BCX GOLD INVESTMENT HOLDINGS LIMITED Independent Expert s Report. 28 November 2013

Transcription

1 BCX GOLD INVESTMENT HOLDINGS LIMITED Independent Expert s Report 28 November 2013

2 Financial Services Guide 28 November 2013 BDO Corporate Finance (WA) Pty Ltd ABN ( we or us or ours as appropriate) has been engaged by BCX Gold Investment Holdings Limited ( BCX Gold ) to provide an independent expert s report on the proposed compulsory acquisition of the remaining Gold One International Limited ( Gold One ) shares. You will be provided with a copy of our report as a retail client because you are a shareholder of Gold One. Financial Services Guide In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide ( FSG ). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees. This FSG includes information about: Who we are and how we can be contacted; The services we are authorised to provide under our Australian Financial Services Licence, Licence No ; Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice; Any relevant associations or relationships we have; and Our internal and external complaints handling procedures and how you may access them. Information about us BDO Corporate Finance (WA) Pty Ltd is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN to represent it in BDO International). The financial product advice in our report is provided by BDO Corporate Finance (WA) Pty Ltd and not by BDO or its related entities. BDO and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services. We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business. Financial services we are licensed to provide We hold an Australian Financial Services Licence that authorises us to provide general financial product advice for securities to retail and wholesale clients. When we provide the authorised financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you. General Financial Product Advice We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. BDO CORPORATE FINANCE (WA) PTY LTD

3 Financial Services Guide Page 2 Fees, commissions and other benefits that we may receive We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee payable to BDO Corporate Finance (WA) Pty Ltd for this engagement is approximately $160,000. Except for the fees referred to above, neither BDO, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report. Remuneration or other benefits received by our employees All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report. We have received a fee from BCX Gold for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report. Referrals We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide. Complaints resolution Internal complaints resolution process As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Corporate Finance (WA) Pty Ltd, PO Box 700 West Perth WA When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination. Referral to External Dispute Resolution Scheme A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service ( FOS ). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FOS will be able to advise you as to whether or not they can be of assistance in this matter. Our FOS Membership Number is Further details about FOS are available at the FOS website or by contacting them directly via the details set out below. Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll free: Facsimile: (03) info@fos.org.au Contact details You may contact us using the details set out on page 1 of the accompanying report.

4 TABLE OF CONTENTS 1. Introduction 1 2. Summary and Opinion 1 3. Scope of the Report 3 4. Terms of the Compulsory Acquisition 4 5. Profile of Gold One International Limited 5 6. Profile of BCX Gold Investment Holdings Limited Economic Analysis Industry analysis Valuation Approach Adopted Valuation of Gold One Valuation of the Consideration Do the Compulsory Acquisition Terms Offer a Fair Value? Conclusion Sources of Information Independence Qualifications Disclaimers and Consents 61 Appendix 1 Glossary Appendix 2 Valuation Methodologies Appendix 3 Discount Rate Assessment Appendix 4 - Technical Assessment and Valuation Report prepared by SRK

5 28 November 2013 The Directors BCX Gold Investment Holdings Limited P.O. Box 957 Offshore Incorporations Centre Road Town, Tortola British Virgin Islands Dear Directors INDEPENDENT EXPERT S REPORT 1. Introduction On 22 July 2013, Gold One International Limited ( Gold One or the Company ) announced that BCX Gold Investment Holdings Limited ( BCX Gold ) had increased its holding in Gold One s issued share capital from 88.77% to 90.03%. By exceeding the 90% threshold, BCX Gold has the right, but not the obligation, under Chapter 6A of the Corporations Act 2001 Cth ( Corporations Act ) to compulsorily acquire any remaining Gold One shares ( Compulsory Acquisition ). BCX Gold has advised that it intends to proceed with the Compulsory Acquisition. BCX Gold is offering $0.30 for each Gold One share ( Consideration ). The notice of compulsory acquisition to minority shareholders of Gold One is to be accompanied by this independent expert s report. 2. Summary and Opinion 2.1 Purpose of the report The directors of BCX Gold have requested that BDO Corporate Finance (WA) Pty Ltd ( BDO ) prepare an independent expert s report ( our Report ) to provide an opinion as to whether or not the terms of the Compulsory Acquisition notice ( Notice of Compulsory Acquisition ) give a fair value for the securities, to the minority shareholders of Gold One ( Shareholders ). Our Report is prepared pursuant to Chapter 6A of the Corporations Act and is to be included in the Notice of Compulsory Acquisition for Gold One in order to assist the Shareholders in their assessment of the terms of the Compulsory Acquisition. BDO Corporate Finance (WA) Pty Ltd ABN AFS Licence No is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN , an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

6 2.2 Approach Our Report has been prepared having regard to Australian Securities and Investments Commission ( ASIC ) Regulatory Guide 10 Compulsory acquisitions and buyouts ( RG 10 ), Regulatory Guide 111 Content of Expert s Reports ( RG 111 ) and Regulatory Guide 112 Independence of Experts ( RG 112 ). In arriving at our opinion, we have assessed the terms of the Compulsory Acquisition as outlined in the body of this report. To determine if the terms of the Compulsory Acquisition offers a fair value for the securities, we have: compared the value of a Gold One share (including a premium for control) with the Consideration; and set out the reasons for our opinion. 2.3 Opinion We have considered the terms of the Compulsory Acquisition as outlined in the body of this report. We have concluded that the terms of the Compulsory Acquisition give a fair value to Shareholders as the Consideration per share is greater than our assessed preferred value per Gold One share. 2.4 Fair value In section 12.1, we determined that the Consideration compares to the value of Gold One share, as detailed below. Ref Low $ Preferred $ High $ Value of a Gold One share on a control basis (per share) Consideration (per share) Source: BDO analysis The above valuation ranges are graphically presented below: Value of a Gold One share on a control basis (per share) Consideration (per share) $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 The above pricing indicates that the terms of the Compulsory Acquisition give a fair value to Shareholders. 2

7 3. Scope of the Report 3.1 Purpose of the Report Chapter 6A of the Corporations Act gives a person a right to compulsorily acquire securities under certain circumstances, depending on the level of a person s interest in the relevant class of securities or the relevant entity overall. There are two types of compulsory acquisition under Chapter 6A of the Corporations Act: a) compulsory acquisition following a takeover bid under Part 6A.1 (post-bid compulsory acquisition); and b) general compulsory acquisition under Part 6A.2. The Compulsory Acquisition will be undertaken as a general compulsory acquisition under Part 6A.2 of the Corporations Act. Part 6A.2 Division 1 of the Corporations Act concerns compulsory acquisition of securities by a 90% holder. Section 664A(3) provides that a 90% holder in relation to a class of securities of a company may compulsorily acquire all the securities in that class in which neither the person nor any related bodies corporate has full beneficial interests. To compulsorily acquire securities under section 664A, sections 664C(1) and 664C(2) provide that a 90% holder must give a compulsory acquisition notice to each other person who is a holder of securities in the class together with a copy of an expert s report under section 667A and an objection form. Accordingly, our Report is prepared to accompany the Notice of Compulsory Acquisition to be sent to Gold One s shareholders. 3.2 Regulatory guidance Chapter 6A of the Corporations Act prescribes the steps an expert must take in reaching an opinion for compulsory acquisitions and buy-outs. Section 667A(1) requires an expert to: a) provide an opinion on whether the proposed terms in the buy-out or acquisition notice give a fair value for the securities; and b) set out the reasons for its opinion. RG states that to determine what fair value is, s667c requires that an expert: c) first assess the value of the entity as a whole; d) then allocate that value among the classes of issued securities in the company (taking into account the relative financial risk and the voting and distribution rights of the classes); and e) then allocate the value of each class pro rata among the securities in that class (without allowing any premium or applying a discount for particular securities or interest in that class). RG states that in determining the fair value for securities, an expert must also take into account the prices paid for securities in that class in the previous six months (s667c(2)). RG 111 suggests that where the transaction is a control transaction, the expert should focus on the substance of the control transaction rather than the legal mechanism to effect it. RG 111 suggests that 3

8 where a transaction is a control transaction, it should be analysed on a basis consistent with a takeover bid. In our opinion, the Compulsory Acquisition is a control transaction as defined by RG 111 and we have therefore assessed the Compulsory Acquisition as a control transaction to consider whether, in our opinion, it offers a fair value to Shareholders. 3.3 Adopted basis of evaluation RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the value of the securities subject of the offer. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm s length. When considering the value of the securities subject of the offer in a control transaction the expert should consider this value inclusive of a control premium. Having regard to the above, BDO has completed this comparison in two parts: A comparison between the value of a Gold One share on a control basis prior to the Compulsory Acquisition and the value of the consideration being offered per share by BCX Gold (fair value see Section 12 Do the terms of the Compulsory Acquisition offer a fair value? ); and The reasons for our fair value opinion (reasons see Section 12 Do the terms of the Compulsory Acquisition offer a fair value? ) This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards Board professional standard APES 225 Valuation Services ( APES 225 ). A Valuation Engagement is defined by APES 225 as follows: an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time. This Valuation Engagement has been undertaken in accordance with the requirements set out in APES Terms of the Compulsory Acquisition BCX Gold has full beneficial interests in approximately 90.03% of Gold One shares. Pursuant to section 664A of the Act, BCX Gold is entitled to compulsorily acquire the remaining Gold One shares in which it does not already have full beneficial interests. BCX Gold has decided to exercise its rights pursuant to the compulsory acquisition provisions of the Act to acquire all the remaining Gold One shares that it does not already own for $0.30 per share. Option holders can participate in the Compulsory Acquisition if they choose to exercise their options before the date of the Notice of Acquisition ( Date of Notice ). It is intended that any options that are unexercised at the Date of Notice will be cancelled by Gold One with the agreement of the option holders. Please see the Notice of Compulsory Acquisition for the full terms and conditions of the Compulsory Acquisition. 4

9 5. Profile of Gold One International Limited 5.1 History Gold One is a mining company primarily focused on the exploration and production of gold and uranium assets across Southern Africa. Gold One was previously known as BMA Gold Limited, but changed its name to Gold One International Limited on 24 March 2009 following the acquisition of Aflease Gold Limited. Gold One is dual listed on the Australian Securities Exchange ( ASX ) and the Johannesburg Stock Exchange ( JSE ). On 30 December 2011, Gold One issued 375,000,000 ordinary shares to BCX Gold in accordance with the terms of the transaction announced on 16 May BCX Gold paid A$150 million for the shares and following the share issue, BCX Gold s interest in the shares of Gold One increased to 89.17%. Gold One has entered into a number of Black Economic Empowerment ( BEE ) arrangements in order to meet the South African Mining charter requirements of 26% black ownership by These arrangements effectively give Gold One s BEE partners a 26% interest in Gold One s mining assets. Highlights of the Company s history are detailed in the following table. Year Events 2008 On 20 November 2008, BMA announced that it had entered into an agreement (via a scheme of arrangement) with Aflease Gold Limited which provided for the dual primary inward listing of BMA on the JSE and the subsequent acquisition by BMA of all the issued ordinary shares of Aflease. The combined entity that arose as a result of the transaction was known as Gold One International Limited On 24 March 2009, BMA changed its name to Gold One. On 17 April 2009, Gold One announced that it had completed the 20:1 consolidation of its share capital. Following the consolidation, Gold One had 24,151,232 ordinary shares and 6,562,558 listed options on issue. On 8 May 2009, Gold One announced that all conditions precedent to the transaction to combine BMA and Aflease had been satisfied. On 18 May 2009, Gold One commenced trading on the ASX and JSE. On 24 June 2009, Gold One announced its intention to raise up to A$37.5 million through the issue of 120 million ordinary shares at $ per share. The shares would primarily be issued to Australian and International institutional investors of Hartleys. On 24 June 2009, Gold One announced that the first gold had been poured at its Modder East gold processing plant after commissioning of the plant commenced in April On 1 July 2009, Gold One announced that it had sold its Twin Hills project, located in North Queensland to ASX-listed North Queensland Metals Limited and Heemskirk Consolidated Limited in 60%:40% proportions, respectively, for cash consideration of A$1.75 million. On 21 July 2009, Gold One announced that it had poured its first 240 ounces of gold from the Modder East underground mine. On 1 September 2009, Gold One closed the transaction related to the issue of shares. In total, Gold One raised approximately A$35.43 million from the issue of 114,289,990 shares. 5

10 Year Events 2010 On 8 March 2010, Gold One announced that it would be included in the ASX All Ordinaries index (top 500 ASX-listed companies in terms of market capitalisation) as of the close of trading on 19 March On 13 April 2010, Gold One announced the results of an independent scoping study that was completed by Turgis Consulting Pty Limited on Gold One s Ventersburg Project. The study confirmed: i) an 11 year lifeof-mine from a 465m underground mine; ii) steady state production of eight years peaking at 157,000 ounces per annum; iii) cash costs of approximately US$379 per ounce; and iv) capital cost of approximately A$285 million. On 23 June 2010, Gold One announced that it had executed a mandate and term sheet for a $US65 million debt facility. The facility was provided by Absa Capital and BNP Paribas and is for a maximum term of four and a half years. The facility is secured by the Modder East gold mine. On 13 October 2010, Gold One announced a proposed transaction that would see the creation of Goliath Gold Mining Limited, a JSE listed gold company. Goliath Gold would be formed via the reverse acquisition of White Water Resources by Gold One Africa Limited, a wholly owned subsidiary of Gold One. Following the transaction, White Water Resources would be renamed Goliath Gold and would house Gold One s deeper level assets which comprise a resource of million ounces. White Water Resources issued 1,048,919,472 shares at ZAR0.25 each to Gold One for total consideration of ZAR262,229,868. This share issue gives Gold One 72% ownership of Goliath Gold. On 7 December 2010, Gold One announced a 70% increase in indicated resources at the Ventersburg project from 1.44 million ounces of gold to 2.45 million ounces of gold and a 22% decrease in inferred resources from 1.84 million ounces to 1.44 million ounces On 22 March 2011, Gold One announced that White Water Resources Limited s shareholders have approved the transaction that will result in the formation of Goliath Gold (transaction announced on 13 October 2010). On 28 April 2011, Gold One announced that it had made a binding offer to acquire 100% of Rand Uranium (Pty) Limited for US$250 million from Pamodzi Uranium (Pty) Limited, Pamodzi Cooke (Pty) Limited and Armgold/Harmony Joint Investment Company (Pty) Limited, being the shareholders of Rand Uranium. Rand Uranium has a net asset value in excess of US$500 million and its assets and operations, which comprised the Cooke 1, 2 and 3 deposits are situated 30 kilometres west of Johannesburg. At the time of the announcement, Rand Uranium had total gold resources of million tonnes at an average grade of 1.00g/t for million ounces of gold and reserves of million tonnes at an average grade of 0.82g/t for 2.95 million ounces of gold. Rand Uranium s uranium resources totalled 206 million tonnes at an average grade of 0.20kg/t for million pounds of uranium and its reserves amounted to million tonnes at 0.20kg/t for million pounds of uranium. 6

