updated independent competent persons’ report on the moeijelik … · 2019-10-31 · management....

Updated Independent Competent Persons’ Report on the Moeijelik Chromite Mineral Asset Prepared for Bauba Platinum Limited SR1.1A(i)

Competent Person: A.N. CLAY

M.Sc. (Geol.), M.Sc. (Min. Eng.), Dip. Bus. M., Pr. Sci. Nat, MSAIMM, FAusIMM, FGSSA, MAIMA, M.Inst.D., MSPE. Managing Director

Compiled by: T.C. ORFORD

B.Sc. Hons (Geol.), GDE (Min. Eng.), Pr.Sci.Nat., MGSSA, MSAIMM, MSPE. Manager

G. J. G. MARSHALL

M.Sc. (MRM), B.Sc. Hons (Geol.), Pr. Sci. Nat. Senior Consultant

S. MAGNUS

MSc. (Env. Sci.), Pr Sci. Nat MIAIASA, MGSSA, MSAIMM Manager Reviewed by: F.J. HARPER

B.Sc. Hons (Geol.), Pr.Sci.Nat., MGSSA. Associate Director

Reference No.:- VMD1906

Effective Date:- 31 January 2016 SR1.1A(ii);

JSE12.9a Final Report Date:- 22 April 2016

Updated Moeijelik CPR April 2016 i

Disclaimer and Risks Venmyn Deloitte has prepared this Updated Competent Persons’ Report (CPR) and, in so doing, has utilised information provided by Bauba Platinum Limited (Bauba Platinum) and its contractors as to its operational methods and forecasts. Where possible, this information has been verified from independent sources with due enquiry in terms of all material issues that are a prerequisite to comply with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC) Code. Venmyn Deloitte and its directors accept no liability for any losses arising from reliance upon the information presented in this report. The authors of this CPR are not qualified to provide extensive commentary on legal issues associated Bauba Platinum’s right to the mineral properties. Bauba Platinum has provided certain information, reports and data to Venmyn Deloitte in preparing this report which, to the best of Bauba Platinum’s knowledge and understanding, is complete, accurate and true and Bauba Platinum acknowledges that Venmyn Deloitte has relied on such information, reports and data in preparing this report. No warranty or guarantee, be it express or implied, is made by the authors with respect to the completeness or accuracy of this document.

Operational Risks The businesses of mining and mineral exploration, development and production by their natures contain significant operational risks. The businesses depend upon, amongst other things, successful prospecting programme and competent management. Profitability and asset values can be affected by unforeseen changes in operating circumstances and technical issues.

Political and Economic Risks Factors such as political and industrial disruption, currency fluctuation, increased competition from other prospecting and mining rights holders and interest rates could have an impact on Bauba Platinum’s 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 Bauba Platinum or any other operating entity.

Forward Looking Statements This report contains forward-looking statements. These forward-looking statements are based on the opinions and estimates of Venmyn Deloitte and Bauba Platinum at the date the statements were made. The statements are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those forward-looking statements anticipated by Venmyn Deloitte and Bauba Platinum. Factors that could cause such differences include changes in world platinum group metal markets, equity markets, costs and supply of materials, and regulatory changes. Although Venmyn Deloitte believes the expectations reflected in the forward-looking statements to be reasonable, Venmyn Deloitte does not guarantee future results, levels of activity, performance or achievements.

Updated Moeijelik CPR April 2016 ii

Updated Independent Competent Persons’ Report on the Moeijelik Chromite Mineral Asset

List of Contents SR1.1A(i) 1. Introduction ................................................................................................................................................................. 1

1.1. Scope of Opinion .......................................................................................................................................... 1 1.2. Competent Persons Declaration ................................................................................................................... 1 1.3. Statement of Independence .......................................................................................................................... 2 1.4. Personal Inspections .................................................................................................................................... 2 1.5. Reliance on Other Experts and Sources of Information ................................................................................ 2

2. Corporate Structure ..................................................................................................................................................... 2 3. Project Description and Location ................................................................................................................................. 2 4. Topography and Climate ............................................................................................................................................. 5 5. Legal Aspects and Tenure .......................................................................................................................................... 5

5.1. Ownership .................................................................................................................................................... 5 5.2. Surface Rights .............................................................................................................................................. 8 5.3. Royalties ....................................................................................................................................................... 8 5.4. Environmental and Social Compliance Status .............................................................................................. 8 5.5. Material Contracts ......................................................................................................................................... 8 5.6. Other Legal Issues ........................................................................................................................................ 8

6. Infrastructure ............................................................................................................................................................... 8 7. Geological Setting ....................................................................................................................................................... 8

7.1. Regional Geology ......................................................................................................................................... 8 7.1.1. The Critical Zone ....................................................................................................................... 10 7.1.2. Regional Structure ..................................................................................................................... 10

7.2. Local Geology ............................................................................................................................................. 12 7.2.1. Structural Geology ..................................................................................................................... 12 7.2.2. Deposit Type and Mineralisation ................................................................................................ 12

8. History ....................................................................................................................................................................... 15 8.1. Historical Ownership ................................................................................................................................... 15 8.2. Historical Activities ...................................................................................................................................... 15

9. Recent Exploration .................................................................................................................................................... 15 9.1. Geophysical Surveys .................................................................................................................................. 15 9.2. Surveying Methods ..................................................................................................................................... 19 9.3. Percussion Drilling ...................................................................................................................................... 19 9.4. Diamond Drilling ......................................................................................................................................... 19

9.4.1. Drilling ........................................................................................................................................ 19 9.4.2. Downhole Surveying .................................................................................................................. 20 9.4.3. Logging ...................................................................................................................................... 20 9.4.4. Core Photography ...................................................................................................................... 21

9.5. Pit Face Mapping and Sampling ................................................................................................................. 21 10. Sample Preparation and Analysis and Security ........................................................................................................ 21

10.1. Sampling Method ........................................................................................................................................ 21 10.2. Laboratory Analyses ................................................................................................................................... 23

10.2.1. Sample Preparation and Analysis .............................................................................................. 23 10.2.2. QA/QC ....................................................................................................................................... 23 10.2.3. Specific Gravity .......................................................................................................................... 24

10.3. Sample Security .......................................................................................................................................... 24 10.4. Bulk Sampling ............................................................................................................................................. 24

Updated Moeijelik CPR April 2016 iii

11. Data Management ..................................................................................................................................................... 24 11.1. Data Acquisition and Validation .................................................................................................................. 24 11.2. Database Management .............................................................................................................................. 25

12. Orebody Modelling and Results ................................................................................................................................ 25 12.1. Compositing ................................................................................................................................................ 25

12.1.1. Drillhole Desurveying Process ................................................................................................... 25 12.1.2. Drillhole Compositing ................................................................................................................. 25

12.2. Reef Thickness ........................................................................................................................................... 25 12.3. Specific Gravity ........................................................................................................................................... 26 12.4. Assay Data ................................................................................................................................................. 26 12.5. Spatial Analysis .......................................................................................................................................... 26

13. Previous Mineral Resource Statements .................................................................................................................... 27 14. Current Mineral Resource Statements ...................................................................................................................... 27

14.1. Resource Estimation ................................................................................................................................... 27 14.2. Statistical Analysis ...................................................................................................................................... 28 14.3. Mineral Resource Classification.................................................................................................................. 28 14.4. Mineral Resource Statement ...................................................................................................................... 30

15. Mining ........................................................................................................................................................................ 30 16. Mineral Processing .................................................................................................................................................... 34 17. Mineral Reserve Statement ....................................................................................................................................... 34 18. Environmental and Social Practices .......................................................................................................................... 34

18.1. General Disclosure ..................................................................................................................................... 34 18.2. Environmental and Social Permitting Status ............................................................................................... 34

18.2.1. Operational Environmental Management................................................................................... 36 18.2.2. Operational Social Management ................................................................................................ 37

18.3. Mine Closure Provision, Closure Planning and Rehabilitation .................................................................... 37 19. Chromite Market Review ........................................................................................................................................... 37

19.1. Ore Processing ........................................................................................................................................... 38 19.2. Uses and Applications ................................................................................................................................ 39 19.3. Chromite Supply ......................................................................................................................................... 39 19.4. Chromite Ore Prices ................................................................................................................................... 41 19.5. Ferrochrome Demand ................................................................................................................................. 41 19.6. Ferrochrome Supply ................................................................................................................................... 41 19.7. Ferrochrome Price ...................................................................................................................................... 42 19.8. Ferrochrome Outlook .................................................................................................................................. 42 19.9. Moeijelik Chromite Market .......................................................................................................................... 43

20. South Africa Country Profile ...................................................................................................................................... 43 20.1. Political and Economic Climate................................................................................................................... 43 20.2. Minerals Industry ........................................................................................................................................ 43 20.3. Legislative Framework ................................................................................................................................ 44

20.3.1. Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA) ...................... 44 20.3.2. Mineral and Petroleum Resources Development Amendment Act 49 of 2008 .......................... 46 20.3.3. Mineral and Petroleum Resources Development Draft Amendment Bill (2012) ......................... 47 20.3.4. Broad-Based Socio-Economic Charter ...................................................................................... 48 20.3.5. Amendment of the Broad-Based Socio-Economic Empowerment Charter (2010) ..................... 49 20.3.6. Promotion of Beneficiation Bill ................................................................................................... 50 20.3.7. Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA) ............................... 50 20.3.8. Institutional and Administrative Environmental and Social Regulatory Structures ..................... 50 20.3.9. Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 – Noise Regulations) ........ 51 20.3.10. National Environmental Management Act (Act No. 107 of 1998) (NEMA) ................................. 51 20.3.11. National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA) ......................... 52 20.3.12. National Water Act (Act 36 of 1998) (NWA) ............................................................................... 53 20.3.13. National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA) ................. 53 20.3.14. National Heritage Resources Act (Act 25 of 1999) (NHRA) ....................................................... 53 20.3.15. National Environmental Management Biodiversity Act (Act 10 of 2004) (NEMBA) .................... 54

Updated Moeijelik CPR April 2016 iv

21. Adjacent Properties ................................................................................................................................................... 54 21.1. Sefateng Chromite Project .......................................................................................................................... 54

22. Risk Analysis ............................................................................................................................................................. 55 23. Effective Date and Signatures ................................................................................................................................... 56

List of Figures SR1.1A(i) Figure 1: Bauba Platinum's Corporate Structure ................................................................................................................. 3 Figure 2: Location of the Moeijelik Chromite Project in Relation to Major Infrastructure ..................................................... 4 Figure 3: Locality Plan in Relation to Local Infrastructure and Legal Tenure ...................................................................... 7 Figure 4: Geology of the Bushveld Complex ....................................................................................................................... 9 Figure 5: Location of the Moeijelik project in Relation to Regional Geology and the Adjacent Chromite Mines ................ 11 Figure 6: Local Geology at Moeijelik ................................................................................................................................. 13 Figure 7: Typical Cross Section and Stratigraphy at Moeijelik .......................................................................................... 14 Figure 8: Location of Boreholes Completed at Moeijelik ................................................................................................... 17 Figure 9: Aeromagnetic Survey and the Interpretation of Dykes and Faults ..................................................................... 18 Figure 10: In Pit Mapping and Sampling ........................................................................................................................... 22 Figure 11: Estimated Cr2O3 Grade (%) by Chromitite Reef ............................................................................................... 29 Figure 12: Mineral Resource Classification for the Moeijelik Project ................................................................................. 31 Figure 13: Chromite Market Material Flow ........................................................................................................................ 40 Figure 14: Chrome Ore and Ferrochrome Prices (March 2010 - March 2016) .................................................................. 42

List of Tables SR1.1A(i) Table 1: Summary of Mineral Asset Details ........................................................................................................................ 6 Table 2: Stratigraphic Zones of the Rustenburg Layered Suite ......................................................................................... 10 Table 3: Moeijelik Project: Summary of Recent Drilling ..................................................................................................... 16 Table 4: Average True Thickness per Chromitite Reef ..................................................................................................... 26 Table 5: Average SG per Chromitite Reef ......................................................................................................................... 26 Table 6: Assay Values per Chromitite Reef ....................................................................................................................... 26 Table 7: Moeijelik Block Model Prototype Parameters ...................................................................................................... 27 Table 8: Estimation Parameters for Moeijelik .................................................................................................................... 28 Table 9: Descriptive Statistics Moeijelik ............................................................................................................................ 28 Table 10: Mineral Resources for the Moeijelik at a 40m highwall (Venmyn Deloitte, 2016) .............................................. 32 Table 11: Mineral Resources for the Moeijelik at a 50m highwall (Venmyn Deloitte, 2016) .............................................. 33 Table 12: Monthly Production Summary for 2015 ............................................................................................................. 34 Table 13: Environmental and Social Compliance Status ................................................................................................... 35 Table 14: Global Mine Production ..................................................................................................................................... 39 Table 15: South African Chromite Production in 2015 ...................................................................................................... 41 Table 16: Types of Rights Applicable in South Africa ........................................................................................................ 45

List of Appendices Appendix 1: References .................................................................................................................................................... 57 Appendix 2: Glossary & Abbreviations .............................................................................................................................. 58 Appendix 3: CVs of the Competent Person and Compilers ............................................................................................... 60

Updated Moeijelik CPR April 2016 1

1. Introduction T1.1A(ii)(iii) Bauba Platinum Limited (Bauba Platinum) has completed an exploration programme with the intention of estimating a maiden Mineral Resource for the Moeijelik Chrome Project (Moeijelik Project or the Project). Venmyn Deloitte (Pty) Limited (Venmyn Deloitte) was commissioned by Bauba Platinum to compile an updated independent Competent Person’s Report (CPR) on the Moeijelik Project incorporating the drilling programme results and the maiden Mineral Resource. Bauba Platinum’s primary business objective is the exploration, evaluation and development of its chromite and platinum group metals (PGM) prospects situated within the eastern limb of the Bushveld Complex (BC). Bauba Platinum has been listed on the Johannesburg Stock Exchange (JSE) since September 2010. This CPR on the Moeijelik Project has been compiled as part of the supporting technical documentation for the estimation of maiden Mineral Resource for the Moeijelik Project, which will be considered by the JSE as a material change to the Moeijelik Project. This CPR is a full evaluation of the exploration programme completed and the resulting Mineral Resource estimation, which has been incorporated into the existing CPR. This CPR has been prepared in accordance with the “South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves” (SAMREC Code), as amended July 2009. This compliance is demonstrated by the insertion of the SAMREC Code Table 1 item numbers (T) where relevant throughout the document. The Moeijelik Project is a chromite mining operation located in the Limpopo province of South Africa, approximately 57km northwest of Burgersfort. Moeijelik has been producing chromite from the eastern limb of the BC under a mining permit since March 2015. An exploration programme commenced in October 2015 with the intention of providing sufficient information in order to estimate a maiden Mineral Resource. The effective date of this report is 31 January 2016 and this report has been compiled based on information available up to and including 31 January 2016. 1.1. Scope of Opinion

Venmyn Deloitte has undertaken an independent technical review of the Moeijelik Project for Bauba Platinum, in order to identify the factors of a technical nature that would influence the future of the Moeijelik Project. Venmyn Deloitte has reviewed all available technical information, particularly in terms of exploration findings and feasibility parameters, where available, for the Moeijelik Project. This technical information has been used as the basis of this CPR. Venmyn Deloitte has also investigated background information to satisfy itself that all technical factors that are likely to impact the asset have been considered. Venmyn Deloitte considered the strategic merits of the Moeijelik Project based upon its location in the BC. This CPR has been compiled in order to incorporate currently available information that will enable potential investors to make a reasoned and balanced judgement regarding the potential of Moeijelik. The authors of this report are not qualified to provide extensive commentary on the legal issues associated with Bauba Platinum and/ or its subsidiaries rights to the mineral properties. Venmyn Deloitte has obtained copies of the relevant mining and prospecting rights, and these have been reviewed to the satisfaction of Venmyn Deloitte. No warranty or guarantee, be it express or implied, is made by the authors with respect to the completeness or accuracy of the legal aspects of this document. Venmyn Deloitte reserves the right to, but will not be obliged to, revise this report or sections therein, and conclusions thereto, if additional information becomes known to Venmyn Deloitte subsequent to the date of this report.

1.2. Competent Persons Declaration T11A(i)(ii) Venmyn Deloitte’s professional advisors, directors and consultants are Competent Persons as defined by the SAMREC Code. Mr. A. Clay is the Competent Person responsible for this CPR on the Moeijelik Project, having more than five years’ relevant experience in the assessment and evaluation of the types of exploration and mining properties discussed in this report.


Mr A. Clay and the compilers of this report are members of the South African Institute for Mining and Metallurgy (SAIMM) and the Geological Society of South Africa (GSSA), which are recognised professional organisations and are registered with the South African Council for Natural Scientific Professions (SACNASP) as Professional Natural Scientists. To this end, Competent Persons certificates and compilers CVs are presented in Appendix 3.

1.3. Statement of Independence T8A(ii)b; T11A(ii) Venmyn Deloitte is an independent advisory company. Its consultants have extensive experience in preparing Competent Persons, technical advisors and valuation reports for mining, energy and exploration companies. Venmyn Deloitte’s advisors writing this report have, collectively, more than 100 years of experience in the assessment and evaluation of exploration and production projects worldwide and are members in good standing of appropriate professional institutions. The signatories to this report are qualified to express their professional opinions on the mineral projects described. Neither Venmyn Deloitte or Deloitte, nor its staff, have, or have had any interest in any of Bauba Platinum’s projects capable of affecting their ability to give an unbiased opinion, and have not, and will not, receive any pecuniary or other benefits in connection with this assignment. Venmyn Deloitte was remunerated a fixed fee amount for the preparation of this CPR, with no part of the fee contingent on the conclusions reached or the content.

1.4. Personal Inspections Mr G. Marshall, Ms T. Orford and Mrs C. Jacobs carried out a site visit to the Moeijelik Project on 09 and 10 November 2015. During this site visit, the operations were inspected, including the drilling sites, core storage, open pits and available infrastructure in the general area and within the property itself. This site visit has substantiated the information provided on the Moeijelik Project, and are supported by the Mineral Resources detailed in the relevant sections to follow.

1.5. Reliance on Other Experts and Sources of Information T1.3A(ii) Venmyn Deloitte has worked in conjunction with the Bauba Platinum employees and subcontractors during the preparation of this report. Venmyn Deloitte has based its review of Bauba Platinum’s chromite asset on information provided by Bauba Platinum and its subsidiary companies, along with technical reports by its contractors, associates and other relevant published data. A full list of all sources of information is provided in Appendix 1. Drafts of this CPR have been provided to Bauba Platinum, in order to identify and address any factual errors or omissions prior to finalisation.

2. Corporate Structure Bauba Platinum’s corporate structure with respect to the chromite mineral assets discussed in this report, is presented in Figure 1. In terms of the legal tenure sections of this report, specific reference is made to the associated subsidiary companies holding the various rights, as appropriate, and their relationship to Bauba Platinum as set out in the corporate structure. However, for ease of reference, and throughout the remainder of the CPR, references to ‘Bauba Platinum’ should be understood to mean ‘Bauba Platinum Limited’ and not Bauba A Hlabirwa Mining Investments Proprietary Limited (Hlabirwa) which is a subsidiary of Bauba Platinum. Bauba Platinum also holds three PGM Prospecting Rights, which are described in a separate CPR.

3. Project Description and Location T1.2A(i); T1.2B(i), T1.5A(i) The Moeijelik Project comprises the Moeijelik 412KS farm over a 2,270ha prospecting right. Moeijelik is located in the Sekhukhune Magisterial District in the Limpopo Province of South Africa. The Project is located off the R37 national road linking Burgersfort and Lebowakgomo, approximately 51km east of Lebowakgomo and approximately 57km northwest of Burgersfort, approximately 72km southeast of Polokwane and 58km north of Steelpoort as illustrated in Figure 2. The farm can be accessed via gravel roads from the tarred R37.

Fig

ure

01

BAUBA’S PLATINUM’S CORPORATE STRUCTUREM

oeije

lik

VMD1906_Bauba2015_2016

Bauba PlatinumLimited (JSE: BAU)

Absolute GroupManagement

(Pty) Ltd

Ndarama MineralResources (Pty) Ltd

Bapedi NationHlabirwa Mining

Investment (Pty) Ltd

Bauba A HlabirwaMining Investments

(Pty) Ltd

PGM Prospects

100% 100%

34.4%

25.6%

37.5% 2.5%

Chromite Prospects

Moeijelik ProjectNorthern Cluster Central Cluster Southern Cluster

Fig

ure

02

LOCATION OF THE MOEIJELIK CHROMITE PROJECT IN RELATION TO MAJOR INFRASTRUCTUREM

oeije

lik

VMD1906_Bauba2015_2016

BOTSWANA

LIMPOPO

NORTH WEST

GAUTENG MPUMALANGA

N11

N1

R37

N1

N11

R101

N4

PretoriaRustenburg

Mokopane

PolokwaneTzaneen

Penge

Thabazimbi

Bela Bela

Marble Hall

Dullstroom

Groblersdal

Brits

Sun City

Phokeng

Burgersfort

Steelpoort

MOEIJELIK

Scale0 25km

22°3

0’

23°

23°3

0’

24°

24°3

0’

27° 27°30' 28° 28°30' 29° 29°30' 30°

Main Roads

Rivers

Rail

Provincial Boundaries

Towns

Game Parks

Cape Town

Johannesburg

Durban

Project Area


The Moeijelik Project is a mining operation that has been producing chromite from an open pit, and that has completed an exploration programme in January 2016. The Moeijelik Project is targeting chromite hosted in the LG6, LG6A and the LG7 reefs, where relevant. These reefs are found in the Critical Zone of the eastern limb of the BC. Bauba Platinum has been mining from open pits using contractor miners, Zizwe Opencast Mining (Pty) Ltd (Zizwe), since March 2015 and supplying chromite ore to ASA Metals (Pty) Ltd (ASA). The project was placed on care and maintenance in January 2016 when ASA went into business rescue. Bauba Platinum holds the mining permit for Moeijelik as illustrated in Figure 1. This updated CPR focuses on the results of the exploration programme, which includes diamond drilling and assay results, as well as the ongoing production results such as average grade, geological losses, structural impact as well as saleability of the product to the market. The coordinate system used must be the South African Gauss conform coordinate system or WGS84 system where possible. Where not possible, the coordinates must be recorded and transposed to the correct system.

4. Topography and Climate T1.6A(i); T1.6B(i) The Moeijelik Project is located on the slope of a hill, with the majority of the property located within the valley floor at approximately 800mamsl. The valley floor is surrounded by mountains to the east and south, with the Brakfontein Peak situated in the southwest corner of the farm reaching a height of approximately 1,295mamsl. The elevation increases steadily from approximately 800mamsl at the chromite sub-outcrop to 1,100mamsl at the peak of the mountain to the east of the Moeijelik Project area. The climate of the area is typical of sub-tropical Highveld conditions, with warm humid summers (from September to April) ranging between 15°C to 38°C and cool dry winters (usually only June and July) ranging between 5°C to 22°C. The rainfall on escarpments is an annual average of 700mm compared to about 500mm in the valleys. Precipitation occurs mainly during the summer months from September to April, and occurs in the form of afternoon thunderstorms. The sudden downpours pose some risk of flooding in low-lying areas. Temperatures recorded at nearby town Steelpoort vary between 17.6°C and 30°C in January and 3.8°C to 21.6°C in July. Extremes of 40° and -2.3°C have also been recorded. The mostly moderate climate means that exploration and mining operations can be undertaken throughout the year, with no extraordinary measures required. The vegetation in the Moeijelik Project area consists of sparsely distributed thornveld with grasses and a sparse tree cover. Several species of antelope are found in the area, however these larger wildlife species occur only in the nature reserves and game farms located near the mining permit. Hares, rodents and birds are commonly found on the project area. The land is mainly given over to cattle and game ranching with localised arable farming.

