RESERVE & RESOURCE UTILISATION WHEN EXPLORATION CAPITAL IS SCARCE “Desperate times call for desperate measures”. No one knows who first said this – it is just a proverb that has been passed down to modern times. At the end of 2002, Bilboes had treated 9.5 Mt grading at 1.27g/t to produce 235koz of gold from its small low grade oxide heap leach open pit mines over a 13 year period with a cumulative exploration expenditure of $10million over that period. Between 2003 and 2013, the company’s average annual production was 4,200oz dropping to a low of 350oz with “all in sustaining costs” at 90% of prevailing gold price. During the period, the company operated on a short term mining plan of 2 years. In 2014, after only spending a cumulative $650,000 in exploration capital including administration costs since 2003, the company has a 10 year Life of Mine at an annual production rate of 15,000oz with “all in sustaining costs at 70% of current gold price” from the same assets. How is this?

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Company Overview – Privately owned Zimbabwean gold exploration and development company formed in 2003 through Management

buyout from Anglo American’s Zimbabwean gold assets

– Complimentary mix of Brownfield and Greenfield assets with near term to long term production potential

– Raised US$7 million debt facility in December 2012 from IDC of South Africa to recapitalise the Oxide Mines

Isabella-McCays-Bubi Oxide Complex (100% Bilboes)

- Previous production of 240,000 oz over a 20 year period to 2009

- Production underway with target to increase production rate to 11,000 to 15,000 oz pa by Q1 2014 over a 10 year life

- Significant ground secured around the existing mines in the form of exploration licenses (11,000ha of mining claims and 160,000ha Exclusive Prospecting Orders)

– Raised US$16m in two private placements, in June 2011 and January 2013 for Definitive Feasibility Studies and on two key projects

Isabella-McCays -Bubi Sulphide Complex - Sulphide (100% Bilboes)

- SRK Consulting assessed JORC resource of 4 moz to 200m depth

- Potential on down dip and strike extensions

- In fill drilling and Pre-Feasibility study underway with Definitive Feasibility Study completion targeted for Q4 2014

Gold Quarry (100% Bilboes)

- SRK derived resource potential of 0.5 to 1.5 moz to 300m within claims environs

- First phase Resource definition review underway with completion targeted for Q1 2014

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Project Locations

– Isabella-McCays-Bubi Oxide Complex (100% Bilboes)

- Located on the Bulawayo Bubi Greenstone belt

- Includes existing Bubi, Isabella, & McCays and Mines

– Isabella-McCays-Bubi Sulphide Complex - (100% Bilboes)

- Located on the Bulawayo Bubi Greenstone belt

- Underlying existing oxide mines

– Gold Quarry (100% Bilboes) - Located on the Odzi Mutare Greenstone

belt

– Exploration Projects (100% Bilboes) - Located around the existing mines and in

the various Zimbabwean Greenstone belts

Bilboes project locations

Isabella-McCays-Bubi Complex

Gold Quarry

Harare

Bilboes Properties in Zim

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Background – Anglo American Corporation exploited shallow low grade gold deposits in Zimbabwe

– Low cost mining and process method

– Open pit drill, blast, heap leach process

– Gold Recovery of 60% from +/-1.50g/t from ore particle sizes of max. 300mm

– Mining depth of +/-24m from surface to exploit “true oxides”

– Cumulative mining of 10Mt with in situ gold content of 400koz

– Only 235koz Au recovered over the years

– Tests confirm gold recovery increase to 90% after crushing to 80% passing 20mm for “true oxides”

– Mining depth can be increased to 40m by including the “transitional zone” at the base of the oxides ~ 16m

– Tests on old leach pads confirmed 50% recoverable gold from remnant

– Tests confirm gold recovery increase to 60-70% after crushing to 80% passing 20mm for “transitional oxides”

– New mining thinking - blending the “old leach pads material’’ plus “transitional zone ore”

Current Work

• Auguring and grid sampling of all old leach pads

• Confirmatory drilling of the transitional zone

• Re-modelling of resources

• Optimisation and re-designing of old pits

• Dewatering of old pits for access and in pit sampling and drilling

• Metallurgical tests “lab and pilot” scale

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Isabella-McCays-Bubi Oxide Complex

– Mines have been recapitalised for near term production

– Previous production of 233,000 oz over a 20 year period

– US$7 million IDC debt facility utilised in 2013 to fund redevelopment on attractive terms – interest at LIBOR +5% per annum and 5 year repayment timeframe

