Roy PitchfordCEO Country Factor

MINING IN ZIMBABWE - OVERVIEW

• PREDATES COLONIAL ERA

• GEOLOGICAL – PRODUCTION DATA FROM 1910

• AT ITS PEAK, MINING IN ZIMBABWE PROVIDED

• 7% of GDP

• 50% of foreign currency earnings

• Direct employment to 60,000

• Development of towns, infrastructure, road, rail, and all forms of communication

MINING IN ZIMBABWE – INVESTMENT POTENTIAL

HIGHLY PROSPECTIVE FOR;• Coal• Diamonds• Gold• Platinum• ChromeOTHER MINERALS• Iron Ore• Phosphates• Asbestos• Black Granite• Coal Bed Methane• Industrial Minerals

MINING IN ZIMBABWE – ECONOMIC ENVIRONMENT

• Single digit inflation• Multiple foreign currencies in use – legally• No foreign currency surrender requirements• Market liberalised• Competitive taxation regime

• NEGATIVE ISSUES INCLUDE;• Skills loss• Property and mineral rights• Unrealistic indigenisation objectives• Political uncertainty

MINING IN ZIMBABWE – COAL

• Deposits considered world-class• Low ash• Current production at 20% of capacity• World-wide demand increasing• Increased exploration activity

HOWEVER• Rail infrastructure requires upgrading • Coking facilities require upgrading• Mining equipment investment needed• New production facilities need to be constructed

MINING IN ZIMBABWE – DIAMONDS

• Country not fully explored• Early 80’s aeromagnetic survey anomalies need

investigation • Several mining operations producing ~ 400,000

carats per annum• 2 million carats per annum production possible• Local processing opportunities

HOWEVER• Minerals rights claims need to be resolved• Adherence to international protocols required

MINING IN ZIMBABWE – GOLD

• Peak production in 1999 – 27 tonnes• Target of 50 tonnes by 2015• Output dropped to 3,5 tonnes per annum• RBZ exchange rate policies and non-payment for

gold reduced exploration and development expenditure

• Constraints now removed• Capital injection to existing mines and brown-field

projects provide short-term gains• Modern exploration expected to lead to new

discoveries• Recent M&A activity demonstrates low cost

acquisition of short-term production resources/reserves

MINING IN ZIMBABWE – PLATINUM GROUP METALS

• Second largest pgm resource in the world• Resources relatively shallow - low cost of production• Three of the world’s four major producers present• Reasonable facilities for processing• Limited green-field exploration• Defined deposits available for development – held by

the Government of Zimbabwe• Enhanced/increased beneficiation opportunities exist• Pgm and associated base metal prices robust• Zimbabwe capable of increasing international

market share of pgm supply

MINING IN ZIMBABWE – PGM’S CONTINUED

• Conventional wisdom states that 80% to 90% of the world’s pgm resources, to a depth of 3,000 metres,are in RSA – 10% Zimbabwe

• Zimbabwe’s pgm resources are less than 1,000 metres

• Measuring pgm resources to 1,000 metres in both countries, the ratio will be much less than 90 : 10

• 70 years of pgm mining in RSA has depleted the shallower resources

• Shallow resources reduce mining costs• Zimbabwe therefore, with shallower resources –

lower cost production, and a greater share of resources less than 1,000m – should have a greater pgm market share

MINING IN ZIMBABWE – PGM’S CONTINUED

In support of asserting that Zimbabwe should have a

greater share of the international pgm market, public

information on Impala Platinum’s resources and

production statistics are utilised in the next group of

slides

IMPALA PLATINUM – RESOURCE & PRODUCTION COMPARISONResource

%Production

%Resource

%Production

%

Impala (RSA) 30 66 38 66Marula (RSA) 3 5 4 5Two Rivers (RSA) 1 10 2 10Tamboti (RSA) 12 0 0 0Afplats (RSA) 10 0 0 0

56 81 44 81

Zimplats (ZIM) 42 12 53 12Mimosa (ZIM) 2 7 3 7

44 19 56 19