the mining industry, Heather has gained extensive experience in the field of evaluating Witwatersrand gold ore bodies, as well as target generation. Heather is a senior member of the Minxcon team, and is involved primarily in the modelling and geostatistical evaluation of various ore-bodies. Heather is proficient in data processing, ore body modelling and Mineral Resource estimation using Datamine™.

SV T1.13 T11



38

1144 CCOOMMPPEETTEENNTT VVAALLUUAATTOORR AANNDD CCOOMMPPEETTEENNTT PPEERRSSOONN

CERTIFICATE of COMPETENT VALUATOR - N J Odendaal

I, Johan Odendaal, do hereby certify that:

1. I am Director of Minxcon (Pty) Ltd Suite 5 Coldstream Office Park, Cnr Hendrik Potgieter and Van Staden Roads, Little Falls, Johannesburg, South Africa

2. I graduated with a B.Sc. (Geology) degree from the Rand Afrikaans University in 1985. In addition, I have obtained a B.Sc. Hons (Mineral Economics) from the Rand Afrikaans University in 1986 and a M.Sc. Min. Eng. from the University of the Witwatersrand in 1992.

3. I am a member/fellow of the following professional associations.

Class Professional Society Year of

Registration Member Geological Society of South Africa (MGSSA No. 965119) 2003 Fellow South African Institute of Mining and Metallurgy (FSAIMM Reg. No. 702615) 2003 Member Australasian Institute of Mining and Metallurgy (MAusIMM Reg. No. 220813) 2003 Member South African Council for Natural Scientific Professions (Pr. Sci. Nat. Reg. No.

400024/04) 2003

Member Investment Analysts Society of South Africa 1992

4. I have worked as a Geoscientist for a total of 23 years since my graduation from university. 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 completed a number of valuations on various commodities including platinum, using the valuation approaches described by SAMVAL.

5. To the best of my knowledge, information and belief, the Report contains all scientific and technical information required to be disclosed to make the Report not misleading.

6. The facts presented in the Report are correct to the best of my knowledge.

7. The analyses and conclusions are limited only by the reported forecasts and conditions.

8. I have no present or prospective interest in the subject property or asset.

9. My compensation, employment or contractual relationship with the Commissioning Entity is not contingent on any aspect of the Report.

10. I have no bias with respect to the assets that are the subject of the Report, or to the parties involved with the assignment.

11. Owing to time constraints and distance from the Project Areas, I have not made a personal inspection of the properties. I conducted a site visit to the general Doornbosch area in 2008.

Yours faithfully,

N J ODENDAAL B.Sc. (Geol.), B.Sc. Hons. (Min. Econ.), M.Sc. (Min. Eng.) Pr. Sci. Nat., FSAIMM, MGSSA, MAusIMM DIRECTOR

Dated this 26th March 2010

SV T1.14 T11



39

CERTIFICATE of COMPETENT PERSON - C J Muller

I, Charles Muller, do hereby certify that:

1. I am Director of Minxcon (Pty) Ltd Suite 5 Coldstream Office Park, Cnr Hendrik Potgieter and Van Staden Roads, Little Falls, Johannesburg, South Africa

2. I graduated with a B.Sc. (Geology) degree from the Rand Afrikaans University in 1988. In addition, I have obtained a B.Sc. Hons (Geology) from the Rand Afrikaans University in 1994 and attended courses in geostatistics and advanced Datamine modelling and geostatistical evaluation through the University of the Witwatersrand.

3. I am a member/fellow of the following professional associations.

Class Professional Society Year of Registration Member Geostatistical Association of Southern Africa 2008

Member South African Council for Natural Scientific Professions (Pr. Sci. Nat. Reg. No. 400201/04)

2004

4. I have worked as a Geoscientist for a total of 25 years. As the former Chief Geologist for Goldfields South Africa, my specialisation lies within Mineral Resource modelling and management. I have completed a number of Mineral Resource estimations for various commodities including platinum using approaches described by SAMREC.

5. To the best of my knowledge, information and belief, the Report contains all scientific and technical information required to be disclosed to make the Report not misleading.

6. The facts presented in the Report are correct to the best of my knowledge.

7. The analyses and conclusions are limited only by the reported forecasts and conditions.

8. I have no present or prospective interest in the subject property or asset.

9. My compensation, employment or contractual relationship with the Commissioning Entity is not contingent on any aspect of the Report.

10. I have no bias with respect to the assets that are the subject of the Report, or to the parties involved with the assignment.

11. Owing to time constraints and distance from the Project Areas, I have not made a personal inspection of the properties.

Yours faithfully,

C J MULLER B.Sc. (Hons) (Geol.), Pr. Sci. Nat., MGSSA DIRECTOR

Dated this 26th March 2010



40

1155 RRAANNGGEE OOFF VVAALLUUEESS

15.1 Doornbosch

In order to determine a value range, a sample of inferred values of typical Bushveld Complex transactions was taken from the bigger population of historical transactions. The lower 25% and upper 25% extreme values were eliminated to establish a value range for the properties within the 25th and 75th quarter percentiles.

Table 14: Doornbosch Mineral Asset Valuation based on Comparative Analysis

Market Approach Total Lower Price

Risk Adjusted

Price Upper Price

Lower Value Fair Value Upper Value

EXPLORATION PROPERTIES WITH RESOURCES

3 PGE + Au ('000) USD/oz ZAR'000

Geo-Consult Indicated Resource 169 9.66 18.09 25.54 12,544 23,492 33,179

Minxcon Inferred Resource 95 0.57 2.86 6.49 416 2,098 4,761

A range of values was provided together with a fair value for both the resource figures produced by Geo-Consult and Minxcon. The values provided were as follows:-

• Value 1: Valuation based on Minxcon reported Inferred resources (excludes Oxidised Zone);

• Value 2: valuation based on Minxcon assumed Indicated resources (Excludes Oxidised Zone), for comparison; and

• Value 3: Valuation based on Geo-Consult Indicated resources (includes Oxidised Zone). The three valuations above were provided because of the valuators opinion that a fair project value for Doornbosch will very much depend on the potential buyer of the mineral asset:-

• Should it be treated on a stand- alone basis, the Project will be valued on a much lower unit value and the total value have to be determined on the Inferred Mineral Resource ounces reported by Minxcon and hence a fair value of ZAR2.098 million only; or

• If the Project is consolidated with neighbouring Modikwa which has a Measured Resource surrounding the Doornbosch area, then Doornbosch could attract a higher value of ZAR15 million to ZAR20 million.

The above valuation represents a total value for the Doornbosch Project.

SV T1.15



41

Figure 15: Value Range for the Doornbosch Project

0

1

2

3

‐ 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Valuation

App

roach

ZAR ('000)

Minxcon Reported Resource (Inferred)

Minxcon Resource (Assumed Indicated)

Geo‐Consult Reported Resource (Indicated)

It is Minxcon’s opinion that an agreement with the neighbouring mine would make the best sense. The consolidation of the area into the Modikwa resource would lift the value beyond the upper USD/oz range of the current valuation.

15.2 Kameelhoek

The upper value of these valuations included projects with measured and indicated resources and these were excluded. Minxcon derived a R/ha value closer to the lower end of the spectrum as illustrated in Table 15.

Table 15: Kameelhoek Mineral Assets Valuation based on Comparative Analysis

Approach Total Lower Price

Median Vaue

Upper Price Lower Value Fair Value Upper Value

EXPLORATION PROPERTIES WITHOUT RESOURCES Ha R/ha ZAR'000 Market Approach (Comp.) 974 R 1,874 R 6,021 R 26,271 R 1,825 R 5,865 R 25,588 A range of values was provided together with a fair value. The upper and lower valuation range was established at between ZAR5.865 million and ZAR25.588 million respectively. The above valuation represents a total value for the Kameelhoek Project.