5. Legal Aspects and Tenure T1.7A(i-iv); T5.1A(i)

5.1. Ownership The Prospecting Right for the Moeijelik Project is held by Bauba A Hlabirwa Mining Investments (Pty) Limited (Hlabirwa). Bauba Platinum purchased a 60% shareholding in the Moeijelik Project in 2014 from Highland Trading Investments Limited, Danene Trust, Kumane Trust, Math-Pin Trust, Pimlico Investment Trust, and Hlabirwa (collectively, the Vendors). The current shareholding is illustrated in Figure 3. Prospecting Right no. LP30/5/1/1/2/390PRR was granted to Hlabirwa on 7 June 2006 and expired on 6 July 2011. The prospecting right was renewed on 18 July 2012 and expired on 17 July 2015. A mining permit, No64/2014, was granted on 24 October 2015. This permit allows Bauba to mine 5ha of open castable chromite whilst the application for a permanent Mining Right is prepared. The mining period is not specified but is expected to be approximately 36 months. The Prospecting Right and the Mining Permit are located on the farm Moeijelik 412KS. A summary of the Prospecting Right details is provided in Table 1.


Table 1: Summary of Mineral Asset Details

PROJECT FARM NAME AND

NUMBER

TOTAL LICENCE

AREA (Ha)

COMPANY HOLDING RIGHTS

DEVELOPMENT STATUS

LICENCE TYPE LICENCE NO. MINERAL DATE

ISSUED DATE OF

LAST RENEWAL

EXPIRY DATE

Moeijelik Moeijelik 412KS

2,270.93 Bauba A Hlabirwa Mining Investments (Pty) Limited

Advanced exploration

New Order Prospecting Right

LP30/5/1/1/2/390PRR

Unspecified Minerals with emphasis on PGM, Vanadium ore, Titanium Ore, Chrome Ore, Iron Ore, and associated minerals and metals*

07 June 2006

18 July 2012 17 July 2015

5.00* Mining Mining Permit

Mining Permit No.64/2014 Chrome

24 October 2014

N/A Not specified approximately 36 months

* The Mining Permit falls within the New Order Prospecting Right

Fig

ure

16

LOCALITY PLAN IN RELATION TO LOCAL INFRASTRUCTURE AND LEGAL TENUREM

oeije

lik

VMD1582_Bauba Chrome CPR _2013 Co-ordinate System: UTM 35J

900

900

900

900

1000

1000

1000

10001000

1000

1100

1100

1100

1100

1100

1200

1200

1200

1200

1200

900

900

900

900

1000

1000

1000

10001000

1000

1100

1100

1100

1100

1100

1200

1200

1200

1200

1200

1200

WIN

TE

RS

VE

LD

417 K

S

BRAKFONTEIN 464 KS

MOEIJELIJK 412 KS

ZWARTKOPPIES 413 KS

9 000mE4

R37

95000mE 96000mE 97000mE 98000mE 99000mE 100000mE 101000mE

-2690000m

N-2

689000m

N-2

688000m

N-2

687000m

N-2

686000m

N

Scale0 400m

Settlement

Road

Track footpath

Areas

Bauba Prospecting Rights

Sefateng servitute

River

5 meters

Suboutcrop LG6

N4

N1

R555

Mo

zam

biq

ue

Swaziland

Botswana

South Africa

Pretoria

Mokopane

Johannesburg

Middelburg

Steelpoort

Musina

30°E

24°S

PROJECT AREA

Scale0 300m


5.2. Surface Rights Bauba Platinum does not own the surface rights for the farm Moeijelik 412KS, the farm over which the mining permit is valid. Bauba Platinum has agreements in place with the surface rights owners to access the properties and access is sufficient for mining to take place.

5.3. Royalties There are no private royalties payable for the Moeijelik Project. However, state royalties, as per the MPRDA (Section 20.3.7), are payable.

5.4. Environmental and Social Compliance Status Bauba Platinum’s current environmental and social compliance requirements and status associated with the Moeijelik Project are detailed in Section 18.

5.5. Material Contracts Hlabirwa has a chrome ore supply agreement in place with ASA under which, Moeijelik will supply 20,000 tonnes (t) of chrome ore to ASA on a monthly basis for a period of 18 months.

5.6. Other Legal Issues Venmyn Deloitte has not been made aware of any land claims, litigation or competing rights associated with the Moeijelik Project.

6. Infrastructure The Bushveld Complex hosts some of the world’s largest reserves of chromium and platinum group metals (PGMs) along with significant resources of iron, tin, titanium and vanadium. Numerous mines are currently exploiting these commodities within the vicinity of Moeijelik. The well-established mining industry in the area ensures that both skilled and unskilled labour is readily available from nearby towns. In addition, the area will be well serviced and can provide modern conveniences, including accommodation and services. The towns are also sources of fuel and labour. The locality with respect to infrastructure and adjacent mines is illustrated in Figure 3. The Moeijelik project is a small open pit mining operation. There is limited permanent infrastructure or equipment associated with activity on the property. Mine offices are located in containers on site. All mining equipment belongs to contractor miners, Zizwe. Water is transported to site as and when required and power is sourced from generators. More permanent water and power supply options will be investigated as part of any pre-feasibility studies that will be undertaken as the Moeijelik Project development status progresses.

7. Geological Setting 7.1. Regional Geology

T4.1A(i) The Moeijelik Project is located on the northern part of the eastern limb of the BC. The eastern limb forms part of three layered mafic-ultramafic arcuate limbs, namely the northern, western and eastern limbs, which together form an ellipse in plan, approximately 200km by 370km in extent. The geology of the BC is illustrated in Figure 4. The BC was intruded at approximately 2,060Ma into the Transvaal Supergroup sequence along the unconformity between the Magaliesburg quartzites and the overlying Rooiberg felsites. The total estimated area of the BC is 66,000km2, approximately 55% of which is covered by younger formations.

Fig

ure

04

GEOLOGY OF THE BUSHVELD COMPLEXM

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VMD1906_Bauba2015_2016

Western limb

Eastern limb

Northern limbMOKOPANE

ROOSENEKAL

Loskop Dam

Hartebeespoort Dam

STEELPOORT

NORTHAM

RUSTENBURG

PilanesbergAlkalineComplex

BRITS

MIDDLEBURG

PROJECT AREA

Scale0 20 km

30°E

24°S

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R555

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zam

biq

ue

Swaziland

Botswana

South Africa

Pretoria

Mokopane

Johannesburg

Middelburg

Steelpoort

Musina

30°E

24°S

PROJECT AREA

Scale0 300m

BUSHVELD IGNEOUS COMPLEX (BIC)

Main River

Younger cover rocks

Younger alkaline intrusions and

carbonatites

Granites and allied rocks

Upper Zone

Main Zone

Critical, Lower and Marginal Zones

Merensky Reef

UG2 Chromitite Layer

Town Rust

enburg

Laye

red S

uite

MR


The BC comprises a set of interconnected intrusives that crystallised to form the layered mafic and ultramafic units known as the Rustenburg Layered Suite (RLS), the granites of the Lebowa Granite Suite (LGS) and the felsic extrusive of the Rashoop Granophyre Suite (RGS). The mafic RLS of the BC outcrop and can be divided into a number of units according to their representative gravity anomalies. The Steelpoort Fault is a major fault that runs approximately southwest-northeast through the eastern limb of the BC. The Steelpoort Fault has caused displacement locally as well as smaller scale associated faults. These faults have not materially impacted the Moeijelik Project, which is located approximately 30km north of the fault. The RLS consists of remarkably consistent layering that can be connected over the extent of the BC and is the host of the chromium, vanadium and nickel mineralisation. The stratigraphy of the RLS is illustrated Table 2. The target horizon for the Moeijelik Project are the LG6, LG6A and LG7 chromitite layers. The Moeijelik Project is illustrated in relation to the BC and adjacent projects in Figure 5.

Table 2: Stratigraphic Zones of the Rustenburg Layered Suite

UNIT WIDTH DOMINANT LITHOGLOGY DESCRIPTION

Upper Zone Varies Gabbros with banded anorthosite and magnetite layers.

No chilled contact with the hanging wall rocks, which consist of rhyolites and granophyres.

Main Zone 3,900m Norite, gabbro-norite, anorthosite and minor pyroxenite.

Comprises half of the RLS. Banding and layering not well developed.

Critical Zone

Upper Critical Zone

(UCZ) 1,400m

Layered pyroxenites, norites, anorthosites and chromitites.

The base of the UCZ is marked by cumulus plagioclase. Norites dominate the UCZ, with subordinate pyroxenites and anorthosites present at intervals through the sequence. Economic chromite mineralization is hosted in the Upper Group (UG) and Middle (MG) chromitite layers. The MG series straddle the contact between the LCZ and UCZ, whereas the UG2 series occurs within the UCZ.

Lower Critical Zone

(LCZ)

Pyroxenite inter-layered with hartzburgite and chromitite.

Economic chromite mineralization is hosted in the Lower Group (LG) chromitite layers. The LG contains seven chromitite layers. This project considers LG6, LG6A and LG7.

Lower Zone

Varies , reaches a maximum of 1,700m.

Cyclically layered units of dunite-hartzburgite.

Thickness varies and thins over basement highs. The most complete exposure is in the northeastern part of the Eastern Limb of the RLS which occurs as a series of dunite-harzburgite cyclically layered units.

Marginal Zone

Several metres to hundreds of metres.

Unlayered, heterogeneous ultramafic rocks mostly norites.

Contamination of the basic magmas by the enclosing host rocks. Sedimentary rock fragments are contained as xenoliths in the lower portions. Exposures of this zone are poor.

7.1.1. The Critical Zone

The Critical Zone contains generally well defined, and easy to correlate layers, which can be broadly sub-divided into the dunite, harzburgite, pyroxenite, norite, anorthosite and chromitite rock types. These layers have both sharp and gradational contacts and progress through subtle variations to produce leuco-cratic and melano-cratic variations of medium grained rocks. In places the rocks are pegmatoidal and can form pipes and segregations. Later dolerite dykes intruded into faults. The region has been extensively prospected in recent times; however, little exploitation is currently taking place. The Middle Group and the Upper Group (UG), which also occur within the upper critical zone, stratigraphically above the LG, are not present in the Moeijelik Project area.

7.1.2. Regional Structure

Dykes of a Karoo to post-Karoo age occur in the region generally trending north-south and showing a positive magnetic polarity. The dykes are commonly vertical to sub-vertical, steeply dipping towards the east. Dolerite dykes tend to intrude along existing fault lines and structural zones of weakness. Faulting is generally minimal, although some dykes in the region have a throw of up to 65m.

Moeijelik

Figure 05

LOCATION OF THE MOEIJELIK PROJECT IN RELATION TO REGIONAL GEOLOGY AND THE ADJACENT CHROMITE MINES

b

a

Lebowagomo

Penge

Roedtan

Marble Hall

DullstroomStoffberg

Groblersdal

KromdraaiBelfast

Burgersfort

Steelpoort

1

2

3

5

4

6

78

9

10

11

12

13

Scale0 25km

23°3

0’

24°

24°3

0’

29° 29°30' 30°

MOEIJELIK

c

Off mapin Lydenburg

CHROMITE MINES*

Corridor MineralsMecklenburg (Chromex)Eastern Chrome Mines (Samancor)Dilokong (ASA Metals)Mooihoek (Umnotho weSizwe)MontroseWinterveld (Samancor)Doornbosch (Samancor)Steelpoort/Tubatse (Samancor)LannexTweefontein (Samancor)Dwarsrivier (Assmang)Thorncliffe (Xstrata)

SMELTERS

a - Dilokong (ASA Metals)b - Tubatse (Samancor)c - Lydenburg (Xstrata)

1

2

3

4

5

6

7

8

9

10

11

12

13 *Approximate Positions

Waterberg Group

Lebowa Granite Suite

Roossenekal Subsuite

Upper Zone

Main Zone

Critical Zone

Lower Zone

Platinum/Chromitite Reefs

Structures (Faults/Lineaments)

RustenburgLayeredSuite

BUSHVELDCOMPLEX

VMD1906_Bauba2015_2016


7.2. Local Geology The Moeijelik Project is located in the eastern limb of the BC. The Moeijelik Project is covered by recent unconsolidated sediments, with minimal outcrop of the underlying geology. The underlying geology comprises units of the Lower Zone. The more resistant Lower Critical Zone forms a steep hill to the southwest of the Moeijelik Project, where the LG6, LG6A and LG7 sub-outcrop at the base of the hill. The local geology at Moeijelik is presented in Figure 6. The chromitite reefs, the target horizons, are confined to the Critical Zone and are sub-divided into Lower, Middle, and Upper groups. The Lower Group (LG) contains seven chromitite reefs, the Middle Group (MG) four chromitite reefs, and the Upper Group (UG) two chromitite reefs in the western BC and three chromitite reefs in the eastern BC. The Moeijelik Project focuses on the LG chromitite reefs, which occur within the pyroxenites of the Lower Critical Zone (LCZ). The Moeijelik Project focuses on the LG7, LG6A and LG6 reefs, together referred to as the LG6 Unit in this report. LG6 Unit sub-outcrops to the southeast of the property, striking northwest-southeast over a strike of approximately 1.6km within the Moeijelik farm. The LG6 Unit is typically continuous along strike and down dip and the reefs are separated by pyroxenite partings. Dip is typically 20° to the west. Average width of the LG6 and LG6A combined is approximately 1.81m, excluding partings. The pyroxenite parting between the LG7 and the LG6A are typically less than 0.1m while the parting between the LG6A and the LG6 is thicker and varies between 0.51m and 1.16m.The LG6A typically has an average width of 0.45m and contains an average grade of 40.77g/t. The LG6 is an average of 1.36m thick and contains an average grade of 43.17g/t. The LG7 is generally of poorer quality and is the most variable reef. Moeijelik targets the LG6A and LG6 reefs and only extracts the LG7 where the width and grade meet the acceptable cut-off and mining limits. The LG7 has consequently been excluded from the Mineral Resource estimation. 7.2.1. Structural Geology

Dolerite dykes occur throughout the Moeijelik project, commonly along faults and joints. Small scale faulting occurs throughout the Moeijelik area but has had no material impact on mining to date. A larger fault occurring at the northwestern boundary of the farm has been identified through the aeromagnetic survey. Faults, dykes and other structural features are generally not identifiable from surface due to cover obscuring outcrop. Flattening and steepening of dip due to potholes and pyroxenite lenses and partings are common in the chromite projects in the region. These potholes and lenses may disrupt the chromitite or cause dilution to the reefs, however no evidence for significant potholing or reef dilution has been encountered during mining at Moeijelik to date. The development of mafic pegmatites is known to disrupt the reef thickness and cause difficult roof support. Mafic pegmatites are found on a small scale throughout the area although they can reach up to 100m in diameter. These small scale pegmatites are intrusions that cut across layering, are generally related to late stage structures and may dilate the chromitite layers or cause downwarping of surrounding layers resulting in marginal synclines. These pegmatites have not affected the area under consideration as yet although they may have an impact on underground extensions of the project.

7.2.2. Deposit Type and Mineralisation The chromitite reefs in the LG each consist of chromite spinel, orthopyroxenite and minor silicates. The quality of chromitite varies with depth and in the various reefs. Shallow and outcropping chromitite is typically friable and produces a fines ore. Below this weathered zone, chromitite tends to be less friable and can produce lumpy ore. The typical stratigraphy and a generalised cross section are illustrated in Figure 7.

Fig

ure

06

LOCAL GEOLOGY AT MOEIJELIKM

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VMD1906_Bauba2015_2016

-2692000m

N-2

690000m

N-2

688000m

N-2

686000m

N-2

684000m

N

?? ? ?? ? ?

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10001000

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90000mE 92000mE 94000mE 96000mE 98000mE 100000mE 102000mE 104000mE

Scale0 500m

JOBS KOP 411 KS

ROSTOK 410 KSROODEKRANS 94 KT

SCHWERIN 95 KT

WINTERSVELD 417 KS

MOEIJELIK 412 KS

ZWARTKOPPIES 413 KS

BRAKFONTEIN 464 KS

KLIPFONTEIN 465 KS

GEOLOGY

Recent Sediments

Dykes

Main Zone, RLS, BC

Critical Zone, RLS, BC

Lower Zone, RLS, BC

Magaliesberg Formation; Pretoria Group

Silverton Formation; Pretoria Group

Granodiorite; Machadodorp

Machadodorp, Silverton Formation

Daspoort Formation; Pretoria Group

Timeball Hill Formation; Pretoria Group

Penge Formation; Chuniespoort Group

Tar road

Dirt road

Track

Other access

Street

Track footpath

The community

River 20

100

LG6 outcrop & suboutcrop

Surface Contour

Moeijelik

Moeijelik

Figure 07

TYPICAL AND STRATIGRAPHY AT MOEIJELIKCROSS SECTION

This diagram and the information herein may not be reproduced or transmitted in any form without prior written permission from Venmyn Rand (Pty) Ltd. Graphics by Interaction.

VMD1906_Bauba2015_2016

Schematic Stratigraphic Column

Weathered Material

Depth Below Surface

0m

Weathered Pyroxenite

LG7 REEF

LG6 REEF

LG6A REEFLG6

0.35m - [email protected] - 43.3glt

[email protected]

[email protected]

Pyroxenite

78 910

LG6/6A Vertical Holes

LG6/6A Inclined Holes

Cross Section Through Boreholes


8. History T1.3

8.1. Historical Ownership Prior to the first Prospecting Right granted to Hlabirwa in 2006, no information regarding historical activities or ownership of the Moeijelik farm are available. Bauba became a 60% shareholder of the Moeijelik Project in 2014, after a transaction with Highland Trading Investments Limited, Danene Trust, Kumane Trust, Math-Pin Trust, Pimlico Investment Trust, and Hlabirwa (collectively, the Vendors).

8.2. Historical Activities The only documented historical exploration in the area is over the adjacent project, Sefateng. This information includes two percussion drillholes that were drilled into the sub-outcrop area near the southern boundary of the farm Zwartkoppies 413 KS (The Sefateng Project). Both drillholes SKP27 and SKP29, were drilled into the LG6 chromitite reef. Mr. N.A. Bleeker, the geologist that supervised the exploration on the Sefateng Project in 2007, also mapped outcrop and sub-outcrop of the LG6, LG6A, and LG7 chromitite reefs near the western boundary of the Moeijelik Project. All drillhole information obtained from the exploration completed on Zwartkoppies 413 KS in 2007 is available (Gain, 2008). A generalised 1:50,000 geological map is also available from the Council for Geoscience. No historical mining activities were conducted on the Moeijelik Project prior to the transaction.

9. Recent Exploration T2.2A(i)(ii), T2.3A(i)(ii), T2.3B(i) Recent exploration refers to all exploration carried out since the Prospecting Rights to the project were acquired by Hlabirwa in 2006. Exploration commenced in 2007 and included geological field mapping with the purpose of delineating the outcrop position, understanding the basic structural geology, and the continuity of the LG6 Unit over the project area. Percussion drilling and diamond drilling commenced in 2007 and a geophysical survey was completed over Zwartkoppies 413KS, Waterkoppies 113KT and Moeijelik 412KS. Of the holes completed, only 2 diamond holes were completed on the Moeijelik Project. A total of 22 diamond holes and 28 percussion holes were completed on Zwartkoppies 413KS and 22 diamond holes were completed on Waterkoppies 113KT. These have been used to confirm continuity of the LG6 Unit from Moeijelik. A digital terrain model (DTM) to 5m contour intervals was completed in 2007. The DTM was validated against the contour information available from the Surveyor General in Cape Town. In 2013, Hlabirwa completed a total of 16 percussion drillholes. The drillholes were planned to prove continuity of the LG6 Unit along the strike of the orebody. Eight of the percussion drillholes intersected the LG6 Unit at a depth of less than 25m and eight intersected the LG6 Unit at a depth of up to 50m. In 2013, a total of three Reverse Circulation (RC) drillholes were completed by Hlabirwa. In 2015, Bauba commenced a diamond drilling programme and four diamond drillholes were completed. These diamond drillholes were planned with the intention of estimating a maiden Mineral Resource. Samples were also taken from the mining face and sent for assay. The exploration drilling completed at Moeijelik is summarised in Table 3 and is illustrated in Figure 8. 9.1. Geophysical Surveys

A high resolution aeromagnetic survey was completed by GAP Geophysics (Pty) Ltd on farms Waterkoppies 113KT, Zwartkoppies 413KS and a portion of Moeijilik 412KS in 2007. The results were processed by Campbell and Johnson (2008). The processed image is illustrated in Figure 9. During this recording approximately 2,152km lines were flown with an average terrain clearance of 23m (varying between 19m and 32m). The flight paths were flown along a heading of 085º at 50m intervals. The recording covered an approximate area of 90km2.


Table 3: Moeijelik Project: Summary of Recent Drilling

DATE COMPANY PURPOSE SURVEYOR DRILLING COMPANY

TYPE OF DRILLING SIZE RESPONSIBLE

GEOLOGIST TOTAL NO.

B/H WIRELINE LOGGING

SEAMS SAMPLED

LABORATORY FOR QUALITY

USED IN MODEL

2015 Bauba Resource drilling

Platinum Borehole Surveying

Discovery Drilling Diamond NQ Johan Krynauw 4 Y LG6A, LG6 Yes Yes

2014 Vendors Resource drilling Not Surveyed Geoserv Diamond NQ Gert vd Linde 3 Y LG6A, LG7 Yes No

2013 Vendors Resource drilling Not Surveyed Discovery

Drilling Percussion 150mm Gert vd Linde 16 N LG6A, LG8 Yes No

Fig

ure

08

LOCATION OF BOREHOLESM

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VMD1906_Bauba2015_2016

900

1000

1100

1200

96400mE 96600mE 96800mE 97000mE 97200mE 97400mE 97600mE 97800mE 98000mE 98200mE-2689600m

N-2

689400m

N-2

689200m

N-2

689000m

N-2

688800m

N-2

688600m

N

MOEIJELIJK 412KS

ZWARTKOPPIES 413KS

MKP1

MKP2

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MKP6A

MKP6B

MKP8

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MKD1

MKD3

SKP 26

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SKP 29

SKP 30

Cr1

MKD2

SKP 28

MKP7

Scale0 100m

MK07MK08

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2015 Diamond Holes

Historic Diamond Holes

Other Access

Street

Track

River

Project Boundary

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Suboutcrop LG6

Bulk Sample LG6

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LG6/6A Inclined Holes

Location of LG6 and LG6A Reef Intercepts

MK07

MK08

MK09

MK10

MK09MK10

MK08MK07

Moeijelik

Figure 09

AEROMAGNETIC SURVEY AND THE INTERPRETATION OF DYKES AND FAULTS

VMD1906_Bauba2015_2016

Cape Town

Johannesburg

Durban

Project Area


The interpretation focussed on identifying areas of potential loss of reef due to close proximity to potholes, folding, faulting or intrusions. Further attempts were made to identify magnetic marker horizons that could potentially correlate with reefs under consideration, however only 2 markers related to UG2 were found. These markers illustrate general continuity at a high level. The most dominant structures identified in the geophysical survey are dyke systems that strike in a north-easterly and south-easterly direction. The most prevalent dykes are in the central part of the study area on Zwartkoppies 413KS, south of Moeijelik 412KS, where dyke spacings with densities of up to 60m can be found. To the north and south of the Zwartkoppies farm, the frequencies of dykes are low and spaced up to 500m apart. Dyke widths range from 5m to 15m. The polarity of the dykes made it possible to differentiate between Karoo-aged and late Bushveld-aged dykes within the survey completed. (Campbell and Johnson, 2008). Information from the aeromagnetic survey also indicates the presence small dunite pipes in the surveyed area. Such pipes would not have a significant impact on the reefs and none were found within the Moeijelik farm.

9.2. Surveying Methods The diamond drillholes completed in 2015 were surveyed by Platinum Borehole Surveying using the Gyro Shot® tool. The tool is gyroscopically oriented and is accurate to ±0.1°. The percussion drillholes, RC holes and older diamond drillholes have not been surveyed and collar coordinates were taken with a handheld Garmin GPS 60CSx, accurate to 3m in the x and y directions. Z coordinates were based on a detailed digital terrain model acquired for the project.