– Targeting production increase to 11,000 to 15,000 oz pa by Q1 2014

- All mines within 30km radius of central elution plant - Estimated 120,000oz recoverable gold from current

oxides comprising dumps and shallow pits (40m)

– Near term production and attractive project economics

- Capital costs of US$8m for plant refurbishment, new equipment and working capital

- Operating cash costs of US$650-700 / oz - US$2/3million cash per annum from 2014 based on gold

price of US$1,200 / oz Isabella main process plant and elution facility

Isabella -Bubi Complex location

Isabella-McCays-Bubi Complex

Oxide Resources (Dec 2013)

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Reserves Resources

Category Mt Au g/t Au oz Category Mt Au g/t Au oz

Pits

Proved 1.09 0.70 25,786 Measured +Indicated

0.25 0.83 6,695

Probable 0.71 1.39 31,757 Inferred 0.80 0.70 18,529

Total 1.80 0.99 57,543 Total 1.05 0.74 24,954

Dumps

Proved 5.1 0.60 99,208 Measured +

Indicated 4.1 0.42 54,683

Probable - - - Inferred - - -

Total 5.1 0.60 99,208 Total 4.1 0.42 54,683

Note: Bilboes estimates 120,000 oz Au recoverable from Isabella, McCays, Bubi Oxide Resources. These Resources are based on schedules maintained by Bilboes which were originally developed by Anglo American Corporation and are considered by the company to be JORC compliant.

Excess cash to be invested for oxide exploration around the existing mines and surrounding ground

ACTUAL FORECAST

Year 2011 2012 2013 2014 2015 2016 2017 2018

Gold Production (oz) 710

192 4,077 12,659 11,286 11,825 11,825 13,390

Revenue ($'000) 1,072

588 4,599 15,190 13,543 14,190 14,190 16,067

Operating cash costs (US$/oz) 2,662

11,087 1,478 632 703 724 724 664

Total All In Costs (US$/oz) 710

15,968 2,065 897 988 989 982 892

NPAT ($'000) 1,072

(2,479) (3,292) 3,836 2,387 2,501 2,574 4,120

Gold Price (US$/oz) 1,200 1,200 1,200 1,200 1,200 1,200

Oxide Mines - Cash Flows

Isabella-McCays-Bubi Complex - Oxide Mining Operations - Summary Financial Forecasts

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McCays Mine - Old Leach Pad (1Mt @ 0.50g/t) being mined as at December 2013

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Isabella Mine - Old Leach Pad (4Mt @ 0.60g/t) as at December 2013

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Isabella Mine - Calcite 5 Pit (151,000t @ 0.74g/t) as at December 2013

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Isabella Mine - (Castile Pit (285,000t @ 1.79g/t); before dewatering and as at December 2013

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Isabella Mine - Old Maria Pit (93,000t @ 1.10g/t) before dewatering and as at December 2013

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Isabella Mine - Diana (265,000t @ 1.10g/t) before dewatering

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Isabella Mine - Calcite Pit as at December 2013. Under investigation

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McCays Mine - McCays Main Pit (250,000t @ 0.70g/t) before dewatering

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McCays Mine - McCays Extension Pit (83,000t @ 1.32g/t) before dewatering

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Isabella Mine - New Leach Pad as at December 2013

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McCays Mine - New Leach Pad as at December 2013

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Isabella Mine - 145tph 2 Stage Crushing Plant; - 60,000tpm

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McCays Mine - 200tph, 2 Stage Crushing Plant; - 60,000tpm

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Isabella Mine - Old & New Leach Pads at December 2013

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McCays Mine - Old & New Leach Pads

Typical adsorption & elution plant at Isabella Mine with solution ponds

Typical process plant at Bubi Mine plant

Typical layout of workshops area – Isabella Mine

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PFS/DFS Projects

– A total of US$16m will be utilised for - Completion of Definitive Feasibility Study for the