42

Figure 16: Value Range for the Kameelhoek Project

0

1

2

0 5,000 10,000 15,000 20,000 25,000 30,000

Valuation

App

roach

Value (ZAR'000)

Market Approach

1166 IIDDEENNTTIIFFIIAABBLLEE CCOOMMPPOONNEENNTT AASSSSEETT VVAALLUUEESS

N/A

1177 HHIISSTTOORRIICC VVEERRIIFFIICCAATTIIOONN

N/A

SV T1.16

SV T1.17



43

1188 MMAARRKKEETT AASSSSEESSSSMMEENNTT

Commodity Market Assessment

18.1 Platinum

In its Platinum Interim review 2009, Johnson Matthey forecast the platinum market to be in a small annual surplus of 140,000 oz during 2009. This was the net result of lower global demand for platinum (Expected to fall by 4.4%) to 5.92 million ounces and an increase of 1.9% to 6.06 million ounces in global supplies. The platinum price began the year at a relatively soft USD949/oz (January average) but climbed to end at a December average of USD1442/oz. South African platinum sales were expected to climb to 4.73 million ounces against supplies from North America and Russia which were set to fall to 255,000 oz and 745,000 oz respectively. Due to the poor economic conditions gross automotive platinum demand contracted by 33.0% in 2009, to 2.48 million ounces, reflecting lower vehicle production in most major markets. European demand was expected to fall by 45.7% due to a sharp decline in the market share of the diesel passenger car and the continued introduction of palladium into diesel after treatment. Net physical platinum investment demand reached an expected 630,000 oz in 2009, some 13.5% more than in 2008. Demand for coins and investment bars rose to 95,000 oz following the demand trends of gold.Net demand for platinum from the jewellery industry was set to grow by an estimated 79.5% to 2.45 million ounces in 2009. In China, lower metal prices and improved profit margins drove very substantial restocking by the jewellery industry while underlying consumer sales of platinum jewellery also rose strongly. In Japan, net demand was expected to rise due to a decline in the rate of recycling of old jewellery in response to the lower platinum price. Industrial demand for platinum contracted by 31.5% to 1.16 million ounces after four years of growth.

Figure 17: Platinum Supply and Demand

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009e

'000

oz

Net Autocatalyst Recovery Chemical Electrical

Glass Net Investment Jewellery

Petroleum Other Total Supply

Source: Johnson Matthey, Platinum Interim Review 2009

SV T1.18 T5.8 i



44

Outlook The platinum market is expected to tighten in 2010 as demand starts to improve. These positive fundamentals might be expected to support the platinum price but external factors are likely to be more important. Platinum is expected to be supported by a strong gold price but could fall back on the strengthening of the dollar.

Figure 18: Platinum Monthly Prices 2000-Jan 2010

0

500

1000

1500

2000

2500

Jan‐00

Jun‐00

Nov‐00

Apr‐01

Sep‐01

Feb‐02

Jul‐02

Dec‐02

May‐03

Oct‐03

Mar‐04

Aug‐04

Jan‐05

Jun‐05

Nov‐05

Apr‐06

Sep‐06

Feb‐07

Jul‐07

Dec‐07

May‐08

Oct‐08

Mar‐09

Aug‐09

Jan‐10

US$/oz

Figure 19: Platinum Consensus Forecasts

10001100120013001400150016001700180019002000

Mar‐10

May‐10

Jul‐1

0

Sep‐10

Nov

‐10

Jan‐11

Mar‐11

May‐11

Jul‐1

1

Sep‐11

Nov

‐11

Jan‐12

Mar‐12

May‐12

USD

/oz

Consensus (Mean) High Low

Source: Consensus Economics; www.kitco.com Palladium

In its Platinum Interim review 2009, Johnson Matthey forecast supplies of palladium to decline by 1.8 per cent in 2009 to 7.18 million ounces, the lowest figure since 2003. Sales from primary production in North America and Russia were expected to fall. South African sales of palladium were expected to increase despite lower underlying production during the year while output from Zimbabwe was expected to rise. Sales of palladium from Russian state stocks were expected to contribute some 960,000 oz to supplies. Net physical investment demand for palladium was forecast to grow by 51.2 % to 635,000 oz during the year. Demand for coins and small bars in North America is expected to grow whilst, investment through Exchange Traded Funds was set to climb from 370,000 oz to 540,000 oz as investors return to the palladium market, enticed by the low price of palladium compared to the highs of mid-2008. Gross automotive palladium demand was forecast to fall by 12.7 % to 3.90 million ounces in 2009. Demand in Japan, North America and the Rest of the World region also declined, in line with lower vehicle production. Chinese demand has risen by 135,000 oz. European demand was forecast to fall only marginally, despite a drop in vehicle production, as palladium benefits from a short term rise in the market share of the gasoline engine and its steady introduction into diesel exhaust after treatment.. Net palladium jewellery demand was expected to rise by 7.6 % in 2009 to an annual total of 920,000 oz. Palladium continues to make steady progress as a jewellery metal in Europe and North America, driving demand higher. The Chinese jewellery market appears now to have reached a level of maturity and demand there was expected to rise to 680,000 oz as the level of recycling of scrap material declines. Net physical investment demand for palladium is forecast to grow by 51.2 % to 635,000 oz during 2009. Demand for coins and small bars in North America was expected to grow and investment through Exchange Traded Funds was set to climb from 370,000 oz to 540,000 oz as investors return to the palladium market.



45

Figure 20: Palladium Supply and Demand

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

'000

oz

Net Autocatalyst Chemical Dental Electronics

Jewellery Investment Other Total Supply

Source: Johnson Matthey, Platinum Interim Review, 2009 Outlook The palladium price performed strongly since the start of 2009 with investors building very large net long positions pushing the price above the USD400/oz level in January 2010. The price is expected to rise steadily with a trading range of between USD340/oz to a high of USD550/oz expected.

Figure 21: Palladium Monthly Prices 2000-Jan 2010

0

200

400

600

800

1000

1200

Jan‐00

Jun‐00

Nov‐00

Apr‐01

Sep‐01

Feb‐02

Jul‐02

Dec‐02

May‐03

Oct‐03

Mar‐04

Aug‐04

Jan‐05

Jun‐05

Nov‐05

Apr‐06

Sep‐06

Feb‐07

Jul‐07

Dec‐07

May‐08

Oct‐08

Mar‐09

Aug‐09

Jan‐10

US$/oz

Figure 22: Palladium Consensus Forecasts

300.0

350.0

400.0

450.0

500.0

550.0

600.0

650.0

Mar‐10

May‐10

Jul‐1

0

Sep‐10

Nov

‐10

Jan‐11

Mar‐11

May‐11

Jul‐1

1

Sep‐11

Nov

‐11

Jan‐12

Mar‐12

May‐12

USD

/oz

Consensus (Mean) High Low

Source: Consensus Economics; www.kitco.com Rhodium

The rhodium market was oversupply –171,000 oz during 2009. Net demand was expected to decline by 122,000 oz to 548,000 oz as metal purchases for use in catalytic converters fall heavily. Rhodium supplies were set to rise by 24,000 oz to 719,000 oz despite a decline in underlying production in South Africa. Gross rhodium purchases by the global automotive sector were forecast to decline by 19.2 per cent to 618,000 oz largely due to an expected 16.1 per cent drop in global light duty vehicle production. The troubles in the global economy have had a severe effect on the automotive industry. Demand was expected to rise only in China, where government subsidies have supported the economy.



46

Rhodium demand has been further reduced by continuing thrifting of this metal from threeway catalysts. Prior to 2009, rhodium prices had been at an elevated level for some time and the auto makers and catalyst manufacturers have devoted significant resources to minimising rhodium usage without worsening catalytic performance. As a result, new, lower-rhodium loaded catalytic converters are being steadily introduced into the market. In 2009, this thrifting, together with the impact of a decrease in average vehicle size, outweighed the effects of tightening legislation, depressing gross rhodium demand by more than the fall in vehicle production. The high rhodium price drove autocatalyst recovery to record levels during 2008, depleting stocks of old spent catalysts, as generous profits were available throughout the recycling industry. With fewer vehicles sold in North America, Europe and Japan during 2009, there has also been a decline in the number of newly-available spent catalysts for recycling. While the Chinese construction market remains robust, exports of fibre glass to other markets have fallen and there has been little production capacity installed in China this year. A temporary dip in demand for LCD glass for flat screen television sets also caused a hiatus in the construction of new production facilities. However, demand has been supported by the fall in the price of rhodium. Glass manufacturers typically have a range of platinum-rhodium alloys they can use in their processes. Addition of extra rhodium increases the durability of these alloys and a low metal price has encouraged the use of higher-rhodium alloys at a number of sites.

Figure 23: Rhodium Supply and Demand

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

'000

oz

Net Autocatalyst Chemical Electrical

Glass Other Total Supply

Chemical sector demand for rhodium was expected to decline by only 2,000 oz to 66,000 oz in 2009. Electrical and other industrial demand for rhodium was expected to to fall from 27,000 oz in 2008 to 24,000 oz during 2009.