9.3. Percussion Drilling Percussion drilling was completed by Discovery Drilling (Pty) Limited and the on-site supervisor was Simon Maphanga. The percussion drill was equipped with a pneumatic hammer with a diameter of 150mm. Boreholes were drilled from a vertical position. The chips were caught next to the drilling hole and piled in rows of 10 for every meter drilled. These piles were then logged on logging sheets prior to being transferred into Excel™. Percussion drilling results did not provide sufficiently detailed results of intersections to include in orebody modelling aside from confirmation of continuity.

9.4. Diamond Drilling T3.1A(i) Diamond drilling was carried out by Centennial Trading Company 4 (Pty) Ltd trading as Discovery Drilling Contractors (Discovery). The drilling, logging and sampling was managed by responsible geologist, Dr J.R. Krynauw of Johan Krynauw Geological Services (Pty) Ltd. The purpose of drilling was to confirm continuity of the LG6 Unit to depth and to declare Mineral Resources. Venmyn Deloitte completed a site visit while drilling was ongoing and is satisfied that drilling, logging and sampling were conducted to the required standard. 9.4.1. Drilling

Drillholes were drilled at a core size of NQ (47.6mm) or NQ/ BQ (36.4mm) to obtain sufficient sample material for analysis. Four diamond drillholes were drilled and consecutively named MK07 to MK10. The four drillholes were drilled from two localities, down dip of the current operations and the subcrop of the LG6 Unit. At each drilling site, two holes were completed, one at -60° and one at 90°, intersecting the down dip extensions of the LG7, LG6 and LG6A. The LG5 reef was also intersected in MK07 but not sampled. Core recovery was 100% in all core below 3m and considered good quality with little grinding, except for one portion of the LG7 in MK10 where a portion was lost during drilling. Core recovery has not impacted grade. Bauba has a contract in place determining the accepted core recoveries, core layout, core metre marks, depth and stickup measurements. The following general drilling techniques were employed:-

drill sites were pegged using handheld GPS;


drill localities are marked with a wooden peg;

each drillhole site was secured and no access was allowed except by designated and defined personnel;

core was placed in steel core trays;

after each run, the stickup distance was measured, prior to removal of rods or inner tube from the hole, to account for any loss or gain of core. Each measurement was recorded, as well as the percentage loss/gain. If there was any change, a note was made in the log book which explained the reason for this change;

core must be removed from the barrel and placed in the core trays in the same sequence it was removed from the core barrel in;

each run of core was to be washed down of all lubricants and grease and properly stored in an aluminium tray which was the appropriate size for the core diameter;

depth of drillhole is calculated using core barrel, rods, quill rod and stickup;

core must be in 1m intervals with a line perpendicular to the core length indicating depth recorded, corrected for gain/loss recorded on the core and on appropriate core blocks;

full core trays were stacked and marked with borehole ID (BHID) and box number;

core recovery must be measured and recorded on the drillers report;

a core block must be placed at the end of each run including BHID, hole depth, gain/loss and recovery;

core trays must be photographed by the responsible geologist.

It must be noted that the drilling sites are located on a particularly steep hill with limited access by vehicle. This made for difficult conditions and most core was logged at the drilling site prior to being carried down to an area where it can be sampled. Drilling localities are photographed before clearing the site, after clearing the site, during drilling and after drilling to ensure that all environmental and safety procedures are being adhered to. The responsible geologist ensures that security fencing, fire breaks, work area and vehicle access and turn around space are in place. Drill sites are rehabilitated within 3 days of completion of drilling. After drilling is completed, casing must be removed from the drillhole and the drillhole collars must be capped and marked with the BHID.

9.4.2. Downhole Surveying After drilling, the drillholes were surveyed using a gyro survey by Platinum Borehole Surveying. MK07 collapsed before the surveyor was able to reach the site and no survey was completed. MK08, MK09 and MK10 were surveyed to 231m, 54m and 102m respectively. No major deviations were noted.

9.4.3. Logging Core is first oriented and a centre line drawn using a ruler. Core is split with a diamond saw into two halves along the length of the core. The halves are marked with perpendicular lines to indicate metre lengths, lithological contacts, faults, core breaks (natural or man-made), as well as any other notable features. Logging then commences and includes the following details:-

lithology type;

from, to and width;


lithology contact angles;

lithology contact type, i.e. sharp or gradational;

colour;

grain size;

weathering;

texture;

mineralisation; and

any other comments.

Rock Quality Designation (RQD) was recorded for MK07 and MK10. These were determined over 3m intervals

9.4.4. Core Photography Each core tray is photographed with a handheld digital camera for both wet and dry core prior to sampling. Each photo must show a clearly legible identification label including the BHID and box number. Photographs are renamed with the BHID and box number and stored electronically. Core was disturbed prior to photographing MK10 by mining contractors while they were removing the mobile offices. Core was already logged, split and sampled. The core was subsequently refitted.

9.5. Pit Face Mapping and Sampling During 2015, and in conjunction with the most recent diamond drilling programme, Bauba completed an assessment of the outcrop in the open pits. This included mapping of the LG7, LG6A and LG6 in the pits where exposed during production. A total of 22 samples were taken from the pits and sent for analysis. The sample results have been used to confirm the continuity and grades of the reefs from the pit to depth but have not been included in the orebody model. An example of the mapping and sampling can been seen in Figure 10.

10. Sample Preparation and Analysis and Security 10.1. Sampling Method

T3.2A(i-vi), T3.2B(i), T3.3A(i-v) Sampling selection is based on the mining cuts used in the open pit to ensure consistency between sample results and production results. All samples are included regardless of grade, losses or contamination. After core is split and the halves are marked to indicate sample lengths and sample numbers, the half core is cut with a diamond saw to take the selected samples. Chromitite reefs are sampled and the internal pyroxenite layers were not sampled. The preferred sample length is 30cm with a maximum of 40cm within the context of the lithology. Every sample received a sample number that was recorded in the drill logs and on both halves of the drill core. Thereafter sample bags were prepared and the appropriate sample numbers were written on each bag. The samples were then placed in the sample bags marked with the corresponding numbers. The sample bags were sealed and each bags sample number recorded prior to transport the laboratory. During sampling, Certified Reference Material (CRM) was inserted into the sample batches at random. CRM samples are labelled in sequence with the samples for Quality Assurance/ Quality Control (QA/QC) purposes. It should be noted that while the accepted terminology for LG6 Unit is LG7, LG6A, and LG6; the mine locally refers to the reefs as LG7, LG6A and LG6B, respectively. Samples taken prior to 2015 will be labelled as per the local mine terminology.

Fig

ure

10

IN PIT MAPPING AND SAMPLINGM

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VMD1906_Bauba2015_2016

MM

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M M M6a

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LG6a Chromitite seam

Middling between LG6 and LG6a

LG6 Chromitite seam

Footwall to LG6a Chromitite seam

Lithological contact

Approximate Lithological contact

Fault

Southeast extremity of panel

Northwest extremity of panel

Reference points for panel sections

1m scale at central point of photographs

Sample section

Sample number

6a

M

LG6

FW

SE1

NW1

L 2521


10.2. Laboratory Analyses T3.3A(i-v), T3.4A(i-iv) The analytical work for the 2015 drilling programme was conducted by Set Point Laboratories, a division of the Set Point Group. SetPoint Laboratories is an ISO 17025 accredited analytical chemistry laboratory. Samples prior to 2015 were analysed by UIS Analytical Services (Pty) Ltd (UIS), an ISO/IEC 17025 accredited laboratory. The samples prior to 2015 have not been considered in the orebody model and consequently, these laboratory analyses are not described here in detail. In 2015, a total of 59 samples were submitted to SetPoint Laboratories for analysis and SG determination. Of the 59 samples submitted, 31 were samples from the drilling programme and 22 were face samples from the open pit and six were CRM samples included by Bauba. These samples included blanks and standards. No duplicates were submitted by Bauba. The laboratory included a further nine QA/QC samples, including blanks, standards and duplicates. SetPoint Laboratory determined the Cr2O3, FeO and SiO2 content using X-Ray Fluorescence Spectroscopy (XRF). 10.2.1. Sample Preparation and Analysis

ISO accreditation specifies the general requirements for the competence to carry out tests and/or calibrations, including sampling. The standard method of sample preparation by SetPoint Laboratory is summarised as follows:-

samples are checked and sorted according to client’s submission sheet;

every batch of samples has an information sheet;

samples are inspected for any trace of moisture, if they require drying, they are placed in the drying oven until they are dry;

each sample is weighed on the top pan balance and the sample weight is recorded in the Laboratory Information Management System (LIMS) system;

primary crushing: rocks, rock chips or lumps are crushed using a jaw crusher and the crushed material is placed into a clean and labelled plastic bag;

secondary crushing: the resulting chips are crushed to a fineness of 90% less than 2.0mm;

if the sample requires splitting, it is split using a Jones riffle splitter. The split is placed into a new sample bag and the remaining sample (coarse reject) will be returned to the client;

the sample is milled to achieve a fineness of 90% less than 106µm or 80% less than 75µm;

after milling, the samples are emptied onto a brown paper sheet and transferred into the sample bag; and

once a batch of samples is completed, they are repacked for analysis.

XRF is a non-destructive analytical technique used to determine a full range of light to heavy elements by pressed pellet or fused disc. For Moeijelik, the fused disk method was used. Fused disc analysis involves fusion of the material into a borate glass disc for analysis. Cr, Fe and Si were the major elements analysed for.

10.2.2. QA/QC T3.1A(i)(ii), T3.4A(i-iv) Laboratories are required to calibrate their equipment daily and are also required to take part in round robin proficiency tests to ensure a high standard of results. SetPoint Laboratories require the following QA/QC measures:-

one out of every 10 samples of every batch passing through the secondary crusher is screened at 2.0mm to check that 90% of the material passes;


one out of every 10 samples of every batch is screened at 75µm or 106µm, whichever is applicable , to check that 80% or 90% of the material passes, respectively;

percentage loss for samples screened should be less than 2%; and

bowls, discs and lids are cleaned with cleaning running water and compressed air between each sample.

SetPoint Laboratory included a total of 15% (nine) QA/QC samples, including blanks, standards and duplicates. All results are verified by the laboratory manager and any inconsistencies or variations outside the laboratory specifications are reanalysed. Bauba included a total of 10% (six) QA/QC samples prior to sending the samples to the laboratory. QA/QC samples included blanks and standards. AMIS0321 and AMIS0388 certified reference materials were used as standards. AMIS0415 certified reference materials was used as the blanks. Bauba undertook a validation of the laboratory results verifying the expected results for the on the standards and blanks compared to the laboratory results. The verification showed that the sample results were acceptable. Only one result appeared marginal.

10.2.3. Specific Gravity T2.4A(ii), T2.4B(i) SetPoint Laboratories analysed the specific gravity (SG) of each sample using a Gas Pycnometer. This standard density measurement technique measures the volume of a sample by gas displacement and density is then calculated as the ratio of mass to volume. No bulk density has been measured because the SG is considered appropriate as an input into the orebody model. It should be noted that near surface, the SG is lower due to oxidation of the reefs.

10.3. Sample Security All samples were sealed after bagging at the core yard and delivered to the laboratory as soon as practically possible. The samples were under the supervision of responsible geologist during logging and sampling. Core is stored on the mine site until it can be moved to a locked core shed. Upon arrival at the laboratory, the samples are subject to the standard security measures of the laboratory.

10.4. Bulk Sampling No bulk sampling has been completed on the Moeijelik Project.

11. Data Management T2.1A(i), T2.1B(i), T3.2A(iv)(v)(vi)

11.1. Data Acquisition and Validation The complete set of Bauba’s drillhole results, including collar ID and co-ordinates, lithology and related geological information, sample ID, sample size, sample quality, and assay results, are stored electronically in an Excel™ database. The original drillhole paper logs were captured into Excel™ and verified by the project geologist. All laboratory results were received in Excel™ format and were incorporated into the main database. The Excel™ database is imported into Datamine™ Studio 3 software for orebody modelling purposes. This software package has a series of automatic verification procedures including checking for overlapping intervals. Preliminary orebody modelling provides a visual check that the drillholes plot correctly on the farm and that intersections are displayed correctly within cross-sections. Any errors identified are investigated by the responsible geologist prior to the commencement of more detailed two-dimensional modelling.


Venmyn Deloitte has independently verified the four diamond drillholes by cross checking the original paper logs and assay sheets with those captured in the database. Venmyn Deloitte has also performed independent validations on the input parameters of the modelling database. No errors were identified.

11.2. Database Management The Excel™ database is managed and maintained by the project geologist and back-ups of the database are stored at Bauba’s head office in Johannesburg.

12. Orebody Modelling and Results T4.1A(ii-iv), T4.1B(i-iv), T7B(iii) The orebody model for Moeijelik has been prepared by Mr G. Marshall (Pr.Sci.Nat.). The model was prepared in Datamine™ Studio 3 software. The model takes into account only the four diamond drillholes completed during the 2015 drilling campaign. The pit model has been used to constrain the boundary between open pit and underground. Production is typically based on a 40m highwall but there is opportunity to mine to a 50m highwall where the chromite ore price conditions and access allow. The percussion and RC drillholes and three older diamond drillholes have been excluded from the modelling as the core is not available for verification and the diamond drillholes were of poor quality. The model has focussed on the LG6A and LG6 reefs and is limited to the northeast by the sub-outcrop of the reefs at surface. The model is also limited to the south and west along the Moeijelik farm boundary. The physical and quality parameters of the LG6A and LG6 reefs were modelled. All parameters were plotted and visually inspected to ensure they were reasonable for geological interpretation prior to completion of the orebody model. The LG7 has been excluded from modelling as it is currently not mined economically and it was not sampled in drillhole MK10. 12.1. Compositing

12.1.1. Drillhole Desurveying Process The following datasets were imported in DatamineTM Studio 3:-

collar co-ordinates;

geology;

specific gravity (SG);

assay; and

downhole survey.

The files were desurveyed to form the 3D drillhole traces used for the orebody modelling and estimation.

12.1.2. Drillhole Compositing The drillholes were composited over the entire reef width for each individual reef. The 3D composites were then converted into 2D for the estimation process.

12.2. Reef Thickness The true thickness for each reef was calculated using the orientation and dip of the reef. The average true thickness for each chromitite reef is provided in Table 4.


Table 4: Average True Thickness per Chromitite Reef

BHID REEF TRUE THICKNESS (m)

MK07

LG6A

0.39

MK08 0.48

MK09 0.52

MK10 0.41

MK07

LG6

1.00

MK08 1.45

MK09 1.40

MK10 1.59

12.3. Specific Gravity T2.4A(ii) The SG was measured by Set Point Laboratories as part of the assay procedure as detailed in Section 10.2.3. The SG included in the orebody model was calculated on a thickness weighted basis for each chromitite reef and is summarised in Table 5. Table 5: Average SG per Chromitite Reef

BHID REEF SG (g/cm3)

MK07

LG6A

4.44 MK08 4.43 MK09 4.29 MK10 4.44 MK07

LG6

4.45 MK08 4.41 MK09 4.41 MK10 4.48

The orebody model has taken into account the SG results from pit sampling where it has been noted that SGs are lower due to oxidation of the reefs. Therefore an SG of 3.7 has been used between 0m-10m depth, and an SG of 3.82 has been used between 10m to 20m depth.

12.4. Assay Data The assay values were calculated on a thickness weighted basis for each chromitite reef and are summarised in Table 6. Table 6: Assay Values per Chromitite Reef

BHID REEF Cr2O3 (%) FeO (%) SiO2 (%) Cr:Fe RATIO

MK07

LG6A

39.20 25.00 8.50 1.38 MK08 42.32 24.31 5.29 1.53 MK09 40.22 23.95 8.05 1.48 MK10 41.10 24.70 5.40 1.46 MK07

LG6

43.73 25.40 3.86 1.52 MK08 43.19 24.58 5.18 1.55 MK09 42.76 25.26 4.23 1.49 MK10 43.21 25.22 4.15 1.51

12.5. Spatial Analysis A detailed geostatistical analysis of the composited reefs was undertaken by Venmyn Deloitte in order to identify any spatial continuity. Due to the lack of variability and limited data, no variogram structures could be modelled for Cr2O3, Fe2O3 and SiO2. Venmyn Deloitte therefore chose to model using the inverse distance squared estimation methodology.


13. Previous Mineral Resource Statements No previous Mineral Resource statement have been declared for the Moeijelik Project.

14. Current Mineral Resource Statements 14.1. Resource Estimation

T2.1B(i), T4.2B(i-vi), T5.7B(i-iii) A 2D block model was constructed in DatamineTM Studio 3 for each chromitite reef based on the logging of the relevant chromitite reefs and mapping of the various pits at the Moeijelik project. The chromitite reefs considered for modelling were the LG6 and LG6A. All of the intersected reefs were considered to be continuous between the drillholes as no significant structures have been noted during exploration or mining. Four drillholes were used for the orebody modelling from the most recent 2015 drilling campaign. Geological mapping was conducted in the open pits in order to identify any variations with respect to the reef width and continuity across the project. Faulting and jointing was also mapped in order to understand the structural complexity of the Moeijelik Project. The results from the in-pit geological mapping were used to determine the approximate geological losses for each reef. With the in-pit geological mapping and interpretation as well as the data density and distribution based upon the latest drilling results, Venmyn Deloitte considers there to be sufficient data and information available to declare a Mineral Resource for the Moeijelik Project. The 2016 Mineral Resources have been based on the results of a drilling programme that is undergoing iterative improvement through the use of statistical analysis using public domain information to determine the drill spacing required to improve confidence in the results. Mineral Resources are presented as in situ tonnes after geological losses have been applied. Geological losses were determined using the estimated geological losses from the in-pit geological mapping as well as known geological losses expected in the eastern Bushveld. No cut-off grade has been used during Mineral Resource estimation. All data used in the resource estimation process is validated against the original sample data each time the estimation is updated. Any errors are corrected and verified prior to updating the model. The prototype model was set up with a block size of 50m x 50m in the XY direction. The block models were subcelled in the XY direction to better represent the lease area boundary, depleted resources and outcrop positions of the chromitite reefs. The block model prototype parameters are shown in Table 7. Table 7: Moeijelik Block Model Prototype Parameters

DIRECTION ORIGIN CELL SIZE (m)

NUMBER OF CELLS SUBCELLS

X 96,200 50 56 10 Y -2,689,750 50 176 10 Z 0 1 1 1

The estimation parameters used for the inverse distance squared estimation of all the variables are shown in Table 8.


Table 8: Estimation Parameters for Moeijelik REFERENCE VALUE_IN SREFNUM IMETHOD POWER

1 Cr2O3 1 2 2 2 FeO 1 2 2 3 SiO2 1 2 2 4 SG 1 2 2 5 Thickness 1 2 2

A search ellipse with a 500m radius was created in order to locate the drillhole composites for the resource estimation. A minimum of three composites were required to be located within the search ellipse for a block to be estimated (SVOLFAC1). If the minimum of three composites could not be observed, the search radius of the search ellipse was doubled (SVOLFAC2), or tripled (SVOLFAC3) if required to locate the minimum number of composites. The cell discretion matrix was set at 2m x 2m x 1m in the X, Y and Z planes respectively for every 50m x 50m block. The estimation was set up to conduct the estimation on a parent cell basis. The estimated grade of the variable across the Moeijelik Project are illustrated in Figure 11. The modelling files for the Moeijelik Project are stored on Venmyn Deloitte’s server which is routinely backed up.

14.2. Statistical Analysis The detailed descriptive statistics of the drillholes used for the mineral resource estimate are shown in Table 9. Table 9: Descriptive Statistics Moeijelik

FIELD REEF NRECORDS MINIMUM MAXIMUM MEAN VARIANCE STANDDEV

CR2O3 LG6A 4 39.20 42.32 40.71 1.32 1.15 FEO LG6A 4 23.95 25.00 24.49 0.16 0.40 SIO2 LG6A 4 5.29 8.50 6.81 2.18 1.48 SG LG6A 4 4.29 4.44 4.40 0.00 0.06 TRUETHK LG6A 4 0.39 0.52 0.45 0.00 0.05 CR2O3 LG6 4 42.76 43.73 43.22 0.12 0.35 FEO LG6 4 24.58 25.40 25.12 0.10 0.32 SIO2 LG6 4 3.86 5.18 4.36 0.25 0.50 SG LG6 4 4.41 4.48 4.44 0.00 0.03 TRUETHK LG6 4 1.00 1.59 1.36 0.05 0.22

14.3. Mineral Resource Classification T7B(i)(ii) The Mineral Resource classification criteria is based on experience from similar projects. The Mineral Resource classification is based on a drillhole distance grid to determine the various radius distances applied to define each resource class. The radius distances are also used to delineate the mineral resource classification from an open mining face. The following drillhole spacing was applied to the Mineral Resources classifications:-

Measured Mineral Resource: 150m radius;

Indicated Mineral Resource: 300m radius; and

Inferred Mineral Resource: 600m radius.

Fig

ure

11

MINERAL RESOURCE CLASSIFICATION FOR THE MOEIJELIK PROJECTM

oeije

lik

VMD1906_Bauba2015_2016

Mineral Resource

Category

Measured

Indicated

Inferred

96 000 97 000 98 0002 6

90 0

00

2 6

89 0

00

Scale250km0


Notwithstanding the above criteria Venmyn Deloitte also consider the following criteria when declaring a Mineral Resource:-

validation of estimates;

grade continuity;

geological continuity;

sample recovery; and

QAQC performance.

The Mineral Resource classification for the chromitite reefs is illustrated in Figure 12.

14.4. Mineral Resource Statement T8B(i-iv) The Mineral Resource estimate for the Moeijelik Project is based on 4 diamond drillholes that were drilled either vertically or inclined at 60° from surface, as well as geological observations made on exposures in the opencast mining areas. The drillholes were generally spaced at 120m apart. Venmyn Deloitte is not aware of any environmental factors that could have a material impact on the likelihood of eventual economic extraction. The Mineral Resource estimate has been completed in accordance with the guidelines of the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (the SAMREC Code). The Mineral Resource estimation was completed by Mr G. Marshall. The Mineral Resources have been verified against the mine manager’s expected output and reflect Venmyn Deloitte’s view of the deposit. The Mineral Resources have been estimated for the Moeijelik Project at a 40m highwall, which is the typical highwall for the open pit, based on production during 2015. The Mineral Resources at a 40m highwall are presented in Table 10. During production, it is possible to achieve a 50m highwall in the open pit under the correct chromite price conditions. To illustrate the potential upside, Mineral Resources at a 50m highwall have also been estimated. The 50m highwall case is illustrated in Table 11. It should be noted that there is potential to expand the open pit along strike to the boundaries of the project. This is currently limited whilst the application for a Mining Right is underway and will depend on the outcome of environmental approvals where the strike extends through a watercourse area. These areas have not been included in this Mineral Resource.

15. Mining T5.4A(i), T5.4B(i-iii) Bauba commenced mining activities on the Moeijelik Project in March 2015. The Moeijelik Project is an open pit, truck and shovel operation where mining is conducted and managed by contract miners, Zizwe Opencast Mining (Pty) Ltd. The mine targets the LG6 and LG6A but also extracts LG7 where thickness and grade are suitable. As at 31 December 2015, a total of 185kt RoM has been produced along 7 panels over a length of 0.5km with a maximum highwall of 50m, but typically at a highwall of 40m. Production is summarised in Table 12. Material with a minimum grade of 38% was trucked directly to ASA based on the agreement in place. The Moeijelik Project was placed on care and maintenance in January 2016 due to low chromite prices and ASA being placed on care and maintenance. No mine plan is in place for the Moeijelik Project at this early stage. The mine is operating in a small pit, limited to the 5ha Mining Permit, while the application for a Mining Right is in progress. It is anticipated that the current open pit can be extended along strike towards the project boundaries once the Mining Right has been granted and the relevant environmental permits have been granted, and appropriate agreements are in place with the community in the area. It is anticipated that the open pit will reopen and continue to mine on a 40m highwall with potential to mine to a 50m highwall along the full strike length where possible, but that the remaining resource will be mined using underground mining methods. Bauba Platinum is currently undertaking a conceptual study to assess the underground mine development.

