O 5. LPS (p) (0.50) (0.036)

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1 Mining Speculative Buy, 3.375p, Market Cap. 3.66m* (Kennedy) is an AIM quoted investing company focused on tantalite production through the 75% stake it acquired in 2015 in African Tantalum(Pty) Limited (Aftan), and sought to fast track reopening the Tantalite Valley Mine (TVM) which Aftan owns and manages and recommissioning the existing processing plant in southern Namibia. However, Kennedy represents a speculative investment opportunity and hence is not without risk. On 20 July 2016, Kennedy announced a conditional staged placing to raise 2m (gross) at 3p with institutional and retail support and two Directors who are existing large shareholders participating for 100,000 in total. The proceeds will be used by Aftan by way of a shareholder loan from the company in a programme to upgrade and expand the plant at TVM and open up the nearby Lepidolite orebody where according to Kennedy lithium potential exists and for general working capital. It noted that operational cashflow had been constrained since TVM was reopened and plant commissioning completed at the end of This was due to irregular mine grades, an unexpectedly high proportion of fine tantalite and significant amounts of lithium bearing ores. Kennedy envisages this programme enabling Aftan to deliver improved recoveries, increased production capacity and provide for near term entry into the attractive lithium market. It believes this fundraise will see TVM to a position of operational cashflow positive within the first quarter after commissioning. Completion of the programme and full production is anticipated in Q at which time it notes that Aftan will also be in a strong position to enter the lithium market. Application has been made for the first firm placing shares to be admitted to trading on AIM and it is expected that dealings in these new shares will commence on 25 July A second firm admission is expected 29 July 2016 and subject to shareholder approval in General Meeting, dealings in the conditional shares will commence on 5 August Key Strengths Namibia politically stable, multi-party presidential democracy and mining friendly. Aftan TVM offers a potential combination of lithium and tantalite delivery into two demand led markets. Independent study confirmed that the estimated resource of the mine stands at 843,000 tonnes grading 490ppm Ta 2. The licence area holds a global ore resource estimated at 2Mt. Offtake agreement in place with a major leading manufacturer of electronic components for tantalite. Key Weaknesses Single asset/investment in Aftan and geo-political risk of operating in Namibia. No guarantees of commercial or economic success with strategy given Aftan ramp-up recoveries impacted by irregular mine grades, an unexpectedly high proportion of fine tantalite and significant amounts of lithium bearing ores. Exploration, development and production activities are high risk undertakings and subject to factors including geology, weather, environmental, social and operational issues. May need further funding going forward. ** Note commodity prices both a potential strength and a weakness. Research Disclosures Important Notice Please see pages 4 to 5. Year end 30 June 2015A H1 2016A Loss for period 000 (219) (368) LPS (p) (0.50) (0.036) Shares in issue Pre* Post second admission AIM Ticker 52 week high/low (p) Price spread (p) NMS Analyst 20 July ,461, ,294,872 KENV 10p/3.26p 3.25p/3.50p 20,000 Trisha Reay SVS Securities Plc. Registered in England and Wales no Authorised and regulated by the Financial Conduct Authority, Firm No A Member of the London Stock Exchange and a HM Revenue & Customs Approved ISA Manager. Registered Office: 2 nd Floor, 20 Ropemaker Street, London EC2Y 9AR. t: +44 (0) f: +44 (0) w: e: info@svssecurities.com 1