47

Figure 24: Rhodium Monthly Prices 2000-Jan 2010

0

2000

4000

6000

8000

10000

12000

Jan‐00

Jun‐00

Nov

‐00

Apr‐01

Sep‐01

Feb‐02

Jul‐0

2

Dec

‐02

May‐03

Oct‐03

Mar‐04

Aug

‐04

Jan‐05

Jun‐05

Nov

‐05

Apr‐06

Sep‐06

Feb‐07

Jul‐0

7

Dec

‐07

May‐08

Oct‐08

Mar‐09

Aug

‐09

Jan‐10

US$/oz

Source: www.kitco.com

18.2 Iron Ore

18.2.1 Supply

World iron ore sources are estimated at 800 billion metric tons of crude ore containing 230 billion metric tons of iron. Amongst the largest producers are Australia, Brazil, China, India, Russia and South Africa. Worldwide, 50 countries produce iron ore, but 96 % of this ore is produced only by 15 countries. Trade occurs primarily between regions rather than within regions, although there is some intra-regional trade in Europe and North America. The major importing region is North Asia, followed by Europe, while the major exporting regions are South America and Oceania.



48

Figure 25: Geographical Spread of Iron Ore Production - 2009

Source: US Bureau of Mines.

Total iron ore production worldwide was expected to be about 2.315 billion metric tonnes in 2009.

Table 16: World Mine Production

Million Metric tonnes 2004 2005 2006 2007 2008 2009e United States 55 54 53 52 54 26

Australia 231 262 275 299 342 370

Brazil 255 280 318 355 355 380

Canada 28 30 34 33 31 27

China 310 420 588 707 824 900

India 121 140 140 180 220 260

Iran 17 19 20 32 32 33

Kazakhstan 20 16 19 24 23 21

Mauritania 11 11 11 12 11 11

Mexico 12 12 11 12 12 12

Russia 97 97 102 105 100 85

South Africa 39 40 41 42 49 53

Sweden 22 23 23 25 24 18

Ukraine 66 69 74 78 73 56

Venezuela 22 20 23 23 21 16

Other countries 37 42 67 47 47 47

World Total Excluding China 1,033 1,115 1,211 1,319 1,394 1,415

World total (rounded) 1,343 1,535 1,799 2,026 2,218 2,315 Source: US Bureau of Mines. Note: Mine production estimates for China are based on crude ore rather than usable ore which is reported for the other countries.

Australia is the source of virtually all of Oceania’s exports, which accounts for about 39% of the total volume of iron ore traded internationally. The second largest iron ore exporting region is South America (31% of global iron ore exports), where Brazil is the major producer and exporter. India and Central Asia is the third major iron ore exporting region, accounting for 11% of the volume of exports. The only two exporters from that region are India and Kazakhstan. Europe accounts for about 8% of the volume of iron



49

ore exports and much of its trade is intra-regional (. Russia also imports iron ore from Kazakhstan and the Ukraine. The Africa and Middle East region accounts for 6% of global iron ore exports. The region's only large exporters are South Africa and Mauritania. Most of North America's iron ore exports (just under 4% of the world total) are intra-regional. In particular, iron ore is traded between Canada and the US. The region's major iron ore exporter is Canada. Although China mines substantial volumes of iron ore, its output is used by the domestic steel industry. The combination of rising production and rising prices produced extremely strong growth in real industry revenue over the five years ending in 2009. The number of iron ore mines in operation is also estimated to have increased, reflecting the opening of new mines in most producing areas in response to rising demand. The iron ore industry has been consolidating almost continuously since the 1970s. The three largest companies, Companhia Vale do Rio Doce (Vale), Rio Tinto and BHP Billiton, together account for about 35% of global output. Steel producers, faced with rising iron ore prices over the last few years, are taking a renewed interest in acquiring iron ore assets. The Japanese company Mitsui, a major steel producer, has a substantial stake in the largest iron ore miner, Vale (about 18%) as well as joint venture interests with BHP Billiton in most of its Australian operations. The four largest firms in the Global Iron Ore Mining industry account for about one-third of industry output, and generate about 50% of industry revenue.

Figure 26: Market Share by Company

Source: IBIS Inc.

Iron ore output surged 49% in the December 2009, mostly driven by China, leading analysts to suggest that miners like Rio Tinto, BHP Billiton and Brazil's Vale could achieve hefty price rises in 2010. Producers have increased production to keep pace with orders from China, the world's top steel producer. The surging demand for iron ore, especially from China, is encouraging producers to make more sales onto the spot market, where buyers are willing to pay twice the price paid under long-term contracts that have traditionally governed the market.

18.2.2 Demand

World steel output is expected to return to growth in 2010, as global economic growth revives. Steel-intensive manufacturing and construction activity in large developing economies such as China and India are expected to bounce back strongly. In this climate, the demand for iron ore is expected to expand,



50

setting the scene for an increase in iron ore production from about 1,737 million metric tons in 2009 to about 2,363 million metric tons in 2014. The four largest producing countries, Brazil, China, Australia and India, will account for the bulk of this growth, reflecting the construction of large new mines and mine expansions in each of these countries. However, other nations will also make substantial contributions to rising iron ore output. Iron ore production in Russia, the Ukraine and Kazakhstan is expected to expand strongly, reflecting renewed investment both by local firms and foreign operations. The trend towards steel makers either acquiring iron ore operations outright or at least taking a strategic stake in them is expected to continue. Chinese steel makers, stung by high iron ore prices as their demand for this feedstock continues to expand strongly, are taking an interest in operations in both Australia and Brazil. Similarly, ArcelorMittal, the world's largest steel maker, has stated that it will continue to expand its iron ore operations. Although China's domestic iron ore production will rise, growth in demand from its steel industry will expand more rapidly and it will continue to draw in a large and growing volume of imports. Links between customers in China and the major exporting companies are expected to strengthen. Not only will Chinese firms increasingly seek to gain ownership stakes in new mines overseas, but iron ore miners may also acquire interests in Chinese operations. For example, Vale has entered into a joint venture with Chinese partners (Zhuhai Yueyufeng Iron & Steel Co. Ltd and Pioneer Iron & Steel Group) in a 1.2 million metric ton per year iron ore pellet plant in Guandong, China. The plant became operational in early 2008, with Vale supplying ore under a 30-year contract. Vale is reported to be considering investing in other new iron ore pellet plants in China, as well as a plant in Malaysia. Steel demand and production in India is also expected to expand rapidly in response to continued urbanization and industrialization. Unlike China, India will remain a net exporter of iron ore, although growth in its iron exports will be constrained by the expansion of the local steel industry and the Indian Government's focus on giving priority access to local iron to steel makers operating in India. A return to growth in the US and Europe is also expected to underpin rising demand for steel in those areas over the five years to 2014. Initially, the pick up in activity in the demand for steel will be relatively weak, due to continued tight credit conditions in early 2010. However, as growth becomes more entrenched, demand levels are expected to firm.

18.2.3 Iron Ore Prices

Iron ore prices plunged in 2009 and are expected to come under further downward pressure in 2010, as buyers wield their new-found market power. Moderate price gains are expected beyond that time, as steel demand and production revive and iron ore supply and demand move more closely into line. Overall, industry performance is expected to improve over the five years ending in 2014, output and prices increase. Industry revenue and profit are expected to expand average annual rates of 4.5% and about 6% respectively. Stronger growth in profit reflects continued productivity gains and an ongoing emphasis on cost containment. The performance gains will not occur evenly. Revenue is expected to fall in 2010 as lower prices more than offset rising output. However, gains are expected in subsequent years. Growth in the volume of iron ore output and the opening of new iron ore mines will ensure that industry employment expands over the outlook period, rising at about 3.3% per year.

18.2.4 Prices

Iron ore prices have subsided during 2009 from the highs in 2008 but spot price are at or near a 12 month high.



51

Figure 27: Iron Ore, 67.55% Iron Content, Fine, Contract Price to Europe, FOB Ponta da Madeira

0

20

40

60

80

100

120

140

160

Mar‐90

Apr‐91

May‐92

Jun‐93

Jul‐9

4

Aug

‐95

Sep‐96

Oct‐97

Nov

‐98

Jan‐00

Feb‐01

Mar‐02

Apr‐03

May‐04

Jun‐05

Jul‐0

6

Aug

‐07

Sep‐08

Oct‐09

USc/dmtu

Source: Indexmundi

Commentators and industry participants who were, in late 2009, forecasting 20% contract price increases are now discussing a jump of 50%, 60% and even 90%.

Figure 28: Industry Consensus Forecasts

90

100

110

120

130

140

150

160

Mar‐10

May‐10

Jul‐1

0

Sep‐10

Nov

‐10

Jan‐11

Mar‐11

May‐11

Jul‐1

1

Sep‐11

Nov

‐11

Jan‐12

Mar‐12

May‐12

USc/dmtu (FOB)

Australian Lumpy Ore Australian Fine Ore Brazilian Fine Ore

Source: Consensus Economic Forecasts

Iron ore prices are expected to rise significantly in 2010/11 after falling in 2009. Analysts are tipping price hikes of anywhere from 10 % to 60 % and foresee a far more confident period for both market growth and perceived demand-led price increases.