11 Year Events On 16 May 2011, Gold One announced that it had entered into a Transaction Implementation Agreement with a consortium of Chinese investors. The terms of the transaction specify that the Consortium, through BCX Gold Investment Holdings Limited, would: i) make an off-market offer for all the outstanding shares in Gold One at A$0.55 per share; ii) subscribe for 375 million Gold One shares at $0.40; and iii) In the event that the above steps and the Consortium s acquisition of 17.7% of Gold One s shares through the acquisition of Baiyin leave the Consortium with less than a 60% shareholding in Gold One, the Consortium will subscribe for up to a maximum of 188,679,245 additional Gold One shares to achieve a minimum holding of 60%, or a lower percentage that is deemed acceptable by the Consortium. On 1 July 2011, Gold One announced that Baiyin Non-Ferrous Group Co Limited have agreed to acquire the 17.64% shareholding in Gold One that is held by Navada Trading (Pty) Limited, a subsidiary of African Global Capital (SA) (Pty) Limited, for cash consideration of A$75,625,355 (A$0.53 per share). On 29 August 2011, Gold One announced that it had secured a financing facility with Investec Bank for up to ZAR1.47 billion to be used in the acquisition of Rand Uranium. The facility is split between a five year senior secured amortising term loan facility of up to ZAR945 million and a two year senior secured amortising loan facility of up to ZAR 525 million that may be settled in cash or shares at Gold One s election. On 30 December 2011, Gold One announced that it has issued 375,000,000 ordinary shares to BCX Gold in accordance with the terms of the transaction announced on 16 May BCX Gold paid A$150 million for these shares and following the share issue, BCX Gold s interest in the shares of Gold One increased to 89.17% On 9 January 2012, Gold One announced that it had completed the transaction to acquire 100% of Rand Uranium (Proprietary) Limited for US$250 million. Gold One paid US$137.7 million in cash on the completion date (6 January 2012) and must pay the remaining US$112.3 million in either cash, shares or a combination thereof, within 90 days of the completion date. On 24 January 2012, Gold One announced that it had entered into a Memorandum of Understanding ( MOU ) with Gold Fields Limited (listed on JSE, NYSE, NASDAW and GFI) to investigate the viability of concurrently reprocessing their combined surface tailings deposits. The assets that Gold One and Gold Fields will contribute will comprise approximately 700 million tonnes and make up over 60% of the total tailings material in the region. The retreatment and reclamation work intended to be completed is aimed at recovering residual gold, uranium and sulphur. On 5 March 2012, Gold One announced that it had entered into a binding agreement with First Uranium Corporation to Acquire 100% of Ezulwini Mining Company (Pty) Limited for US$70 million. The Ezulwini mine is located 40km from Johannesburg next to Gold One s existing Cooke Operations. On 3 April 2012, Gold One announced that it had secured the financing facility with Investec Bank (initially announced on 29 August 2011) as well as an additional US$75 million unsecured shareholder loan granted by Baiyin Precious Metals Limited. The funds from these two facilities will be used to settle to remaining $US112.3 million owed by Gold One in relation to its acquisition of Rand Uranium and for the US$70 million purchase of Ezulwini Mining Company (Pty) Limited. 7

12 Year Events On 17 April 2012, Gold One announced that New Kleinfontein Goldmine Proprietary Limited (a wholly owned subsidiary of Gold One), and Goliath Gold, had entered into an agreement with the Joint Provisional Liquidators representing Pamodzi Gold East Rand Proprietary Limited to acquire the Pamodzi East Rand underground deposits and selected assets for ZAR70 million. On 3 August 2012, Gold One announced that it had completed the acquisition of Ezulwini Mining Company for US$70 million. Gold One also announced its intention to integrate the Ezulwini mine into the Cooke underground operations so as to realise the synergies which drove the acquisition. Part of this integration involves restoring the Ezulwini uranium plant for a total estimated cost of US$4.95 million. On 29 November 2012, Gold One announced that Neal Froneman would be resigning from his position as CEO and Executive Director effective from 31 December Chris Chadwick who was the CFO at the time was appointed as the acting CEO On 22 July 2013, Gold One announced that BCX Gold had increased its holding in Gold One s shares to 90.03% and has therefore acquired the right to compulsorily acquire any remaining Gold One shares within a six month period commencing 19 July On 7 August 2013, Gold One and Goliath Gold announced that they had been granted two of the three prospecting licences applied for in connection with the acquisition of Pamodzi East Rand (Pty) Limited and the acquisition of selected surface assets had been made unconditional. On 20 August 2013, Gold One announced the first gold and uranium resource and reserve estimations for the Cooke 4 deposit which were acquired in August 2012 when Gold One acquired Ezulwini Mining Company (Pty) Limited. See table below for further details regarding the current resource and reserve estimates for Gold One s assets. On 21 August 2013, Gold One announced that it had entered into an agreement with Sibanye Gold Limited ( Sibanye Gold ) to merge its 74% shareholding in Newshelf 1114 Proprietary Limited which owns 100% of Rand Uranium Pty Limited and which will also hold 100% of Ezulwini Mining Company Pty Limited after internal restructuring in exchange for a 17% interest in Sibanye Gold ( Sibanye Transaction ). On 18 September 2013, Gold One and Goliath Gold announced that the final prospecting right applied for in connection with the acquisition of Pamodzi East Rand had been granted. 5.2 Projects - Operations Modder East The Company s flagship project is the Modder East gold project which contains the producing Modder East gold mine and is located 30 kilometres east of Johannesburg, South Africa. The Company commenced development of Modder East in 2006 after successful greenfield exploration activities. One of the key features of the Modder East deposit is the relatively shallow depth at which the gold ore is situated; only 300 meters to 500 meters underground. The shallow nature of the mine has meant the cash costs associated with extracting the ore are low in comparison to other underground gold mines. 8

13 First gold was produced from the mine in July 2009 with the life of mine estimated to be approximately 10 years. In May 2010, 10 months after the mine s commissioning, the first tonne of gold was poured and in ,445 ounces of gold were produced at an average cash cost of US$484 per ounce. Production increased in 2011 to 121,518 ounces at a cash cost of US$491 per ounce before falling in 2012 to 97,958 ounces at a cash cost of US$686 per ounce. The decreased production in 2012 arose partly as a result of strike action by employees at the Modder East mine during the year. The low cash operating costs achieved at Modder East have enabled the Company s operations to remain profitable despite the decline in the gold price in the first half of Total gold production at Modder East to 30 June 2013 was 50,945 ounces at an average cash cost of approximately US$627 per ounce. Cooke The Cooke operations are split between the Cooke Underground Operations and Randfontein Surface Operations. Cooke Underground operations are located approximately 38 kilometres west of Johannesburg near Randfontein and comprise four mines; Cooke 1, 2, 3 and 4. The Cooke 1, 2 and 3 mines were acquired in January 2012 after the Company s acquisition of Rand Uranium (Proprietary) Limited ( Rand Uranium ) for US$250 million. The Cook 4 mine was acquired in August 2012 following Gold One s US$70 million acquisition of Ezulwini Mining Company (Proprietary) Limited ( Ezulwini ). The four operations are primarily focused on gold however uranium resources have been identified at the four operations and the Cooke 3 and 4 deposits contain proved and probable uranium reserves. The Cooke deposits are deeper than Modder East with a maximum depth of approximately 1,000 meters. Since acquiring the Cooke operations, all production has been in the form of gold. During 2012, 98,541 ounces of gold was produced at an average cash cost of US$1,558 per ounce and in the first half of ,544 ounces at an average cash cost of approximately US$1,390. During 2012, Gold One completed a feasibility study on a high uranium yielding area at Cooke 3. Uranium extracted from this area would be extracted through the Cooke 4 uranium plant which is to be upgraded. The Randfontein Surface Operations host gold and uranium surface resources including the Cooke Tailings Dam, Millsite, Dump 20 Slime and the Old 4 Dam which are processed through the Cooke gold plant. In 2012, the Randfontein Surface Operations milled million tonnes or ore and produced 36,853 ounces of gold at an average cash cost of US$1,137 per ounce. 5.3 Projects Exploration Pamodzi East Rand Project (Goliath Gold) The Pamodzi East Rand underground deposits and selected assets were acquired by Gold One in April 2012 from Pamodzi Gold East Rand Proprietary Limited for ZAR70 million. Specifically, Gold One acquired the prospecting rights to the down-dip extensions to the Modder East Mine, the Grootvlei treatment plant, the Number 4 Shaft Infrastructure and the main office complex for ZAR65 million. Goliath obtained the prospecting rights and historical mining and geological data over the remaining Pamodzi Gold East Rand Operations for ZAR5 million. The prospecting rights were subsequently granted and cover an area of approximately 64,481 hectares. 9

14 West Rand Tailings Retreatment Project The West Rand Tailings Retreatment project is a joint venture between Gold One and Sibanye Gold in which both companies contribute surface tailings deposits in the West Rand of Johannesburg for retreatment. In 2013 a pre-feasibility study was completed on the project. The results of the study estimated that approximately 3 million ounces of gold and 50 million pounds of uranium over a 30 year mine life may be able to be produced by retreatment of the current and historic tailings. Following these results, the companies decided to proceed to a definitive feasibility study. Modder North The Modder North project is located approximately six kilometres north of Modder East and is currently the subject of a pre-feasibility study following positive results from initial exploration activities conducted in 2011 and During the September 2013 quarter 3,362 metres of diamond drilling and 360 metres of percussion drilling were completed. Further drilling is planned for the December 2013 quarter with the results of the drilling to be used to update the mineral resource estimates at Modder North. The prefeasibility study is expected to be completed in the June 2014 quarter. Tulo The Tulo project is located in north-west Mozambique approximately 20 kilometres from Tanzania. Work at the Tulo project has consisted of a high resolution helicopter-borne geophysical survey and the excavation of 47 trenches along two kilometres of strike in the magnetic lineament that was identified during the airborne geophysical survey. In the September 2013 quarter, the Company commissioned APT laboratories to complete metallurgical test work on samples from Tulo in order to determine the economic viability of recovering gold via gravity concentration after impact crushing and milling. The results of the testing indicated that this method of extraction would be possible. Ventersburg The Ventersburg project is located 25 kilometres south east of Welkom in South Africa s Free State province and covers approximately 11,000 hectares of land. The Ventersburg project comprises five properties; Ventersburg 1, 2, 3, 4 and 6. Currently Gold One holds prospecting rights for Ventersburg 3, 4 and 6 with renewals pending on prospecting rights for Ventersburg 1 and 2. Gold One has to undertake all prospecting and pay for the exploration expenditure up to and including the bankable feasibility study. If the Gold One board decides to commence with the construction of a new mine, at that point in time, Gold Fields will have an option to acquire a 51% interest in the project for a consideration payment of 75% of all of the exploration and feasibility costs incurred up until that date. 10

15 5.4 Reserves and Resources The table below show the resource profile of Gold One s mineral assets: Gold Uranium Resources Gold Uranium Tonnes Grade Tonnes Grade Content Content (Mt) (g/t) (Mt) (kg/t) (Moz) (Mlbs) Measured Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Measured Indicated Modder East Cooke 1-3 Underground Cooke Randfontein Surface Ventersburg Turnbridge Modder North Goliath Gold Total Indicated Total Measured and Indicated Inferred Modder East Cooke 1-3 Underground Cooke Randfontein Surface Ventersburg Turnbridge New Kleinfontein Modder North Goliath Gold Total Inferred Total Measured, Indicated and Inferred Source: SRK Technical Assessment and Valuation Report (see Appendix 4 for details) 1 Mineral resource estimates as at 31 December Mineral resource estimates as at 28 February Mineral resource estimates as at 31 July Mineral resource estimates as at 20 February Mineral resource estimates as at 31 December 2011 We note that the Goliath resources included in the table reflect a 100% interest. Only 72% of the resources are attributable to Gold One based on the Company s 72% shareholding in Goliath. 11

16 The table below shows the reserve profile of Gold One s mineral assets. Gold Uranium Reserves Gold Uranium Tonnes Grade Tonnes Grade Content Content (Mt) (g/t) (Mt) (kg/t) (Moz) (Mlbs) Proved Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Proved Probable Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Probable Proved and Probable Reserves Source: SRK Technical Assessment and Valuation Report (see Appendix 4 for details) 1 Mineral reserve estimates as at 31 December Mineral reserve estimates as at 28 February

17 5.5 Historical Balance Sheet Reviewed as at Audited as at Audited as at Statement of Financial Position 30-Jun Dec Dec-11 A$'000 A$'000 A$'000 CURRENT ASSETS Cash and cash equivalents 7,729 37, ,492 Trade and other receivables 20,136 14,678 8,997 Inventories 20,397 15,805 7,109 Gold derivative asset 2, Taxation receivable TOTAL CURRENT ASSETS 50,952 67, ,833 NON-CURRENT ASSETS Held-to-maturity investment 2,414 2,127 1,408 Restricted cash 21,306 13,402 13,124 Available-for-sale investments 25,611 30,266 - Property, plant & equipment 572, , ,931 Investment property Investment assets 8,939 9,305 7 Deferred tax assets - - 3,931 TOTAL NON-CURRENT ASSETS 631, , ,401 TOTAL ASSETS 682, , ,234 CURRENT LIABILITIES Trade and other payables 48,815 33,403 22,897 Taxation payable 734 1,489 - Gold derivative liabilities 6,714 30,399 - Accruals 14,123 13,518 11,406 Bank overdraft 4, Borrowings 69,908 60,195 - TOTAL CURRENT LIABILITIES 145, ,004 34,303 NON-CURRENT LIABILITIES Deferred tax liabilities 41,362 52,670 24,591 Gold derivative liabilities 9,387 46,435 - Borrowings 157, ,017 - Provisions 41,727 37,616 2,835 TOTAL NON-CURRENT LIABILITIES 249, ,738 27,426 TOTAL LIABILITIES 394, ,742 61,729 NET ASSETS 287, , ,505 EQUITY Contributed equity 348, , ,826 Reserves (79,515) (44,017) (32,188) Retained earnings 13,434 42,502 10,867 CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF GOLD ONE 282, , ,505 Non-controlling interest 4,597 5,162 - TOTAL EQUITY 287, , ,505 Source: Gold One s audited annual reports for the years ended 31 December 2011 and 31 December 2012 and reviewed financial statements for the six months ended 30 June