2 Background and Key Dates (Kennedy) is an AIM quoted investing company focused on tantalite production through its stake in African Tantalum (Pty) Limited (Aftan), which owns and manages the Tantalite Valley Mine (TVM) near Warmbad in the Karas District of southern Namibia. An independent study confirmed that the estimated resource of the mine stands at 843,000 tonnes grading 490ppm Ta 2. The licence area holds a global ore resource estimated at 2Mt. Namibia has seen a long period of political stability having become independent in 1990 with a multi-party, presidential democracy. It has a good national infrastructure and is regarded as a mining friendly jurisdiction with attractive fiscal terms. Mining is the cornerstone of the country s economy. In January 2015, the company successfully completed the acquisition of 75% of Aftan for a total consideration of R12m ( 0.66m) having previously announced a conditional agreement to acquire 60% of the Tantalite Valley Project (TVP). In September 2015, Aftan purchased the remaining 40% interest in TVP enabling it to become the sole owner of the operating companies and thus increasing Kennedy s exposure to this mine. left the TVM. The company noted that this was slightly later than anticipated due to exceptionally unusual and adverse weather conditions. Kennedy added that there appeared to be a number of related opportunities within the broader tantalum field, both in terms of regional sourcing and downstream processing. Furthermore, investigations into TVM s lithium potential had generated very exciting results which it was evaluating. Tantalite/Tantalum and Lithium Tantalite (or coltan) is a naturally occurring oxide; the main ore and source of oxides and metallic tantalum. Tantalum is the refined elemental metal (although mostly used as high purity oxides). Kennedy has noted that demand for tantalum is driven by the electronics and technology industries, where tantalum capacitors are used in nearly all electronic equipment including computers, tablets, motor components and video game systems and mobile devices. Tantalum is also used in super alloys, specialised steels, corrosion resistant equipment and medicine. Tantalum s applications are based on its unique physiochemical properties. The oxides and metal have extremely high melting points, high heat conductivity and strong resistance to corrosive environments. Tantalum is a conflict mineral and the company remains committed to ensuring that the tantalum produced by Aftan will be conflict-free. Kennedy has also highlighted how the lithium market has seen enormous recent demand largely driven by its use in portable energy storage batteries in electric vehicles. Further growth is anticipated in this market where strong long term fundamentals exist, as many major car manufacturers declare positions in the green transport electric vehicle market. Source: Company In July 2015, Aftan reached an important milestone following the completion of a long term offtake agreement with a major leading manufacturer of electronic components for the full tantalite production from Aftan. Also in July 2015, the company raised 1.4m at 5.25p per share with the proceeds going towards bringing TVM back into production, due diligence on other tantalite projects and for investment and working capital purposes. November 2015 saw it complete the commissioning of Aftan s process plant within budget. In February 2016, an Operational Update confirmed full receipt of the explosives magazines licence, after an unexpected delay enabling Aftan to take delivery of, and store explosives at the Mine. On 31 March 2016, Kennedy announced that the first shipment consignment of 285kg of high grade tantalite concentrate had Interim Results and Related Party Transaction On 31 March 2016, the company released its H1 Results to end December 2015.These showed an operating loss and loss for the period of 368,000. Cash as at 31 December 2015 stood at 233,000. Post period end, on 27 April 2016, the Board approved an interest-free and unsecured loan facility of up to 150,000 from Westleigh Investments Holdings Limited (WIHL). The loan for working capital was for Aftan in order that it could undertake a preliminary evaluation of TVM s lithium potential, as disclosed in the company s Interim Results and to potentially take advantage of certain short term trading opportunities in tantalite. WIHL is a company in which Giles Clarke and Nick Harrison, both of whom are Directors of Kennedy hold a beneficial interest of 73.28% and 26.72% respectively and as such the loan is classified as a related party transaction. WIHL is also a major shareholder in Kennedy and prior to the fundraise set out below held 8.76% of the issued share capital with the two Directors also individually having a stake of 5.9% each. 2