1199 AAUUDDIITTSS AANNDD RREEVVIIEEWWSS

N/A

SV T1.19 T9



52

2200 GGLLOOSSSSAARRYY OOFF TTEERRMMSS

Term Definition

Adit An opening driven horizontally into the side of a mountain or hill for providing access to a mineral deposit.

Acid Rock Drainage The exposure, usually as a result of mining, of sulphide-bearing minerals to air and water, forming sulfuric acid. This acid dissolves metals such as lead, zinc, copper, arsenic, selenium, mercury, and cadmium, into ground and surface water. Acid rock/mine drainage can poison ground and drinking water and destroy aquatic life and habitat. Commonly mined ore bodies that pose the risk of acid rock drainage include gold, silver, copper, iron, zinc, and lead.

Alluvial Deposited by running water.

Amsl Above mean sea level

Archaean A period of time between 4,000Ma and 2,500Ma.

Assay Process to determine the proportions of metal in an ore.

Assay laboratory A facility in which the proportions of metal in ores or concentrates are determined using analytical techniques.

Auriferous A synonym for gold bearing.

Bearing Strike

Black Economic Empowerment (“BEE”) company

The following recommendations have been made to the South African government by the Black Economic Empowerment Commission regarding the definitions of different levels of company ownership by Black people that qualify for BEE status:

• A ‘Black company’ is one that is 50.1% owned and managed by Black people; • A ‘Black empowerment company’ is one that is at least 25.1% owned and

managed by Black people; and • A ‘Black influenced company’ is one that is 5% -25% owned and managed by

Black people.

Blank Samples that contain no mineral content that are sent to the assay laboratory for quality control.

Block model Technique of modelling which divides the resources into mineable blocks.

Borehole

A hole drilled usually drilled from surface but also from underground, in which core of the rock strata is cut by a diamond-impregnated bit or crown as the cutting edge. This core can be studied and split with one half being sent for the determination of any contained metals (called assaying).

Bulk sample Large sample which is processed through a small-scale plant and not a laboratory.

Buckshot Pyrite Pyrite that has crystallised in a cubic shape.

Carbon-In-Pulp (CIP) A common process used to extract gold from cyanide leach slurries. The process consists of carbon granules suspended in the slurry and flowing counter-current to the process slurry in multiple-staged agitated tanks. The process slurry, which has been leached with cyanide prior to the CIP process, contains solubilised gold. The solubilised gold is absorbed onto the carbon granules, which are subsequently separated from the slurry by screening. The gold is then recovered from the carbon by electrowinning onto steel wool cathodes or by a similar process.

Chip Sample Sample of ore chipped out of a rock face.

Clastic A sediment or rock composed chiefly of fragments derived from pre-existing rocks or minerals.

T10 ii



53

Term Definition

Coefficient of Variation A measure of dispersion of a probability distribution (ratio of standard deviation to the mean).

Competent Person The SAMREC Code defines a Competent Person as a person who is registered with any one of SACNASP, ECSA, PLATO or any other statutory South African or international body that is recognized by SAMREC. A Competent Person should have a minimum of five years’ experience relevant to the style of mineralisation and type of deposit under consideration and to the activity, which that person is undertaking.

Composite Sample The combining of individual sample results to determine the average grade of a borehole intercept.

Conglomerate A sedimentary rock containing rounded fragments (clasts) derived from the erosion and abrasion of older rocks. Conglomerates are usually formed through the action of water in rivers and beaches.

Core A cylindrical shaped sample of ore, derived by drilling with a hollow cylinder for the purpose of obtaining geological information.

Density-apparent porosity studies

The standard mass and water displacement methodology to calculate the SG of the rock, which also takes into account the amount of weathering of the material that might have taken place.

Diamond drilling A drilling method, where the rock is cut with a diamond bit, usually to extract cores.

Dilution Waste which is mixed with ore in the mining process.

Dip The angle that a structural surface, i.e. a bedding or fault plane, makes with the horizontal measured perpendicular to the strike of the structure.

Dolomite A sedimentary rock formed by the replacement of limestone.

Dyke A tabular body of intrusive igneous rock that cuts across the layering or structural fabric of the host rock.

Eskom South African electricity supply company

Enterprise Value A measure of a company's value, often used as an alternative to straightforward market capitalization. EV is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.

Exchange Rate The rate at which one currency will be converted to another.

Exploration Prospecting, sampling, mapping, diamond drilling and other work involved in the search for mineralisation.

Facies The features that characterise a sediment as having been deposited in a particular depositional environment.

Fault A fracture in earth materials, along which the opposite sides have been relatively displaced parallel to the plane of movement.

Faulting The process of fracturing that produces a displacement.

Fire Assay Analysis of gold content by cupellation process.

Fluvial Pertaining to rivers.

Footwall The underlying side of a fault, orebody or stope.

Geozone An area defined by geological characteristics.

Grade The quantity of metal per unit mass of ore expressed as a percentage or, for gold, as grams per tonne of ore.

Granite A common, coarse-grained, light-coloured, hard igneous rock consisting chiefly of quartz, orthoclase or microcline, and mica, used in monuments and for building.



54

Term Definition

Greenstone Any of various altered basic igneous rocks coloured green by chlorite, hornblende, or epidote.

Hanging Wall The overlying side of a fault, orebody or stope.

Hedging Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.

Highwall The unexcavated face of exposed overburden and ore in an opencast mine.

Homogenous Uniform in structure or composition throughout.

Inferred Mineral Resource An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or 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 or of uncertain quality and reliability. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource.

In situ In place, i.e. within unbroken rock.

Indicated Mineral Resource 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 exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed (SAMREC definition).

Interburden A layer of rock that lies in-between two layers of mineralised rock.

Kriging A weighted-moving-average interpolation method where the set of weights assigned to samples minimizes the estimation variance, which is computed as a function of the variogram model and locations of the samples relative to each other, and to the point or block being estimated.

Kurtosis A measure of the ‘peakedness’ of the probability distribution of a real-valued random variable.

Latitude The angular distance north or south of the earth’s equator, measured in degrees along a meridian, as on a map or globe.

Lava Molten rock that reaches the earth’s surface through a volcano or fissure.

Lenticular Resembling in shape, the cross-section of a lens.

Level The workings or tunnels of an underground mine which are on the same horizontal plane.

Lithology The general compositional characteristics of sedimentary rocks.

Logging Method of obtaining a continuous record of the lithology, stratigraphy and structure of the core obtained from a diamond-drill hole.

Lognormal Distribution A probability distribution in which the log of the random variable is normally distributed, meaning it conforms to a bell curve.

Longitude The angular distance north or south of the earth’s equator, measured in degrees along a meridian, as on a map or globe.

Mean Average.

Measured Resource That part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops,



55

Term Definition trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity (SAMREC definition).

Metamorphic Rock Rocks that result from partial or complete recrystallization in the solid state of pre-existing rocks under conditions of temperature and pressure.

Metaquartzite A quartzite formed by metamorphic recrystallization.

Mineable That portion of a resource for which extraction is technically and economically feasible.

Mineral Reserve The economically mineable material derived from a Measured and/or Indicated mineral Resource. It is inclusive of diluting materials and allows for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified. Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proved Mineral Reserves (SAMREC definition).

Mineral Resource A concentration (or occurrence) of material of economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a mineral resource are known, estimated from specific geological evidence and knowledge, or interpreted from a well-constrained and portrayed geological model. Mineral Resources are subdivided, in order of increasing confidence in respect of geoscientific evidence, into Inferred, Indicated and Measured categories (SAMREC definition).

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.

National Instrument 43 101 The Canadian Code for reporting of Mineral Resources and Ore Reserves.

Oligomictic Composed almost entirely of a single type of fragment.

Ordinary Kriging A variety of kriging which assumes that local means are not necessarily closely related to the population mean, and which therefore uses only the samples in the local neighborhood for the estimate. Ordinary kriging is the most commonly used method for environmental situations.

Opencast Opencast mining is a type of surface excavation which often takes the shape of an inverted cone; the shape of the mine opening varies with the shape of the mineral deposit.

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 area over which a particular rock unit occurs at the Earth’s surface.

Overburden The alluvium and rock that must be removed in order to expose an ore deposit.

Palaeochannel An ancient trough or channel-like feature that was formed by river or similar stream current action during deposition of sediment at some period of geological time.

Pay limit The breakeven grade at which the ore-body can be mined without profit or loss and is calculated using the gold price, the working cost and recovery factors.

Payshoot High trending grade area.

Placer A sedimentary deposit containing economic quantities of valuable minerals mainly formed in alluvial and eluvial environments.