18 We have not undertaken a review of Gold One s reviewed half-year financial statements in accordance with Australian Auditing and Assurance Standard 2405 Review of Historical Financial Information and do not express an opinion on this financial information. However nothing has come to our attention as a result of our procedures that would suggest the financial information within the financial statements has not been prepared on a reasonable basis. Balance sheet commentary Cash and cash equivalents has decreased by $29.28 million from 31 December 2012 to 30 June Inventories comprise gold bullion stock and spares and consumables. On acquisition of Ezulwini in August 2012, Gold One inherited a contract between Franco-Nevada (Barbados) Corporation ( Franco-Nevada ) and Ezulwini whereby Franco-Nevada acquired the right to receive seven percent of the life of mine gold production from Ezulwini ( the Ezulwini Gold Stream Transaction ). Under the terms of the Ezulwini Gold Stream Transaction, Franco- Nevada paid Ezulwini US$50 million upfront. Franco-Nevada will make an ongoing payment equal to the lesser of US$400/oz (the Fixed Price, subject to an annual inflation adjustment of 1%, non-compounding, starting in the fourth year following receipt of the first payment) and the prevailing spot price at the time of such payment for each ounce of gold delivered. The total gold ounces delivery obligation by Ezulwini under the current Ezulwini life of mine plan to Franco-Nevada has been accounted for as a financial liability, which is measured at fair value using the Garman Kohlhagen, extension of the Black Scholes pricing model. Held to maturity investments of $2.41 million at 30 June 2013 relate to premiums paid on a Guardrisk policy to enable the Company to furnish a guarantee to the Department of Minerals Resources for future rehabilitation expenditure at Modder East. Any claim for rehabilitation will be paid by Guardrisk. The policy expired in September 2013 but has been extended until 19 May 2016 to cover all Gold One operations. Restricted cash relates to short-term investments and guarantees for rehabilitation. Available for sale investments relate to funds held in the Cook Rehabilitation Trust in order to meet the closure liability at the end of the life of mine. The reduction in property, plant and equipment from 31 December 2012 to 30 June 2013 of approximately $89 million includes an impairment charge of $76 million. The impairment resulted from a lower than expected life of mine profit due predominantly to the reduction in the gold and uranium price assumptions. The investment property relates to various properties in Johannesburg and Westonaria held for capital appreciation. One residential property is leased out to generate rental income. The properties are valued by a property valuer. The latest valuation was 31 December Investment assets are goodwill and IT development and software. The goodwill was recognised when Goliath Gold Mining Limited acquired all of the Megamine Pty Ltd assets of Gold One Africa, a 100% subsidiary of Gold One. Accruals relate to employee related payables and employee PAYE payables. Gold One has a loan facility with Investec Bank Limited totalling A$169 million and is secured by the assets in Rand Uranium and over all non-rehabilitation related cash balances in the group amounting to A$432 million. At 30 June 2013, A$70 million remains unpaid on this facility. As a 14

19 result of the Company being in breach of the contract on Investec s facilities, the Investec debt has been classified as current liabilities as at 30 June Deferred tax liabilities increased approximately $28 million in the financial year ended 31 December 2012 to $52.67 million. The majority of the deferred tax liability is due to temporary differences attributable to property, plant and equipment. Baiyin Nonferrous Metal Group Co. Limited advanced two unsecured shareholder loans totalling US$145 million (A$141 million) to Gold One to facilitate the acquisition of Rand Uranium and Ezulwini. These loans accrue interest at 10% and 8.5% per annum respectively for which the interest is repayable semi annually. The principal repayment is due on 28 September In July 2013, Gold One received a further advance of US$20 million pursuant to this facility. The provision of $41.73 million as at 30 June 2013 is a rehabilitation provision for all of the Company s operational projects. Gold One also obtained debt facilities of US$75 million from Bank of China on 1 November 2013 for a 12-month term at an interest rate of 0.9% above the London Interbank Offer Rate (LIBOR). The full amount of the loan was drawn down on 18 November

20 5.6 Historical Statement of Comprehensive Income Reviewed for the Audited for the Audited for the Statement of Comprehensive Income half-year ended year ended year ended 30-Jun Dec Dec-11 A$'000 A$'000 A$'000 Revenue Revenue 185, , ,260 Cost of sales (174,970) (335,435) (82,413) Gross Profit 10,799 46, ,847 Other income 1, ,392 General and administrative expenses (10,465) (28,946) (34,751) Fair value adjustments 47,063 (21,545) 7,049 Other expenses - (5,638) (45) Exploration and pre-feasibility expenditure (3,519) (11,002) (8,805) Gain on bargain purchase - 107,206 - Black Economic Empowerment transactions - (28,685) - Impairment of assets (75,898) - - Operating Profit (30,664) 57,932 70,687 Finance income 887 2,669 1,645 Finance costs (11,041) (14,318) (3,632) Profit before taxation (40,818) 46,283 68,700 Income tax benefit / (expense) 3,164 (16,131) (18,807) Profit after income tax for the year (37,654) 30,152 49,893 Other Comprehensive Income/(Loss), net of tax Items that may subsequently be reclassified to profit & loss Currency translation differences on foreign operations (29,504) (44,604) (34,266) Fair value adjustments of investments held in trust 843 2,589 - Total comprehensive income for the periods (66,315) (11,863) 15,627 Total comprehensive income/(loss) attributable to: Owners of the parent (65,750) (9,321) 15,627 Non-controlling interest (565) (2,542) - Total Comprehensive Income for the Period (66,315) (11,863) 15,627 Source: Gold One s audited annual reports for the years ended 31 December 2011 and 31 December 2012 and reviewed financial statements for the six months ended 30 June 2013 We have not undertaken a review of Gold One s reviewed half-year financial statements in accordance with Australian Auditing and Assurance Standard 2405 Review of Historical Financial Information and do not express an opinion on this financial information. However nothing has come to our attention as a result of our procedures that would suggest the financial information within the financial statements has not been prepared on a reasonable basis. Profit and loss statement commentary The financial year of Gold One is for the 12-month period from 1 January to 31 December ( FY ). For the six months to 30 June 2013, the Company s gross profit was $10.8 million, down from $38.5 million for the six months to 30 June

21 The fair value adjustment of approximately $21 million in FY12 related to the Franco-Nevada gold derivative liability. The gain on bargain purchase of $107.2 million in FY12 resulted from the acquisition of Rand Uranium and Ezulwini. The Black Economic Empowerment expense relates to share based payments made during FY12. An impairment expense of A$76 million was recorded for the six month period ended 30 June 2013 relating to the Rand Uranium underground assets. The impairment resulted from a lower than expected life of mine profit due predominantly to the reduction in the gold and uranium price assumptions. 5.7 Capital Structure The share structure of Gold One as at 16 October 2013 is outlined below: Number Total ordinary shares on issue 1,421,538,989 Top 20 shareholders 1,396,718,212 Top 20 shareholders - % of shares on issue 98.25% Source: Computershare report The range of shares held in Gold One as at 16 October 2013 is as follows: Range of Shares Held Number of Ordinary Shareholders Number of Ordinary Shares Percentage of Issued Shares (%) 1-1, , % 1,001-5, ,965, % 5,001-10, ,730, % 10, , ,356, % 100,001 - and over 37 1,411,014, % TOTAL 1,686 1,421,538, % Source: Computershare report The ordinary shares held by the most significant shareholders as at 16 October 2013 are detailed below: Name Number of Ordinary Shares Held Percentage of Issued Shares (%) BCX Gold Investment Holdings Limited 1,279,861, % National Nominees Limited 42,397, % HSBC Custody Nominees 16,980, % JP Morgan Nominees Australia 5,811, % Subtotal 1,345,051, % Others 76,487, % Total ordinary shares on issue 1,421,538, % Source: Computershare report 17

22 As at the date of our Report, the following unlisted Gold One options were on issue: Strike Price Number of Grant date Expiry Date Currency Strike Price (AUD) options 21/01/ /01/2014 AUD ,000 Restricted executive options 24/06/ /06/2014 ZAR ,592,274 2,592,274 12/06/ /06/2014 ZAR , ,322 6/10/2009 6/10/2014 ZAR , ,500 11/12/ /06/2014 ZAR , ,989 6/10/2009 6/10/2014 ZAR , ,000 21/12/ /12/2014 ZAR , ,866 5/03/2010 5/03/2015 ZAR , ,246 21/12/ /12/2014 ZAR ,675 24/02/ /02/2014 ZAR ,000 11/01/ /01/2015 ZAR ,000 20/05/ /05/2015 ZAR ,484,881 1,484,881 20/05/ /05/2015 AUD ,800,000 1,800,000 3/09/2010 3/09/2015 ZAR ,500 25/11/ /11/2015 ZAR ,000,000 2,000,000 22/02/ /02/2017 ZAR ,502,922 22/02/ /02/2017 AUD ,853 22/02/ /02/2017 ZAR ,400,000 29/05/ /05/2017 ZAR ,965,605 6/09/2012 6/09/2017 ZAR ,300,000 Total 33,851,633 10,470,078 Exchange rate based on 1 AUD : 9.5 ZAR on 15 November 2013 ( Source: Gold One management and Notice of General Meeting for Gold One s shareholders meeting on 23 May 2013 We note the following in relation to the options: The restricted executive options are subject to the transaction implementation agreement ( TIA ) between Gold One and BCX Gold dated 16 May The intention is that the relevant executives will put their options back to Gold One and the Company will simultaneously cancel the options. We have been advised this is likely to occur in early The executives will receive the difference between the exercise price and the offer price under the TIA of $0.55 per share. Of the remaining options on issue (excluding executive options), 782,175 are considered to be inthe-money based on the value of a Gold One share of $0.24 per share as set out in section 12 of our Report. The value of the existing in-the-money options where the restricted options have not been cancelled is $274,910. In the event that the restricted options are cancelled as intended, the value of the options is $23,284: 18

23 Grant date Ordinary options Expiry Date Number of options Currency Strike Price Strike Price (AUD) Gold One's share price (per section 12) (AUD) Intrinsic value per option (AUD) Value of the options (AUD) 21/01/ /01/ ,000 AUD ,600 21/12/ /12/ ,675 ZAR ,774 24/02/ /02/ ,000 ZAR ,800 11/01/ /01/ ,000 ZAR /09/2010 3/09/ ,500 ZAR ,810 Total ordinary options 782,175 23,284 Restricted executive options 24/06/ /06/2014 2,592,274 ZAR ,768 12/06/ /06/ ,322 ZAR ,110 6/10/2009 6/10/ ,500 ZAR ,340 11/12/ /06/ ,989 ZAR ,199 6/10/2009 6/10/ ,000 ZAR ,120 21/12/ /12/ ,866 ZAR ,457 5/03/2010 5/03/ ,246 ZAR ,387 20/05/ /05/2015 1,484,881 ZAR ,244 Total restricted executive options 6,670, ,626 Total 7,452, ,910 Exchange rate based on 1 AUD : 9.5 ZAR on 15 November 2013 ( Source: BDO analysis Note that we have only valued the options that are in-the-money. Options are in-the-money if the exercise price is less than our assessed preferred value of a Gold One share, being $ BCX Gold s beneficial ownership RG requires that in addition to the opinion on fair value, an expert report accompanying a general compulsory acquisition notice that is given in reliance on s664a(2) of the Corporations Act must include an opinion on whether the acquirer and related bodies corporate have full beneficial ownership in at least 90% (by value) of all securities in the entity that are shares or convertible into shares: s667a(2). In order to qualify for the Compulsory Acquisition, the shares issued upon the exercise of the options have to be issued prior to the Date of Notice. It is intended that options that are not exercised prior to the Date of Notice will be cancelled by Gold One with an agreement with option holders. Accordingly, the value of an option is its intrinsic value, being the difference between the exercise price and the value of a Gold One share of $0.24 per share as set out in section 12 of our Report. Based on our analysis in section 5.7 of our Report, the value of the in-the-money options, prior to the cancellation of the restricted options, is $274,910 and after the cancellation is $23,

24 The table below shows that, BCX Gold does not have full beneficial ownership in at least 90% (by value) of all the securities in Gold One that are shares or convertible into shares. This means that BCX Gold is not entitled to give compulsory acquisition notices in relation to any class of option. Percentage Name Number of Ordinary Shares Held Value of securities of total value of Gold One (%) BCX Gold Investment Holdings Limited 1,279,861, ,166, % Other shareholders 141,677,754 34,002, % Options (including restricted options) - 274, % Total ordinary shares on issue (if restricted options are exercised) 1,421,538, ,444, % In the event the restricted options are cancelled BCX Gold Investment Holdings Limited 1,279,861, ,166, % Other shareholders 141,677,754 34,002, % Options (excluding restricted options) - 23, % Total ordinary shares on issue (if restricted options are cancelled) 1,421,538, ,192, % Source: BDO analysis 6. Profile of BCX Gold Investment Holdings Limited BCX Gold is a limited company incorporated under the laws of the British Virgin Islands and held by a consortium of investors established and based in the People s Republic of China ( PRC ). BCX Gold was incorporated solely as a special purpose investment vehicle. The consortium consists of: Baiyin Nonferrous Metal Group Co. Limited ( Baiyin ); China-Africa Development Fund ( CADF ); and Long March Capital Group ( Long March ). Baiyin Non-Ferrous Group Co. Limited Baiyin was founded in 1954 and is a resources extraction and processing enterprise of substantial scale based in the Gansu Province, West China. Baiyin has developed its own smelting technologies, and operates facilities involved in the processing of copper, lead, zinc, nickel, silver, platinum and gold. Baiyin also operates numerous underground and open pit mines extracting copper, lead, zinc, gold, quartz and fluorspar. China-Africa Development Fund CADF was established in 2007 pursuant to the Beijing Summit for China-Africa Cooperation in 2006, and was the first Chinese equity investment fund to focus specifically on direct investments in Africa. Since its inception, CADF has made investments in a variety of sectors ranging from resources to telecoms in over 20 African countries. 20