Fig

ure

12

CHROMITE MARKET MATERIAL FLOW

Chromite Ore

Refractories

1.0%

Foundry Sands

3.8%

Metallurgical (FeCr)

91.0%

Chemical

2.0%

Chromium Metal

2.2%

Stainless Steel

65.8%

Austenitic Steel Ferritic Steel Cr Mn

Ferrochrome

Others

7.5%

Nickel Alloy Foundries

Alloy Steel

26.7%

Tool and High Speed Steel

Low Alloy Steel

Moeije

lik

VMD1906_Bauba2015_2016


Table 10: Mineral Resources for the Moeijelik at a 40m highwall (Venmyn Deloitte, 2016) MINING

METHOD REEF RESOURCE CATEGORY TONNES (Mt) REEF WIDTH

(m) Cr2O3 (%) FeO (%) SiO2 (%) Cr:Fe Ratio SG (g/m3)

Opencast*

LG6A

Measured 0.04 0.47 40.76 24.30 7.09 1.48 4.37 Indicated 0.01 0.51 40.29 23.99 7.90 1.48 4.30 Inferred 0.02 0.47 40.72 24.30 6.93 1.47 4.37

Total 0.07 0.48 40.66 24.24 7.20 1.48 4.36

LG6


Total 0.20 1.38 43.03 25.12 4.39 1.51 4.43 Total Measured 0.14 1.13 42.50 24.87 5.14 1.50 4.41 Total Indicated 0.05 1.17 42.13 24.92 5.21 1.49 4.39

Total Inferred 0.08 1.20 42.51 24.95 4.94 1.50 4.42 Grand Total Opencast 0.27 1.16 42.43 24.90 5.09 1.50 4.41

Underground

LG6A


Total 1.68 0.45 40.77 24.49 6.62 1.47 4.40

LG6



Total Inferred 2.11 1.27 42.64 25.02 4.68 1.50 4.44 Grand Total Underground 7.01 1.18 42.60 24.98 4.87 1.50 4.43

Combined

LG6A


Total 1.75 0.45 40.76 24.48 6.65 1.47 4.40

LG6



Total Inferred 2.20 1.27 42.63 25.02 4.69 1.50 4.44 Grand Total 7.28 1.18 42.60 24.98 4.88 1.50 4.43

Notes: * Calculated at a 40m highwallMineral Resources are reported as in situ tonnes Mineral Resources are reported as inclusive of Mineral Reserves No cut-off grade applied No potential mining dilution factors applied Apparent computational errors due to rounding down Geological losses applied to the Mineral Resources:-

Measured – 5% Indicated – 10% Inferred – 20%


Table 11: Mineral Resources for the Moeijelik at a 50m highwall (Venmyn Deloitte, 2016) MINING

METHOD REEF RESOURCE CATEGORY

TONNES (Mt)

REEF WIDTH (m)

Cr2O3 (%)

FeO (%)

SiO2 (%) Cr:Fe Ratio SG

(g/m3)

Opencast*

LG6A


Total 0.11 0.48 40.70 24.27 7.06 1.48 4.36

LG6



Total Inferred 0.13 1.22 42.53 24.96 4.89 1.50 4.42 Grand Total Opencast 0.45 1.17 42.45 24.92 5.04 1.50 4.41

Underground

LG6A


Total 1.64 0.45 40.77 24.49 6.62 1.47 4.40

LG6



Total Inferred 2.06 1.27 42.64 25.02 4.67 1.50 4.44 Grand Total Underground 6.84 1.18 42.60 24.98 4.87 1.50 4.43

Combined

LG6A


Total 1.75 0.45 40.76 24.48 6.65 1.47 4.40

LG6



Total Inferred 2.19 1.27 42.63 25.02 4.69 1.50 4.44 Grand Total 7.28 1.18 42.60 24.98 4.88 1.50 4.43

Notes: * Calculated at a 50m highwallMineral Resources are reported as in situ tonnes Mineral Resources are reported as inclusive of Mineral Reserves No cut-off grade applied No potential mining dilution factors applied Apparent computational errors due to rounding down Geological losses applied to the Mineral Resources:-

Measured – 5% Indicated – 10% Inferred – 20%


Table 12: Monthly Production Summary for 2015

MONTH LG6A & LG6 TONNAGE (t)

LG7 TONNAGE (t)

AVERAGE PRODUCTION GRADE

(Cr2O3 %)

March 2015 15,126.16 - 39.02

April 2015 20,869.60 - 38.69

May 2015 20,408.80 - 39.00

June 2015 20,372.82 - 38.06

July 2015 21,497.00 - 40.77

August 2015 20,231.00 - 39.88

September 2015 13,883.52 6,330.18 39.40

October 2015 20,403.70 5,308.61 41.06

November 2015 17,754.57 40.53 40.91

December 2015 460.00 - 40.08

TOTAL/AVERAGE 173,454.21 11,598.26 39.74

16. Mineral ProcessingT5.5A(i), T5.5B(i-iii) No mineral processing is being carried out at the Moeijelik Project. Based on the quality of the ore, ore is sorted into stockpiles based on grade and shipped directly to ASA as per the existing contract. No metallurgical or mineralogical testwork has been necessary. The Moeijelik Project was placed on care and maintenance in January 2016 due to low chromite ore prices and ASA being placed on care and maintenance.

17. Mineral Reserve StatementNo Mineral Reserves have been declared for the Moeijelik Project.

18. Environmental and Social PracticesT5.2A(i), T5.2B(i)(ii) Bauba Platinum have an approved Environmental Management Programme (EMP), closure plan and financial provision, with associated compliance reporting conditions contained within the Prospecting Right. Performance assessment reports detailing compliance with EMP management practices and requirements, in addition to the financial provisions for closure and rehabilitation, are provided in the annual prospecting report submitted to the DMR.

18.1. General Disclosure The following activities were undertaken in the performance of this CPR:-

a discussion with Bauba Platinum as to an overview of the current environmental andsocial compliance status (including management practices) for the Moeijelik ChromiteProject; and

a review of all relevant documentation, inclusive of licences, internal and externalaudits, where available.

18.2. Environmental and Social Permitting Status The environmental and social compliance status in relation to the South African legislative requirements for the Moeijelik Chromite Project are summarised in Table 13.


Table 13: Environmental and Social Compliance Status ACT,

REGULATION OR BY-LAW

REQUIREMENTS SECTIONAL REQUIREMENTS PERMITTING REQUIREMENTS

CURRENT COMPLIANCE STATUS

MPR

DA,

200

2 (A

ct 2

8 of

200

2)

An EMP must be approved in terms of Section 39(4) of the MPRDA as a perquisite to the commencement of the mining / exploration permit.

Sections 39(1) and (2) of the MPRDA require that all applicants for a reconnaissance permissions, prospecting rights or mining permits must conduct an Environmental Impact Assessment (EIA) and submit an EMP. Prescriptive details are provided in Section 39(3) a-d. Regulations 49, 50, 51 and 52 detail the requirements for the contents and processes for scoping, EIA, EMP and EMPRs.

Approval of submissions subject to the conditions stipulated in Section 39(4) of the MPRDA.

Bauba Platinum have an approved EMP for the Moeijelik Chromite Project, and submit annual compliance audit findings in the prospecting report to the DMR.

Financial provision must be made to allow for closure and rehabilitation must be annually adjusted.

Sections 41 to 47 of the MPRDA address legislative closure requirements. GNR 527 of the MPRDA addresses the financial provision for mine rehabilitation and closure and requires that the quantum of financial provision, to be approved by the Minister, must be based on the requirements of the approved EMP and shall include a detailed itemisation of all actual costs required for:-

Annual closure and rehabilitation estimation and associated financial provision

Bauba Platinum have made financial provision for both scheduled and unscheduled closure of the prospecting operations at Moeijelik. This provision is adjusted annually and submitted to the DMR.

premature closure regarding:- The rehabilitation of the surface of the area. The prevention and management of pollution of the atmosphere. The prevention and management of pollution of water and the soil. The prevention of leakage of water and minerals between subsurface formations and the surface. Decommissioning and final closure of the operation; and

Post closure management of residual and latent environmental impacts. Regulation 54(2) requires annual financial closure estimation and associated financial adjustment.

MPR

DA,

20

02

(Act

28

of 2

002)

An approved Social and Labour Plan (SLP) is required for permitting approval, with annual compliance reporting submission.

Sections 40 - 46 of GNR 527 of 2004 and 39(1) and (2) of the MPRDA dictate the requirements of submission, approval and reporting of the SLP

Approval and annual reporting to the regional DMR office on compliance in compliance with S, 200445 of GNR 527

Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require an SLP. This will be a future requirement should the PR be converted to a Mining Right.

NEM

A, 1

998

(A

ct N

o. 1

07 o

f 199

8)

EIAs and EMPs are required as defined by listed activities set out under Section 24 of NEMA, 1998.

Section 14 details the contents of an EMP, with Regulations 543, 544, 545 and 546 establishing the processes to be followed to obtain an environmental authorisation and the listed activities requiring authorisation.

Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require an Environmental Authorisation from the Department of Environmental Affairs (DEA). This will be a future requirement should the PR be converted to a Mining Right.

Section 28 addresses the duty of care and remediation of environmental damage.

Section 28 details that all persons who cause, have caused or may cause significant pollution or degradation of the environment must take reasonable measures to prevent such pollution or degradation from occurring, continuing or recurring, or, in so far as such harm to the environment is authorised by law or cannot reasonably be avoided or stopped, to minimise and rectify such pollution or degradation of the environment.

Bauba Platinum currently undertake concurrent rehabilitation, and are compliant with section 28 of the National Environmental Management Act (NEMA).


ACT, REGULATION OR BY-LAW

REQUIREMENTS SECTIONAL REQUIREMENTS PERMITTING REQUIREMENTS

CURRENT COMPLIANCE STATUS

NEM

:AQ

A,

2004

(A

ct 3

9 o

f 200

4) No listed activity in

terms of the Act can take place without a licence.

GN 1210 establishes national Ambient Air Quality Standards, and provides limits for SO2, NO2, Particulate Matter (PM10 ), ozone, benzene, lead and CO.

Atmospheric Emission Licence

Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require an Air Emissions Licence (AEL) permit. This may be a future requirement should the Prospecting Right be converted to a Mining Right.

NEM

: WA

Act,

2008

(A

ct 5

9 of

200

8)

A licence is required to establish and operate a waste disposal site, as defined by the listed activities within the Act.

Chapter 5 of the Act provides for the licensing of waste management activities, which include storage, transfer, recycling, treatment and/or disposal of waste. Radioactive waste and mine residues have been excluded from the Act.

Waste Management Licence

Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require a Waste Management Licence (WML) permit. This may be a future requirement should the Prospecting Right be converted to a Mining Right.

NW

A, 1

998

(A

ct 3

6 of

199

8)

as a

men

ded A licence is required for

the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent.

The National Water Act (NWA) stipulates that a WUL is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act.

Water Use Licence

Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require a Water Use Licence application (WULA). This may be a future requirement should the Prospecting Right be converted to a Mining Right.

18.2.1. Operational Environmental Management Exploration activities currently include mapping, sampling and reverse circulation core drilling. Bauba Platinum undertakes concurrent rehabilitation management practices for all exploration and drill holes.

Bauba Platinum has the made the following commitments in its environmental policy:-

compliance with relevant state and national legislation as a minimum,

ensure that management and reduction of environmental risks is anintegral part of operations planning and long term strategy,

develop, implement and monitor environmental management plans toachieve environmental targets,

set and meet environmental objectives and targets based on theprevention of pollution,

recognise and protect areas of special heritage and cultural value,

support and participate in community based environmental projects,

maintenance of a close working relationship with government and otherrelated industries to continually improve environmental management andperformance.

regular review and reporting on the environmental performance of thecompany and will ensure that this policy remains relevant to achieving itstarget of minimal impact to the environment.


18.2.2. Operational Social Management Bauba Platinum does not have a Social Labour Plan (SLP) for the Moeijelik Project, as the Project is still in exploration phase. An SLP is not a requirement for prospecting operations in terms of Regulation 46 of the MPRDA (Act 28 of 2002) (as amended).

18.3. Mine Closure Provision, Closure Planning and Rehabilitation Financial Provision and closure planning, informed by both an approved EMP and GNR 527 of the MPRDA, is a statutory legislative requirement when holding a prospecting licence. Sections 41 to 47 of the MPRDA address current legislative closure requirements. Section 41(1) requires that an applicant for a prospecting right, mining right or mining permit must, before the Minister approves the environmental management plan or environmental management programme (EMP) in terms of Section 39(4), make the prescribed “financial provision” for the rehabilitation or management of negative environmental impacts. Bauba has made provision for both scheduled and unscheduled closure of the prospecting operations. Closure and rehabilitation operations allow for the two borehole drill sites. The provision also accounts for closure and rehabilitation operations being performed according to the requirements of the EMP. Bauba has secured its mining permit on the Moeijelijk Project by filing a Scoping report for the Environmental Impact Assessment (EIA) to the DMR on 11 May 2015, which was accepted on 22 May 2015. An EIA in support of the Mining Right application was submitted on 28 July 2015 and response should be received by December 2015 as per the required timeframes. A Water Use License Application (WULA) was submitted on 12 August 2015 and an official Acknowledgement of Receipt was received on 12 October 2015. Bauba has made provision for both scheduled and unscheduled closure of the mining operations. Closure and rehabilitation operations allow for the four drillhole drill sites and the open pit. The provision also accounts for closure and rehabilitation operations being performed according to the requirements of the EMP. ASA has issued a current financial guarantee on behalf of Bauba A Hlabirwa of ZAR5,110,105 to the DMR in respect of its Mining permit. Based on the revised rehabilitation and closure costs, the updated financial accrual is calculated at ZAR2,871,963 resulting in an excess of ZAR2,238,142. Bauba has also filed a rehab guarantee for its mining right application to the value of ZAR6,054,152.

19. Chromite Market Review T5.8A(i) The Moeijlik Project will produce a direct shipping chromite ore. The offtake agreement in place with ASA is outlined in Section 5.5. This section provides an overview of the chromite market that would relate to the Moeijelik Project. Chromite is a brownish-black cubic mineral belonging to the spinel group. It is the only ore mineral from which metallic chromium (Cr) and Cr compounds are commercially obtainable. It has the chemical formula FeCr2O4, and a theoretical composition of 22-24% FeO and 38-40% Cr2O3. In its natural form, it occurs in solid solution with other minerals in the spinel group, so Cr2O3 grades are less than the theoretical 68%. Cr is the most abundant of the Group VIA family of metallic elements comprising Cr, molybdenum (Mo) and tungsten (W). At a concentration of nearly 400ppm in the earth's crust as various minerals, it is the 13th most common element. Chromite occurs exclusively in rocks formed by the intrusion and solidification of magma which is rich in the heavy, iron-containing minerals such as pyroxenes and olivines to form ultramafic igneous rocks. Within these rocks, Cr occurs as a chromium spinel, a highly complex mineral made up of varying compositions of MgO and Al2O3. However, magnesium (Mg) can be substituted in varying proportions by divalent iron (Fe2+), and aluminium (Al) can be substituted, also in varying proportions, by trivalent Cr3+ and trivalent Fe3+. This improves the Cr:Fe ratio. For this reason, the Cr spinel may be represented as (Fe,Mg)O(Cr,Fe,Al)2O3.


Commercial chromite deposits are found mainly in two forms, which are:-

stratiform seams in basin-like intrusions, often multiple seams through repeated igneous injections; and

the more irregular podiform or lenticular deposits.

Stratiform deposits are generally very large complexes and can be more than 5km thick and cover thousands of km2 in area. The BC of South Africa is one of the best known examples of a stratiform igneous deposit. The BC contains approximately 72% of the world's chromite reserves. The other important stratiform deposit is the Great Dyke of Zimbabwe which traverses nearly the length of the country (NNE to SSW), measuring approximately 550km in length and is approximately 11km wide. Other stratiform deposits occur in Madagascar and in the Orissa district of India. Podiform deposits are relatively small in comparison and may be shaped as pods, lenses, slabs or other irregular shapes. Many have been extensively altered to serpentine and they are often faulted. They are generally richer in Cr than stratiform deposits and have higher Cr:Fe ratios. The chromite ore reserves in Kazakhstan are an example of podiform deposits. Podiform ores were originally highly sought after as the best source of metallurgical grade chromite for high-carbon ferrochrome. These ores also tend to be massive (hard lumpy) ores, as opposed to the softer, more friable ores from the stratiform deposits, and this makes for better electric smelting operation. There is a third type of chromite deposit but of very limited commercial significance. These are the eluvial and alluvial deposits that have been formed by weathering of chromite-bearing rock and release of the chromite spinels with subsequent gravity concentration by flowing water. Chromium may also be concentrated in high-iron lateritic deposits containing nickel and there have been attempts to smelt these to produce a chromium-nickel pig iron for subsequent use in the stainless steel industry.

19.1. Ore Processing

Initial processing of chromite ores is generally by heavy media or gravity separation of ores to remove gangue and produce upgraded lumpy and chip ores followed by spiral gravity separation to produce fine concentrates. Magnetic separation and flotation techniques may also be applied. Approximately 93% of the world's chromite is converted into various ferrochrome alloys for use in the stainless steel and other alloy industries. Chromite is generally smelted in submerged arc furnaces, together with carbonaceous reductants and fluxes, although other technologies such as DC arc furnace smelting are also in use. Importantly, agglomeration of ore fines, especially those produced from South Africa's friable chromite, is an important aspect of processing prior to smelting. Pelletising of the fines is currently the preferred route. A wide range of possible technologies for smelting chromite to ferrochromium has been investigated. In the early days of high-carbon ferrochrome production, the furnaces were supplied only with high-grade, lumpy chromite especially from countries such as Zimbabwe but with the increasing demand of ferrochrome from the 1970s, most countries, particularly South Africa, began using the lower-grade ores. The ferrochrome produced from these ores is known as charge chrome because the chromium content is lower and the carbon content, and in particular the C:Cr ratio, is much greater than in high-carbon ferrochrome. However, because stainless steel producers require as little carbon as possible entering their melts for each chromium unit, the introduction of the argon-oxygen decarburising (AOD) and vacuum-oxygen decarburising (VOD) processes has positively changed the ferrochrome smelting business as there is no longer a need to use larger quantities of the more costly low-carbon ferrochromium. These processes enabled the steelmakers to remove carbon from the stainless melts without excessive oxidation and losses of chromium. A more advanced attempt to overcome the problem of ore fines was the introduction of DC arc furnace (or plasma furnace) technology. Some of the advantages of DC arc furnace operation are:-

use of fine ores without a need for pelletising;

use of lower cost reductants and greater choice of reductants;

higher chromium recoveries;

specific changes in the charge composition reflected in slag or metal, and


the introduction of the closed top operation enabled furnace off-gas energy to be used for co-generation of power.

Pelletising technology was introduced for friable chromite ores by binding, adding a reductant and fluxes, and then passage through a rotary kiln for hardening by sintering. This also enables a degree of pre-heating and pre-reduction of the chromite feed before charging to a submerged arc furnace to produce ferrochrome. A more recent approach, and one which is being installed by more plants, is pelletising. Pellets are produced with coke and these are sintered and partly pre-reduced on a steel belt sintering system. From there, the pellets are delivered to pre-heating shaft kilns that are located above submerged arc furnaces and which operate as direct feed bins, making use of the off-gas heat from the furnaces. Lump ore, coke and fluxes are also directed to the feed bins. Chromite in various sizes is typically charged into a submerged AC Electric Arc Furnace with the addition of reductants (coke, coal and quartzite). The smelting process is energy intensive requiring up to 4MWh/t of material. Slag is separated from the liquid ferrochrome and tapped into ladles for further processing. Liquid ferrochrome is then poured into moulds and after cooling, is crushed into sizes as required by the customers. Crushed ferrochrome is railed to final customers or harbours for shipment.

19.2. Uses and Applications Chromium is a versatile element and finds a wide variety of uses in applications in the steel and alloy, chemical, and refractory industries. Approximately 93% of chromite produced globally is used for smelting into ferrochrome alloys. These alloys are used in the stainless steel, steel, and other alloy industries. Chromium metal, which is produced by the aluminothermic or electrolytic process, is mainly used for specialty alloys. The primary chemical product from chromite is sodium chromate. From this, a variety of other chemical products are made and used, for example, for tanning leather, as coloured pigments in paints, plastics and ceramics, and metal finishing such as chromium plating. Production of chromite for refractory use and foundry sands is about 3% of global chromite production. Refractory chromite is used in sectors of ferrous and non-ferrous metallurgy, in cement kilns and in the glass industry. The specifications of chromite ore for smelting purposes in general are becoming less rigid. However, whilst the required Cr2O3 grade for the production of high-carbon ferrochrome has decreased from 48% to 40% (minimum) and the Cr:Fe ratio from 2.8:2, the specifications of the ores for charge chrome production are still more rigid. A similar trend is also noted in the grades of the refractory-grade ore. In addition, the use of technologies such as pelletisation, agglomeration, plasma arc technology, and direct reduction has meant that ores that were previously considered uneconomic can now be used to produce ferrochrome. Figure 13 shows the end-uses of chromite.

19.3. Chromite Supply South Africa holds 72% of the world’s chromite resources, Zimbabwe ranks second with 12% of the world’s resources (Table 14). South Africa is the leading producer of chromite mine production, having produced an estimated ~45% of global chromite production in 2015 (Table 14). South African chromite production is primarily made up of chromite with less than 44% Cr2O3, with a smaller fraction of its production being made up of chromite with a Cr2O3 content of between 44% and 48% (Table 15). Table 14: Global Mine Production

COUNTRY MINE PRODUCTION (Mt) CHROMITE ORE 2014 2015 RESOURCES (%)

India 3.54 3.50 0.90% Kazakhstan 3.70 3.80 5.00% South Africa 12.00 15.00 72.00% Turkey 2.60 3.60 0.90% Other Countries* 4.59 4.60 21.20% TOTAL 26.43 30.50 100.00% Source: USGS, Mineral Commodity Summaries, January 2016; ISSF, Stainless Steel in Figures, 2015 *Other countries include Zimbabwe, Russia, Brazil and Finland.

Moeijelik

Figure 13

ESTIMATED CR O GRADE (%) BY CHROMITITE REEFS2 3

VMD1906_Bauba2015_2016

96 000 97 000 98 0002 6

90 0

00

2 6

89 0

00

Scale250km0

CR O (%)2 3

42.7,43

43,43.3

43.3,43.5

43.5,43.85

Lg6 CR O (%) GRADE2 3

96 000 97 000 98 0002 6

90 0

00

2 6

89 0

00

Scale250km0

CR O (%)2 3

39.2,39.8085

39.8085,40.417

40.417,41.0255

41.0255,41.7341

LG6A CR O (%) GRADE2 3


Table 15: South African Chromite Production in 2015

COMMODITY PRODUCTION LOCAL SALES EXPORT SALES TOTAL SALES

QUANTITY (Mt)

QUANTITY (Mt)

VALUE (ZARm)

UNIT VALUE (ZAR/t)

QUANTITY (Mt)

VALUE (ZARm)

UNIT VALUE (ZAR/t)

QUANTITY (Mt)

VALUE (ZARm)

Chrome ore 15.69 9.81 8,088.87 825.00 4.82 8,104.13 1,681.00 14.63 16,193.0

0 >44% CR2O3 13.56 8.74 6,655.01 762.00 3.78 5,898.96 1,559.00 12.52 12,553.97 44% TO 48%

CR2O3 2.14 1.07 1,433.87 1,335.00 1.04 2,205.17 2,129.00 2.11 3,639.03

>48% CR2O3 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Source: DMR, Production Summary Report, 2015

19.4. Chromite Ore Prices

LG6 ore refers to ore that is mined from “lower group six”, or the sixth chromite seam in the lower group of the BC, while UG2 ore refers to ore mined from “upper group two”, or the upper critical zone of the BC. LG6 and UG2 chromite ore prices have shown a downward price trend since March 2011, with LG6 ore consistently trading at a higher price than UG2 ore and the price difference between the two ore types increasing from the 2nd half of 2011 (Figure 14). In March 2016, at the time of writing this report, the UG2 chromite ore price was trading at ~USD88/t. The last LG6 price available traded at USD173/t in January 2014.