56

Term Definition

Production The day-to-day activities directed to obtaining saleable product from the mineral resource on a commercial scale. It includes extraction and other processing prior to sale.

Pyconometer A standard vessel used in measuring the density or specific gravity of materials.

Pyrite A common yellow sulphide mineral (FeS2).

Quartzite A metamorphic rock consisting primarily of quartz grains, formed by the recrystallization of sandstone by thermal or regional metamorphism.

Reef A gold-bearing placer, normally a conglomerate, which may contain economic concentrates of gold and uranium.

Refining The final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag.

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.

Relative Density Relative density (also known as specific gravity) is a measure of the density of a material. It is dimensionless, equal to the density of the material divided by some reference density (most often the density of water, but sometimes the air when comparing to gases)

Reverse Fault A dip-slip fault marked by a hanging wall that has moved upward relative to the footwall.

Riffler Ore splitter.

Royalty A payment made for a concession of commercial value.

Sampling Taking small pieces of rock at intervals along exposed mineralisation for assay (to determine the mineral content).

SAMREC Code The South African Code for the reporting of Exploration Results, Mineral Resources and Mineral Reserves.

Sandstone A sedimentary rock formed by the consolidation and compaction of sand and held together by a natural cement, such as silica.

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.

Shaft Vertical or inclined passageway to access the underground mining areas.

Shale A fine grained sedimentary rock formed by the compaction of silt, clay or sand that accumulates in deltas and on lake and ocean bottoms.

Simple Kriging A variety of kriging, which assumes that local means are relatively constant and equal to the population mean, which is well known. The population mean is used as a factor in each local estimate, along with the samples in the local neighborhood. This is not usually the most appropriate method for environmental situations.

Skewness A measure of the asymmetry of the probability distribution of a real-valued random variable.

Specific Gravity The ratio of the weight of a given volume of a substance to the weight of an equal volume of water. (Also referred to as relative density)

Stope Excavation within the orebody where the main production takes place.

Stratigraphic A term describing the chronological sequence in which bedded rocks occur that can usually be correlated between different localities.

Strike The direction taken by a structural surface such as a fault or bedding plane as it intersects the horizontal.

Subcrop A sub surface outcrop.



57

Term Definition

Tabular Having two dimensions much greater than the third.

Telkom South African telecommunications company.

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.

Trench A surface excavation to intersect the orebody, which is generally longer than it is wide.

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.

Variance A measure of a random variables statistical dispersion indicating how its possible values are spread around the expected value.

Variogram It describes the spatial or temporal correlation of observations.

Waste rock Rock with an insufficient gold content to justify processing.

Winze A small shaft sunk from one level to another in a mine, as for the purpose of ventilation or access.

Yield/Recovered grade The actual grade of ore realised after the mining and treatment process.



58

Abbreviation Definition ~ Approximately 2-D Two Dimensional. 3-D Three Dimensional. AIDS Acquired Immunodeficiency Syndrome AIM Alternative Investment Market Al Aluminium Au Gold AusImm Australian Institute of Mining and Metallurgy BEE Black Economic Empowerment BRQF Black Reef Quartzite Formation CAPM Capital Asset Pricing Model CCIC Caracle Creek International Consulting Inc CEO Chief Executive Officer CFO Chief Financial Officer CIP Carbon in Pulp COG Cut off Grade COO Chief Operating Officer CPIX Consumer Price Index excluding the effects of mortgage rate changes CPR Competent Persons Report CRG Central Rand Group CW Channel Width DCF Discounted Cash Flow DMR Department of Mineral Resources DD Diamond Drillhole DTM Digital Terrain Model DWAF Department of Water Affairs and Forestry EAGC EAGC Ventures corp. ECSA Engineering Council of South Africa EMP Environmental Management Programme EMPR Environmental Management Programme Report ERB East Rand Basin Fe Iron FW Footwall GCS Groundwater Consulting Service (Pty) Ltd GDP Gross Domestic Product GFGC Gold Fields Geological Centre GFM&D Gold Fields Mining and Development (Pty) Ltd GSSA Geological Society of South Africa HDS High Density Sludge HDSA Historically Disadvantaged South Africans HIV Human immunodeficiency virus HMI Human Machine Interface HW Hanging Wall ICP-OES Inductively Coupled Plasma Atomic Emission Spectroscopy IRR Internal Rate of Return ISO International Standards Organisation JSE JSE Securities Exchange LOM Life of Mine M&A Mergers and Acquisitions



59

Abbreviation Definition Max Maximum Min Minimum Mn Manganese MOU Memorandum of Understanding MPRDA Mineral and Petroleum Resources Development Act MVR Middelvlei Reef MWP Mining works programme NIR Not in Resource (but included in the LOM plan) NPV Net Present Value NYSE New York Stock Exchange ORM Ore Reserve Manager PC Percussion (Drillhole) PLC Programmable logic controllers PPP Purchasing Power Parity Pr.Sci.Nat Practicing Natural Scientist PRF Plant Recovery Factor Ptn Portion PV Present Value RC Reverse Circulation (Drillhole) Re Remaining Extent REL Randfontein Estates Limited RD Relative Density ROM Run of Mine S&LP Social and Labour Plan SAG Semi-autogenous Grind (mill) SAMREC The South African Code for the Reporting of Mineral Resources and Mineral Reserves SAMVAL The South African Code for the Valuation of Mineral Assets SANAS South African National Accreditation System SAIMM South African Institute of Mining and Metallurgy SCADA Supervisory Control and Data Acquisition SCF Shaft Call Factor SEC Securities and Exchange Commission SHE Safety, Health and the Environment SMU Smallest Mining Unit SPV Special Purpose Vehicle STC Secondary Tax on Companies TSX Toronto Stock Exchange UG Underground VAT Value Added Tax VCR Ventersdorp Contact Reef



60

Unit Definition % Percentage bcm Bank cubic meter cm Centimeter cmg/t Centimeter grams per tonne cmkg/t Centimeter kilograms per tonne g Grams g/t Grams per tonne Ha Hectare kg Kilogram kg/t Kilogram per tonne kt kiloton lb Pound Ma One million years M Million m Meter mbs Meters below surface Mg/l Milligrams per liter Ml Megalitres Mlb Million pounds mm Millimetre R South African Rand R/t Rands per tonne t Tonne t/hour Tonnes per hour t/year Tonnes per year tpm Tonnes per month u Micro US$ United States Dollar US$/oz United States Dollar per ounce US$/t United States Dollar per tonne ZAR South African Rand ZAR/t Rands per tonne



61

Appendix 1: Minxcon JSE Listing Requirements and SAMREC Code Audit Checklists

JSE LISTING REQUIREMENTS AUDIT CHECKLIST

JSE Section JSE Contents Report Section

12.4 (c) The Competent Person’s Report must be accompanied by a compliance checklist cross referencing every paragraph in this section together with the applicable sections in the SAMREC and SAMVAL codes to the relevant part of the Competent Person’s Report. Appendix 1

Listing Particulars12.8 (a) The Competent Person’s Report must comply with: -

(i) the SAMREC and SAMVAL Codes, (which for purposes of this requirement includes the guidelines in italics and Table 1 of the SAMREC and SAMVAL Codes); and 2.1

(ii) paragraph 12.9 of this section. 2.1 12.8 (b) Details of any direct or indirect beneficial interest, which each director (and his/her associates), Competent Person, Competent Valuator and where

applicable related party, (as defined in Section 10 of the JSE Listings Requirements), has or, within two years of the date of the pre-listing statement, had:

2.1

(i) in any asset (including any right to explore for minerals): 2.1 (1) of the applicant issuer; 2.1 (2) which has been acquired or disposed of by, or leased to or by, the applicant issuer, including any interest in the consideration passing to or from the applicant issuer; and

2.1

(ii) in the share capital of the applicant issuer; 2.1 12.8 (c) Financial information in terms of Section 8 of the Listing Requirements to the extent that the applicant issuer has financial history; 8-12 12.8 (d) A statement by the directors of any legal proceedings that may have an influence on the rights to explore or mine, or an appropriate negative

statement. 3.7

12.8 (e) Confirmation that the applicant issuer, or its group (including companies in which it has investments) is in possession of the necessary legal title or ownership rights to explore, mine or explore and mine the relevant minerals. 3.7

Competent Person's Report

12.9 (a) The Competent Person’s Report must 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. Cover pg

12.9 (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. -

12.9 (c) If the Competent Person is not independent of the issuer, clearly disclose the nature of the relationship or interest. 2 12.9 (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 In

document 12.9 (e) The report must contain a paragraph stating that all requirements of this section, the SAMREC Code (including Table 1) and SAMVAL Code have

been complied with, or that certain clauses were not applicable and provide a list of such clauses; and 2.1

12.4 c



62

JSE Section JSE Contents Report Section

Include a statement detailing: - (i) exploration expenditure incurred to date by the applicant issuer and by other parties where available; 4 (ii) planned exploration expenditure that has been committed, but not yet incurred, by the applicant issuer concerned; and 4 (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. 4

12.9 (f) The report must 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, 9, 10, 12

12.9 (g) The report must be published in full, on both the JSE and applicant issuer’s websites - 12.9 (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:

1

(i) purpose; 1 (ii) project Outline; 1 (iii) location map indicating area of interest; 1 (iv) legal aspects and tenure, including any disputes, risks or impediments; 1 (v) geological setting description; 1 (vi) exploration programme and budget; 1 (vii) brief description of individual key modifying factors; 1 (viii) brief description of key environmental issues; 1 (ix) mineral Resource and Mineral Reserve Statement; 1 (x) reference to Risk paragraph in the full Competent Person’s Report; 1 (xi) statement by the Competent Person that the summary is a true reflection of the full Competent Person’s Report; 1 (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) 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.