25 Long March Capital Group Long March is a privately-held investment manager based in Beijing and focused on the transactional management of resources investments by Chinese capital abroad. Long March co-manages Chinese and offshore capital and co-invests in transactions which it originates and manages, such as the investment in Gold One. 7. Economic Analysis 7.1 Australia Recent information is consistent with global growth running below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined from their peaks, but generally remain at high levels by historical standards. Inflation in most countries is well contained. Overall, global financial conditions remain very accommodative. Volatility in financial markets has abated recently. Long-term interest rates remain very low and there is ample funding available for creditworthy borrowers. In Australia, the economy has been growing below trend over the past year and the unemployment rate has edged higher. This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment. Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook. There has been an improvement in indicators of household and business sentiment recently, but it is still too soon to judge how persistent this will be. Public spending is forecast to be quite weak. Recent data on prices show inflation consistent with the medium-term target. The Reserve Bank's assessment is that this is likely to remain the case over the next one to two years. The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet. The pace of borrowing has remained relatively subdued overall to date, though recently there have been signs of increased demand for finance by households. There is also continuing evidence of a shift in savers' behaviour in response to declining returns on low-risk assets. Housing and equity markets have strengthened further, trends which should in time be supportive of investment. The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy. Source: Statement by Glenn Stevens, Governor: Monetary Policy Decision 5 November South Africa During the second quarter of 2013, global economic growth improved in both advanced and emerging economies with South Africa s real growth increasing to an annualised rate of 3%. The major sectors underlying this increase were the manufacturing, electricity and construction sectors. Growth in the agricultural sector declined as dry weather conditions led to lower field-crop production. Production from the mining sector also declined primarily as a result of escalating cost pressures, safety stoppages and disruptions to the labour force. Diamond production was also affected by flooding which disrupted South 21

26 Africa s largest diamond mine. Expectations from South Africa s Reserve Bank are for growth to be approximately 2.0% in 2013, 3.3% in 2014 and 3.6% in Domestic demand in South Africa increased during the September 2013 quarter as a result of higher real disposable income. The increased levels of disposable income saw a growth in consumption expenditure with spending primarily going towards the purchase of motor vehicles as consumers took advantage of low interest rates. The expectation that prices could rise in the future also led to consumers making preemptive purchases of motor vehicles and other goods including computers and related equipment. Capital spending increased with the mining, manufacturing and agricultural sectors leading the way. Companies in the coal, gold and iron ore subsector were primary contributors to the increased capital spending along with manufacturing companies in the food, paper product, fuel and motor vehicle subsectors. South Africa s terms of trade fell significantly in the September quarter as a result of lower commodity prices, a lack of growth from non-gold exports and the depreciation of the rand following tapering remarks from the US Federal Reserve. The deterioration of the terms of trade saw South Africa s trade deficit increase during the quarter to 6.5% of gross domestic product, approximately ZAR216 billion. Traditionally a large current account deficit has placed pressure on the rand and led to further depreciation of South Africa s currency. While the weak rand has helped to boost exports, the slow recovery of the global economy has dampened the benefits that increased export income has had on reducing the current account deficit. Inflation increased in the September quarter following monthly annualised inflation of 6.3% in July and 6.4% in August. These levels of inflation are above the 3% - 6% target band established by the South African Reserve Bank in February In September, South Africa s Monetary Policy Committee addressed the recent high levels of inflation but noted that they expected this was only temporary and that inflation would fall below the 6% upper limit in the December 2013 quarter. As such, no intervention was made and interest rates remained unchanged at 5.0%. Renegotiation of wages between unions and the South African Government may place further upward pressure on inflation. While negotiations are still continuing for some industries, those agreements that have been finalised have seen wages increase by more than the headline rate of inflation. If this trend continues, the South African Reserve Bank may have to revisit its monetary policy decisions. Unemployment increased marginally to approximately 26% in the September quarter, primarily being pushed up by an expansion in the size of the labour pool. Expectations are for unemployment to remain around 26% over the next two years. Source: 8. Industry analysis 8.1 Gold Gold is both a commodity and an international store of monetary value. Once mined, gold continues to exist indefinitely, often melted down and recycled to produce alternative or replacement products. This characteristic means that gold demand is supported by both mine production and gold recycling. 22

27 Gold Demand/Supply Mined Metric tonnes Demand as % Supply As illustrated in the chart below, gold mine production was approximately 2,842 metric tonnes in 2012 and gold consumption was 4,484 metric tonnes. Demand for gold has consistently exceeded supply over the last 12 years, and the escalated level of economic and financial uncertainty during the past 48 months has caused investors to move capital from comparatively risky assets to gold assets, which are perceived to be a good store of monetary value. As a result, total gold demand has increased by 11% and supply by 17% between 2008 and Demand as a percentage of supply has remained at over 150% for the same period however; this margin is on a downward trend as the growth in supply has exceeded the growth in demand in recent years Gold Supply and Demand 170% 165% 160% 155% 150% 145% 140% 135% Gold Mine Supply Gold Demand Demand as % Supply Source: Bloomberg and BDO Analysis Until the late 1980 s, South Africa was responsible for approximately half of the total gold produced. More recently however, gold production has become geographically segmented, as shown in the chart below, with production dominated by China, Australia and the United States. Production by Country % China Australia 34% United States 10% Russia South Africa 4% 4% 7% 8% 7% 10% Peru Mexico Canada Others Source: Bloomberg and BDO Analysis 23

28 US$/Ounce Gold prices The price of gold fluctuates on a daily basis depending on global demand and supply factors. The price trend over the last two years is reflective of weak global economic conditions driving demand. Gold Spot Price 2,000 1,800 1,600 1,400 1,200 1, Gold spot price Forward Source: Bloomberg and BDO Analysis As can be seen in the graph above, the value of gold peaked at US$1,900 per ounce on 5 September This peak was largely caused by the debt market crisis in Europe, but it was also driven by the Standard and Poor s downgrade of the US credit rating. This resulted in a depression of global stock markets as investors redirected their assets from equity capital markets towards safer havens such as gold. Prices contracted in December 2011 reaching a low of US$1,545 per ounce; however 2012 saw the gold price recover, reaching US$1,790 per ounce on 4 October In the first half of 2013 the gold price fell significantly. The decrease was primarily driven by the US Federal Reserve s announcement that it was going to wind back its stimulus policies. Investors saw this announcement as an indication that the economy was beginning to recover and therefore investors reduced their investments in gold in search of higher returns from comparatively riskier investments. This action by investors resulted in the gold price falling to a low of US$1,201 per ounce on 27 June 2013, a 32% decrease from the 2012 high of US$1,790 per ounce. Gold prices are forecast to remain stable at around US$1,300 per ounce to US$1,350 per ounce over the three year period to 30 June Nevertheless, growth in global money supply, the uncertainty regarding the US debt ceiling and overall uncertainty in global financial markets may continue to drive investors toward gold as a store of value. This could be further fuelled by the rapidly increasing appetite for gold from China. Recent gold transactions The emergence of a new generation of mid-tier miners and the resurgent gold price has been driving the increase in the number of announced gold acquisitions in In the last half of 2012, several large deals have been announced to the market involving gold companies: 24

29 On 29 June 2012 it was announced that Allied Gold Mining Plc and St Barbara Ltd had reached an agreement in which the two companies would merge, worth $594 million. This deal was completed on 7 September In August 2012, Zijin Mining Group announced that it had made a cash offer to acquire its remaining 83.02% share in Norton Gold Fields Ltd for $198 million. This deal was completed on 21 August On 6 August 2012, Silver Lake Resources announced it planned to merge with Integra Mining Ltd in a deal worth $417 million. The merger between Integra and Silver Lake was completed on 11 January On 9 August 2012, Regis Resources Limited announced it had executed a letter of agreement to acquire the McPhillamys Gold Project from joint venture owners, Newmont Exploration Pty Ltd and Alkane Resources Limited. The consideration to be paid is $150 million to be satisfied by the issue of Regis shares based on an issue price of $4.20 per share. This deal was completed on 16 November On 19 September 2012, CGA Mining Limited and B2Gold Corp announced they had entered into a Merger Implementation Agreement to combine the two companies. The transaction was valued at $939 million. This merger was completed on 31 January On 13 December 2012, Primero Mining Corp, a Canada based mining corporation announced that it had signed a definite agreement to acquire Cerro Resources, an Australian based mining company that specialised in global gold and silver exploration in a deal worth $111 million. This acquisition was completed on 22 May We have identified the following transactions announced to the market in 2013 involving gold companies: On 30 January 2013, Kumarina Resources Limited, a West Australian copper and gold exploration company, announced it had agreed to merge by way of a Scheme of Arrangement with Zeta Resources Limited. On 17 April 2013, Norton Gold Fields Limited announced it had signed a Takeover Bid Implementation Deed with Kalgoorlie Mining Company Ltd pursuant to which Norton would make an off-market takeover offer to acquire all Kalgoorlie Mining shares. Norton closed the takeover offer on 7 August 2013 and announced it had received a relevant interest in more than 90% of Kalgoorlie Mining shares and would now exercise its rights to compulsory acquire the remaining shares. 8.2 Uranium Uranium is extracted as uranium ore. As uranium deposits are relatively scarce, mining is concentrated in a few countries worldwide. The most common method of extraction is open pit mining due to the volume intense nature of extraction. This is attributable to uranium ore mostly occurring at relatively low concentrations. The state of the world s uranium market is almost wholly dependent on the global fortunes of the nuclear power generation industry. The Fukushima nuclear disaster, which occurred in March 2011, cast an ominous shadow over the industry and rekindled divisive opinions over the use of uranium as an energy source. 25

30 USD/lb Uranium Price The uranium spot price as at 29 October 2013 was US$34.75/lb U 3 O 8. The following table shows historical and forecast U 3 O 8 weekly spot prices since December 2009: Uranium Spot Price and Uranium Spot Price Uranium Source: Bloomberg (historical prices), Consensus Economics () Up until the Fukushima nuclear power plant crisis, uranium prices were beginning to gain momentum after a steady decline from project delays caused by the global financial crisis and issues with over supply from production in Kazakhstan. The beginning of January 2010 had shown a significant spike in uranium prices as a result of expansion in Asia. Chinese demand is expected to keep uranium supply in a deficit and place upward pressure on prices in the short term. The long term price projections show a recovery to around US$70.0/lb. Uranium Production Africa has considerable mineral deposits, including uranium, and as it has become more developed, will potentially become a leading producer of uranium. The leading producing countries of uranium in Africa include Namibia and Niger. Both Namibia and Niger began commercial uranium mining in the 1970s and have strong government support for expanding uranium mining operations. Collectively, the mines in these countries account for approximately 16% of global uranium production in The chart below shows the world uranium production figures for

31 Uzbekistan 5% Russia 5% USA 3% Global Uranium Production 2012 China 3% Other 3% Australia 12% Malawi 2% Namibia 8% Niger 8% Kazakhstan 37% Canada 15% Source: World-nuclear.org (updated at July 2013) Kazakhstan, Australia and Canada accounted for more than 63% of the world s uranium production in Global Outlook The Japanese nuclear power plant crisis at Fukushima has tarnished the general view of nuclear energy and as such prices have been slow to recover from a seven year low. With China, South Korea and India announcing expansion plans and Japan likely to restart its reactors, future growth in the uranium industry is likely to be heavily reliant on Asia. Nuclear power offers a viable long term source of energy over fossil fuels which are becoming scarcer. Although Kazakhstan, Canada and Australia have historically been the key producers of uranium, Africa has shown enormous potential as being the next uranium superpower with many international uranium miners such as ARMZ, Uranium One and Paladin establishing operations there. The catalyst for a price recovery may be the expected closure of the Megatons to Megawatts programme in The Megatons to Megawatts program commenced in Russia in 1993 and is responsible for approximately 11% of the world s uranium supply. With this program ceasing, the supply of uranium is likely to decrease which may lead to an increase in the price of uranium and may spur growth in the industry. Additional growth may arise as emerging economies look towards uranium as an alternative source of energy. While the above factors indicate that the industry will recover, this recovery is likely to be in the medium to long term. Over the short-term, there does not appear to be any clear signs of an immediate recovery and it is likely that conditions in the industry will remain challenging. 27

32 9. Valuation Approach Adopted There are a number of methodologies which can be used to value a business or the shares in a company. The principal methodologies which can be used are as follows: Capitalisation of future maintainable earnings ( FME ) Discounted cash flow ( DCF ) Quoted market price basis ( QMP ) Net asset value ( NAV ) Market based assessment such as resource multiple A summary of each of these methodologies is outlined in Appendix 2. Different methodologies are appropriate in valuing particular companies, based on the individual circumstances of that company and available information. 9.1 Valuation of Gold One In our assessment of the value of a Gold One share, we have chosen to employ the following methodologies: Sum-of-parts method, as our primary method, which estimates the market value of a company by separately valuing each asset and liability of the company. The value of each asset may be determined using different methods. The component parts of Gold One are valued using the NAV method and the DCF method. As a cross check to the DCF value of Gold One s Cooke 1, 2, 3 & 4 operations, we have analysed the recently announced transaction between Gold One and Sibanye Gold; QMP approach as our secondary method; and the resource multiple method as a cross check to our sum of parts and QMP values. Methodologies adopted We have chosen these methodologies for the following reasons: Gold One has two operating mines in South Africa, the Company s core value is in the future cash flows from the mines; the Cooke and Modder East mines are established mines with proven and probable mineral reserves. Therefore, the DCF method is most appropriate in valuing the projects; other component parts of Gold One are valued using NAV method; the Sibanye Transaction provides an indication to the current market value of the Cooke assets; and Gold One is listed on both the ASX and the JSE which provide an indication of the market value where an observable market for the securities exists Sum of parts method We have employed the sum-of-the-parts method in estimating the fair market value of Gold One by aggregating the estimated fair market values of its underlying assets and liabilities, having consideration to the following: The value of Gold One s Cooke 1-3 Underground and Randfontein Surface Mines ( Cooke 1-3 Project ), Cooke 4 Underground Mine ( Cooke 4 Project ) and Modder East Mine ( Modder East Project ) (applying the DCF method); 28