19.5. Ferrochrome Demand As discussed previously, approximately 93% of chromite produced globally is used for smelting into ferrochrome alloys. These alloys are used in the stainless steel, steel, and other alloy industries and, as a result, demand for ferrochromium is dependent on whether there is global growth in demand for stainless steel, steel and other alloys globally. Since approximately 85% of ferrochrome is used in the production of stainless steel, with the remaining ferrochrome being primarily used in the production of alloy steel as well as refractory, chemical and foundry uses, ferrochrome demand, and, therefore, chromite demand, is intricately linked to the demand for stainless steel in particular (Chirisa, 2009). The demand for ferrochrome has increased, according to the HSBC, by 10.1% CAGR (compound annual growth rate) between the years 2009 and 2014 with the trend slowing down in recent years as a result of the downward movement of stainless steel production figures (Burns, 2015). The International Stainless Forum estimated a 0.7% drop in stainless melt shop production in the first half of 2015, subsequently restraining ferrochrome demand (Burns, 2015). HSBC estimates ferrochrome prices to decrease in 2016, averaging at USD1.05/lb and pick up to USD1.10/lb in 2017 (Burns, 2015).

19.6. Ferrochrome Supply Global ferrochrome supply has been gradually shifting from South Africa, which produced more than 50% of global ferrochrome ten years ago, towards other countries, and particularly China. As a result, the share of global ferrochrome production that is produced by South Africa has been falling and is estimated to have reached 32% of global production in 2012 (KPMG, 2013). China’s ferrochrome production, meanwhile, has increased from 20% of global production in 2008 to an estimated 37% in 2013 (ISSF, 2015).


Figure 14: Chrome Ore and Ferrochrome Prices (March 2010 - March 2016)

Source: INet Bridge Note: No prices for LG6 available after January 2014.

South Africa’s reducing contribution to global ferrochrome production figures can be attributed to its increased exports of chromite ore to China. The increasing costs of ferrochrome production in the country due to rising electricity costs and general electricity supply problems resulted in the closure of less-competitive plants, further contributing to the lower South African production rate (PRNewswire, 2014). The remaining ferrochrome producers, benefiting from the weak Rand, along with major new projects in China, India and Kazakhstan have further added supply to the market, subsequently increasing inventory and creating a surplus supply in the market (Burns 2015).

19.7. Ferrochrome Price The European Benchmark ferrochrome price has remained between the USD1.1/lb and USD1.36/lb spread from April 2010 to December 2015. However, at the time of writing this report (March 2016), the ferrochrome price experienced an 11.5% drop in price resulting in a decrease to USD0.92/lb.

19.8. Ferrochrome Outlook The outlook for the ferrochrome market is intricately linked to the stainless market, as previously stated. The stance for the global stainless steel market remains bleak with weak purchasing activity and low transaction values (World Steel News, 2015). The world’s largest stainless steel producer, China, is expected to decrease imports as the demand for infrastructure and construction declines, in a weakened Chinese economy (Frizsimmons, 2015). Subsequently the surplus ferrochrome inventory increases, fuelled by the declining Chinese economy, recessionary conditions in the majority of South America and the flat growth in Europe. According to the HSBC, these elements will combine to see the surplus ferrochrome persist through 2018 (Burns, 2015). The market for both chromite and ferrochrome would be significantly affected by any restrictions placed on future South African chromite export. Analysts, however, speculate that the introduction of export duties or quotas on the supply of chromite raw materials to Chinese ferrochrome producers would exert upward pressure on future prices (PRNewswire, 2014).

0.00

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CHROME ORE SA LG 6 MET Grade Price 42% CIF ($/TONNE)CHROME ORE SA UG2 MET grade Price 40% CIF ($/TONNE)FERROCHROME SPOT PRICE CIF ($/LBCR)


In South Africa, ferrochrome production is influenced by the rising cost of electricity, as previously stated. Eskom has been upwardly revising power tariffs with the intention of curtailing electricity demand and is planning to raise the tariffs further in the coming years (KPMG, 2013). For South African ferrochrome producers, it will be important to assess whether there is available electricity that makes it affordable to produce ferrochrome.

19.9. Moeijelik Chromite Market The Moeijelik Project is targeting chromite for metallurgical use, specifically in the ferrochrome industry. The exploration results identify that the chromite content meets the requirements for supply to ferrochrome market. The Moeijelik orebody contains an average of 41% Cr2O3 and FeO content of approximately 18% to 26% based on the early stage information available. The LG6 is considered appropriate for the market that has been identified, however detailed demand, supply and product details will be assessed during the advanced exploration stage.

20. South Africa Country Profile SR10A(i)

20.1. Political and Economic Climate South Africa gained independence from Britain on 31 May 1910, and was declared a republic in 1961. From 1948 until 1990, the South African political and legal systems were based upon the concept of apartheid, a philosophy of separate racial development, enforced by a white minority government. The first multiracial elections in 1994 brought an end to apartheid and ushered in black majority rule under the African National Congress (ANC), with a number of different political parties participating in the elections. The country continues to hold democratic, peaceful, free and fair elections, the last of which was won by the ANC in 2014, under the leadership of President Jacob Zuma. South Africa is the most advanced economy in Africa and provides the gateway to Sub-Saharan Africa. It is classified as a middle-income emerging market, with well-developed financial, legal and judicial systems and modern infrastructure. Between 2004 and 2008 South Africa grew economically as a result of macroeconomic stability and a global commodities boom, but growth slowed in the second half of 2008 and 2009 due to poor global economic conditions, which influenced commodity prices and demand. Gross Domestic Product (GDP) fell almost 2% in 2009, worsening the country’s already high unemployment levels. However, in 2010, 2011 and 2012, the country again reflected a positive economic growth rate, with 2.8%, 3.4% and 2.6% real GDP growth rates, respectively (CIA, 2013). South African economic policy is fiscally conservative but pragmatic. The country attempts to control inflation by keeping it within an acceptable range (3% - 6%), maintains a budget surplus, uses State-owned enterprises to deliver basic services to low-income areas and provides social grants to a quarter of the population. Currency and inflation volatility, poverty, income disparities, and poor availability of public services continue to characterise the country. However, there has been an improvement in many of these areas. The country, for instance, returned to its target inflation range in 2010, 2011 and 2012, since inflation stood at an estimated 4.1%, 5% and 5.2%, respectively, in these years compared to an estimated 7.2% inflation rate in 2009 (CIA, 2013). A dent was also made in the South Africa’s high unemployment rate, as unemployment levels also fell from an estimated 24.9% in 2011 to an estimated 24.4% in 2012 (CIA, 2013).

20.2. Minerals Industry The minerals industry contributed 8.8% of South Africa’s GDP in 2011, but this contribution is more significant if multiplier and induced effects of mining are taken into account (COM, 2012). South Africa has a mature minerals industry developed from gold and diamond discoveries in the late 1800s. The country is the world’s largest producer of platinum, chromite and vanadium and ranks highly in the production of diamonds, coal, iron ore and base metals. South Africa hosts a number of large orebodies such as the Bushveld Complex and the Witwatersrand Basin, as well as rich diamond fields and extensive coalfields.


One of the greatest challenges associated with the minerals and mining industry in South Africa is rising costs of labour, electricity, diesel and steel, among other costs. Another challenge, which has gained headline attention in 2012, is that of labour and community unrest caused by low wages particularly among contract workers and under-resourced communities – a phenomenon that has been worsened by municipalities’ inability to provide adequate infrastructure to communities and an apartheid-era homeland system that has workers from labour-sending areas being impoverished by supporting two households. Other important concerns for the mining industry are the effect of HIV/Aids on the workforce, as well as uncertainty related to resource nationalism, including requirements for beneficiation, limitations on the export of “strategic minerals”, the introduction of a State mining company and calls for the nationalisation of mines.

20.3. Legislative Framework The South African Government has an extensive legal framework within which mining, environmental and social aspects are managed. Inclusive within the framework are international treaties and protocols, and national acts, regulations, standards, and guidelines which address international, national, provincial and local management areas. South African statutory legislation and requirements relevant to the Moeijelik project and considered as part of this assessment included:-

Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA);

Mineral and Petroleum Resources Development Amendment Act 49 of 2008;

Mineral and Petroleum Resources Development Draft Amendment Bill (2013);

Broad-Based Socio-Economic Charter (and associated amendments, 2010);

Promotion of Beneficiation Bill;

Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA);

National Environmental Management Act (Act 107 of 1998) (NEMA);

National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA);

National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA);

National Environmental Management: Protected Areas Act (Act 57 of 2003) (NEM:PAA);

Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 – Noise Regulations);

National Heritage Resources Act (Act 25 of 1999) (NHRA);

National Forests Act (Act 30 of 1998) (NFA);

National Water Act (Act 36 of 1998) (NWA);

Hazardous Substances Act (Act 15 of 1973) (HAS); and

Mine Health and Safety Act (Act 29 of 1996) and amendments (MHSA).

The most important of these are summarised in the subsections to follow. 20.3.1. Mineral and Petroleum Resources Development Act (Act 28 of 2002)

(MPRDA) Types of rights and permits applicable to the mining industry in South Africa, as provided for in the MPRDA and amendments, are detailed in Table 16.


The South African government enacted the MPRDA on the 1st May 2004. It defines the State’s legislation on mineral rights and mineral transactions in South Africa. The Act emphasises that the government did not accept the existence of the historic dual State and private ownership of mineral rights in South Africa and, as such, the Act legislated that all mineral and petroleum resources in South Africa now vest in the State. Additional objectives of the Act include the promotion of economic growth, the development of resources to expand opportunities for the historically disadvantaged, and the socio-economic development of the areas in which mining and prospecting companies are operating. It also provides for security of tenure relating to prospecting, exploration, mining and production.

Table 16: Types of Rights Applicable in South Africa LICENCE TYPE PURPOSE DURATION REQUIREMENTS CONDITIONS

Reconnaissance Permission

Exploration at the reconnaissance stage.

1 year (non renewable)

Financial ability; technical ability and work programme.

Holder does not have the exclusive right to apply for a New Order Prospecting Right (NOPR).

New Order Prospecting Right (NOPR)

Exploration at target definition stage.

Up to 5 years initially. renewable once for 3 years.

Financial ability; technical ability; economic programme; work programme and environmental plan.

Payment of Prospecting fees. Holder has the exclusive right to apply for NOMR.

Retention Permit Hold onto legal rights between prospecting and mining stages.

3 years initially. Renewable once for 2 years.

Prospecting stage complete; feasibility study complete and Environmental Management Plan (EMP) complete. Project not currently feasible.

May not result in exclusion of competition, unfair competition or hoarding of rights. May not be transferred, ceded, leased, sold, mortgaged or encumbered in any way.

New Order Mining Right (NOMR)

Development and production stage.

30 years initially. Renewable for further periods of 30 years. Effective for life of mine (LOM).

Financial ability; technical ability; prospecting complete; economic programme; work programme; social plan; labour plan and completed EMP.

Payment of royalties (from 2010). Compliance with Mining Charter and Codes of Good Practice on broad based BEE.

Mining Permit Small-scale mining.

2 years initially. Renewable for 3 further periods of 1 year at a time.

Life of project must be <2 years; areas must be <5ha and completed EMP.

Payment of royalties (from 2010). May not be leased or sold.

A further objective of the Act was to advance BEE within South Africa’s minerals industry, by encouraging mineral exploration and mining companies to enter into equity partnerships with BEE companies. The Act also makes provision for the implementation of social responsibility procedures and programmes by coal resource companies. The Act incorporated a "use-it or lose-it" principle, that has been applied to companies or individuals who owned mineral rights or the rights to prospect and mine prior to 2004 (Old Order Rights). These Old Order Rights were required to be transferred within specified timeframes, under the provisions of the Act, into New Order Rights to prospect and mine. Once the State has granted the conversion of the Old Order Rights to New Order Rights, or has granted a New Order Right for new applications submitted after the implementation of the MPRDA, a Notarial Agreement between the State and the holder of the New Order Right is entered into. This Agreement sets out all the conditions associated with the New Order Right. New Order Rights can be suspended or cancelled by the Minister if, upon notice of a breach from the Minister of its obligations to comply with the MPRDA, or the conditions prescribed as part of its New Order Right, a breaching entity fails to rectify such a breach. In addition, in terms of the MPRDA, mining and exploration companies have to comply with additional responsibilities relating to environmental management and to environmental damage, degradation or pollution, resulting from their prospecting or exploration activities. Section 37 of the MPRDA establishes the framework for the inclusion of environmental management principles, with Section 39 establishing environmental management programme and EMP requirements. Requirements for the contents of exploration, scoping, Environmental Impact Assessment (EIA), EMPs and EMP reports are provided in Government Notice Regulations (GNRs) 49, 50, 51 and 52.


Sections 41 to 47 of the MPRDA address legislative closure requirements. GNR 527 of the MPRDA addresses the financial provision for mine rehabilitation and closure and requires that the quantum of financial provision, to be approved by the Minister, must be based on the requirements of the approved EMP and include a detailed itemisation of all actual costs required for:-

premature closure regarding:-

the rehabilitation of the surface of the area;

the prevention and management of pollution of the atmosphere;

the prevention and management of pollution of water and the soil; and

the prevention of leakage of water and minerals between subsurface formations and the surface.

decommissioning and final closure of the operation; and

post closure management of residual and latent environmental impacts.

GNR527 establishes the requirements for the social and labour plan (SLP). Amongst other aims, the MPRDA strives to transform the mining and production industries. The Act requires the submission of the SLP as a prerequisite for the granting of mining or production rights. The SLP requires applicants for mining and production rights to develop and implement comprehensive Human Resources Development Programmes including Employment Equity Plans, Local Economic Development Programmes and processes to protect jobs and manage downscaling and/or closure . Monitoring and performance assessments, and waste management principles inclusive of pollution control and waste management, and the management of mine residue stockpiles and deposits are also included within the scope of GNR527. Blasting permits are required for any blasting activities as defined within the MPRDA.

20.3.2. Mineral and Petroleum Resources Development Amendment Act 49 of 2008 In 2008, an Amendment Bill proposed to make significant changes to the MPRDA. The Bill was signed by the President in 2009 but did not come into force at that time (Webber Wentzel, 2009). The 31st May 2013 Government Gazette noted the Act would come into force on the 7th of June 2013, but this announcement was followed by a further announcement in the 6 th June 2013 Government Gazette that some of the amendments, including those relating to the transferability of MPRDA rights (which required Ministerial approval) and the prohibition of the amendment of rights to include additional areas or minerals, would not come into effect. Van der Want (2013) suggests that the proclamation of this Act was an error. While not an exhaustive list, the Amendment Act is noteworthy because it addresses the following issues:-

it requires the prior written consent for disposal in various forms of a prospecting or mining right or an interest in such a right;

it changes the duration of the reconnaissance permission from two years to one and allows a Regional Manager to reject a defective application with reasons within 14 days of receipt;

it requires that the Minister refuse a prospecting right if there is a concentration of rights by the applicant and associated companies;

it allows the Minister to impose further conditions on an applicant for mining rights to include participation by the community;


it increases the area for which a mining permit can be issued to 5ha, but does not allow an applicant to have more than one mining permit on the same or adjacent land;

it allows for the cancelation or suspension of mineral rights if there is non-compliance with the MPRDA;

it discusses transitional arrangements for mineral rights, including documentary proof that holders of Old Order Mining Rights are in compliance with the BEE and socio-economic objectives of the MPRDA;

it attempts to promote the development of input and downstream industries;

it encourages the entry of HDSAs, including women and communities with interests or rights to land, into the industry; and

it has various forward-looking environmental provisions that were to come into effect 18 months after the promulgation of the Act. These include:-

making the Minister of Mineral Resources responsible for environmental matters that relate to mining;

requiring the simultaneous application for environmental authorisation with mineral tenure applications; and

requiring a report on compliance with environmental authorisation with renewal applications (Legalbrief Today, 2013; Webber Wentzel, 2013).

20.3.3. Mineral and Petroleum Resources Development Draft Amendment Bill

(2012) An explanatory summary of the 2013 Amendment Bill was published in the same Government Gazette that announced that the 2008 Amendment Act was to come into force. The 2013 Amendment Bill proposes amendments to the 2008 Amendment Act and is seen as an important indicator of likely future mineral policy in South Africa (Legal brief Today, 2013). The Bill has seen a significant amount of comment from industry players who suggest that irregularities and ambiguities are contained within. While not an exhaustive list, some of the key changes that are proposed in the Bill are the following:-

the Minister is given the right to initiate beneficiation, including setting the level required for beneficiation, the price required for beneficiation, and the percentage of raw material inputs that are set aside for local beneficiators;

persons who intend to export “designated minerals” are required to obtain written approval for this from the Minister. The term is not defined, but is thought to refer to what was known as “strategic minerals”, or minerals defined periodically by the State to be of strategic importance to the country;

historic tailings, the ownership of which was contested by a high-profile De Beers court case, are now held in custody by the State rather than the historic producer of those tailings;

associated minerals, discovered in mining, can be mined by the primary mineral rights holder. Third parties are also permitted to apply for rights over associated minerals, but will have to notify the primary rights holder of the application;

the right to a mineral deposit is sub-divisible, but consent as to the transfer of any interest is required from the Minister;


environmental requirements will be implemented under NEMA, and rights holders will be responsible for environmental liabilities even after a closure certificate has been issued by the Minister;

penalties for non-compliance with various mining-related legislation and requirements are set as a percentage of annual turnover and exports;

the Minister is prohibited from granting a right where this would result in anti-competitive conduct and dominance by the applicant in a particular sector of the mining industry;

the State has a right to a share in the annual profits derived from exploration or production from all new petroleum exploration and production rights;

BEE objectives are required to be complied with in prospecting rights, where they were required to be complied with in only mining rights in the past;

in the case of liquidation, mineral rights held fall within the insolvent estate but ministerial approval is required when they are transferred to a new owner; and

historically disadvantaged persons are redefined to exclude white women (Tucker and Sibisi, 2013; Leon, 2013).

The MPRDA Amendment Bill was approved by parliament in 2014.

20.3.4. Broad-Based Socio-Economic Charter Promulgation of the Broad-based Socio-Economic Charter for the South African Mining Industry (also known as the Mining Charter) marked the end of protracted debates and varying interpretations of the legislation’s requirements, paving the way for the full implementation of the MPRDA. All mining and prospecting companies are required to comply with the provisions of the Mining Charter. The objectives of the Mining Charter are to:-

promote equitable access to the State’s resources by all the people of South Africa. It required that every mining company achieved a 15% level of ownership of its mining assets by historically disadvantaged South Africans (HDSAs) by the 1st May 2009, and a level of 26% ownership by the 1st May 2014;

substantially and meaningfully expand opportunities for HDSAs, including women, to enter the mining and minerals industry and to benefit from the exploitation of the nation’s resources. In terms of this requirement, 40% of management roles were to be held by HDSAs by 2010;

expand the skills base of HDSAs to serve the community;

promote employment and advance the social and economic welfare of mining communities, and the major areas from which labour is drawn to carry out exploration or mining; and

promote the beneficiation of South Africa’s mineral commodities, whereby the companies which have facilitated downstream, value-adding activities for products they mine, could achieve an “offset” against the HDSA equity participation requirement.


Most mining companies are already implementing their own empowerment strategies. These strategies demonstrate their best endeavours to consider the issues and a willingness to accommodate the requirements when they are finally defined. Compliance with the Mining Charter is measured using a designated scorecard, which provides a practical framework against which the Minister can assess whether a company actually measures up to what was intended in the MPRDA and the Mining Charter.

20.3.5. Amendment of the Broad-Based Socio-Economic Empowerment Charter (2010) The Amendment of the Broad-based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (the Charter Amendment) was released in September 2010. It was unsurprising that it retained the minimum target of 26% HDSA ownership of mining assets by 2014. However, an offsetting of HDSA ownership by as much as 11% is now possible depending on the extent of a company’s beneficiation strategies. BEE procurement targets in the Amendment are as follows:-

a minimum of 40% of capital goods will have to be sourced from BEE entities by 2014; and

70% of services and 50% of consumer goods will have to be purchased from BEE entities by 2014.

In addition, multinational suppliers of capital goods will have to contribute 0.5% a year of their annual income from South African mining firms towards a socio-economic development fund. HDSA targets for employment equity are also further refined and a minimum of 40% HDSA demographic representation is stipulated for executive management, senior management, core and critical skills, middle management and junior management by 2014. Specific annual targets are noted for human resources development, since a percentage of the annual payroll (excluding the mandatory skills levy) will have to be spent on skills development activities and be reflective of South Africa’s demographics. Skills expenditure, as a percentage of payroll, increases by 0.5% each year, with an initial target of 3% of payroll in 2010, rising to 5% by 2014. The expenditure is intended to support South African-based research and development initiatives focused on solutions in sectors such as exploration, mining, processing, technology efficiency in the use of water and energy in mining, beneficiation and environmental conservation and rehabilitation. The Charter Amendment also supports SLPs by insisting on:-

an ethnographic community consultative and collaborative process prior to the start of a mining project; and

a community development needs analysis, together with mining communities, of projects to be implemented in support of Integrated Development Plans, the spend of which should be proportionate to the size of the mining investment.

The Charter Amendment also calls for an upgrade of hostels to family units, a one-person-per-room occupancy rate, and support for home ownership options – all of which should be implemented by 2014. Environmental management and an improvement in the industry’s health and safety performance are also highlighted, and best-practices in these areas are specifically mentioned. The Charter Amendment also calls for annual reporting by mining companies on their levels of compliance with the Mining Charter, and notes that noncompliance with the Charter and the MPRDA will result in mining companies being in breach of the MPRDA.


20.3.6. Promotion of Beneficiation Bill This is still being prepared, and is expected to provide incentives for upstream companies that facilitate downstream investments, in order to reduce the exporting of unprocessed mineral products and to promote local value addition.

20.3.7. Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA) This piece of legislation incorporates the government’s intention to impose royalties on revenues derived from mineral production in South Africa. Enacted in 2008, the MPRRA was initially set to be implemented in May 2009. However, in an effort to mitigate job losses in the mining sector during the global financial crisis, the government decided to postpone the implementation of the new mineral and mining royalty regime until 31 March 2010. The main purpose of the Act was to provide legislation for the collection of royalties from mines, developed and operated in terms of the New Order Mining Right (NOMR), granted through the MPRDA process. The Act distinguishes between refined and unrefined resources, where refined minerals have been refined beyond a condition specified by the Act, and unrefined minerals have undergone limited beneficiation as specified by the Act. The royalty is determined by multiplying the gross sales value of the extractor, in respect of that mineral resource, in a specified year, by the percentage determined by the royalty formula. Both direct operating expenditure (Opex) and capital expenditure (Capex) incurred is deductible for the determination of earnings before interest and tax (EBIT). The quantum of the revenue royalty on all minerals is dependent on the profitability of the company based on the following formula. For refined mineral resources the formula is:-

Royalty Rate = 0.5 + EBIT X 100

Gross Sales (refined) x 12.5

The maximum percentage for refined mineral resources is 5%. For unrefined mineral resources the formula is:-

Royalty Rate = 0.5 + EBIT X 100

Gross Sales (unrefined) x 9

The maximum percentage for unrefined mineral resources is 7%.

20.3.8. Institutional and Administrative Environmental and Social Regulatory Structures The government of South Africa is divided into national, provincial and local spheres which address environmental and social regulatory elements within the country. These spheres are distinct, but are closely interdependent and interrelated. The South African Constitution allocates legislative and administrative functions to all three spheres of government, providing for a broad and diverse platform from which government agencies can responsibility manage environmental and social aspects.