1



63

SAMREC COMPLIANCE CHECKLIST

SAMREC Section SAMREC Contents Pertains

To Report Section

Purpose of Report T1.1 (i) Title page, Table of Contents, including figures and tables. E, R, R* Cover pg T1.1 (ii) State for whom the report was prepared, whether it was intended as a full or partial evaluation or other purpose, what work was

conducted. E, R, R*

2

Effective date of report. E, R, R* Cover pg What work remains to be done. E, R, R* 4.2

T1.1 (iii) The Competent Person's statement as to whether the document is SAMREC compliant. If a reporting code, other than SAMREC has been used, include an explanation of the differences.

E, R, R* 2.1

Project Outline T1.2 (i) Brief description of scope of project (i.e. preliminary sampling, advanced exploration, conceptual, pre-feasibility, or feasibility phase,

LOM plan for an ongoing mining operation or closure). E, R, R*

1

Describe the geological setting, deposit type, commodity. E, R, R* 1 Describe the area of project. E, R, R* 1 Describe the background of project. E, R, R* 1 Describe the business arrangement. E, R, R* 1 Brief description of key technical factors that have been considered. R 1 Brief description of mining, processing and other key technical factors. R* N/A

History T1.3 (i) Historical background to the project and/or adjacent areas concerned, including known results of previous exploration and/or mining

activities (type, amount, quantity and development work). E, R, R*

4

Prior ownership and changes thereto. E, R, R* 4 Discuss known/existing historical Mineral Resource estimates and performance statistics to actual production for past and current operations, including the reliability of these and how they relate to the SAMREC Code.

R, R* 4

Discuss known/existing historical Mineral Reserve estimates and performance statistics to actual production for past and current operations, including the reliability of these and how they relate to the SAMREC Code.

R* N/A

T1.3 (ii) Reference all information used from other sources. E, R, R* 4 Previous successes or failures should be referred to transparently with reasons why the project should now be considered potentially economic.

R, R* 4

Key Plan, Maps and Diagrams T1.4 (i) Include and reference 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. E, R, R* In

document



64


To Report Section

If adjacent or nearby properties have an important bearing to the report, then their location and common mineralised structures should be included on the maps.

E, R, R* In document

Reference all information used from other sources E, R, R* In document

All maps, plans and sections noted in this checklist, should be legible, and include a legend, coordinates, system of coordinates, scale bar and north arrow.

E, R, R* In document

T1.4 (ii) Diagrams or illustrations should be legible, annotated and summarised. E, R, R* In document

Project Location and Description T1.5 (i) Description of location (country, province, and closest town/city, coordinate systems and ranges, etc.). E, R, R* 3.1 T1.5 (ii) Location map of prospecting/mining rights E, R, R* 3.1

Location map of any historical and current workings, E, R, R* 3.1 Location map of any exploration. E, R, R* 3.1 Location map of all principal geological features. E, R, R* 3.1

Topography and Climate T1.6 (i) All relevant issues relating to the mineral project, such as the topography and climate, noting any conditions that may affect possible

mining activities. E, R, R*

3.1.2

Topo-cadastral map in sufficient detail to support the assessment of eventual economics. Known associated climatic risks. R 3.1 Detailed topo-cadastral map. Where applicable aerial surveys should be checked with ground controls and surveys, particularly in areas of rugged terrain, dense vegetation and/or high altitude.

R* N/A

T1.6 (ii) A general topo-cadastral map should be available to support the above statement. E, R, R* 3.1

Legal Aspects and Tenure T1.7 The legal tenure should be verified to the satisfaction of the Competent Person. E, R, R* 3.7 T1.7 (i) The nature of the issuer’s rights (e.g. prospecting and/or mining). E, R, R* 3.2

The right to use the surface of the properties to which these rights relate. E, R, R* 3.3 T1.7 (ii) 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).

E, R, R* 3.6

T1.7 (iii) The security of the tenure held at the time of reporting or which is reasonably expected to be granted in the future along with any known impediments to obtaining the right to operate in the area.

E, R, R* 3.7

T1.7 (iv) A statement of any legal proceedings that may have an influence on the rights to prospect or to mine for minerals, or an appropriate negative statement.

E, R, R* 3.7

Data Management and Database



65


To Report Section

T2.1 (i) Identify and comment on the primary data elements (observation and measurements) used for the project and describe the management of this data or database. This should describe the following relevant processes; acquisition (capture or transfer), validation, integration, control, storage, retrieval and backup processes. Final verification of data, including QA/QC processes should also be part of the database. It is assumed that data is stored digitally but hand printed tables with well-organised data and information may also constitute a database.

E, R, R*

6

Identify and comment on interpreted data elements, derived from primary data (modelled or analysed), used for the project and describe the management of this data or database.

R 6

Identify and comment on interpreted and planned data elements, derived from modelled data, used for the project plans and describe the management of this data or database.

R* N/A

Spatial Data T2.2 (i) Describe the survey methods, techniques and expected accuracies of spatial data. E, R, R* 6 T2.2 (ii) Representative models and/or maps and cross sections or other 2D or 3D illustrations of results should exist, showing location of

samples, accurate drill hole collar positions, down hole surveys, exploration pits, underground workings, relevant geological data, etc. E, R, R*

5

Geological Data T2.3 (i) Describe the data acquisition or exploration techniques, the nature, level of detail, and confidence in the geological data used (i.e.

stratigraphy, lithology, structure, alteration, mineralisation, hydrology, geophysical, geochemical, petrography, mineralogy, geochronology, etc.

E, R, R* 5, 6

Discuss geological data that could materially influence the estimated quantity & quality of the Mineral Resource. R 5,6 Discuss geological data that could materially influence the estimated quantity & quality of the Mineral Reserve. R* N/A

T2.3 (ii) Acknowledge and appraise data from other parties and reference all data / information used from other sources E, R, R* In document

Specific Gravity and Bulk Tonnage Data T2.4 (i) If target tonnage ranges are reported then the preliminary estimates or basis of assumptions made for bulk density/ specific gravity(s)

must be stated. E, R, R*

6

Describe the method of bulk density /specific gravity determination with reference to the frequency of measurements, the size, nature and representativeness of the samples.

R 6

Include bulk densities for materials mined additional to the Mineral Resource to the same order of accuracy (such as waste, stripping and/or dilution material).

R* N/A

T2.4 (ii) Specific gravity samples must be representative of the material for which grade range is reported. E, R, R* N/A The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity etc.) moisture and differences between rock and alteration zones within the deposit.

R N/A

T2.4 (iii) Discuss assumptions for bulk density estimates used in the evaluation process of the different material. R N/A

General Data T2.5 (i) All relevant general data should be discussed with reference to the nature, level of detail and confidence. E, R, R* In

document



66


To Report Section

Sampling Governance T3.1 (i) Discuss the governance of the sampling campaign and process, to ensure sample and data quality and representivity, 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.

E, R, R* 6

T3.1 (ii) State whether sample recoveries have been properly recorded and results assessed. In particular whether a relationship exists between sample recovery and grade, and sample bias (e.g. preferential loss/gain of fine/coarse material).

E, R, R* 6

Sampling Method, Collection, Validation, Capture and Storage T3.2 (i) 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. E, R, R* 6

Data sets should include all relevant metadata, such as unique sample number, sample mass, collection date, spatial location etc. E, R, R* 6 Where mineral processing and/or metallurgical testing analyses have been carried out (bulk-sampling/trial mining), include the results of the testing, details of the testing methods and procedures, and discuss whether the samples are representative.