33 the value of Gold One s exploration assets including the resources that have been excluded from the Cooke 1-3 Project, Cooke 4 Project and Modder East Project DCF valuations (having reliance on an independent specialist valuation report); the value of other assets and liabilities of Gold One (applying the cost approach under the NAV method); and the consideration payable by Sibanye Gold for Gold One s 74% interest in the Cooke 1-3 Projects and the Cooke 4 Project provides us with an indication of the fair market value of the assets. We note that the Sibanye Transaction will not be completed prior to the completion of the Compulsory Acquisition. Technical expert In performing our valuation of Gold One s operating Cooke 1-3 Project, Cooke 4 Project and Modder East Project using the DCF method, we have relied on the Technical Assessment and Valuation Report prepared by SRK in November 2013, based on SRK s review of the technical project assumptions contained in the cash flow models of the three operating mines. A copy of SRK s Technical Assessment and Valuation Report is attached in Appendix 4. Independent specialist valuation In valuing Gold One s development and exploration assets, we have relied on the independent specialist valuation performed by SRK in accordance with the Code of Technical Assessment of Mineral and Petroleum Assets and Securities for Independent Expert Reports ( the Valmin Code ) and the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ( JORC Code ). SRK has used the comparable market value method which analyses resource bases in conjunction with comparable transactions, to derive a dollar value per ounce of contained gold to apply to the mineral resources. Gold One s uranium resources has been valued on a gold equivalent bases where revenue from uranium is converted back into the number of ounces of gold that would produce the same revenue. We are satisfied with the valuation methodologies adopted by SRK which we believe are in accordance with industry practices and compliant with the requirements of the Valmin Code. A copy of SRK s Technical Assessment and Valuation Report is attached in Appendix Quoted market prices The QMP basis is a relevant methodology to consider because Gold One s shares are listed on the ASX and JSE. This means there are regulated and observable markets where Gold One s shares can be traded. However, in order for the QMP methodology to be considered appropriate, the Company s shares should be liquid and the market should be fully informed as to Gold One s activities Resource multiple method As a cross check to our sum-of-parts valuation, we have analysed the resource multiple observed for companies listed on the ASX, JSE, AIM, NYSE, TSX and LSE with gold projects as their primary focus. 29

34 10. Valuation of Gold One 10.1 Sum of parts valuation of Gold One We elected to use the DCF approach in valuing the Cooke 1-3 Project, Cooke 4 Project and the Modder East Project ( the Projects ). The DCF approach estimates the fair market value by discounting the future cash flows arising from the Projects to their net present value. Performing a DCF valuation requires the determination of the following: the expected future cash flows that the Projects are expected to generate; and an appropriate discount rate to apply to the cash flows of the Projects to convert them to present value equivalent. Cash flow models for the Projects were prepared by Gold One ( Cooke 1-3 Model, Cooke 4 Model and Modder East Model, collectively the Models ). The Models estimate the future cash flows expected from gold production at the Projects based on determined JORC compliant reserves. The Models depict forecasts of nominal, post-tax cash flows over the life of mine on an annual basis. The Models have been adjusted by us to reflect any changes to technical assumptions as a result of SRK s review and any changes to the economic and other input assumptions from our research. We have adjusted the Models to reflect cash flows on an annual basis. The Models were prepared based on estimates of production profile, operating costs and sustaining capital expenditure. The main assumptions underlying the Models include: mining and production volumes; commodity prices; operating costs; sustaining capital expenditure; foreign exchange rates; royalties; and discount rate. Limitations Since forecasts relate to the future, they may be affected by unforeseen events and they depend, in part, on the effectiveness of management s actions in implementing the plans on which the forecasts are based. Accordingly, actual results may vary materially from the forecasts, as it is often the case that some events and circumstances frequently do not occur as expected, or are not anticipated, and those differences may be material. Economic assumptions Inflation We have applied an inflation rate to convert the forecast real costs into nominal terms. 30

35 In our assessment of the inflation rate, we have considered forecasts prepared by economic analysts and other publicly available information including broker consensus to arrive at our inflation rate assumptions. From our analysis, inflation in South Africa in 2012 was 5.75% and until September 2013, inflation was 5.90%. s are for South Africa s inflation rate to decrease to 5.15% by On this basis, we have assumed the inflation rate in South Africa going forward will be 5% on average for the forecast period. Foreign exchange rate All commodity prices are stated in United States Dollars ( USD ), the forecasts relating to costs in the Models are in Rand ( ZAR ) and our valuation is in Australian Dollars ( AUD ). The conversions from USD to AUD and from ZAR to AUD were undertaken using the following foreign exchange rate assumptions: Period 1 AUD: x USD 1 AUD: x ZAR CY CY CY CY CY2017 onwards Source: Bloomberg Royalties and tax Royalties The royalty included in the Models is based on a percentage of gross sales. Corporate tax Tax has been applied to each model on the same basis in accordance with relevant legislation. The corporate tax rate in South Africa is 28%. DCF Valuation Discount rate We have selected a nominal after tax discount rate in the range of 12% to 13% to discount the forecasts to their present value. In selecting this range of discount rates we considered the following: the rates of return for comparable listed gold companies with African operations; the risk profile of Gold One as compared to other gold companies; the debt to equity ratio of Gold One; and Gold One s current cost of debt as advised by management. Details on our discount rate determination are provided in Appendix 3. 31

36 Commodity prices In obtaining forecast gold prices we have considered: historical spot and forward prices from Bloomberg; and most recent Consensus Economics price forecasts. Based on our analysis, we adopted the following future gold prices (in nominal terms): Period Gold (US$/Ounce) CY2013 1,290 CY2014 1,300 CY2015 1,300 CY2016 1,320 CY2017 1,340 CY2018 onwards 1,350 Source: Consensus Economics & Bloomberg On acquisition of Ezulwini in August 2012, Gold One inherited a contract between Franco-Nevada and Ezulwini whereby Franco-Nevada acquired the right to receive seven percent of the life of mine gold production from Ezulwini. Under the terms of the Ezulwini Gold Stream Transaction, Franco-Nevada paid Ezulwini US$50 million upfront. Franco-Nevada will make an ongoing payment equal to the lesser of US$400/oz (the Fixed Price, subject to an annual inflation adjustment of 1%, non-compounding, starting in the fourth year following receipt of the first payment) and the prevailing spot price at the time of such payment for each ounce of gold delivered under the contract. We have used a US$400 sales price per ounce of gold, growing by 1% per annum (in the fourth year following receipt of the first payment), and applied these prices to 7% of gold produced at the Cooke 4 Project. Based on our analysis, we adopted the following future uranium prices (in nominal terms): Period Uranium (US$/lb) CY CY CY CY CY CY CY2019 onwards Source: Consensus Economics & Bloomberg 32

37 Valuation of the Cooke 1-3 Project, Cooke 4 Project and the Modder East Project We undertook the following analysis on the Models: a review of the mathematical structure and internal consistency; appointed SRK as the technical expert to assess the reasonableness of the geological and mining inputs used in the preparation of the life of mine; conducted independent research on certain economic and other inputs such as commodity prices, foreign exchange rates, inflation and discount rate applicable to the future cash flows of the Projects; held discussions with Gold One s management regarding the preparation of the forecasts in the Models and its views; adjusted the Models to reflect any changes to the technical assumptions as a result of SRK s review and any changes to the economic and other input assumptions from our research; and performed a sensitivity analysis on the value of the Cooke 1-3 Project, Cooke 4 Project and the Modder East Project as a result of flexing selected assumptions and inputs. Appointment of a technical expert SRK, an independent mining expert, was engaged to prepare the Technical Assessment and Valuation Report. SRK reviewed and provided an assessment on the reasonableness of the following assumptions used in the preparation of the Models: resources and reserves incorporated into the Cooke 1-3 Model for the Cooke Underground and Randfontein Surface Operations, Cooke 4 Model for the Cooke 4 Underground Operations and the Modder East Model for the Modder East Operations; mining physicals (including tonnes of ore mined, ore processed, recovery and grade); processing assumptions (including products and recovery, scheduling, mill production, refining recovery and plant utilisation); operating costs (including but not limited to surface mining, underground mining, general site costs, haulage, processing, corporate office, royalties); non-operating and other costs (including but not limited to reclamation, surface mining prestripping, discretionary capital costs, deferred development costs); capital expenditure (including but not limited to sustaining capital expenditure); and any other relevant technical assumptions not specified above. Based on SRK s Technical Assessment and Valuation Report, we highlight the following: SRK has provided the mining physicals using life of mine plans for 2013 depleted until 15 November 2013; and SRK has not provided details regarding the mining physicals for the Surface Uranium Project on the basis that development of this project into production would not currently be economically viable. 33

38 DCF Valuation Future cash flows Cooke 1-3 Project Mining Physicals The Cooke 1-3 Project has a significant remaining life (forecast to conclude in 2025) based on three underground mines, Cooke 1, 2 and 3. Also included in the Cooke 1-3 Model are forecasts regarding the processing of Dump 20. We note that the life of mine projections do not include the Surface Uranium Project which has been delayed pending the outcome of the feasibility study currently being undertaken jointly with Sibanye. In the event that the Surface Uranium Project is brought into production, the life of mine may extend beyond The tables below show the forecast tonnes of ore to be milled annually over the remaining 12 year life of mine. See SRK s report in Appendix 4 for further details. Gold Cooke 1-3 Project 15 Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 onwards 1 Cooke 1-3 Ore milled (tonnes) 87,720 1,253,950 1,495,894 1,335,316 1,076, , , ,787 Recovered grade (g/t) Total production (ounces) 11, , , , , , ,031 59,123 Dump 20 Ore milled (tonnes) 492,550 4,706,667 4,706,667 4,720, , Recovered grade (g/t) Total production (ounces) 5,025 37,816 32,412 32,257 2, The LOM for the Cooke 1-3 mines extends until Shown above are the average tonnes, grade and production over the period CY2020-CY2025. Cooke 1-3 Project - Ore milled (tonnes) (Gold) 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Average CY CY2025 Cooke 1-3 Dump 20 Source: Cooke 1-3 Model 34

39 Uranium 15 Nov Cooke 1-3 Project Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Cooke 1-3 Ore milled (tonnes) - 487, , , , , ,188 Recovered grade (g/t) Total production (lbs) - 446, , , , ,936 79,332 Source: Cooke 1-3 Model Cooke 1-3 Project - Ore milled (tonnes) (Uranium) 600, , , , , , Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Source: Cooke 1-3 Model Operating Costs Operating costs included in the Cooke 1-3 Model consist of mining operations, processing and other costs. The table below shows the forecast operating costs per annum for the remaining life of mine. Cooke 1-3 Project Operating costs CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY (A$'000) 19, , , , , , ,302 96,268 Source: Cooke 1-3 Model CY2025 Average 35

40 Capital Expenditure The table below shows the forecast capital costs per annum for the remaining life of mine. Cooke 1-3 Project CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY Capital costs (A$'000) 6,380 42,242 25,533 19,407 12,220 8,185 4,954 3,720 Source: Cooke 1-3 Model BEE Arrangements CY2025 Average Under the BEE arrangements relating to the Cooke 1-3 Project, Gold One entered into an empowerment transaction with the Rand Uranium Empowerment Partnership ( RU BEE ) where the RU BEE could earn in its 26% interest in the Cooke 1-3 Project. A loan of ZAR458 million was advanced by Gold One to the RU BEE which will be repaid by redirecting 90% of all dividends earned by the RU BEE from the Cooke 1-3 Project back to Gold One. The loan interest is 7.5% per annum, which is capitalised and added to the loan outstanding. The loan outstanding as at 15 November 2013 was ZAR540,364,128, which was used as the opening balance for the BEE calculations. DCF Valuation sensitivities The estimated value of the Cooke 1-3 Project is derived under the DCF approach. Our valuation is most sensitive to changes in the forecast gold prices and exchange rates. We have therefore included an analysis to consider the value of the Cooke 1-3 Project under various pricing scenarios and in applying: a change of +/- 10% to commodity prices a change of +/- 10% to exchange rates a change of +/- 10% to the tonnes mined a change of +/- 10% to grade of the gold a change of +/- 10% to grade of the uranium a change of +/- 10% to operating expense a change of +/- 10% to capital expenditure a discount rate in the range of 10% to 14%. 36

41 The following table sets out the valuation outcomes from our DCF analysis. Flex NPV (A$m) Gold Price NPV (A$m) Uranium Price NPV (A$m) Gold Tonnes Mined NPV (A$m) Uranium Tonnes Mined NPV (A$m) Gold Grade Sensitivity Analysis NPV (A$m) Uranium Grade NPV (A$m) Operating Costs NPV (A$m) NPV (A$m) NPV (A$m) Capital Costs Exchange Rate AUD:ZAR Exchange Rate AUD:USD -10% % % % % % % % % % % Source: BDO Analysis Discount rate sensitivity Discount rate (%) 10% 11% 12% 13% 14% NPV (A$m) Source: BDO Analysis Considering the valuation outcomes above, we estimate the fair market value of the Cooke 1-3 Project to be in the range of A$267 million to A$327 million, with a preferred value of A$297 million. Cooke 4 Project Low Value (A$m) Preferred Value (A$m) High Value (A$m) DCF Value of Cooke 1-3 Project (Gold One s share) Source: BDO Analysis DCF Valuation Future cash flows Cooke 4 Project Mining Physicals The Cooke 4 Project s life of mine is expected to conclude in 2025 based on one underground shaft. We note that the life of mine projections do not include the inferred resources identified for the Cooke 4 Project. These inferred resources have the potential to increase the life of mine. The tables below show the forecast tonnes of ore to be milled annually over the remaining 7 year life of mine. 37

42 Gold 15 Nov 13 - Cooke 4 Project 31 Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Ore milled (tonnes) 46, , , , , , , ,589 Recovered grade (g/t) Total production (ounces) 5,058 63,902 67,421 56,790 40,697 30,467 31,869 26,294 Source: Cooke 4 Model Cooke 4 Project - Ore milled (tonnes) (Gold) 700, , , , , , , Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Source: Cooke 4 Model Uranium 15 Nov 13 - Cooke 4 Project 31 Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Ore milled (tonnes) - 239, , , , , , ,589 Grade (grams/tonne) Total production (lbs) - 195, , , , , , ,891 Source: Cooke 4 Model 38

43 Cooke 4 Project - Ore milled (tonnes) (Uranium) 350, , , , , ,000 50, Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Source: Cooke 4 Model Operating Costs Operating costs included in the Cooke 4 Model consist of mining operations, processing, pre-production costs, transport costs and utilities. The table below shows the forecast operating costs per annum for the remaining life of mine. 15 Nov 13 - Cooke 4 Project 31 Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Operating costs (A$'000) 6,161 84,574 86,905 80,370 76,710 68,578 74,829 69,638 Source: Cooke 4 Model Capital Expenditure The table below shows the forecast capital costs per annum for the remaining life of mine. Cooke 4 Project 15 Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Capital costs (A$'000) 593 8,644 7,729 4,398 2,071 1,796 1,247 Source: Cooke 4 Model BEE Arrangements Under the BEE arrangements relating to the Cooke 4 Project, Gold One entered into an empowerment transaction with the Ezulwini Mining Empowerment Partnership ( EMC ) where the EMC could earn in its 26% interest in the Cooke 4 Project. A loan of ZAR137 million will be advanced by Gold One to the EMC from 1 January 2014 which will be repaid by redirecting 90% of all dividends earned by the EMC from the Cooke 4 Project back to Gold One. The loan interest is 7.5% per annum, which is capitalised and added to the loan outstanding. The loan outstanding as at 15 November 2013 was nil but we used the loan of ZAR564,396,000 as the opening balance for the BEE calculations given that it will be effective from 1 January