Isabella-McCays-Bubi Sulphide Complex

- Commence resource definition and further work at the Gold Quarry Prospect

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JORC Mineral Resources

Project

Indicated Inferred Total

Mt Au g/t

Ounces Mt Au g/t

Ounces Mt Au g/t

Ounces

Bubi - Sulphide 13.3 1.67 713,030 14.4 1.84 851,960 27.7 1.75 1,564,990

Isabella North - Sulphide

6.4 2.60 537,200 7.9 2.46 625,650 14.3 2.52 1,162,850

Isabella South - Sulphide

5.7 2.63 484,370 2.3 2.48 185,900 8.1 2.59 670,270

McCays - Sulphide 3.9 2.14 266,610 5.4 1.72 299,050 9.3 1.89 565,660

Gold Quarry - Oxide - - - 1.6 0.80 40,375 1.6 0.80 40,375

Total 29.3 2.12 2,001,210 31.6 1.97 2,002,935 60.0 2.04 4,004,145

SRK Resource Statement – October 2013

An additional potential of 745,000 oz Ag in-situ from Gold Quarry Oxides has not been included in the above mineral resource estimate

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Bateman - Conceptual Processing Study

Processing Method Bacterial

Heap Oxidisation

UFM Concentrate

UFM Whole Ore

Albion Concentrate

BIOX Concentrate

POX Concentrate

Ore Processed (t / year) 600,000 600,000 600,000 600,000 600,000 600,000

Gold in Plant Feed (oz / year)

43,403 39,062 43,403 39,062 39,062 39,062

Gold Recovery 70% 45% 50% 83% 83% 85%

Gold Produced (oz / year) 30,382 17,578 21,701 32,344 32,344 33,047

Total Capital Cost US$51.3m US$45.9m US$53.3m US$52.6m US$56.9m US$67.6m

Total Operating Cost US$1,307/oz US$614/oz US$631/oz US$349/oz US$402/oz US$493/oz

Bateman Engineering - Conceptual Processing Options Study Summary

Bateman Engineering conducted a conceptual study of the processing options for refractory ore in Zimbabwe which returned the following key results for a conceptual 30,000oz/year plant

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Mintek Metallurgical Testwork Programme

Mintek test-work programme was designed to include;

- Mineralogical evaluation, gold deportment and chemical assessment of the ore

- Comminution tests

- Gravity amenability tests

- Flotation optimisation tests

- Diagnostic leaching tests

- Pressure Oxidation, Bi-oxidation & Ultrafine grinding tests of flotation concentrates

- Intensive cyanidation of flotation tails

Programme commenced in July 2013 is scheduled to be completed by February 2014

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– Results so far - 1.6 to 2.8 g/t Au associated with sulphides

- Gold occurs mainly as very fine sub-microscopic particles (0-5microns) as free or electrum (alloy).

- high carbonates and ore is refractory

- Flotation tests – up to 94% Au recovery

Mintek Testwork Results

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Mintek – Outstanding Tests

Flotation tests

- Optimum grind and recovery and mass pull with cleaning stages

- Ultra fine milling of concentrate followed by intensive cyanidation at high dissclved oxygen levels

- Ultra fine grinding of flotation concentrates following gold recovery after partial oxidation

- Gold recovery via gravity, flotation, gravity-flotation and gold recovery from tails

Results expected by end of February 2014

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MDM Engineering Programme

The MDM Engineering programme covers the following;

- Supervision of Mintek work

- Evaluation and selection of process route and trade of studies to determine the preferred process route

- Review of all available metallurgical test work results

- Design of conceptual flow sheets for the process plant

- Infrastructural requirements covering equipment, power and water

- Development of capital and operating cost estimates to +/-25% accuracy for pre-feasibility study

- Development of capital and operating cost estimates to +/-10% accuracy for definitive feasibility study

Pre-Feasibility Study programme is scheduled to be completed by Q2 2014

Definitive Feasibility Study is scheduled to be completed by end of Q4 2014

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Future Funding Requirements

Intention to raise funds for mine development at Isabella-McCays-Bubi sulphide complex

Target of 30-50,000oz pa with capital estimated at $100million

Financing options are outlined below;

- Raise full amount through debt and equity

- Financier to construct plant and Bilboes can become an anchor supplier of material (capital required can be reduced to $50m)

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Anticipated Sulphide Project Economics

Potential Open Pit for 2 moz grading 2.5g/t

- Potential vertical extent of +/-100m

- Potential Life of Mine of 10 years at 100,000oz pa

- Mining extraction factor of 80% and gold recovery of 85%

- Projected all in sustaining costs of $800/oz

• Processing $400/oz

• Mining $100/oz

• Administration $150/oz

• Capital replacement $150/oz

Underground potential

- SRK derived potential of 1 moz grading 4.5g/t

- Potential derived from 100 - 250m vertical extent

- Upside potential tested to 500m