3 Operational Update and Strategy Included within the Fundraising announcement set out below in the next section, Kennedy provided an update noting that operational cashflow had been constrained since Aftan reopened the TVM and recommissioned the existing processing plant at the end of This was due to the following: Irregular mine grades. Unexpectedly high proportion of fine tantalite as mining moved through the orebody. Significant amounts of lithium bearing ores that the existing plant was not configured to currently recover. The programme to upgrade and expand the existing TVM plant with the placing proceeds and to open up the nearby Lepidolite* ore body will enable increased throughput to a targeted 15,000 tonnes per month (previous target 10,500 tonnes) and output to a targeted 15 tonnes of tantalite concentrate. * Lepidolite is situated within 2km of the main Homestead operation and plant site. It is anticipated that all the increased product volume will be supplied to Aftan s offtake partner under the existing agreement. The company hopes the upgraded recovery plant will significantly improve overall recoveries by allowing the reprocessing of all tailings and the ability to process micaceous ores from the Homestead Mine (not previously possible) and surrounding ore bodies including Lepidolite. The Lepidolite ore body holds higher grades of 730ppm Ta 2 (Homestead resource from an earlier independent study of 430ppm Ta 2 ) will drive improved production levels. capital for both it and Aftan. In addition, funds will be used to open up the Lepidolite ore body as referenced above. The company envisages that this programme will enable Aftan to deliver improved recoveries,increased production capacity and provide for its near term entry into the lithium market, by way of further exploration and eventual start of lithium concentrate production, with upgrading to lithium carbonate anticipated later. Application has been made for the first firm placing shares to be admitted to trading on AIM and it is expected that dealings in these new shares will commence on 25 July Following this first admission, the company will have 120,461,539 ordinary shares in issue and post the second admission on 29 July 2016, 126,294,872. Subject to shareholder approval in General Meeting, application will be made for the conditional shares to be admitted to trading on AIM and it is expected that dealings following this conditional admission will commence on 5 August Following this final admission, the issued share capital will be 175,128,204 ordinary shares. Conclusion Kennedy represents a speculative investment opportunity and hence is not without risk. However, the company believes that this fundraise will see TVM to a position of operational cashflow positive within the first quarter after commissioning. Completion of the programme to upgrade and expand TVM s plant and full production is anticipated in Q at which time it notes that Aftan will also be in a strong position to enter the lithium market. Aftan has also identified significant lithium potential from the TVM and anticipates producing lithium concentrate after the programme is completed that will enable it to enter the lithium market. The Lepidolite ore body has resource potential along strike and down dip, with studies ongoing to understand the best way to exploit the lithium potential. The near term objective will be to produce lithium concentrate followed by lithium carbonate through the upgrade of the concentrate on site. Fundraising On 20 July 2016, Kennedy announced a conditional staged placing to raise 2m (gross) at 3p per share. The placing comprises 12m first firm placing shares and 5.83m second firm placing shares under the company s existing authorities and 48.83m conditional placing shares, the latter conditional on shareholder approval in General Meeting on 4 August Two of the Directors, Giles Clarke and Nick Harrison are participating in the conditional placing each subscribing for 50,000 and 25,000 respectively. In addition, WIHL is to participate for 25,000. Following completion of the placing and final admission, Giles Clarke will hold 4.6%, Nick Harrison 4.1% and WIHL 5.9% of the enlarged issued share capital. The net proceeds of the placing will be used to enable Aftan by way of a shareholder loan from the company to upgrade and expand the current plant at TVM as well as for general working 3

4 Research Disclosures This document has been issued in the UK by SVS Securities Plc (SVS) which is authorised and regulated by the Financial Conduct Authority ( FCA ) and is a member of The London Stock Exchange PLC. This report has been prepared by its author(s) as non-impartial research in relation to Company (the Company ), and is provided for background information only. Analyst Certification: The analyst(s) responsible for preparing this research report or sections of this report, in whole or in part, hereby certify/ies that, with respect to any and all of the securities or issuers that the analyst(s) cover(s) in this report, the views expressed in this report accurately reflect the individual research analyst s personal views. In addition, no part of the research analyst s compensation was, is, or will be directly or indirectly, related to the specific recommendations or view expressed in this report or summary. Disclosure Lists: Author: Trisha Reay Investment Analyst Publication date: 20 July Research Disclosures Applicable to this Recommendation: N/A The clauses below apply to this recommendation: 1. SVS Securities Plc (SVS) is acting as broker, market maker or placing agent. 2. SVS has previously acted for the Company as broker, market maker or placing agent within the last 12 months. 3. SVS holds 0.5% or more of the Company s total issued share capital. 4. SVS holds 5% or more of the Company s total issued share capital. 5. SVS and or its affiliates, holds options or warrants in the Company which on conversion would represent 0.5% or more of the Company s total issued share capital. 6. The authoring analyst or any associate of the authoring analyst has a long or short position in the Company s securities held directly, or through derivatives. 7. A director, officer, employee or agent of SVS Securities Plc is an officer, director, partner, employee or agent of the Company. Recommendation Definitions: Buy - stocks are recommended with this rating where we have a reasonable basis to expect significantly positive share price performance. Speculative buy - stocks are recommended with this rating where we have a reasonable basis to expect significantly positive share price performance with a significantly higher level of downside risk than a buy recommendation. Such stocks may not be generating profits or revenues at the present time. Hold - stocks are recommended with this rating where we have a reasonable basis to expect neither significantly positive or negative share price performance. Sell - stocks are recommended with this rating where we have a reasonable basis to expect significantly negative share price performance. Recommendation history for this recommendation for previous 12 months: Previous Recommendation: None. Recommendation history for previous 12 months: During the 12 months ended 20 July 2016, 0 of SVS Securities principal recommendations have been on a hold basis and 27 of SVS Securities principal recommendations has been on a speculative buy basis. Recommendation update frequency: Our research is primarily event driven and as a result, there is no planned frequency for updates and rather updates will be published as and when the analyst believes there is a reason to publish. 4

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