R, R* 6

T3.2 (ii) Demonstrate that adequate field sampling process verification techniques (QA/QC) have been applied, e.g. the level of duplicates, blanks, reference material standards, process audits, analysis, etc.

E, R, R* 6

If indirect methods were used (e.g. geophysical methods), these should be described, with attention given to the level of confidence. E, R, R* 6 T3.2 (iii) If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only

the down-hole lengths are reported, there should be a clear statement to this effect. E, R, R* 6

T3.2 (iv) Describe the data validation procedures used to ensure the data integrity, e.g. transcription, input or other errors, between its initial collection and its future use for modelling (e.g. geology, grade, density, etc.).

E, R, R* 6

T3.2 (v) Describe retention policy and storage of physical samples (e.g. core, sample reject, etc.). E, R, R* 6 T3.2 (vi) Describe the audit process and frequency (including dates of these audits). E, R, R* 6 T3.2 (vi) Disclose any material risks identified. E, R, R* 6

Sample Preparation T3.3 (i) Describe the laboratory/facility/location and accreditation. E, R, R* 6

Summarise 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.).

E, R, R* 6

T3.3 (ii) For all sample types the nature, quality, verification and appropriateness of the sample preparation technique should be discussed. E, R, R* 6

T3.3 (iii) If a drill core sample, 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.

E, R, R* 6

T3.3 (iv) Describe the quality control and quality assurance procedures adopted for all processes, including sub-sampling stages to maximise representivity of samples. This should include whether sample sizes are appropriate to the grain size of the material being sampled.

E, R, R* 6

T3.3 (v) Describe the audit process and frequency (including dates) and disclose any material risks identified. E, R, R* 6



67


To Report Section

Sample Analysis T3.4 (i) Identify the laboratory(s) and analytical method. E, R, R* 6

Discuss the nature, quality and appropriateness of the assaying and laboratory processes and procedures used and whether the technique is considered partial or total.

E, R, R* 6

T3.4 (ii) State the accreditation status and Registration Number of the laboratory. Laboratories should be appropriately accredited, however, if not, then this should be disclosed.

E, R, R* 6

T3.4 (iii) Discuss the nature of quality control procedures adopted and quality assurance thereof (e.g. reference material, standards, blanks, duplicates, external / referee laboratory checks) and state whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

E, R, R* 6

T3.4 (iv) Describe the audit process and frequency (including dates of the audits) and disclose any material risks identified. E, R, R* 6

Geological Model and Interpretation T4.1 (i) Briefly describe the regional geology E, R, R* 5.1

Describe the geological model, construction technique and assumptions. 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.

R, R* 6

T4.1 (ii) Describe the geological model, level of investigation (e.g. conceptual, pre-feasibility etc.) and inferences made from this model. E, R, R* 5, 6 Description of the thoroughness (precision and accuracy) with which lithological, structural, mineralogical, alteration or other geological, geotechnical and geo-metallurgical characteristics were recorded.

R, R* 5

T4.1 (iii) 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 deposit

E, R, R* 5, 6

Discuss whether consideration was given to alternative interpretations or models and their possible effect (or potential risk) if any, on the Mineral Resource estimate.

R, R* 5, 6

T4.1 (iv) Reliable geological models and/or maps and cross sections that support interpretations should exist. E, R, R* 5 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.).

R, R* 5, 6

Estimation and Modelling Techniques T4.2 (i) If an exploration target or deposit is reported, then the estimation techniques used to determine the grade and tonnage ranges should be

described in detail. E 6

Describe the determination of, and estimation techniques applied to define volume, density, grade, size distribution, value, geotechnical, geo-hydrological, geo-metallurgical or other appropriate models (e.g. section, polygon, inverse distance, geostatistical or other method) should be stated and justified, together with key assumptions and implications thereof, including any adjustments made to data (i.e. compositing, grade cutting / capping), sample spacing, estimation unit size (block size), selective mining units, reconciliation, domaining and maximum distance of extrapolation from data points.

R, R*

6

T4. 2(ii) Describe assumptions and justification of correlations made between variables. R, R* 6



68


To Report Section

T4. 2(iii) Discuss the block or grid cell size in relation to the average sample spacing and any assumptions behind modelling of selective mining units (also non-linear estimation techniques if used)..

R, R* 6

T4. 2(iv) Any relevant specialised computer program (software) used should be named (with the version number) together with a reference to where all the original files are stored for this specific model.

R, R* 6

T4. 2(v) The processes of checking and validation, the comparison of model information to sample data and use of reconciliation data should be stated, and whether the Mineral Resource estimate takes account of such information.

R, R* 6

T4. 2(vi) Describe the assumptions made regarding the estimation of any by-products or deleterious elements. R, R* 6

Governmental T5.1 (i) A statement should be provided to the effect that such governmental requirements as may be required have been approved. E, R, R* 3.7

Environmental T5.2 (i) Describe any obvious environmental factors that could have a significant impact on the prospects of any possible exploration target or

deposit. E

3.5

The necessary permits have been obtained, or there is reasonable basis to believe that all permits required for the project can be obtained.

R, R* 3.5

T5.2 (ii) Describe any environmental factors that could have a material impact on the likelihood of eventual economic extraction. Discuss possible means of mitigation.

R, R* 3.5

T5.2 (i) A statement should be provided to the effect that all necessary permits have been approved. R* N/A T5.2 (ii) Describe future yearly environmental liabilities/compliance methods and costs, including reclamation and closure and their planned

funding. R* N/A

T5.2 (iii) Refer to Environmental Impact Study. R* N/A

Social T5.3 (i) A statement should be provided to the effect that a social management program as may be required has been approved. R* N/A

Mining T5.4 (i) Describe any obvious mining factors that could have a significant impact on the prospects of any possible exploration target or deposit. E 7

State the level of the techno / economic study – whether conceptual, pre-feasibility, feasibility or ongoing life-of- mine or strategic business plans.

R, R* 8

State the resource models that have been used in the study. R* N/A T5.4 (ii) Disclose all assumptions made regarding possible mining methods, minimum mining dimensions (or pit shell) and internal (or, if

applicable, external) mining dilution. R, R* 7

State and justify all modifying factors and assumptions made regarding mining methods, minimum mining dimensions (or pit shell) and internal (or, if applicable, external) mining dilution 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.

R* N/A



69


To Report Section

T5.4 (iii) It may not always be possible to make assumptions regarding mining methods and parameters when estimating Mineral Resources. Where no mining assumptions have been made, this should be explained.

R 7

Optimisation methods used in planning, list of constraints (practicality, plant, access, exposed reserves, stripped reserves, bottlenecks, draw control).

R* N/A

Treatment/Processing T5.5 (i) Describe any obvious processing factors that could have a significant impact on the prospects of any possible exploration target or

deposit. E

7

Discuss the level of study, possible processing methods and any processing factors that could have a material impact on the likelihood of eventual economic extraction.

R 7

Describe and justify the processing method(s) to be used, equipment, plant capacity, efficiencies, and personnel requirements. R* N/A T5.5 (ii) The basis for assumptions or predictions regarding metallurgical amenability and any preliminary mineralogical test work should already

be carried out. R

7

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, specifically for multi-product operations where the saleable materials are priced for different chemical and physical characteristics.

R* N/A

A detailed flow sheet/diagram and a mass balance should exist, specifically for multi-product operations where the saleable materials are priced for different chemical and physical characteristics.

R* N/A

T5.5 (iii) It may not always be possible to make assumptions regarding metallurgical treatment processes and parameters when reporting Mineral Resources. Where no assumptions have been made, this should be explained.

R 7

State any assumptions or allowances 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 ore body as a whole.

R* N/A

T5.5 (iv) The tonnages and grades reported as Mineral Reserves must be in respect of material delivered to the processing facility. R* N/A Infrastructure T5.6 (i) 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, power supply, offices, housing, security, resource sterilisation testing etc.).

R* N/A

Detailed maps showing location of facilities should exist. Project milestones and completion dates should be stated. R* N/A T5.6 (ii) State assessment of value, ownership, type, extent and condition of plant and equipment which is significant to the existing operation(s). R* N/A T5.6 (iii) Statement showing that all necessary logistics have been considered (electricity, reagents, fuels). R* N/A

Economic Criteria T5.7 (i) Not usually reported for Exploration Results. If mentioned, however, factors significant to project economics should be current and

based on generally accepted industry practice and experience. Assumptions should be clearly defined. E

8

In reporting, a Mineral Resource should meet the minimum requirement of “reasonable prospects for eventual economic extraction”. R 8 For Mineral Reserves, parameters should be detailed with engineering completed to a pre-feasibility study level as defined in the SAMREC Code.