44 DCF Valuation sensitivities The estimated value of the Cooke 4 Project is derived under the DCF approach. Our valuation is most sensitive to changes in the forecast gold prices and exchange rates. We have therefore included an analysis to consider the value of the Cooke 4 Project under various pricing scenarios and in applying: a change of +/- 10% to commodity prices a change of +/- 10% to exchange rates a change of +/- 10% to the tonnes mined a change of +/- 10% to grade of the gold a change of +/- 10% to grade of the uranium a change of +/- 10% to operating expense a change of +/- 10% to capital expenditure a discount rate in the range of 10% to 14%. The following table sets out the valuation outcomes from our DCF analysis. Sensitivity Analysis Flex NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) Gold Price Uranium Price Gold Tonnes Mined Uranium Tonnes Mined Gold Grade Uranium Grade Operating Costs Capital Costs Exchange Rate AUD:ZAR Exchange Rate AUD:USD -10% % % % % % % % % % % Source: BDO Analysis Discount rate sensitivity Discount rate (%) 10% 11% 12% 13% 14% NPV (A$m) Source: BDO Analysis 40

45 Considering the valuation outcomes above, we estimate the fair market value of 100% of the Cooke 4 Project to be in the range of A$5 million to A$20 million, with a preferred value of A$13 million. Cooke 4 Project Low Value (A$m) Preferred Value (A$m) High Value (A$m) DCF Value of Cooke 4 Project (Gold One s share) Source: BDO Analysis DCF Valuation Future cash flows Modder East Project Mining Physicals The Modder East Project has a remaining life of nine years. Underground mining is used at Modder East to access the target reefs which are located at a depth that does not exceed 500m. By comparison to the Cooke 1-3 and Cooke 4 Projects, the ore at Modder East is significantly shallower. Mining at Modder East is focussed exclusively on gold. The table shows the forecast tonnes of ore to be milled annually over the remaining nine year life of mine. Modder East Project Ore milled 15 Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 (tonnes) 131, , , , , , , , , ,768 Grade (g/t) Total production (ounces) 19, , , , , ,003 92,489 69,628 64,268 51,388 Source: Modder East Model 1,000,000 Modder East Project - Ore milled (tonnes) (Gold) 800, , , , Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Source: Modder East Model 41

46 Operating Costs Operating costs included in the Modder East Model consist of mining operations and processing costs. The table below shows the forecast operating costs per annum for the remaining life of mine. Modder East Project Operating 15 Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 costs (A$'000) 7,946 29,539 58,819 63,364 61,826 68,752 79,913 86,971 95,222 92,011 Source: Modder East Model Capital Expenditure The table below shows the forecast capital costs per annum for the remaining life of mine. Modder East Project Capital costs 15 Nov Dec 13 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 (A$'000) 2,347 42,256 38,823 40,023 35,650 32,987 26,215 16,824 6,173 3,350 Source: Modder East Model BEE Arrangements Under the BEE arrangements relating to the Modder East Project, Gold One entered into an empowerment transaction with Amoribrite (Pty) Ltd ( Amoribrite ) where Amoribrite could earn in its 26% interest in the Modder East Project. A loan of ZAR520 million was advanced by New Kleinfontein Mining Company Proprietary Limited, ultimately 100% owned by Gold One, to Amoribrite which will be repaid by redirecting 94% of all dividends earned by Amoribrite from the Modder East Project back to Gold One. The loan interest is based on the South African prime rate which was 8.5% per annum as at 15 November The loan interest is capitalised and added to the loan outstanding. The loan outstanding as at 15 November 2013 was ZAR480,395,244 which was used as the opening balance for the BEE calculations. DCF Valuation sensitivities The estimated value of the Modder East Project is derived under the DCF approach. Our valuation is most sensitive to changes in the forecast gold prices and exchange rates. We have therefore included an analysis to consider the value of the Modder East Project under various pricing scenarios and in applying: a change of +/- 10% to commodity prices a change of +/- 10% to exchange rates a change of +/- 10% to grade of the gold a change of +/- 10% to operating expense a change of +/- 10% to sustaining capital expenditure a discount rate in the range of 10% to 14%. 42

47 The following table sets out the valuation outcomes from our DCF analysis. Sensitivity Analysis Flex NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) NPV (A$m) Au Price Au Tonnes Au Grade Opex Capex Exchange Rate USD:ZAR Exchange Rate AUD:ZAR -10% % % % % % % % % % % Source: BDO Analysis Discount rate sensitivity Discount rate (%) 10% 11% 12% 13% 14% NPV (A$m) Source: BDO Analysis Considering the valuation outcomes above, we estimate the fair market value of the Modder East Project to be in the range of A$254 million to A$304 million, with a preferred value of A$279 million. The value of the Modder East Project attributable to Gold One is shown below. Modder East Project Low Value (A$m) Preferred Value (A$m) High Value (A$m) DCF Value of Modder East Project (Gold One s share) Source: BDO Analysis Value of the resources, not included in the Models We have instructed SRK to value all of the JORC compliant resources at the Cooke 1-3 Project, Cooke 4 Project and the Modder East Project that are not included in the Models. We have also instructed SRK to provide an independent market valuation of Gold One s other exploration areas. In valuing Gold One s resources, SRK has used the comparable market value method which analyses resource bases in conjunction with comparable transactions, to derive a dollar value per ounce of contained gold to apply to the mineral resources. Gold One s uranium resources have been valued on a gold equivalent basis where revenue from uranium is converted back into the number of ounces of gold that would produce the same revenue. We are satisfied with the valuation methodologies adopted by SRK which are in accordance with industry practices and compliant with the requirements of the Valmin Code. The table below provides a summary of this valuation: 43

48 Valuation of resources not included in the Models 100% value of non-dcf Resources Units Effective ownership Low value Preferred value High value Ventersburg ZAR Randfontein summary ZAR Goliath ZAR Cooke 4 Summary ZAR Total Value of non-dcf Resources ZAR ,120.0 Gold One's Share Ventersburg ZAR 95% Randfontein summary ZAR 95% Goliath ZAR 68% Cooke 4 Summary ZAR 95% Total Value of Gold One's Share ZAR ,020.4 Exchange rate ZAR/AUD Total value of resources A$ Source: SRK Technical Assessment and Valuation Report and BDO Analysis 1 This percentage represents the potential impact of the BEE arrangements on Gold One s ownership of these projects in the event that they are developed into a producing mine. 95% was calculated as the average effective ownership of the Cooke 1-3, Cooke 4 and Modder East Projects when the BEE arrangements are factored into the DCF valuation and when they are omitted. 2 The effective ownership of Goliath incorporates both the 95% as discussed in note 1 above, and Gold One s current 72% interest in the project. The table above indicates a range of values between $47.2 million and $107.2 million, with a preferred value of $76.3 million. A copy of SRK s Technical Assessment and Valuation Report is attached at Appendix NAV multiple The value per share of gold mining companies when valued using the DCF valuation methodology, including the value of exploration assets, is often lower than the value of the trading price per share. It is common practice to apply a NAV multiple to the DCF value and value of the exploration assets to arrive at the value of a company. Possible reasons for a difference between the value of the mineral assets per share and the traded price are: The potential upside at existing operating or development sites that would allow for an extension of the life of mine and higher volumes, outside of the announced reserve and resource; The potential for actual gold prices exceeding the long-term forecast prices used in the DCF valuations; Gold being perceived as a safe asset investment; and The value attributable to the strong management of a company. 44

49 Due to the declining price of gold over the past twelve months and the current market sentiment surrounding gold, we do not believe that investors are willing to pay a premium above the DCF value of gold assets. Therefore we consider a gold multiple of 1.0 to be applicable in our valuation of Gold One Other Assets and Liabilities Other assets and liabilities represent the assets and liabilities of Gold One which have not been included in any of the specific valuation above. A summary of other assets and liabilities identified is as follows. Statement of Financial Position CURRENT ASSETS Reviewed as at 30-Jun-13 Value of other assets & liabilities Note A$'000 A$'000 Cash and cash equivalents 7,729 7,729 Trade and other receivables 20,136 20,136 Inventories a 20,397 20,397 Gold derivative asset b 2,690 - TOTAL CURRENT ASSETS 50,952 48,262 NON-CURRENT ASSETS Held-to-maturity investment 2,414 2,414 Restricted cash 21,306 21,306 Available-for-sale investments 25,611 25,611 Property, plant & equipment c 572,226 - Investment property Investment assets d 8,939 - TOTAL NON-CURRENT ASSETS 631,291 50,126 TOTAL ASSETS 682,243 98,388 CURRENT LIABILITIES Trade and other payables 48,815 48,815 Taxation payable Gold derivative liabilities b 6, Accruals 14,123 14,123 Bank overdraft 4,977 4,977 Borrowings e 69,908 69,908 TOTAL CURRENT LIABILITIES 145, ,159 NON-CURRENT LIABILITIES Deferred tax liabilities f 41,362 - Gold derivative liabilities b 9,387 - Borrowings 157, ,123 Provisions g 41,727 41,727 TOTAL NON-CURRENT LIABILITIES 249, ,850 TOTAL LIABILITIES 394, ,009 NET ASSETS 287,373 (239,621) Source: BDO Analysis 45

50 We have been advised that there has not been a significant change in the net assets of Gold One since 30 June 2013 and that the above value of assets and liabilities represent their fair market value apart from the adjustments discussed below: Note a: Inventories Inventories comprise gold bullion stock and spares and consumables. The gold bullion stock was measured at its net realisable value as at 30 June 2013 in Gold One s interim financial statements. Note b: Gold derivative asset & liabilities On acquisition of Ezulwini in August 2012, Gold One inherited a contract between Franco-Nevada and Ezulwini whereby Franco-Nevada acquired the right to receive seven percent of the life of mine gold production from Ezulwini. Franco-Nevada will make an ongoing payment equal to the lesser of US$ 400/oz (the Fixed Price, subject to an annual inflation adjustment of 1%, non-compounding, starting in the fourth year following receipt of the first payment) and the prevailing spot price at the time of such payment for each ounce of gold delivered under the contract. The total gold ounces delivery obligation by Ezulwini under the current Ezulwini life of mine plan to Franco-Nevada has been accounted for as a financial liability, which is measured at fair valued using the Garman Kohlhagen, extension of the Black Scholes pricing model. We have excluded the derivative asset and liabilities related to the Franco-Nevada contract as they are incorporated in our valuation of the Projects. We have however retained the gold liability of $602,000 relating to forward sale agreements as these were not included in the DCF valuations. Note c: Property, plant & equipment The majority of the property, plant and equipment relates to the mining operations and has been included in the DCF valuations of the projects. We have been advised that only an immaterial amount relates to office furniture and therefore we have excluded 100% of the property, plant and equipment. Note d: Investment assets Investment assets are goodwill and IT development and software. The goodwill was recognised when Goliath Gold Mining Limited acquired all of the Megamine Pty Ltd assets of Gold One Africa. Goliath Gold s mining assets have been independently valued by SRK in section and we have therefore excluded the asset. Note e: Borrowings Borrowings comprise a A$169 million loan facility with Investec Bank Limited with a balance of approximately A$70 million outstanding as at 30 June Gold One further obtained debt facilities of US$75 million from Bank of China on 1 November 2013 for a 12-month term at an interest rate of 0.9% above the London Interbank Offer Rate (LIBOR). The full amount of the loan was drawn down on 18 November However, we have been advised that, as at the date of our Report, none of the funds have been deployed and the full balance remains in Gold One s Australian bank account. We have not adjusted the balance sheet for the loan as the adjustment of increasing both the cash balance and borrowings by US$75 million would have no impact on the net asset value of Gold One. 46

51 Note f: Deferred tax liabilities The majority of the deferred tax liability is due to temporary differences attributable to property, plant and equipment. The value of the property, plant and equipment has been included in the DCF valuations of the Projects and therefore we have excluded the related liability. Note g: Provisions We have retained the rehabilitation liability as the rehabilitation costs have not been included in the DCF valuations. We have assessed the rehabilitation provision to be reasonable based on the Company s Guardrisk policy to cover all of Gold One s operations, as well as the restricted cash and Cooke rehabilitation trust investments. We consider any additional requirements for rehabilitation to be immaterial Corporate costs We have been advised by management that corporate costs are estimated to be approximately ZAR125 million or $12.98 million in We calculated the corporate costs over the maximum life of mine based on ZAR125 million per year and adjusted for South Africa s forecast inflation at a rate of 5% per annum. As each of the three projects has a different life of mine we have assumed that the corporate costs will continue to be incurred at the same rate until the life of mine of the final project has concluded which is The net present value of the corporate costs estimated to be incurred over the period from Valuation Date to 31 December 2025 is A$85.09 million. We note that the net present value of corporate costs will vary as the mine life varies Shares on Issue We have calculated Gold One s value per share on an undiluted basis. The exercise of any in-the-money unlisted options between the date of our report and the release of the Notice of Compulsory Acquisition to Shareholders will have an immaterial impact on the value per share. As at the date of this report, 1,421,538,989 ordinary shares are on issue. 47

52 Sum-of-parts valuation for Gold One Our valuation using the Sum-of-Parts methodology is summarised in the following table. Preferred Gold One International Limited Low value value High value Summary of Assessment $m $m $m DCF value of Cooke 1-3 (Gold One's share) DCF value of Cooke 4 (Gold One's share) DCF value at Modder East (Gold One's share) Value of resources not included in the DCF Value of Gold One's mineral assets NAV multiple Total value of Gold One's mineral assets Other assets Other liabilities (338.01) (338.01) (338.01) Corporate costs (85.09) (85.09) (85.09) Value of Gold One under sum-of-parts method Number of Gold One shares on issue ,421,538,989 1,421,538,989 1,421,538,989 Value per share $ $ $ Source: BDO Analysis We conclude the value per share on a control basis is between A$0.175 and A$0.305 with a preferred value of A$ Quoted Market Prices for Gold One Securities To provide a comparison to the valuation of Gold One in Section 10.1, we have assessed the quoted market price for a Gold One share as traded on the ASX and JSE. In addition, RG states that in determining the fair value for securities, an expert must take into consideration the prices paid for securities in that class in the previous six months. The quoted market value of a company s shares is reflective of a minority interest. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain 100% control of another company. These advantages include the following: control over decision making and strategic direction; access to underlying cash flows; control over dividend policies; and access to potential tax losses. BCX Gold will gain 100% control of Gold One if the Compulsory Acquisition is successful. 48