The national elections, held in 2009, resulted in the allocation of environmental responsibility at national level to the Department of Water and Environmental Affairs (DWEA). Within this new ministerial function, there are two autonomous departments, namely, the Department of Water Affairs (DWA) and the Department of Environmental Affairs (DEA) (Patel, 2011). The National Environmental Advisory Forum and the Committee for Environmental Coordination are advisory bodies established by NEMA. The former has been established to advise the Minister on any matter concerning environmental management and governance, with the latter mandated to promote the integration and coordination of environmental functions by the relevant organs of state (Patel, 2011). The latter committee has not yet been constituted.

20.3.9. Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 – Noise Regulations) ECA served as the national legislative environmental framework prior to the promulgation of NEMA in 1998. The majority of ECA has been repealed by NEMA, its subsidiary legislation and other Acts. Section 25 of ECA, which addresses noise and the associated regulations (GNR 154 of 1992), are still in effect. The Act and associated regulations control noise and regulate procedures relating to noise impact and nuisance. Section 4 of the regulations prohibits the generation of noise, or the allowance of noise produced or caused by any person, machine, device or apparatus or any combination thereof (ECA, 1989). Section 5 of GNR 154 of 1992 regulates the creation of a noise nuisance.

20.3.10. National Environmental Management Act (Act No. 107 of 1998) (NEMA) NEMA was promulgated in 1998 to replace ECA as the overarching national environmental legislative framework. NEMA was promulgated to give effect to the Environmental Management Policy (published in 2007), and has been subsequently amended, including the National Environmental Management Amendment Act of 2003, and the National Environmental Management Second Amendment Act, No. 8 of 2004. The EIA Regulations made in terms of ECA were replaced in 2006 by new EIA Regulations made in terms of Chapter 5 of NEMA. These Regulations have subsequently been revised and gazetted in GNR 543 on the 18th June 2010. Regulations 543, 544, 545 and 546 establish the processes to be followed to obtain an environmental authorisation and the listed activities requiring authorisation. It should be noted that previously, mining authorisations, including environmental authorisations for mining, were issued under the MPRDA and the DEA was involved, through cooperative governance mechanisms, as a commenting agency. However, this process is currently is undergoing a three-stage process of change in terms of the new provisions in the National Environmental Management Amendment Act, (Act 62 of 2008) (Patel, 2011). Phase 1 details that the status quo will remain until the MPRDA amendments come into effect, with Phase 2 then coming into effect for an 18 month period. In this time, all new mining, exploration and production rights applications and renewals thereof will have to comply with the NEMA EIA Regulations, but the competent authority will remain the Minister of Mineral Regulation. However, the Minister for Water and Environmental Affairs would hear any appeals. Thereafter, in Phase 3, it is envisioned that the DEA becomes the competent authority. As such, the future potential exists for the transfer of responsibility for environmental permitting from the DMR to the DWEA. Changes relevant to Bauba Platinum’s assets at the time of transition will consist of the inclusion of mining as a listed activity and integrated environmental licensing. The principles set out in Section 2 of Chapter 1 of NEMA underpins all other related Acts and policies and form the basis of sustainable development in the country. These principles are also applicable to all organisations wishing to obtain an environmental authorisation and operate within the South African legislative framework.


Chapter 5 of NEMA establishes the regulatory framework for integrated environmental management. Section 24 of NEMA establishes the requirements for obtaining environmental authorisations for listed activities, with the inclusion of undertaking impact assessment studies activities listed in terms of R544, R545 and R546. Section 24 also outlines the minimum conditions attached to environmental authorisations, monitoring and performance assessment requirements, and the procedure for mine closure on environmental authorisation. Chapter 7 of NEMA establishes compliance and enforcement, with Part 1, Section 28, detailing the duty of care principle (encompassing the remediation of environmental damage).

20.3.11. National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA) Chapter 5 of NEM:WA states that a licence is required to establish and operate a waste disposal site. Chapter 5 establishes the procedures and requirements (in terms of footprint, volume, and waste type) for the licensing of waste management activities, inclusive of the storage, transfer, recycling, treatment and/or disposal of waste. Waste that has been excluded from the Act and its associated regulations include radioactive waste and mine waste residue. Regulations to manage contaminated land are currently being drafted, which may have future potential implications for BAUBA PLATINUM in terms of greater licensing and management requirements. Section 19 of the Act establishes activities which require a waste management licence. The activities listed include the following categories:-

storage of waste;

reuse, recycling and recovery;

treatment of waste;

disposal of waste;

storage, treatment and processing of animal waste; and

construction, expansion or decommissioning of facilities and associated structures and infrastructure.

Each of the listed activities has a threshold which would trigger the need for a waste management licence (various parameters are defined, inclusive of such thresholds as volumes, time, and throughputs). The Act provides considerations for all holders of any waste type. A holder of waste, must, within the holder’s power, take all reasonable measures to:-

avoid the generation of waste and where such generation cannot be avoided, to minimise the toxicity and amounts of waste that are generated;

reduce, re-use, recycle and recover waste;

where waste must be disposed of, ensure that the waste is treated and disposed of in an environmentally sound manner;

manage the waste in such a manner that it does not endanger health or the environment or cause a nuisance through noise, odour, or visual impacts;

prevent any employee or any person under his or her supervision from contravening the Act; and

prevent the waste from being used for unauthorised purposes.


Regulations to manage contaminated land are currently being drafted, which may have future potential implications for Bauba Platinum in terms of greater licensing and management requirements.

20.3.12. National Water Act (Act 36 of 1998) (NWA) The NWA stipulates that a Water Use Licence (WUL) is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act. Use of water for mining and related activities is also regulated through regulations that were updated after the promulgation of the NWA in 1999 - Government Notice (GN) 704. GN 704 addresses the regulations on use of water for mining and related activities aimed at the protection of water resources (DWAF, 2007). Inclusive within GN 704 are the control measures for activities and its regulation of the sizing, control and monitoring of water management measures.

20.3.13. National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA) The National Environmental Management: Air Quality Act (NEM:AQA, Act 39 of 2004) results from the promulgation of the NEMA. The Act serves as the dominant legislative tool for the management of air pollution and related activities, and defines listed emission activities which require licensing. The overall objectives of the Act are to protect the environment by providing reasonable measures for:-

protection and enhancement of the quality of air in the Republic;

prevention of air pollution and ecological degradation;

securing ecologically sustainable development while promoting justifiable economic and social development; and

giving effect to Section 24(b) of the constitution to enhance the quality of ambient air for the sake of securing an environment that is not harmful to the health and wellbeing of people.

The South African government has established National Ambient Air Quality Standards in Government Notice 1210. The standard provides for various emission limits, inclusive of particulate matter (PM10), ozone (O3), carbon monoxide (CO), sulphur dioxide (SO2), and nitrogen dioxide (NO2).

20.3.14. National Heritage Resources Act (Act 25 of 1999) (NHRA) The South African Heritage Resources Agency (SAHRA) of 1999 (Act 25 of 1999 - NHRA) provides for the protection of all recognised heritage resources of South Africa that have been identified as culturally significant, or are of other special value. The Act provides an integrated system for the management of national heritage resources. Section 38 of the NHRA states that any person who intends to undertake a development must at the earliest stages of the development, notify the responsible Heritage Resources Authority and furnish it with details regarding the location, nature, and extent of the proposed development. Categories of heritage resources are recognised as part of the National Estate in Section 3 of the NHRA, and include:-

geological sites of scientific or cultural importance;

objects recovered from the soil or waters of South Africa, including archaeological and paleontological objects and material, meteorites and rare geological specimens; and


objects with the potential to yield information that will contribute to an understanding of South Africa’s natural or cultural heritage.

20.3.15. National Environmental Management Biodiversity Act (Act 10 of 2004)

(NEMBA) The State NEMBA to provide for:-

the management and conservation of South Africa’s biodiversity within the framework of the NEMA;

the protection of species and ecosystems that warrant national protection;

the sustainable use of indigenous biological resources; the fair and equitable sharing of benefits arising from bio-prospecting involving indigenous biological resources;

the establishment and functions of a South African National Biodiversity Institute; and

for matters conducted therewith.

Specifically, NEMBA has the following goals:-

manage, conserve, and sustain South Africa’s biodiversity and its components and genetic resources; and

progressive realisation of the objectives identified through the implementation of the Act.

The piece of legislation is underpinned by various objectives described below. NEMBA provides for the management and conservation of biological diversity within the Republic and of the components of such biological diversity, and promotes the use of indigenous biological resources in a sustainable manner, in conjunction with the fair and equitable sharing among stakeholders of benefits arising from bio prospecting involving indigenous biological resources. NEMBA aims to give effect to ratified international agreements relating to biodiversity which are binding in the Republic to provide for co-operative governance in biodiversity management and conservation, and to provide for a South African National Biodiversity Institute (SANBI) to assist in achieving the objectives of this Act.

21. Adjacent Properties The following information has not been independently verified by Venmyn Deloitte and any conclusions drawn from this information cannot be attributed to the Moeijelik Project without due interrogation, analysis and verification on the Moeijelik property. 21.1. Sefateng Chromite Project

The Sefateng Project is located on the eastern limb of the Bushveld Complex over two farms neighbouring the Moeijelik Project, namely, Zwartkoppies 413KS and Waterkoppies 113KT. The primary target for this project is the LG6 Unit, which regarded as an important chromite target in the Bushveld Complex, combining favourable chemistry and thickness. The LG6 Unit is located at the base of a prominent chain of mountains which run along the central axis of the prospect, and whose orientation rotates from north- northwest in the south to west-northwest in the north, continuing into Moeijelik. The hills form a chain of high points climbing from an altitude of 820m to 860m in the valleys to a height of 1,294m on a hill called Tshailane at the western corner of Zwartkoppies 413KS and to an altitude of 1,400mamsl on a hill called Serafa close to the southern corner of this Waterkoppies 113KT.


The chromite mineralisation dips to the south-west under these hills and exploration has been conducted using drill roads specially cut into the relatively steep mountain side, developed to contour levels which have allowed access over the mountains. Drilling information from this project and information from nearby mines such as Dilokong has shown that the dip of the chromitite layer reduces to around 10º-12º with depth. With a shallower dip, Sefateng consider it possible that mechanised mining could be conducted on the complete LG6 Unit, which is approximately 2.46m thick (Gain, 2008). The LG6 Unit is overlain by a thick sequence of medium- to coarse-grained. The LG7 tends to lie approximately 22m to 30m above LG6 in this project area. The LG7 is overlain by medium to coarse-grained orthopyroxenite (Gain, 2008). In the Sefateng Project area, most of the boreholes drilled through the MG chromitites while drilling for the LG6 Unit. In this region, these MG reefs are not as well developed as those in the western limb of the Bushveld Complex and vary in thickness and continuity along strike. Other mines close to Sefateng property have historically produced 20%-40% lumpy ore. Sefateng note that the proportion of lumpy ore can increase significantly closer to faults or other structural disturbances (Gain, 2008).

22. Risk Analysis SR6B(i), T10A(i) Many of the technical and infrastructural risks associated with the Moeijelik Project have been minimised due to its favourable location with respect to an established mining region. The Moeijelik Project is located in a well understood geological setting that is currently supporting numerous mining operations, which lowers the operational risks. The technical risks associated with the Mineral Resource estimation includes the location and extent of structural features such as faults, dykes and dunite pipes, which are not well understood from exploration drilling completed to date. It is expected that further drilling will not improve confidence in locating these features and reliance is placed upon the geophysical survey. Low commodity prices also pose a risk to the economic viability of the Moeijelik Project.


23. Effective Date and Signatures T11A(iii)

Competent Person:

A.N. CLAY

M.Sc. (Geol.), M.Sc. (Min. Eng.), Dip. Bus. M., Pr. Sci. Nat, MSAIMM, FAusIMM, FGSSA, MAIMA, M.Inst.D., MSPE. Managing Director

Compiled by:

T.C. ORFORD

B.Sc. Hons (Geol.), GDE (Min. Eng.), Pr.Sci.Nat., MGSSA, MSAIMM, MSPE. Manager

G. J. G. MARSHALL

M.Sc. (MRM), B.Sc. Hons (Geol.), Pr. Sci. Nat. Senior Consultant

S. MAGNUS

MSc. (Env. Sci.), Pr Sci. Nat MIAIASA, MGSSA, MSAIMM Manager

Reviewed by:

F.J. HARPER

B.Sc. Hons (Geol.), Pr.Sci.Nat., MGSSA. Associate Director

Reference No.:- VMD1906

Effective Date:- 31 January 2016 Final Report Date:- 22 April 2016


Appendix 1: References In completing this review, the following information has been referenced.

AUTHOR DATE TITLE SOURCE

M. Chirisa

2009, updated

2013

A Strategic Industry Review and Facilitation Report on the South African Chromite Supply Industry Venmyn Deloitte

DMR 2015 December 2015 Provisional Mineral Production and Sales Statistics DMR

USGS 2015 Chromium www.usgs.gov S. Burns 2015 Will ferrochrome prices benefit from low energy prices? https://agmetalminer.com/ K. Fitzsimmons 2015 December steel price forecast: HRC price to drop in 2016? https://agmetalminer.com/ Roskill Infromation Services 2014 Chromium market growth continues, but ferro-chrome

producers face headwinds http://www.prnewswire.com/

World Steel News 2015 2016 Forecast to be another downbeat year for stainless steel http://www.worldsteelnews.com/

KPMG 2013 Commodity insights bulletin – Chromite – Special edition http://www.kpmg.com/


Appendix 2: Glossary & Abbreviations T10A(ii)

TERM EXPLANATION

3D 3 Dimensional amsl Above mean sea level ANC African National Congress AOD vacuum-oxygen decarburising AusIMM Australian Institute of Mining & Metallurgy β Beta value, is measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole BHID Borehole Identification number B.Sc. Bachelor of Science degree B.Sc .(Hons) Bachelor of Science Honours degree Bt Billion tonnes Capex Capital Expenditure CPR Competent Persons’ Report CRIRSCO Committee for Mineral Reserves International Reporting Standards DCF Discounted cash flow DEA Department of Environmental Affairs (for South Africa/Botswana) DEFR Department of Forestry and Range Resources Dip Diploma DMR Department of Mineral Resources DWA Department of Water Affairs D/V Proportion of company funded by debt EAPs Environmental Assessment Practitioners EBIT Earnings before interest and tax ECA Environment Conservation Act ECSA Engineering Council of South Africa EIA Environmental Impact Assessment/ Energy Information Administration EMP Environmental Management Plan/ Programme EMPR Environmental Management Programme Report EMRP Equity Market Risk Premium EPA EPA Technical Services (Pty) Limited ESIA Environmental and Social Impact Assessment EU European Union E/V Proportion of company funded by equity FA Forest Act FGSSA Fellow of the Geological Society of South Africa FSAIMM Fellow of the South African Institute for Mining & Metallurgy GDP Gross domestic product GN Government Notice GNR Government Notice Regulations GSSA Geological Society of South Africa ha Hectare IAASB Internal Auditing and Assurance Standards Board IFRS International Financial Reporting Standards IRR Internal Rate of Return JSE Johannesburg Stock Exchange Limited kg Kilogram km Kilometre LG6 Unit This includes the LG7, LG6A and LG6 for the purposes of this report. LG7 Lower Group 7 chromite reef LG6A Lower Group 6A chromite reef LG6 Lower Group 6 chromite reef m Metre / million m2 Square metres m3 Cubic metre MAusIMM Member of the Australian Institute of Mining & Metallurgy MGSSA Member of the Geological Society of South Africa Min.Eng Mining Engineer Mining Charter Broad-based Socio-Economic Charter for the South African Mining Industry mm Millimetre MPRDA South African Minerals and Petroleum Resources Development Act MPRRA Minerals and Petroleum Resources Royalty Act MR Mining Right MSAIMM Member of the South African Institute for Mining & Metallurgy M.Sc. Masters degree in Science


TERM EXPLANATION

Mt Million tonnes Mtpa Million tons per annum N/A Not applicable NEMA National Environmental Management Act NEM:AQA National Environmental Management: Air Quality Act NEMBA National Environmental Management Biodiversity Act NEM:PAA National Environmental Management: Protected Areas Act NEM:WA National Environmental Management : Waste Act NFA National Forests Act NOPR New Order Prospecting Right NPV Net Present Value NWA National Water Act Opex Operating expenditure PPP Purchasing Power Parity Pr.Sci.Nat Professional Natural Scientist Ptn Portion Q Quarter R 186 South African government bond RD Relative density ROM Run of mine ROPO Recognised Overseas Professional Organisation SAIMM South African Institute for Mining & Metallurgy SAMREC South African Code for Reporting of Mineral Resources and Mineral Reserves SAMVAL The South African Code for the Reporting of Mineral Asset Valuation SHE Safety, Health and Environment SLP Social and Labour Plan t Tonnes tc Corporate Tax Rate USD United States Dollar Venmyn Deloitte Venmyn Deloitte (Pty) Limited VOD vacuum-oxygen decarburising WA Water Act ZAR South African Rand ZARm Million South African Rands


Appendix 3: CVs of the Competent Person and Compilers T11A(i) Name of Staff: Andrew Neil Clay Position: Managing Director, Minerals Industry Advisor, Competent Person and Competent Valuator Name of Firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa (Pty) Ltd Address: 1st Floor, Building 33, the Woodlands Office Park, 20 Woodlands Drive, Woodmead Profession: Geologist Date of Birth: 16 April 1955 Years with Firm/Entity: 29 Nationality: British Membership in Professional Societies:

CLASS PROFESSIONAL SOCIETY YEAR OF REGISTRATION Member Canadian Institute of Mining, Metallurgy and Petroleum 2006 Advisor JSE Limited Listings Advisory Committee 2005 Advisor JSE Issuer Services 2008 Member JSE Issuer Mining Sub-committee 2009 Associate Member American Association of Petroleum Geologists 2005 Member South African Institute of Directors 2004 Fellow Geological Society of South Africa 2003 Member American Institute of Mineral Appraisers 2002 Member South African Institute of Mining and Metallurgy 1998 Fellow Australasian Institute of Mining and Metallurgy 1994 Member Natural Scientist Institute of South Africa 1988 Member Investment Analysts Society of South Africa 1990 Member Society of Petroleum Engineers 2009 Member Project Management Institute 2011 Expert Hong Kong Stock Exchange 2012

Involvement in Code Writing:

POSITION PROFESSIONAL CODE DATE OF INVOLVEMENT Chairman South African Oil & Gas Committee (SSC) 2011 - present Member South African (SAICA) extractive industries deliberations 2003 - present Member International Minerals Valuation Code (IMVAL) 2012 – present Representative Investment Analysts Society on the SSC (IAS) 2009 - present Initiator SAMREC / IAS Award 2002 - present Advisor JSE Listing Requirements (Section 3 On-going obligations) 2002 - present Working Group Member SAMREC Code (Oil & Gas) 2005 - present Working Group Member SAMVAL Code 2001 – present Working Group Member SAMREC Code (Re-write Sections 1 – 5) 2005 - present Working Group Member SAMREC Code (Re-write) 2003 - present Working Group Member SAMREC Code (First Version) 1996 - 2001

Mr Clay currently has a special interest in incorporating oil and gas reporting procedures into the general application of mineral asset valuation. Involvement in Fund Management:

POSITION FUND DATE OF INVOLVEMENT

Member of Investment & Audit Committee New Africa Mining Fund (NAMF) 2007 - 2012

Director Strategic African Mineral Investment Fund (SAMI) 2008 - 2012 Fairness Opinions:


YEAR CLIENT SECURITIES EXCHANGE

JURISDICTION TRANSACTION

TYPE IMPLIED VALUE (USDm)

DESCRIPTION

2014 Bauba Platinum JSE Exchange of cash for shares 10 Independent Professional Expert Report 2013 Platinum Australia ASX, JSE Scheme of arrangement 50 Independent Technical Expert Report

2011

Optimum Coal JSE The specific offer of ZAR38.00 in cash per ordinary share by an external party

Independent Professional Expert Report

Chrometco JSE Acquisition of an Interest in Line-Chem 66.6 Independent Professional Expert Report

Wesizwe JSE Financing Solution for the Development of Wesiswe’s Project 2

227 Indpendent Professional Expert Report

2010 Sylvania ASX Issuing new ordinary shares 34 Independent Professional Expert Report

2009

Chrometco JSE Acquisition of interest 8.3 Independent Professional Expert Report Metorex JSE Disposal of 6.3% interest 5.7 Independent Professional Expert Report Braemore Resources JSE Acquisition of interest 36.3 Independent Professional Expert Report

2007 Diamondcore/ BRC JSE Acquisition 50 Independent F&R for Diamondcore

2006 LionOre International TSX Acquisition notification

documentation. 650 Independent Technical and Valuation Fatal Flaws Report and F&R opinion for the Board of LionOre. Not published as an F&R.

2005

Diamond Core JSE Category I Merger 10.0 Independent CPR on the mineral assets of Samadi Resources SA (Pty) Ltd and Diamond Core Resources Limited.

LionOre International TSX Acquisition notification

documentation. 110.0 Tati Nickel Review of Mineral Resources.

Aquarius JSE 26% BEE 150.0

Independent Techno-Economic Valuation and Fair and Reasonable Opinion on the PIC, IDC, DBSA 26% Empowerment Transaction. Documents waived for the secondary listing.

2004 Barplats JSE Offer to Barplats Minorities 60.0

Offer by Platinum Consortium to take out Implats. The SRP insisted our report be prepared in full. In the end Investec wrote the Fair and Reasonable but was fully reliant upon the Venmyn work as demonstrated in the circular.

Zimplats ASX Collapse of the Makwiro Structure for shares to Implats. 38.0 Fair Value calculation in a corporate

restructure.

2003

Amplats JSE Acquisition price calculation for Unki Platinum. Confidential

Preparation of an Independent Techno-Economic Valuation Report and Fair and Reasonable Opinion. Document not used as the transaction became immaterial for reporting purposes.

Aquarius Platinum (South Africa) (Pty) Ltd

ASX Opinion on the value of a Refinery Agreement. 10.0

Fair & Reasonable Opinions for Aquarius Platinum for the Impala Refinery Commitments.

2002

Consolidated African Mines Limited.

JSE CAM acquired 40% of the Letseng diamond mine for CAM shares.

10.0 Preparation of an Independent Techno-Economic Valuation Report and Fair and Reasonable Opinion. Document used in full.

Zimplats ASX Implats aquired a controlling interest in Zimplats by acquiring Aurion Gold shares.

50.0 Preparation of an Independent Techno-Economic Valuation Report and Fair and Reasonable Opinion. Document used in full.

Aquarius ASX Aquarius aquires 65% in ZCE Platinum Limited. 50.0

Preparation of an Independent Techno-Economic Valuation Report and Fair and Reasonable Opinion. Document used in full.

2000 DiamondWorks TSX

Lyndhurst a South African Company takes control of Canadian junior Diamondworks.

20.0

Preparation of an Independent Techno-Economic Valuation Report and Fair and Reasonable Opinion. Document used in full and special representation required in Toronto to explain the transaction and the assets.

1999 New Mining Corporation JSE Listing and acquisition

documentation. 50.0 Complicated transaction and full Independent Techno-Economic Valuation prepared with Fair and Reasonable Opinion included in our report. This satisfied the JSE and the SRP.

1996 West Witwatersrand Gold Holdings Limited

JSE Section 440k Offer 20.0

Independent Competent Persons Report on the Offer by Durban Deep to West Wits under Section 440k. Document included in circulars to both shareholders. Our Fair and Reasonable Opinion was specifically requested by the SRP.