R* N/A



70


To Report Section

T5.7 (ii) State and define the reasonable and realistic assumptions/parameters (albeit preliminary, e.g. cut-off grade, cut-off screen size, product price or other criteria) used to assess eventual likelihood of economic extraction.

R 8

State, describe and justify 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.

R* N/A

T5.7 (iii) These assumptions and factors should be reasonably developed and based on generally accepted industry practice and experience. If appropriate, state the level of study.

R 8

Summary description of method used to estimate the commodity price profiles used for cut-off grade calculation, economic analysis and project valuation, including applicable taxes, inflation indices and exchange rates.

R* N/A

T5.7 (iv) If applied, the basis of equivalent metal formulae should be reported. R 8 Demonstrate that the product price assumptions are reasonable and supportable. Justify assumptions made concerning production cost and value of product. Consider transportation, treatment, penalties, exchange rates, marketing and other costs.

R* N/A

T5.7 (v) Resource sensitivity – detailed description of method used and results obtained. R 8 Allowances should be made for royalties payable, both to Government and private. R* N/A

T5.7 (vi) Resource/Reserve sensitivity – detailed description of method used and results obtained. R* N/A

Marketing T5.8 (i) Describe the valuable and potentially valuable product(s) including suitability of products to market. E, R 18

Describe product to be sold. Discuss whether there exists a ready market for the product, whether contracts for the sale of the product are in place or expected to be readily obtained.

R* N/A

Risk Analysis T6 (i) Generally not applied to Exploration Projects. E 8.1

Report any risk assessment completed to support the reasonable prospect of eventual economic extraction and disclose any material risks identified.

R 8.1

Report detailed assessment of project technical, economic, political and other key risk factors. Description of actions which will be taken to mitigate and/or manage the identified risk(s).

R* N/A

Resource and Reserve Classification Criteria T7 (i) For exploration targets and/or deposits, specific quantities and grades/qualities should be reported in ranges, the basis of which should

be explained. E

6

Describe and justify criteria and method used as the basis for the classification of the Mineral Resources into varying confidence categories.

R 6

Describe and justify criteria and method used as the basis for the classification of the Mineral Reserves into varying confidence categories which should be based on the Mineral Resource Category and include consideration of the confidence in all the modifying factors.

R* N/A

T7 (ii) Exceptions to the above should be discussed if they are material and detailed reports thereof should exist. R 6



71


To Report Section

Discuss the proportion of Probable Mineral Reserves, which have been derived from Measured Mineral Resources (if any), including the reason(s) therefore.

R* N/A

T7 (iii) Discuss whether appropriate account has been taken of all relevant factors. I.e. relative confidence in tonnage /grade computations, density, quality, value and distribution of primary data and information, confidence in continuity of the geological and mineralisation models.

R 6

Only Measured and Indicated Resources can be considered for inclusion in the Mineral Reserve. R* N/A T7 (iv) State whether the result appropriately reflects the Competent Person’s view of the deposit. R 6

Mineral Resources classified as Inferred Resources lack the requisite degree of confidence to be converted to a Reserve. R* N/A T7 (v) State whether the result appropriately reflects the Competent Person’s view of the deposit. R* N/A

Balanced Reporting T8 (i) Where comprehensive reporting of all exploration results is not practicable, representative reporting of low and high-grades and/or

widths, should be practiced together with their spatial location to avoid misleading the reporting of Exploration Results. E

6

Mineral Resources should be stated as inclusive or exclusive of Mineral Reserves. R 6 Describe the Mineral Resource estimate used as a basis for the conversion to a Mineral Reserve. R* N/A

T8 (ii) Announcements by Companies should comply with the SAMREC Code, where applicable, and insofar as they relate or refer to a Competent Person’s report they should:

E, R, R* -

(a) Be approved in writing in advance of publication by the relevant Competent Person; and - (b) The Competent Person(s) relationship to the issuer of the report, if any, should be clearly defined 2.1 Report the Mineral Resource statements with sufficient detail indicating the source and type of mineralisation, such as open pit, underground, mineralisation type, facies or ore body, surface dumps, stockpiles and all other sources.

R N/A

Caution should be exercised if Inferred Resources are considered in economic studies, and if included, full disclosure and the effect on the results of the economic studies should be stated.

R* N/A

T8 (iii) If grades are reported then it should be stated clearly whether these are regional averages or if they are selected individual samples taken from the property under discussion.

E 6

The Mineral Resource will include all remnants, stockpiles, tailings, and existing pillars where there may be reasonable and realistic prospects for eventual economic extraction. Inclusion or exclusion of existing pillars into the Mineral Resource will be determined site by site taking into consideration factors such as size, shape, grade, location and other historical and geotechnical considerations. A detailed listing of such exclusions and reasons therefore, signed by a relevant Competent Person(s) should exist.

R

6

A comparison between the two scenarios, the one with inclusion and the one without inclusion should be fully explained in the Public Report in such a way so as not to mislead the investors. Inferred Mineral Resources may not be reported as Mineral Reserves.

R* N/A

T8 (iv) Reconciliation - Report the reliability, of the current geological and resource models, and key assumptions, including the reliability of resource classifications. This should include a comparison to the previous Resource quantity and qualities, if available. Where appropriate report and comment on any historic trends (e.g. global bias).

R 6



72


To Report Section

The Mineral Reserve Statement should be reported with sufficient detail indicating the source and type of mineralisation, such as open pit, underground, mineralisation type, facies or ore body, surface dumps, stockpiles and all other sources.

R* N/A

T8 (v) State the proportion of the total Reserves that is likely to be mined within the current assured tenure timeframe. R* N/A T8 (vi) Report historic reliability and reconciliation of the performance parameters, assumptions and modifying factors. This should include a

comparison to the previous Reserve quantity and qualities, if available. Where appropriate report and comment on any historic trends (e.g. global bias).

R* N/A

Audits and Reviews T9 (i) The overall conclusions of relevant audits or reviews, with specific reference to compliance to relevant Codes, where significant

deficiencies and remedial actions should be disclosed. E, R, R*

19

Material results of any audits or reviews of Mineral Resource estimates. Specific reference regarding all material deficiencies and remedial actions should be disclosed.

R 19

The material results of any audits or reviews of Mineral Reserve estimates. Specific reference regarding all material deficiencies and remedial actions should be disclosed.

R* N/A

T9 (ii) State type of review (e.g. independent, external) and name of the reviewer(s) together with their recognised professional. E, R, R* 19

Other Considerations T10 (i) Description of any other material information that is likely to prevent or facilitate the economic potential of the project. E, R, R* In

document Discuss possible opportunities that may affect the Mineral Resource. R N/A While any other material information or opportunities affecting the project should be discussed, no material impediments to the profitable exploration of the property should remain.

R* N/A

T10 (ii) A glossary of terms used in the report E, R, R* 20

Qualification of Competent Person(s) and Other Key Technical Staff; Date and Signature Page T11 (i) State the accountable Competent Persons full name, address, registration number and name of the professional body or ROPO

recognized by SAMREC, of which he/she is a member, and relevant experience, together with other key technical staff who prepared and are responsible for the Public Report.

E, R, R* 13, 14

T11 (ii) The Competent Person(s) relationship to the issuer of the report, if any, should be clearly defined. E, R, R* 13, 14 T11 (iii) The Public Report should include a signature page for the Competent Person(s) to attest to its release. E, R, R* 14

Such page should include the date of sign-off and the effective date of the report. E, R, R* 14 NOTES:

1. E = Exploration Results

2. R = Mineral Resources

3. R* = Mineral Reserves



73

SAMVAL COMPLIANCE CHECKLIST

SAMVAL Section SAMVAL Criterion Report Section

SV T1.1 Executive Summary 1

SV T1.2 Introduction and Scope 2

SV T1.3 Identity and Tenure 3

SV T1.4 History 4

SV T1.5 Geological Setting 5

SV T1.6 Mineral Resources and Mineral Reserves 6

SV T1.7 Modifying Factors 7

SV T1.8 Valuation Approaches and Methods 8

SV T1.9 Valuation Date 9

SV T1.10 Valuation Summary and Conclusions 10

SV T1.11 Sources of Information 11

SV T1.12 Previous Valuations 12

SV T1.13 Competent Persons and Other Experts 13

SV T1.14 Competent Valuator 14

SV T1.15 Range of Values 15

SV T1.16 Identifiable Component Asset (ICA) Values 16

SV T1.17 Historic Verification 17

SV T1.18 Market Assessment 18

SV T1.19 Audits or Reviews 19


74

An Independent Mineral Asset Valuation Report on the ... · Mineral Resources and Mineral Reserves...

Documents

Transcript of An Independent Mineral Asset Valuation Report on the ... · Mineral Resources and Mineral Reserves...