53 Share Price ($) Volume (millions) Our calculation of the quoted market price of a Gold One share including a premium for control has been prepared in two parts. The first part is to calculate the quoted market price on a minority interest basis. The second part is to add a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control. Gold One is listed on the both the ASX and JSE and as such, we have analysed the quoted market prices on each exchange. Minority interest value On 22 July 2013, Gold One announced that BCX Gold had increased its shareholding beyond 90%, giving BCX Gold the right, but not the obligation under Chapter 6A of the Corporations Act to compulsory acquire any remaining Gold One shares. Our analysis of the quoted market price of a Gold One share is based on the pricing prior to the announcement of BCX Gold exceeding 90%. This is because the value of a Gold One share after the announcement may include the effects of any change in value as a result of BCX Gold exceeding 90%. ASX analysis The following chart provides a summary of the share price movement of Gold One shares traded on the ASX over the six months to 21 July 2013 which was the last trading day prior to the announcement. The period of six months has been selected in compliance with the requirements of RG GDO share price and trading volume history on the ASX Volume Closing share price Source: Bloomberg The daily price of Gold One s shares from 22 January 2013 to 21 July 2013 has ranged from a low of $0.105 on 17 July 2013 to a high of $0.330 on 6 February The share price of Gold One has steadily declined over the six month period analysed. 49

54 The key announcements made during this period are set out in the following table. Date Announcement 24/05/2013 Mineworker Fatally Injured at Cooke Underground Operations Closing Share Closing Share Price Three Days Price Following After Announcement Announcement $ (movement) $ (movement) % % 30/04/2013 Quarterly Activities Report % % 28/02/2013 Appendix 4E - Full Year Report % % 22/02/2013 Mineworker Fatally Injured at Cooke 4 Operation % % 31/01/2013 Quarterly Activities Report % % Source: Bloomberg and BDO Analysis To provide further analysis of the market prices for a Gold One share, we have also considered the VWAP and high price for 10, 30, 60, 90 day periods and 6 months to 21 July Share Price 21-Jul Days 30 Days 60 Days 90 Days Closing price $0.120 Prior 6 months VWAP $0.119 $0.138 $0.160 $0.174 $0.211 Source: Bloomberg, BDO analysis The above VWAP has been analysed based on the preceding six months to the date that BCX Gold exceeded a 90% interest in Gold One, to avoid the influence of any increase in price of Gold One s shares that has occurred since the announcement. The analysis below sets out the volume of trading in Gold One s shares for the six months to 21 July Trading days Share price low Share price high Cumulative volume traded As a % of issued capital As a % of shares not held by BCX Gold 1 Day $0.120 $ % 0.00% 10 Days $0.105 $ , % 0.05% 30 Days $0.105 $ ,146, % 0.81% 60 Days $0.105 $ ,129, % 1.50% 90 Days $0.105 $ ,585, % 1.82% 6 months to 21 July 2013 $0.105 $ ,629, % 2.56% Source: Bloomberg, BDO analysis This table indicates that Gold One s shares display a low level of liquidity, with only 0.26% of the Company s current issued capital being traded on the ASX over a six month period. The shares are tightly held due to BCX Gold holding approximately 90% of the issued capital over the six month period analysed. We have shown the percentage of shares traded excluding the shares held by BCX Gold which shows only 2.56% of the remaining shares traded on the ASX over the six month period. 50

55 Share Price (ZAR cents) Volume (millions) JSE analysis The following chart provides a summary of the share price movement of Gold One shares traded on the JSE over the six months to 21 July 2013 which was the last trading day prior to the announcement of BCX Gold exceeding a 90% interest in Gold One. GDO share price and trading volume history on the JSE Volume Closing share price Source: Bloomberg The daily price of Gold One s shares from 22 January 2013 to 21 July 2013 has ranged from a low of ZAR1.00 on 21 June 2013 to a high of ZAR3.55 on 22 Jan The share price of Gold One has steadily declined over the six month period analysed. To provide further analysis of the market prices for a Gold One share, we have also considered the VWAP and high price for 10, 30, 60, 90 day periods and 6 months to 21 July Jul Days 30 Days 60 Days 90 Days Prior 6 months Share Price ZAR ZAR ZAR ZAR ZAR ZAR Closing price VWAP Source: Bloomberg, BDO analysis We converted the VWAP prices into AUD to make the analysis more comparable to the ASX analysis. Share Price Closing price $ Jul Days 30 Days 60 Days 90 Days Prior 6 months VWAP $ $ $ $ $ Exchange rate based on 1 AUD : 9.03 ZAR on 21 July 2013 ( Source: Bloomberg, BDO analysis 51

56 The above VWAP has been analysed based on the preceding six months to the date that BCX Gold exceeded a 90% interest in Gold One, to avoid the influence of any increase in price of Gold One s shares that has occurred since the announcement. An analysis of the volume of trading in Gold One s shares for the six months to 21 July 2013 is set out below: Trading days Share price low (ZAR) Share price high (ZAR) Cumulative volume traded As a % of issued capital As a % of shares not held by BCX Gold 1 Day , % 0.01% 10 Days , % 0.25% 30 Days ,261, % 0.89% 60 Days ,529, % 3.20% 90 Days ,960, % 4.21% 6 months to 21 July ,978, % 5.63% Source: Bloomberg, BDO analysis This table indicates that Gold One s shares display a low level of liquidity, with only 0.56% of the Company s current issued capital being traded on the JSE over a six month period. The shares are tightly held due to BCX Gold holding approximately 90% of the issued capital over the six month period analysed. We have shown the percentage of shares traded excluding the shares held by BCX Gold which shows only 5.63% of the remaining shares traded on the JSE over the six month period. For the quoted market price methodology to be reliable there needs to be a deep market in the shares. RG indicates that a deep market should reflect a liquid and active market. We consider the following characteristics to be representative of a deep market: Regular trading in a company s securities; Approximately 1% of a company s securities are traded on a weekly basis; The spread of a company s shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and There are no significant but unexplained movements in share price. A company s shares should meet all of the above criteria to be considered deep, however, failure of a company s securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares cannot be considered relevant. In the case of Gold One, we do not consider the shares to be liquid as a total of 0.82% has been traded on the ASX and JSE over a six month period and 8.19% when excluding the shares held by BCX Gold. Our assessment is that the range of values for Gold One s shares based on market pricing, after disregarding post announcement pricing, is between $0.12 and $0.22, with a midpoint of $

57 Control Premium We have reviewed the control premiums paid by acquirers of gold mining companies listed on the ASX. We have summarised our findings below: Year Source: Bloomberg Number of Control Transactions with announced premiums Average Deal Value (US$m) Average Control Premium (%) Median 45.4 Mean 53.6 Median (excluding 2013 outlier) 45.4 Mean (excluding 2013 outlier) 43.9 In arriving at an appropriate control premium to apply, we note that observed control premiums can vary due to the: nature and magnitude of non-operating assets; nature and magnitude of discretionary expenses; perceived quality of existing management; nature and magnitude of business opportunities not currently being exploited; ability to integrate the acquiree into the acquirer s business; level of pre-announcement speculation of the transaction; and level of liquidity in the trade of the acquiree s securities. We note that only transactions with observable control premiums are included in the table above. In 2013, there were only two completed transactions with announced premiums. The two announced premiums were 55.14% and %. We have excluded the premium of % as an outlier in our calculation of the control premium. We consider a control premium of 30% to 40% to be appropriate. Quoted market price including control premium Applying a control premium to Gold One s quoted market share price results in the following quoted market price value including a premium for control: Low $ Midpoint $ High $ Quoted market price value Control premium 30% 35% 40% Quoted market price valuation including a premium for control Source: BDO analysis 53

58 Share Price (ZAR cents) Volume (millions) Therefore, our valuation of a Gold One share based on the quoted market price method and including a premium for control is between $0.16 and $0.31, with a midpoint value of $0.23. Whilst we have considered the value of Gold One shares as required under RG11.49, we would be cautious in placing too much reliance on these values obtained under the QMP approach due to the illiquidity of the shares Sibanye Gold Transaction As a crosscheck to the value of the Cooke deposits 1, 2, 3 and 4, we have also valued the transaction between Gold One and Sibanye Gold that was announced by Gold One on 21 August Gold One will merge its 74% interest in Rand Uranium and Ezulwini with Sibanye Gold for a 17% interest in Sibanye Gold ( Sibanye Transaction ). Although the Sibanye Transaction will not be completed prior to the completion of the Compulsory Acquisition, it provides a cross check for the market value of 74% of the Cooke 1, 2, 3, & 4 deposits as assessed using the sum of parts method. We have valued a 17% equity interest in Sibanye Gold by analysing the quoted market price of a Sibanye Gold share as traded on the JSE for the six months prior of the announcement of the Sibanye Transaction. Gold One will be acquiring a minority 17% interest in Sibanye Gold so we have assessed the value of a Sibanye Gold share on a minority interest basis. The following chart provides a summary of the share price movement over the six months to 20 August 2013 which was the last trading day prior to the announcement of the Sibanye Transaction. Sibanye Gold's share price and trading volume history on the JSE 1, , , , Volume Closing share price Source: Bloomberg To provide further analysis of the market prices for a Sibanye One share, we have also considered the volume weighted average market price ( VWAP ) and high price for 10, 30, 60, 90 day periods to 20 August Share Price 20-Aug Days 30 Days 60 Days 90 Days Closing price 9.93 ZAR ZAR ZAR ZAR ZAR VWAP Source: Bloomberg, BDO analysis 54

59 An analysis of the volume of trading in Sibanye Gold s shares from 11 February 2013 (when Sibanye Gold started trading on the JSE) to 20 August 2013 is set out below: Trading days Share price low (ZAR) Share price high (ZAR) Cumulative volume traded As a % of issued capital 1 Day ,397, % 10 Days ,361, % 30 Days ,364, % 60 Days ,550, % 90 Days ,758, % 135 days ,536, % Source: Bloomberg, BDO analysis This table indicates that Sibanye Gold s shares display a high level of liquidity, with approximately 74% of the Sibanye Gold s current issued capital being traded on the JSE over a six month period. Our assessment is that the range of values for Sibanye Gold s shares based on market pricing is between ZAR8.40 per share and ZAR9.95 per share. QMP valuation of Sibanye Gold Low High Assessed QMP value of a Sibanye Gold share (ZAR) Current Sibanye Gold shares on issue 735,039, ,039,000 17% interest: shares issued to Gold One 150,550, ,550,157 Total shares on issue following the Sibanye Transaction 885,589, ,589,157 Value of a 17% interest in Sibanye Gold (ZAR) 1,264,621,316 1,497,974,058 Value of a 17% interest in Sibanye Gold (AUD) $ 133,118,033 $ 157,681,480 Control premium 30% 40% Value of a 17% interest in Sibanye Gold on a control basis (AUD) $ 143,634,358 $ 183,225,880 Exchange rate based on 1 AUD : 9.5 ZAR on 15 November 2013 ( Source: BDO analysis We have calculated the value of a 17% interest in Sibanye Gold on a control basis to make it comparable to the value of the Cooke 1-3 Project and the Cooke 4 Project in section 10.1 of our Report. We applied a control premium of 30% to 40% based on our analysis is section 10.2 of our Report. We have assessed a 17% interest in Sibanye Gold to be valued between $144 million and $183 million. The value of the Cooke 1-3 Project and the Cooke 4 Project in section 10.1 of our Report, without considering the additional resources attributable to these projects is in the range of $272 million and $347 million with a preferred value of $310 million. This is substantially higher than the 17% interest in Sibanye Gold. 55

60 Possible reasons for the difference in the valuations are as follows: The sensitivity to the exchange rate in our assessment; Gold One and Sibanye Gold may have used different macro economic assumptions in their valuation of the Sibanye Transaction such as: o o o forecast gold prices; forecast uranium prices; and foreign exchange rates. Sibanye Gold s market capitalisation may be at a discount to the intrinsic value of Sibanye Gold due to the recent decline in the gold spot price Resource multiple valuation cross check As a cross check to the sum-of-parts valuation, we have analysed the resource multiple observed for comparable companies listed on the ASX, LSE, AIM, TSX, NYSE and JSE with gold projects in Africa as their primary focus. The table below shows that the average enterprise value per unit of inferred, indicated and measured resource is $46.6/ounce; compared to $10.8/ounce for Gold One. We have also calculated the average multiple excluding Randgold Resources Limited, DRDGOLD Limited, Avocet Mining PLC, Vantage Goldfields Limited and Mintails Limited as we consider the companies to be outliers. Excluding these outliers, the average enterprise value per unit of inferred, indicated and measured resource is $45.8/ounce. We consider Sibanye Gold and Pan African Resources to be the most comparable to Gold One due to the: - nature of the operations - locations of the operations - average cash cost per ounce; and - volume of the resources. Sibanye Gold s three principal operations are the Driefontein, Beatrix and Kloof mines, located in South Africa. The operations comprise of shallow to ultra-deep level gold mines. Sibanye Gold s average all-in cash cost in the first six months of 2013 was US$1,275 per ounce. Pan African Resources key gold assets are its Barberton and Evander gold mines which are both located in South Africa. Barberton s cash cost is US$776 per ounce. The underground operations range between depths of 1,200 metres to 1,450 metres. 56

61 Resource Multiple Company Gold One International Limited Major Exchanges Market Capitalisation (A$m) Enterprise Value 1 21 July 2013 (A$m) Gold Resources (Moz) EV/Resource Multiple ($/oz) ASX/JSE Randgold Resources Limited 2 LSE 6, , Anglogold Ashanti Limited NYSE/JSE/LSE/ ASX 5, , Gold Fields Limited NYSE/JSE/SWX 4, , Harmony Gold Mining Co Limited NYSE/JSE 1, , Sibanye Gold Limited 3 JSE/NYSE , Pan African Resources PLC 3 JSE/AIM Resolute Mining Limited ASX DRDGOLD Limited 2 NYSE/JSE Perseus Mining Limited ASX/TSX Teranga Gold Corporation ASX/TSX Stonewall Resources Limited ASX Avocet Mining PLC 2 LSE Vantage Goldfields Limited 2 ASX Mintails Limited 2 ASX Mean 46.6 Median 18.3 Source: Bloomberg and BDO Analysis 1 Enterprise value includes a premium for control of 30% Mean excluding outliers 45.8 Median excluding outliers 43.2 Minimum excluding outliers 13.8 Maximum excluding outliers The EV/resource multiples observed for these entities are considered outliers and have been excluded from our calculations. 3 We consider these companies to be the most comparable to Gold One We have calculated our preferred inferred Gold One share price by applying the average resource multiple of Sibanye Gold and Pan African Resources, being The high and low inferred values per share have been calculated to show the range of values based on the minimum and mean resource multiples of the comparable companies in the table above (excluding the outliers). This reflects the additional difficulties encountered at Gold One s projects which results in generally lower values than for some comparable companies. 57