Detailed Tasks Assigned:

YEAR CLIENT COMMODITY DOCUMENTATION

2015 Bauba Chrome Valuation Chrome Valuation Aquila Valuation Coal Valuation



2015

Great Western Minerals Steenkampskraal Rare Earths Pre-Feasibility Study

Kemin Drozhil Mo-Tu Competent Persons Report Kemin Smimov Mo-Tu Competent Persons Report Aktobe Kokbulak AGR Advisory Iron PEA Somaf Gold Prospectivity Review BHP Billiton Coal Valuation Fasken Martenau Tharisa Minerals Chrome Technical Review Samancor / Sinosteel Valuation Chrome Valuation Molopo Gas Resource Review Ironveld Iron Valuation Village Reef Gold Valuation Samancor Chrome Limited Chrome Valuation Discovery Metals Deloitte Botswana Base Metals Technical Review MCC Prospectivity Diamonds and Coal Resource Review Rwanda Gas Gas Resource Review Bushy Park Zinc & Lead Valuation Keaton Energy Coal Competent Persons Report Renenergen Gas JSE Listing HSBC and others Platinum Resource Review Bauba Chrome Resource Review Grassvalley Chrome Valuation

2014

Kemin Drozhil Mo-Tu Competent Persons Report Kemin Smimov Mo-Tu Competent Persons Report Aquila Valuation Coal Valuation Minera Gold Valuation Gold Valuation Fasken Martenau Tharisa Minerals Chrome Technical Review Samancor / Sinosteel Valuation Chrome Valuation Buchanan DFS Iron Financial Model Somaf Gold Prospectivity Review Veremo Iron Technical Review Sentula Nkomati Various Competent Persons Report J Francks Portfilo Oil & Gas Assessment of Technical and Commercial Information Hambledon Mining Gold Phase 2 Kazakhstan

2013

Busitema / Greenstone Mining Gold Resource Review Sylvania Grasvally Chrome Valuation Resource Generation Coal Technical Review Great Western Minerals Steenkampskraal Rare Earths PFS

Taung Gold / Ncondezi Gold Technical Review Xceed / Keaton Energy Coal Resource Review Rand Refinery / Deloitte Audit Gold Audit TRX Buckreef Remodelling Gold 3D Model Bauba Chrome Valuation Memor Chrome Cash Flow Forrest Oil Oil and Gas Valuation Glencor Xstrata Ferrochrome Audit Eureka Gold Technical Statement Aura Coal Exploration Nkwe PGE Technical Review Lesego Broadtec Beijing PGE Due Diligence Zyl Sentula Coal Valuation Samancor CITIC Chrome Valuation Jubilee Platinum Platinum Valuation Gold One Tulo Gold Gold Valuation Eureka Delta Gold Gold Technical Statement Exarro Iron Valuation Deloitte Grindrod Manganese Audit Aquarius PGE Review

2012

Banro Lugushwa Gold Technical Review Araxa Rare Earths NI 43-101 Bauba Platinum Technical and Economic Assessment IFC Mining Technical and Economic Assessment Central Rand Gold Gold CPR Lanxess Chrome Technical and Economic Assessment Loncor Ngayu Gold Mineral Resource Valuation Loncor Makapela/Mangajuripa Gold Mineral Resource Valuation Pering Listing Hong Kong Zinc Lead / Base metals CPR



2012

Stonebridge Hanieal Mozambique Gold Corporate Advice and Project setup Stonebridge Zim Gold Gold Corporate Advice and Project setup Terra Nova Manica Investment Gold Technical and Corporate Valuation PSIL Arbitration Expert Witness AngloCoal Coal Valuation Virgil Mining Gold Technical Report Sikhuliso Harmony Dumps Gold Corporate Transaction Advice Smart Carbon Combrink Coal Coal Technical Report and Valuation Optimum Coal Coal Independent Opinion Wits Gold Gold CPR and Valuation Pan African Resources Gold CPR and Valuation Banro Gold Technical Report and Valuation Harmony Evander Gold Full CPR and Valuation Boynton PGM Pre-feasibility Study Sudor Coal Coal Valuation NMIC Gold Technical Report and Valuation

2011

SSC Mandarin Gold Independent Corporate and Technical Advisor Harmony Gold CPR Afrisam Cement Independent Valuation Chromex Chrome Hong Kong Listing Banro Gold Independent Technical Statement Xceed Capital Coal Independent Valuation Statement Chrometco Chrome Independent Valuation Scinta Coal Independent Technical Statement and Valuation Seque Manganese Manganese Prospectivity and Scoping Study Sable PGE Prospectivity and Drilling Density CP Taung Gold Hong Kong Listing Maghreb Minerals Zinc CPR Veremo Iron Updated Technical Statement on Veremo Smart Carbon Coal Strategic Advisor Sephaku Cement Technical and Economic Documentation Axmin Gold Technical and Economic Documentation Absa Vanadium Vanadium Vanadium Project Valuation BCL Dumps Nickel Scoping Study AMRT Copper/Gold Scoping Study Jindal Mining Coal Techno-Economic Statement on the Mbili Coal Project Essar RioZim Various Corporate Transaction SEW Trident Coal Transaction and Valuation Planning PSIL Uranium Strategic Valuation Kibo Mining Gold/Various Tanzanian Assets Moabsvelden Coal Coal Technical and Valuation Work Wesizwe PGE Fairness Opinion

2010

Namane Coal Technical Assessment Bauba Platinum Platinum Independent Strategic Technical Advisor Evraz Mapochs Independent Valuation

African Copper Copper Independent Mass Balance and Orebody Fatal Flaws Assessment

Advanced Mineral Recovery Technologies Gold Independent Sampling and Mass Balance Report

Xstrata Coal Coal Independent Valuation Certificate Sephaku Cement Independent Technical Review White Water Resources Gold Independent Competent Persons’ Report White Water Resources Gold Independent Technical Statement Platmin Platinum Independent Techno-Economic Reports and Valuation West Wits Mining Gold Independent Prospectivity Review SSC Mandarin Gold Independent Corporate and Technical Review Ultra Tech Cement Independent Techno-Economic Statements Taung Gold Independent Technical Review Taung Gold Independent Valuation Statement Sylvania PGMs Independent Technical and Valuation Experts Report Mzuri Capital Gold Independent AIM Compliant Competent Person’s Report Kalagadi Manganese Independent High Level Techno-Economic Review Lesego Platinum Independent Techno-Economic Valuation Report Lesego Platinum Independent Executive Summary G&B Resources Li Independent Prospectivity Review Miranda Coal Independent Technical Resource and Valuation Statement Loncor Gold Independent Techno-Economic Valuation Report Gentor Resources Copper Indpendent Techno-Economic Report



2010

ETA Star Coal Independent Valuation Report AfriSam Cement Independent Technical Review Buildmax Cement Independent Short-Form Competent Report Anglo Platinum Platinum Independent Valuation of the PGM Assets Nyota Minerals Gold Independent Inferred Resource Estimate Absolute Holdings Platinum Independent Competent Persons’ Report AfriSam Cement Independent Technical Review African Copper Copper Mass Balance and Orebody Fatal Flaws Assessment Ruukki Platinum Short-Form Techno-Economic Statements Umbono Capital PGMs Independent Competent Persons’ Report Anglo Platinum PGMs Independent Mineral Asset Valuation Zambia Copper Investments Copper Mineral Asset Valuation White Water Resources Gold Short-Form Valuation Statements Central African Gold Gold NI 43 – 101 Technical Report Platmin Platinum Updated NI 43 – 101 Technical Report

2009

G & B Resources Uranium Independent Competent Persons’ Report Kalagadi Manganese Independent Techno-Economic Review Sephaku Cement Cement Indendent Competent Persons’ Report Metorex Gold Independent Fairness Opinion Kivu Resources Pegmatites Independent prefeasibility study Kalagadi Manganese Manganese Independent Tehno-Economic Review Taung Gold Gold Independent Competent Person’s Report Sylvania Resources Platinum Independent Technical and Valuation Expert’s Report

Ernst & Young Jordan Gold Independent Valuation Report on mineral assets of a Gold Mining Concession in Ethiopia

Dwyka Resources Gold Independent Technical Statement on Tulu Kapi Gold Project G & B African Resources Pot Ash Independent Prospectivity Review

Central African Gold Gold Information Memorandum in the form of NI 43-101 Compliant Technical Statement

Braemore Resources Platinum Fairness Opinion New Dawn Gold Independent Technical Statement Investec Cement Independent Technical Review of CILU Cement assets IBI Iron ore Independent Technical Resource Statement Chrometco Chrome Fairness Opinion Rand Uranium Uranium Mineral Resource Review and Modelling

2008

Signet Mining Coal Independent valuation of coal assets Lesego Platinum PGMs Independent Competent Person’s Report for JSE Listing Norilsk Nickel Nickel Review of business strategy

Minero Group Zinc/Lead Review of business strategy and Competent Person’s Report

Paramount Mining Diamonds Independent Technical Statements Anglo Platinum PGMs Independent Technical Report and valuation Demindex Diamonds Review of business strategy and Technical Advice Investec Cement Due Diligence and valuation of Cilu Cement DGI Copper/Cobalt Independent Technical Statements Abalengani Platinum Review of plant and valuation Absolute Holdings Quarry valuation Metorex Copper/Cobalt Fairness Opinion Investec Cement Due diligence on Sephaku assets Kivu Resources Tantalite Tantalite strategic planning and valuation Tantilite Resources Tantalite Independent Technical Report DGI Copper/Cobalt Independent Technical Statement and valuation Uramin Uranium, Resourse Review and Technical Statements

Harmony Gold Mining Au, Uranium Independent Technical Statements and Strategic business plan

Harmony Gold Uranium Cooke Dump Resource and Finacial Valuation Harmony Gold Au Uranium Resevre and Resource Audit for the group

Nkwe Platinum PGMs Independent Technical Statement and Competent Person’s Report

Highveld Steel & Vanadium Corporation Steel, Vanadium Independent Resource and Reserve planning

African Minerals Diamonds Independent Technical Statements Continental Coal Coal Independent Technical Report Industrial Base Metals Base Metals Base Metal Refinery Audit

2007

Crushco Industrial Minerals Independent valuation Kimberley Consolidated Mining Diamonds Independent valuation LionOre Mining Nickel. PGMs Technical and economic valuation PBS Group PGMs Project review Western Areas Au Independent valuation Harmony Gold Mining Au. Uranium Independent scoping and valuation



2007

Great Basin Gold Au Independent valuation for BEE transaction BRC/Diamondcore Resources Diamonds Valuation and Opinion provider

Urals Investors Diamonds Au. PGMs and Oil and Gas Independent Transaction Report

Energem Diamonds Indepndent Technical Statement for Koidu Xstrata Cr Independent CGT and Valuation advice

PWC Magnetite Mine Review Magnetite Independent Mineral Resource Review and Valuation for apportionment calculations

Magnum Resources Ta Independent Mineral Resource Review Gaanahoek Coal Deposit Coal Prospectivity Review DRDGold Au Emperor Gold Mines independent forensic review Kimberley Diamonds Corporation Diamonds Independent Listings Documentation Rockwell Diamonds Transhex Transaction Documentation Rockwell Diamonds Independent Mineral Resource Review Caledonia Mining Au Independent Disposal Documentation Eersteling Caledonia Mining Au Independent Disposal Documentation Barbrook Adsani Tantalite Refinery Ta Independent Technical Report

2006

LionOre Ni Base Metals Independent Valuation of Falconbridge International and Nikkelverk Refinery

LionOre/BCL Ni Base Metals Independent Technical and Economic Valuation Vanamin V Independent Report for disposal Kurils Islands Au Independent Technical Report NI43-101 Mgart Armenia Au Independent Assessment and Valuation for AIM Zimbabwe Mining Bill All Preparation of industry submission to government Energem Oil & Gas Preparation of National Instrument Compliance Ncondedzi Coal Coal Technical & Corporate Listing Documentation Metallon International - Armenia Gold & Base Metals Prospectivity & Exploration Programme Preparation Hood Tantalite Tantalite Independent Techno Economic Valuation Report

2005

Letseng Diamonds Independent Competent Person’s Report for disposal Zimplats Tenements Platinum Group Metals Independent Competent Person’s Report for disposal DRD Gold Fair & Reasonable ARM Madikwa Platinum Group Metals Independent Valuation for Impairment Calculation Harmony Competitions Tribunal Gold Independent Expert Witness Ecca Holdings Bentonite Independent Industry Review Harmony Randfontein 4 Shaft Gold Independent Valuation Gallery Gold Gold Independent Competent Person’s Report for disposal Stuart Coal Coal Independent Competent Person’s Report for disposal Elementis Chrome Chrome Independent Industry Review Diamond Core Diamonds Independent Competent Person’s Report Diamond Core Diamonds Fair & Reasonable Statement Kensington Resources Diamonds Independent Inspection & Certification of Laboratory

Bayer Valuation Chrome Independent Valuation for Economic Empowerment Transaction

Pangea Diamonds Diamonds Independent Competent Person’s Repor LionOre International Nickel Tati Nickel Review of Mineral Resources. Aquarius PSA2 Independent Competent Person’s Repor Aquarius Platinum Marikana Mineral Resources Review. LionOre International Nickel Nkomati Due Diligence and Transaction Value Calculations. LionOre International Nickel World Nickel market study for group corporate work.

2004

Avgold Limited Gold Fair & Reasonable Opinion on the Methodologies applied and Values attributed to the Mineral Assets of ET Cons

Aquarius Platinum Update of Independent Valuation of Mimosa

Aquarius Platinum

Independent Techno-Economic Report and Fair and Reasonable Opinion tot the PIC, DBSA and IDC on the 26% BEE Transaction for AQPSA – Document waived by the JSE.

Mimosa Mining Company Platinum Mineral Resource and Ore Reserve Review Zimplats Platinum Zimplats Makwiro Valuation and Corporate Restructuring Assmang Manganese CGT Valuation Aquarius Platinum CGT Valuation Sishen South Iron CGT Valuation

2003

Unki Platinum Project Platinum CGT Valuation Hernic Ferrochrome (Pty) Ltd, Itochu Corporation Chromite Independent valuation of the Stellite Chromite Mine Joint

Venture.

African Diamond Holdings (Pty) Ltd Diamonds Independent techno-economic due diligence and valuation of African Diamond Holdings marine diamond concessions and diamond cutting operation in Walvis Bay, Namibia.

Unki Platinum Project, Zimbabwe Platinum Techno-Economic Valuation Report & Fair & Reasonable Opinion

Transvaal Ferrochrome Ltd Ferrochrome Independent Competent Person’s Report and Valuation as a bankable Document for Australian Stock Exchange



2003 Aquarius Platinum (SA) (Pty) Ltd Platinum Independent Competent Person’s Report and Valuation for the Everest South Project

2002

Zimbabwe Platinum Mines Ltd Platinum Independent valuation of Zimplats relative to the value of the Impala Platinum Ltd/AurionGold Ltd transaction.

Mitsubishi Corporation Ferrochrome Expansion Report and Valuation on Hernic Ferrochrome (Pty) Ltd.

Aquarius Platinum Ltd Platinum Acquisition Report on ZCE Platinum Ltd including the due diligence and valuation of Mimosa Mine in Zimbabwe.

Freddev Gold Valuation of Mineral Rights & Royalties Barnex Gold Valuation of Mineral Rights & Royalties

Western Areas Gold WA4 Project : Valuation of Mineral Rights & Royalty Agreement

Mitsubishi Ferrochrome Expansion report and valuation Aquarius Platinum Acquisition Report

2001

Northam Platinum Valuation Mitsubishi Corporation Ferrochrome Due Diligence, Valuation and Acquisition Report Amcol Due Diligence Bentonite Independent due diligence and valuation on G&W Zimplats Impala Raising Platinum Circular to shareholders valuation report

2000

African Minerals Varied Independent competent person’s report Barnato Exploration Limited Varied Competent person’s report Durban Deep Gold Independent valuation report Iscor Limited Varied Independent valuation of exploration assets

1999 Harmony Gold Mining Co Ltd Gold Harmony / Kalgold / West Rand Cons Leighton Contractors Tin Pre-feasibility study Pemali Tin (Indonesia) Mitsubishi Ferro-Chrome Techno-economic valuation of Hernic Chrome

1998

Barnex Ltd Wits Gold Due diligence Camco Diamonds Independent Competent Person’s Report and valuation Crown Mines and DRD Wits Gold Valuation Egyptian Government Phosphate Due diligence and valuation Great Fitzroy Mines Copper Competent Person’s Report and Valuation Iscor Mining Greenstone Gold Due diligence and valuation JCI Ltd Wits Gold Competent Person’s Report Randgold & Exploration Co Ltd Gold Competent Person’s Report Western Areas Wits Gold Competent Person’s Report

1997

CBR Mining Coal Due diligence Durban Roodepoort Deep Ltd Wits Gold Competent Person’s Report G&W Base Bentonite Due diligence JCI Ltd Wits Gold Competent Person’s Report Opaline Gold Greenstone Gold Competent Person’s Report Penumbra Coal Due diligence Randgold & Exploration Co Ltd Greenstone Gold Competent Person’s Report Rondebult Colliery Coal Due diligence

1996

African Mining Corporation* Alluvial Gold Project valuation Australian Platinum Mines NL Platinum Due diligence Benoni Gold Holdings Ltd Wits Gold Competent Person’s Report Consolidated Metallurgical Industries Ferrochrome Competent Person’s Report and valuation Durban Roodepoort Deep Ltd Wits Gold Competent Person’s Report Harmony Gold Mining Co Ltd Wits Gold Competent Person’s Report JCI Ltd Wits Gold Valuation Rand Leases Properties Ltd Wits Gold Competent Person’s Report and valuation Randgold & Exploration Co Ltd Wits Gold Due diligence

1995

African Mines Limited* Greenstone Gold Project valuation Barney-Seidle Arbitration Granite Project valuation arbitration Mopet Oil* Oil and Gas Market analysis facilitator Randgold & Exploration Co Ltd Wits Gold Competent Person’s Report and valuation Randgold Durban Deep Wits Gold Competent Person’s Report and valuation Randgold Harmony Unisel Merger Wits Gold Competent Person’s Report and valuation

1994

Aurora Exploration Varied - Industrials Competent Person’s Report and valuation Consolidated Mining Corp Wits Gold Due diligence and valuation CRA (Australia) Iron Ore Due diligence Durban Roodepoort Deep Ltd Wits Gold Competent Person’s Report and valuation Ghana Gold Mines* Greenstone Gold Due diligence and valuation Gold Fields of SA Ltd Wits Gold Competent Person’s Report and valuation Hernic Chrome Ferro-Chrome Valuation and Strategic Analysis Inca Magnesium Due diligence and valuation Mitsubishi Ferrochrome Due diligence and valuation Namco* Diamonds Competent Person’s Report and valuation Randgold & Exploration Co Ltd Wits Gold Due diligence

1993 Namibia Oil & Gas licence applications Oil & Gas Working with Paul Blair licence applications



1993

Atomic Energy Commission Uranium Strategic Analysis Eskom Base metals Strategic Analysis JCI Wits Gold Financial Planning Analysis (Rehabilitation) Lonrho Platinum Financial Planning Analysis (Rehabilitation) Rand Mines Properties Varied Mineral rights evaluation

1992

Barbrook Gold Mines Greenstone Gold Ore resource modelling and mine valuation Rand Merchant Bank Copper Ore resource modelling and project valuation Rembrandt Platinum Mine valuation (Northam Platinum) West Rand Cons Wits Gold Ore resource modeling and mine valuation

1991 Rand Merchant Bank Wits Gold Ore reserve evaluation (Westonaria Gold Mine) Rembrandt (Gold Fields of SA) Varied Due diligence, valuation and strategic analysis Standard Merchant Bank Greenstone Gold Due diligence and valuation (Eersteling Gold Mine)

1990

Sequence Oil and Gas Oil & Gas Due Diligence Report Atomic Energy Corporation Nuclear Fuels Strategic analysis Consolidated Mining Corp Wits Gold Due diligence and valuation Eskom Copper/Zinc Strategic Market Analysis (Toll Smelter potential) Freddies Minerals Feldspar - Industrials Due diligence Industrial Machinery Supplies Coal Strategic analysis and valuation (Bricketting plant) Knights Gold Mine Wits Gold Competent Person’s Report Rand Merchant Bank Diamonds Due diligence and valuation (Alluvial Mine) Corex Oil & Gas Evaluation of prospectivity Rand Merchant Bank Lead/Zinc Due diligence and valuation (Miranda Mine) Rand Mines Varied Corporate Strategic Analysis Rhogold Wits Gold Ore resource modeling Rice Rinaldi Coal Due diligence and valuation Sub Nigel Gold Mine Wits Gold Due diligence and valuation Zaaiplaats Tin Mine Tin Due diligence and valuation

1989

Avontuur Diamond Mines Diamonds Due diligence and valuation Granite Consolidated Mining Granite Due diligence and valuation Osprey Gold Mine Greenstone Gold Due diligence and valuation Rand Leases Gold Mine Wits Gold Ore resource modeling Rand Merchant Bank* Varied Mineral portfolio analysis (Swanson Rights) Rhovan Vanadium Competent Person’s Report and valuation Vanamin Severrin Mining Vanadium Due diligence and valuation Zimco Andalusite Competent Person’s Report and valuation

1988 Mullet Slate Slate Due diligence and valuation Rand Merchant Bank Wits Gold Risk assessment analysis (Peritus Exploration) Wit Nigel Gold Mine Wits Gold Ore resource modelling

Key Qualifications: Mr Clay has been a serving professional in the minerals industry since 1975 when he undertook field mapping and a professional apprenticeship within the Rhodesian Geological Survey. This was at a time when fieldwork and practical application of geological principals was still fundamental to the development of geology as a science. Following this, Mr Clay has dedicated his career to the commercial incorporation of first principles scientific process to the description, reporting and valuation of mineral assets. Having worked for a number of years with mining companies, both underground and in corporate, Mr Clay became a founding member of Venmyn in 1988. At this time the company was closely associated with Rand Merchant Bank. This relationship enabled him to pursue the process of linking technical and financial valuation. Since that time Mr Clay has been involved in growing Venmyn and is presently the Managing Director and major shareholder. He has been involved in developing a style of reporting at Venmyn which has become internationally recognised as compliant shorter form reporting. The emphasis of the work is on concise and graphical reporting, bullet points and descriptive graphics for ease of presentation and shareholder appreciation. He has been involved in the writing of numerous codes the South African Code for the Reporting of Mineral Resources and Reserves (SAMREC Code) and is currently on the committee writing the South African Code for the Valuation of mineral projects (SAMVAL Code). He is presently involved in the oil and gas industry where his expertise in valuation is being used to determine the relationship between the reporting methodologies in this industry relative to the rest of the mineral industry.


Mr Clay’s key areas of expertise lie in the detailed financial valuation of mineral and mining projects using discounted cash flow models. In this regard he has undertaken over 25 valuations for eight different commodities over the last four years. Details of the valuations and other assignments are tabled above. These valuations have been used in listing and merger documentation both in local and international stock exchanges and for the private use of the companies concerned. Education:

DEGREE/ DIPLOMA FIELD INSTITUTION YEAR

B. Sc. Hons. Geology University College Cardiff 1976

M. Sc. Econ. Geol. Economic Geology (awarded Corstorphine Medal for best M.Sc. Thesis) University of the Witwatersrand 1981

GDE Graduate Diploma in Mining Engineering University of the Witwatersrand 1986 M. Sc. Mining Engineering University of the Witwatersrand 1988 Dip. Bus. M. Diploma in Business Management Damelin College 1983 Tax Mgmt Tax Management and Planning University of the Witwatersrand 1988

Employment Record:

POSITION COMPANY JOB DESCRIPTION DURATION

Managing Director Venmyn Deloitte

Mr Clay serves as the Managing Director of Venmyn Deloitte and is responsible for the company’s strategic process as well as finances, budgeting and operations;

Venmyn operates as a subsidiary of Deloitte Consulting, serving as a techno-economic consultancy for the resources industry on a world wide basis;

Mr Clay has been a key member of the SAMREC Working Group, responsible for compiling the SAMREC Code;

Served on the JSE/SAMREC working committee for the development of the JSE Section 12 requirements;

Serves on the Readers Panel for the JSE; Mr Clay is director of the advisory business and provides hands-on

services to all the company’s major clients; His expertise in financial valuation is particularly appropriate for

ensuring market to market presentation of both the technical and financial issues of resources projects;

Course leader for the Witwatersrand University and Continuing Education programme on Compliance in the Minerals Industry; and

Mr Clay has a special interest in the proposed International Accounting Standards “IAS” Extractive Industries rules for determining NAV and NPV calculations in the minerals industry.

2012 - present

Managing Director and Founding partner

Venmyn Rand (Pty) Ltd

Mr Clay serves as the Managing Director of Venmyn and is responsible for the company’s strategic process as well as finances, budgeting and operations;

Venmyn operates as a techno-economic consultancy for the resources industry on a world wide basis;

Mr Clay has been a key member of the SAMREC Working Group, responsible for compiling the SAMREC Code;

Served on the JSE/SAMREC working committee for the development of the JSE Section 12 requirements;

Serves on the Readers Panel for the JSE; Mr Clay is director of the advisory business and provides hands-on

services to all the company’s major clients; His expertise in financial valuation is particularly appropriate for

ensuring market to market presentation of both the technical and financial issues of resources projects;

Course leader for the Witwatersrand University and Continuing Education programme on Compliance in the Minerals Industry; and

Mr Clay has a special interest in the proposed International Accounting Standards “IAS” Extractive Industries rules for determining NAV and NPV calculations in the minerals industry.

1997 - 2012

General Manager RMB Resources Rand Merchant Bank

Continuing business functions detailed below; Also valuing, managing and marketing investment projects of the

Resources division including deal structuring and corporate finance. 1996 – 1997

Managing Director and founding partner

Venmyn Rand (Pty) Ltd

Techno-economic evaluation of a wide range of mineral resource projects using cashflow, market capitalisation, option pricing and other comparative methods.

1987 – 1996

Senior Geologist Rand Mines Ltd Resident senior gold mine geologist responsible for the development and implementation of modern computerised ore reserve evaluation techniques at Harmony Gold Mine and Durban Roodepoort Deep Gold Mine.

1981 – 1988



Transferred to head office where he was responsible for all gold mine ore reserve valuation functions. This computer work involved the development and planning of very large databases for orebody modelling.

Senior Geologist Zimro (Pty) Ltd (Industrial Minerals Division of AAC)

Market development and application of a wide range of industrial and base minerals.

1979 – 1981

Geologist Geological Survey of Zimbabwe

Mapped a 100km² area of granite-greenstone terrain and assisted in the compilation of a Bulletin over the area.

Assisted the small mining sector with geological advice on gold, copper, gemstones and industrial minerals.

1975 – 1979

Languages: English: Excellent Certification: I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. _________________Date: March 2016 Full name of staff member: Andrew Neil Clay


Name of Staff Member: Tarryn Claire Orford Position: Manager Name of Firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa (Pty) Ltd Address: 1st Floor, Building 33, the Woodlands Office Park, 20 Woodlands Drive, Woodmead Profession: Geologist Date of Birth: 26 March 1987 Years with Firm/Entity: Joined March 2010 Nationality: South African Membership in Professional Societies:-

CLASS PROFESSIONAL SOCIETY YEAR OF REGISTRATION Member Geological Society of South Africa 2010 Member Geostatistical Association of South Africa 2011 Member South African Institute for Mining and Metallurgy 2014 Member Society for Petroleum Engineers 2015 Professional Natural Scientist South African Council for Natural Scientific Professions 2015

Detailed Tasks Assigned:-

YEAR CLIENT COMMODITY PROJECT DESCRIPTION

2016

AngloGold Ashanti Gold Prepared a mineral asset valuation on a gold asset.

CoAL Coal Prepared a JORC Compliant CPR on the Greater Soutpansberg Projects in South Africa as supporting documentation for a transaction through the LSE.

Deloitte Audit South Africa Coal Review of technical inputs, Resources and Reserves, depletions and reconciliations for the audit of Glencore Coal.

Deloitte Audit South Africa Chrome, Platinum & Vanadium Review of technical inputs, Resources and Reserves, depletions and reconciliations for the audit of Glencore Alloys.

Deloitte Audit South Africa Iron Ore Review of technical inputs and requirements as the basis of an Asset Retirement Obligation review for Kumba, South Africa.

2015

Deloitte Audit South Africa Chrome Review of technical inputs, Resources and Reserves, depletions and reconciliations for the audit of Hernic.

Deloitte Audit South Africa Gold Mining Specialist review of a Mineral Resources for impairment testing on a number of gold projects in the Pilgrims Rest area.

Deloitte Audit South Africa Gold Independent review of exploration plan and budget for a gold mine in the Evander Basin, South Africa.

Deloitte Rwanda Gas Independent operational review and asset valuation of a gas asset in Lake Kivu, Rwanda.

Confidential Gas & Gold Review of a number of assets for gas and prospectivity in South Africa.

Molopo Gas Completion of a SAMOG Compliant report on a gas asset located in South Africa, in conjunction with Deloitte REA, Canada.

Chrometco Chrome & PGEs Provided strategic advice on the relevant properties, company strategy and transaction value to Chrometco to use for use as part of a potential transaction on assets in South Africa.

Molopo Gas Exploration guideline which provides a best practice company document to ensure exploration going forward is compliant with the relevant reporting codes in South Africa.

Kemin Molybdenum/Tungsten Two JORC Compliant Technical Reports on two molybdenum and tungsten projects in Kazakhstan, for listing on the LSE.

Deloitte Audit South Africa Coal Review of technical inputs, Resources and Reserves, depletions and reconciliations for the audit of Glencore Coal.

Deloitte Audit South Africa Chrome, Platinum & Vanadium Review of technical inputs, Resources and Reserves, depletions and reconciliations for the audit of Glencore Alloys.

Deloitte Audit Perth Iron Ore Provided technical guidance to the Perth audit team as the basis for an impairment review.

2014

Greenflash Trading Potash, REE’s Technical guidance for determining the exploration and economic potential of an offshore deposit.

Sentula Coal Listing CPRs on Sentula’s major coal assets in South Africa for the purposes of disposal.

Deloitte Kyrgyztan Uranium Mining Specialist review of Mineral Resources for audit assist on a number of uranium projects.

Deloitte Italy Gold Strategic Exploration Guidance on a gold asset in the DRC.

Deloitte Pretoria Gold Mining Specialist review of a CPR for audit assist on a number of gold projects in the Pilgrims Rest area.

Chrometco Chrome & PGEs Strategic Review of the Rooderand Properties in the Bushveld Complex, South Africa.

Bauba PGEs Completed a CPR on their South African PGE assets for updated listing on the JSE.

Hambledon Gold Gap Analysis and CPR on the Sekisovskoya Gold Mine in Kazakhstan.

Bauba PGEs Completed a CPR on their South African PGE assets for updated listing on the JSE.



2013

Ecobank Gold Completed a review of a financial model to assist a client to obtain financing for a gold asset located in the Democratic Republic of the Congo.

Village Main Reef Water Assessment of Flooding and Pumping arrangements in the Klerskdorp Gold Basin, South Africa.

Banro Gold Completed a Feasibility study for the Namoya Project, Democratic Republic of the Congo.

Ashkari Chrome Fatal Flaws Analysis on 11 chrome assets in Zimbabwe.

Deloitte Atlanta Sand & Aggregate Mining Specialist review of Mineral Resources, density calculations, QA/QC and Life of Mine for audit assist on a number of sand and aggreaagte projects in the USA.

Village Main Reef Water Assessment of Flooding and Pumping arrangements in the Klerskdorp Gold Basin, South Africa.

Banro Gold Completed a Feasibility study for the Namoya Project, Democratic Republic of the Congo.

Ashkari Chrome Fatal Flaws Analysis on 11 chrome assets in Zimbabwe.

Bauba PGEs Update of the Mineral Resource estimates for the Bauba Projects, Bushveld Complex, South Africa.

African Nickel Nickel Completed a market review for Nickel in South Africa.

Western Utilities Corporation Intangible Assets Independent high level evaluation of intangible Acid Mine Drainage technology assets for Financial Year end statements.

Capital Works Clay Review of a Clay Mine, in South Africa, for Fatal Flaws to assist with an Investement Decision.

Loncor Gold Compiling several sections for a NI 43-101 Preliminary Economic Assessment on the Makapela Prospect, Democratic Republic of the Congo.

Banro Gold Verifying geological model and Mineral Resource estimates for the Lugushwa Project, Democratic Republic of the Congo.

ZYL/Sentula Valuation Coal Valuation for various coal assets in the Kangwane Coalfield, South Africa, for potential merger discussions.

2012

Pinette Mining Copper Compilation of a exploration best practice guideline.

Deloitte UK Iron Ore Review of Technical and Business Model on an Iranian Gold Project for guidance on an investment decision.

Eureka Gold Short Form Technical Report and guidance on a defunct gold mine, Zimbabwe.

Deloitte Canada Iron Ore Audit Assistance on Mont Wright Mine, Canada.

SARS Coal Mineral Asset Valuation on various assets within South Africa held by Umthombo Resources.

G&B African Resources REE’s, W, Li Compilation of a CPR as part of listing requirements for their Zimbabwean assets.

SEW Trident Iron Ore Technical on-site assistance in identifying mineralisation concessions in Guinea.

Chrometco Chrome Compilation of a valuation letter for mineral assets in the Bushveld Complex, South Africa.

Rukwa Coal Compilation of a CPR and technical documentation on their coal assets in Tanzania.

Bauba PGEs Update of the Bauba’s Mineral Resources in the Bushveld Complex, South Africa.

Loncor Gold Verification of geological modelling and Mineral Resource estimation and parameters for the Makapela Project, Democratic Republic of the Congo.

Izingwe and BRL Magnetite Techno-Economic Statement on the Mokopane Magnetite Project, Northern Limb, Bushveld Complex, South Africa.

Razita Mining Various Short Form Prospectivity Reviews on various New-Order Prospecting Rights under application over South Africa.

2011

Lesego PGEs Strategic Assistance during exploration, project development and resource estimation for an Bushveld Project, South Africa.

Evraz Highveld Steel and Vanadium Magnetite and Iron Ore

Update of Annual Resource Statement for Mapochs Mine and technical assistance for future development of the asset in the Bushveld Complex, South Africa.

Sable Platinum Platinum and Vanadium Strategic Technical Assistance on geology and exploration on some Bushveld Complex platinum projects, South Africa.

Sylvania Chrome Techno-Economic Statements on chrome dump projects, South Africa.

PSIL Uranium Techno-Economic Statement on a uranium deposit in Kazakhstan.

African Consolidated Resources Gold Review and geostatistical analysis on some greenstone belt gold projects located in Zimbabwe.

Realm Resources PGEs Techno-Evaluation Statement on some Bushveld Complex platinum assets, South Africa.

Lesego PGEs Mineral Resource Update for their Bushveld Complex project, South Africa.

Boynton PGEs Pre-Feasibility Study on the Western Bushveld Complex Magazynskraal Project, South Africa.

Aura Coal A prospectivity Review on a coal Project in Nigeria.

Pan African Resources Gold A Fatal Flaws Review of a gold tailings retreatment project near Barberton, South Africa.

National Mining Corporation Gold And Base Metals A Scoping Study on gold and base metal projects in Ethiopia.

2010 Central African Gold Gold Technical Statement and Update of Resource Statement on a greenstone gold deposit in Zimbabwe.



2010

JCI Exploration Uranium Technical Review document on a Greenfields uranium project in the Northern Cape, South Africa.

Absolute Holdings PGEs Compilation and research on three Bushveld Complex platinum projects for three Techno-Economic Valuations and a CPR.

AfriSam Cement Data collection, research and proofreading for a Technical Review of numerous limestone, aggregate, sandstone, and dolomite assets, South Africa.

Keldoron Coal Mining Coal Independent Valuation on coal assets in the Klipriver Coalfield, KwaZulu Natal, South Africa.

Banro Gold Assistance with compilation of CPRs on a number of gold projects in the Democratic Republic of Congo.

Buildmax Sand Short Form CPR on some sand mineral assets, South Africa.

Ultratech Coal Technical and Valuation report on various coal projects, South Africa.

Gentor Base Metals CPR and Technical Review of ophiolite deposits in Oman.

Coal of Africa Coal Supporting documentation for valuation of coal assets in the Ermelo, Soutpansberg, Limpopo and Highveld Coalfields, South Africa.

Bauba Platinum PGEs Technical assistance and Technical Statement on three Bushveld Complex platinum projects, South Africa.

Key Qualifications:- Tarryn Orford studied at the University of Pretoria where she undertook her Bachelor of Science degree in Geology and later, her Honours in Geology. As part of her honours degree, she undertook a study detailing the effect of metamorphism by the Bushveld Complex on the Transvaal Supergroup. Tarryn joined the Venmyn team in March 2010. She brought with her experience in tutoring at University of Pretoria as well as vacation work for Digby Wells and Associates. Her current area of expertise includes preparation of SAMREC and National Instrument compliant technical documents, interpretation and analysis of mineral project data, preparation of technical diagrams and geostatistics to provide technical assistance during early stages of exploration. In 2013, Venmyn Rand became Venmyn Deloitte, a wholly owned subsidiary of Deloitte Consulting South Africa. Since joining Venmyn, Tarryn has been involved in a number of projects including Competent Person’s Reports, Technical Reports, Due Diligence Studies, Mineral Resource and Mineral Reserve Statements and Techno-Economic Valuations, Fatal Flaw Evaluations and has provided technical assistance to a number of companies over a wide range of commodities including Platinum Group Minerals, gold, coal, uranium, base metals, iron ore, manganese, magnetite, Rare Earth Elements, sand and clay. These projects included many technical field visits throughout South Africa and globally, including Ethiopia, Guinea, Botswana, Tanzania, Benin, Zimbabwe, the DRC and Kazakhstan. Tarryn has completed her Graduate Diploma in Engineering (GDE) in Mining Engineering specialising in Mineral Resource Evaluation through the University of the Witwatersrand. Education:-

DEGREE/DIPLOMA FIELD INSTITUTION YEAR

B.Sc. Geology University of Pretoria 2008 B.Sc. (Honours) Geology University of Pretoria 2009 Graduate Diploma in Engineering

Mining Engineering specialising in Mineral Resource Evaluation University of the Witwatersrand 2013

Employment Record:-


Mineral Project Analyst

Venmyn Deloitte (Previously Venmyn Rand)

Venmyn Rand operates as a techno-economic consultancy for the resources industry on a worldwide basis. Responsibilities at Venmyn include:-

data processing for technical reports; compilation of due diligences, prospectivity reviews,

technical reports, mineral resource and mineral reserve statements;

compiling technical and geological information into reports which are compliant with the SAMREC and JSE listing rules; and

high level research for multiple facets of mineral projects.

March 2010 to Present


POSITION COMPANY JOB DESCRIPTION DURATION Geology Tutor University of

Pretoria Assisted students with practical tasks and assignments including identification of hand specimens and preparation for tests and exams.

January to July 2009

Geography Tutor University of Pretoria

Assisted students with practical tasks and assignments. Marking and overseeing tasks and exams.

January to July 2009

Student Geologist Digby Wells and Associates

Assistance on project specific work and a desktop study in the environmental field, secretarial work and general assistance to employers.

June 2009 to July 2009

Languages:- English: Excellent Afrikaans: Excellent French: Basic Certification:- I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. ______________________Date: March 2016 Tarryn Claire Orford


Name of Staff Member: Garth John Gerrie Marshall Position: Senior Consultant Name of Firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa (Pty) Ltd Address: 1st Floor, Building 33, the Woodlands Office Park, 20 Woodlands Drive, Woodmead Profession: Geologist Date of Birth: 02 May 1986 Years with Firm/Entity: Joined June 2014 Nationality: South African Membership in Professional Societies:-

CLASS PROFESSIONAL SOCIETY YEAR OF REGISTRATION Member SACNASP 2010 Member GSSA 2015

Detailed Tasks Assigned:-


2015

Samancor Chrome Chrome SAMREC Compliant Independent Technical Report and Mineral resource Update

Memor Exploration Chrome Strategic Assistance and Exploration Program Management Rand Refinery Gold Quarter Stock take and Audit Assistance Gem Diamonds Diamonds Mineral Resource and Reserve Update 2015 Deloitte Audit/Nordgold Gold Technical Due Diligence/ Audit Support

2014

Siyanda Resources Chrome Technical Due Diligence Ichor Coal Coal Due Diligence Rand Refinery Gold Review of Refinery procedures and protocol Rand Refinery Gold Review of Smelter procedures and protocol

Rand Refinery/Deloitte Audit Gold Attend and monitor annual stake clear up and stack taking procedure

Kemin Resource Molybdenum and Tungsten JORC Compliant mineral resource review and technical review

2013

Gold One Gold Mineral Resource update and SAMREC compliant report Desert Gold Gold Mineral Resource update and NI43-101 technical report Goldfields Gold Cerro Corona Mineral Resource update and technical report Metmar Tantalum Mineral Resource update Barrick Gold Gold Geological Modelling and Mineral Resource Statement Anglo Gold Ashanti Gold Monthly tailings dam recon

2012

Gold One Gold Geological wireframing and Mineral Resource Update Goldfields Gold Cerro Corona Mineral Resource update and technical report Platfields Platinum Mineral Resources Reconciliation Ezulwini Gold Mineral Resource update and SAMREC compliant report Anglo Gold Ashanti Gold Monthly tailings dam recon Asanko Gold Geological model review Rockgate Falea Silver, Copper Mineral Resource Update and NI43-101 technical report Rockridge Gold Mineral Resource Estimation and technical report

2011 Shiva Uranium Gold, Uranium

Consulting to Shiva Uranium in order to align the Mineral Resources Department with the Mining Value Chain. Also involved with underground and opencast production and geological modelling.

2010 Samancor Chrome Chrome Mine and exploration geologist Key Qualifications:- Garth Marshall studied at the University of Johannesburg where he undertook his Bachelor of Science degree in Geology and Geography and later, His Honours in Geology. At the beginning of 2011 Garth started his Master of Science degree in Mineral Resource Management and obtained the Master’s degree in mid-2013. Garth was awarded a bursary with Samancor Chrome in 2008 in his third year of study towards a Bachelor of Science degree in Geology and Geography. Subsequently after completing his Honors degree in Geology in 2009 he joined Samancor Chromes, Western Chrome Mines as a geologist. His duties included and were not limited to geological mapping of underground workings, management of exploration drilling and planning for both surface and underground drilling campaigns as well as geological modelling and database management.


After completing his obligations to Samancor Chrome Garth joined Sound Mining Solutions in 2011 and was contracted to Shiva Uranium to assist in the Mineral Resources Department and to focus on generating and maintaining the geological models and geological database. His duties included and were not limited to geological modelling, database management, management of surface exploration drilling, core logging and sampling as well as mapping geological features within the open pit. In 2012 Garth joined the Resources team at Minxcon. Garth was heavily involved with geological modelling and resource estimation, working with a variety of commodities across many different countries and continents. Garth was responsible for managing projects in the resources department and his duties included and were not limited to geological modelling, resource estimation, database management, QAQC as well as the compilation of Competent Persons Reports. Garth was also involved with auditing and reviewing geological models as well as compiling mineral resource statements for various clients. In June 2014 Garth Joined Venmyn Deloitte with the intention of bolstering Venmyn Deloitte’s Mineral Resources Management, Modelling and Resource estimation capability. Garth has been involved with, reviewing geological models as well as working with Deloitte Audit on a technical review of a large gold smelting and refining operation. Garth was part of a team which reviewed Rand Refinery’s metal accounting procedures in both the smelter and refinery. He is actively involved with the audit support work and quarterly stocktake supervision at Rand Refinery. Garth has also been involved with a number of technical due diligences and mineral resource estimates while at Venmyn Deloitte. Garth has the ability to compile competent person reports in a number of reporting codes, such as SAMREC, JORC and NI43-101. Education:-

DEGREE/DIPLOMA FIELD INSTITUTION YEAR

M.Sc Mineral Resource Management University of the Free State 2013 B.Sc. (Honours) Geology University of Johannesburg 2009 B.Sc. Geology and Geography University of Johannesburg 2008

Employment Record:-


Senior Geologist Venmyn Deloitte Samancor Chrome SAMREC Compliant Independent Technical Report

and Mineral resource Update Gem Diamonds Mineral Resource and Reserve Update

2015

Geologist Venmyn Deloitte

Reviewing laboratory and assay procedures. Reviewing Refinery processes and protocols. Undertaking geostatistical and resource estimations as well as

variography. Using Datamine software and Statistica for use in the geological

modelling and resource estimation phases of the projects. Geological modelling and review Compiling SAMREC, NI43-101 and JORC technical reports as well as

resource statements, audits and reviews.

2014

Geologist Minxcon

Building and maintaining geological models for various clients. Creating and maintaining geological maps and sections Wireframing of massive ore bodies, tabular ore bodies and pegmatite’s Undertaking geostatistical and resource estimations as well as

variography. Using Datamine software and Statistica for use in the geological

modelling and resource estimation phases of the projects. QA / QC as well as managing and implementation of databases. Recommending and implementing strategic sampling programs to

achieve a complaint resource as well as best practise sampling for optimal throughput and ore quality control.

Compiling SAMREC, NI43-101 and JORC technical reports as well as resource statements, audits and reviews.

Worked with the following commodities: gold, uranium, chrome, platinum, silver, copper, tantalum, tin, rubidium and REE.

Risk assessment analysis for various projects

2012-2013

Geologist Sound Mining Solutions

Directly managing a staff complement of 2 at the Shiva Uranium Mine (Data Capturer and Surveyor/aspiring geologist).

Managing projects such as data compilation and digitisation of geological information for modelling purposes.

Consulting to a gold and uranium mine in the Klerksdorp gold field area (Shiva Uranium).

Managing databases as well as building geological models and updating the geological models for both underground and opencast gold and uranium deposits.

2011-2012



Geologist Sound Mining Solutions

Building and updating geological models using Datamine software as well as managing the DownHole Logger database.

Applying QAQC standards to all data collected and stored in the database which are related to the geological models.

Compiling annual mineral resource and reserve statements from the geological models.

Creating surface maps and plans for use in production and planning (GIS).

Exploring and assisting production at the open pit at the mine. Managing, budgeting and planning exploration / blast hole drilling

relating to the opencast gold mine (brownfields). Logging and sampling core. Managing drilling contractors and drill rigs. Sampling supervision and data management. Assisting the Opencast Manager to mark out drill holes and identify

reef to be separated from the waste. Profiling the opencast on a regular basis to update topsoil and

overburden models.

Geologist Samancor Chrome

Directly managing a staff complement of 3 Geological Assistants and numerous core yard staff.

Performing underground geological mapping in conventional breast stope panels, room and pillar mining and development ends.

Plotting geology on 1:200 stope sheets and writing reports. Liaising with the mining department to mitigate and discuss geological

hazards and approach to mining and worker safety. Managing underground cover hole layouts for the numerous shafts at

WCM. Attending monthly planning meetings to discuss and give

recommendations on the monthly production of the various sections of WCM.

Giving geological advice / recommendations and assistance to the mining departments with respect to mine production.

Drawing sections through development ends to assist with development planning and stope layouts.

Managing surface exploration, planning, budgeting and drilling (brown fields geological exploration):

- Planning the location and estimated depth of hole based on known geological facts.

- Completing risk assessments with respect to the drilling site and machinery to ensure Samancor Western Chrome Mines safety standards are adhered to and maintained throughout the drilling programme.

- Identifying areas of concern and certain measures that need to be put in place to rectify the problem areas.

- Ensuring downhole surveys are done to measure the deflection which may occur and to identify the exact position to insert the wedge for the deflection of the hole.

- Logging and sampling core which is then captured into the geological database (GBIS) for geological modelling.

Geological modelling: exporting data that has been captured in the geological database (GBIS) into Minex (geological modelling software) and modelling a geological model of the ore reserve / resource.

Estimating and calculating year-end mine reserves and resources to accurately estimate the geological losses and life of mine according to the SAMREC code.

Maintaining and motivating safety within the Geology Department as well as in the Mineral Resources Department to ensure that safety targets are met.

Organising and chairing weekly safety meetings within the Geology Department.

Managing the Geological coreyard and exploration vehicle.

2010-2011

Languages:- English: Excellent Certification:- I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. ______________________Date: March 2016 Garth J G Marshall


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