62 Based on the preferred resource multiple, the inferred value of a Gold One share on a control basis is $0.25, which is consistent with the value we derived under the Sum of Parts methodology. Gold One's share price based on comparable companies EV/resource multiple EV/Resource Resources Enterprise value Net debt multiple (Moz) ($m) ($m) ($/oz) Shares on issue (million) Inferred share price A$ Low , Preferred , High , , Source: Bloomberg and BDO Analysis 10.5 Assessment of Gold One s value The results of the valuations performed are summarised in the table below: Low $ Preferred $ High $ Sum of parts value prior to the completion of the Sibanye Transaction (Section 10.1) QMP value (Section 10.2) Resource multiple (10.4) Source: BDO analysis The values derived from our Sum-of-Parts and QMP approaches and the implied value from resource multiple are reasonably consistent with one another. Given that the shares of Gold One are not liquid and the resource multiples are used only as a cross check to our primary valuation methodology, we have elected to rely on the value derived from our Sum-of-Parts approach. Accordingly, we consider that the value of a Gold One share to be between $0.18 and $0.31, with a preferred value of $ Valuation of the Consideration Under the terms of the Compulsory Acquisition, BCX Gold is offering $0.30 cash for every Gold One share it does not already own. 58

63 12. Do the Compulsory Acquisition Terms Offer a Fair Value? 12.1 Fair value opinion The value of a Gold One share on a control basis is compared to the value of the Consideration as shown below: Ref Low $ Preferred $ High $ Value of a Gold One share on a control basis Value of the Consideration We note from the table above that the value of the Consideration is higher than the value of a Gold One share on a control basis. Therefore, we consider that the terms of the Compulsory Acquisition give a fair value to Shareholders Reasons for our fair value opinion We have concluded that the terms of the Compulsory Acquisition give a fair value to Shareholders as the Consideration per share is greater than our assessed preferred value per share. 13. Conclusion We have considered the terms of the Compulsory Acquisition as outlined in the body of this report and have concluded that the Compulsory Acquisition terms give a fair value to Shareholders. 14. Sources of Information This report has been based on the following information: Draft Compulsory Acquisition Notice on or about the date of this report; Audited financial statements of Gold One for the years ended 31 December 2011, 31 December 2012 reviewed half year financial statements to 30 June 2013; Project Models prepared by BDO in accordance with the mining and technical inputs provided by SRK. Independent Technical Assessment and Valuation Report of Gold One s mineral assets dated November 2013 performed by SRK; Share registry information; Information in the public domain; and Discussions with Directors and Management of Gold One. 59

64 15. Independence BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $160,000 (excluding GST and reimbursement of out of pocket expenses). The fee is not contingent on the conclusion, content or future use of this Report. Except for this fee, BDO Corporate Finance (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report. BDO Corporate Finance (WA) Pty Ltd has been indemnified by BCX Gold in respect of any claim arising from BDO Corporate Finance (WA) Pty Ltd's reliance on information provided by BCX Gold, including the non provision of material information, in relation to the preparation of this report. Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence with respect to BCX Gold and Gold One and any of their respective associates with reference to ASIC Regulatory Guide 112 Independence of Experts. In BDO Corporate Finance (WA) Pty Ltd s opinion it is independent of BCX Gold and Gold One and their respective associates. Neither the two signatories to this report nor BDO Corporate Finance (WA) Pty Ltd, have had within the past two years any professional relationship with BCX Gold or Gold One, or their associates, other than in connection with the preparation of this report. A draft of this report was provided to BCX Gold and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this report as a result of this review. BDO is the brand name for the BDO International network and for each of the BDO Member firms. BDO (Australia) Ltd, an Australian company limited by guarantee, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN to represent it in BDO International). 16. Qualifications BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance advice, particularly in respect of takeovers, mergers and acquisitions. BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX and the Corporations Act. The persons specifically involved in preparing and reviewing this report were Sherif Andrawes and Adam Myers of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of independent expert reports, valuations and mergers and acquisitions advice across a wide range of industries in Australia and were supported by other BDO staff. Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Member of the Institute of Chartered Accountants in Australia. He has over twenty five years experience working in the audit and corporate finance fields with BDO and its predecessor firms in London and Perth. He has been responsible for over 200 public company independent expert s reports under the Corporations Act or ASX Listing Rules. These experts reports cover a wide range of industries in Australia with a focus on companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in Western Australia, 60

65 Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural Resources Leader for BDO in Australia. Adam Myers is a member of the Australian Institute of Chartered Accountants. Adam s career spans 15 years in the Audit and Assurance and Corporate Finance areas. Adam has considerable experience in the preparation of independent expert reports and valuations in general for companies in a wide number of industry sectors. 17. Disclaimers and Consents This report has been prepared at the request of BCX Gold for inclusion in the Notice of Compulsory Acquisition which will be sent to the minority shareholders of Gold One. BCX Gold engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert's report to consider if the proposed terms of the Compulsory Acquisition give a fair value for the shares of Gold One held by the minority shareholders of Gold One. BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Compulsory Acquisition Notice. Apart from such use, neither the whole nor any part of this report, nor any reference thereto may be included in or with, or attached to any document, circular resolution, statement or letter without the prior written consent of BDO Corporate Finance (WA) Pty Ltd. BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of the Notice of Compulsory Acquisition other than this report. We have no reason to believe that any of the information or explanations supplied to us are false or that material information has been withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting as an independent expert to perform any due diligence procedures on behalf of the Company. The Directors of the Company are responsible for conducting appropriate due diligence in relation to Gold One. BDO Corporate Finance (WA) Pty Ltd provides no warranty as to the adequacy, effectiveness or completeness of the due diligence process. The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions prevailing at the date of this report. Such conditions can change significantly over short periods of time. The forecasts provided to BDO Corporate Finance (WA) Pty Ltd by BCX Gold, Gold One and its advisers are based upon assumptions about events and circumstances that have not yet occurred. Accordingly, BDO Corporate Finance (WA) Pty Ltd cannot provide any assurance that the forecasts will be representative of results that will actual be achieved. BDO Corporate Finance (WA) Pty Ltd disclaims any possible liability in respect of these forecasts. With respect to taxation implications it is recommended that individual Shareholders obtain their own taxation advice, in respect of the Compulsory Acquisition, tailored to their own particular circumstances. Furthermore, the advice provided in this report does not constitute legal or taxation advice to the Shareholders of Gold One, or any other party. BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon an independent assessment of the technical inputs to the life of mine cash flows for the Projects and valuations for mineral assets held by Gold One. The independent technical specialist engaged for the technical assessment and mineral asset valuation, SRK, possess the appropriate qualifications and experience in the industry to make such assessments. The 61

66 approaches adopted and assumptions made in arriving at their opinion and valuation are appropriate for this report. We have received consent from the independent technical specialist for the use of their Technical Assessment and Valuation Report in the preparation of this report and to append a copy of their report to this report. The statements and opinions included in this report are given in good faith and in the belief that they are not false, misleading or incomplete. The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd has no obligation to update this report for events occurring subsequent to the date of this report. Yours faithfully BDO CORPORATE FINANCE (WA) PTY LTD Sherif Andrawes Director Adam Myers Director 62

67 Appendix 1 Glossary of Terms Reference Definition $, $A or AUD Australian dollars Amoribrite Amoribrite (Pty) Ltd APES 225 Accounting Professional & Ethical Standards Board professional standard APES 225 Valuation Services ASIC ASX Au Baiyin BCX Gold BDO BEE CADF the Company Compulsory Acquisition Consideration Cooke 1-3 Model Cooke 4 Model Cooke 1-3 Project Cooke 4 Project Corporations Act CY Date of Notice Australian Securities and Investments Commission Australian Securities Exchange Gold Baiyin Nonferrous Metal Group Co. Limited BCX Gold Investment Holdings Limited BDO Corporate Finance (WA) Pty Ltd Black Economic Empowerment China-Africa Development Fund Gold One International Limited The proposed compulsory acquisition by BCX Gold of the remaining shares in Gold One that it does not already own The offer of A$0.30 per share contained in the Notice of Compulsory Acquisition The DCF model prepared by Gold One and adjusted by SRK and BDO The DCF model prepared by Gold One and adjusted by SRK and BDO Gold One s Cooke 1-3 Underground and Randfontein Surface Mines operations Gold One s Cooke 4 Underground Mine operations Corporations Act 2001 Cth Calendar Year Date of the Notice of Acquisition 63

68 Reference DCF EBIT EBITDA EMC Ezulwini Ezulwini Gold Stream Transaction FME Franco-Nevada FY g Gold One Technical Assessment and Valuation Report JORC Code JSE Kg Lb Long March Mlbs the Models Modder East Model Modder East Project MOU Moz Definition Discounted Future Cash Flows Earnings before interest and tax Earnings before interest, tax, depreciation and amortisation Ezulwini Mining Empowerment Partnership Ezulwini Mining Company (Pty) Limited Gold sale contract between Ezulwini and Franco-Nevada Future Maintainable Earnings Franco-Nevada (Barbados) Corporation Financial year for the 12 month period 1 January to 31 December Gram Gold One International Limited Gold One International Technical Assessment and Valuation Report dated November 2013, prepared by SRK The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves Johannesburg Stock Exchange Kilogram Pound Long March Capital Group Million pounds The Cooke 1-3 Model, Cooke 4 Model and Modder East Model The DCF model prepared by Gold One and adjusted by SRK and BDO Gold One s Modder East Mine Memorandum of Understanding Million ounces 64

69 Reference Mt NAV Notice of Compulsory Acquisition Our Report Oz PRC the Projects QMP Rand Uranium Definition Million tonnes Net Asset Value The notice of compulsory acquisition provided by BCX Gold to the minority shareholders of Gold One for $xx for each Gold One share. This Independent Expert s Report prepared by BDO Ounces People s Republic of China Cooke 1-3 Project, Cooke 4 Project and the Modder East Project Quoted market price Rand Uranium (Proprietary) Limited RG 10 Compulsory acquisitions and buyouts (June 2013) RG 111 Content of expert reports (March 2011) RG 112 Independence of experts (March 2011) RU BEE Shareholders Sibanye Gold Sibanye Transaction SRK t TIA U 3 O 8 $US or USD the Valmin Code Rand Uranium Empowerment Partnership Shareholders of Gold One not associated with BCX Gold Sibanye Gold Limited Gold One will merge its 74% interest in Rand Uranium and Ezulwini with Sibanye Gold for consideration of 17% of Sibanye Gold s ordinary shares SRK Consulting (South Africa) Pty Ltd Tonne The transaction implementation agreement ( TIA ) between Gold One and BCX Gold dated 16 May 2011 Triuranium octoxide, a compound of uranium US Dollars Code for the Technical Assessment and valuation of Mineral Petroleum Assets and Securities for Independent Expert Reports 65

70 Reference VWAP Valuation Engagement ZAR Definition Volume Weighted Average Price An Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time. South African Rand 66

71 Appendix 2 Valuation Methodologies Methodologies commonly used for valuing assets and businesses are as follows: Net asset value ( NAV ) Asset based methods estimate the market value of an entity s securities based on the realisable value of its identifiable net assets. Asset based methods include: Orderly realisation of assets method Liquidation of assets method Net assets on a going concern method The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner. The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity may not be contemplated, these methods in their strictest form may not be appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs. Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity s valuation. Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on a going concern basis. This is particularly so for exploration and mining companies where investments are in finite life producing assets or prospective exploration areas. These asset based methods ignore the possibility that the entity s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when an entity is not making an adequate return on its assets, a significant proportion of the entity s assets are liquid or for asset holding companies. Quoted Market Price Basis ( QMP ) A valuation approach that can be used in conjunction with (or as a replacement for) other valuation methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a deep market in that security. Capitalisation of future maintainable earnings ( FME ) This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data. 67

72 The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives. The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax ( EBIT ) or earnings before interest, tax, depreciation and amortisation ( EBITDA ). The capitalisation rate or earnings multiple is adjusted to reflect which base is being used for FME. Discounted future cash flows ( DCF ) The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present value at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks. Considerable judgement is required to estimate the future cash flows which must be able to be reliably estimated for a sufficiently long period to make this valuation methodology appropriate. A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate. DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows. Market Based Assessment The market based approach seeks to arrive at a value for a business by reference to comparable transactions involving the sale of similar businesses. This is based on the premise that companies with similar characteristics, such as operating in similar industries, command similar values. In performing this analysis it is important to acknowledge the differences between the comparable companies being analysed and the company that is being valued and then to reflect these differences in the valuation. The resource multiple is a market based approach which seeks to arrive at a value for a company by reference to its total reported resources and to the enterprise value per tonne/lb of the reported resources of comparable listed companies. The resource multiple represents the value placed on the resources of comparable companies by a liquid market. 68

73 Appendix 3 Discount Rate Assessment Determining the correct discount rate, or cost of capital, for a business requires the identification and consideration of a number of factors that affect the returns and risks of a business, as well as the application of widely accepted methodologies for determining the returns of a business. The discount rate applied to the forecast cash flows from a business represents the financial return that will be before an investor would be prepared to acquire (or invest in) the business. The capital asset pricing model ( CAPM ) is commonly used in determining the market rates of return for equity type investments and project evaluations. In determining a business weighted average cost of capital ( WACC ) the CAPM results are combined with the cost of debt funding. WACC represents the return required on the business, whilst CAPM provides the required return on an equity investment. Cost of Equity and Capital Asset Pricing Model CAPM is based on the theory that a rational investor would price an investment so that the expected return is equal to the risk free rate of return plus an appropriate premium for risk. CAPM assumes that there is a positive relationship between risk and return, that is, investors are risk averse and demand a higher return for accepting a higher level of risk. CAPM calculates the cost of equity and is calculated as follows: CAPM K e = R f + β x (R m R f ) Where: K e R f R m R m R f β = expected equity investment return or cost of equity in nominal terms = risk free rate of return = expected market return = market risk premium = equity beta The individual components of CAPM are discussed below. Risk Free Rate (R f ) The risk free rate is normally approximated by reference to a long term government bond with a maturity equivalent to the timeframe over which the returns from the assets are expected to be received. Having regard to the period of the operations we have used the current yield to maturity on the 10 year South African Government Bond which was 7.81% per annum as at 15 November Market Risk Premium (R m R f ) The market risk premium represents the additional return that investors expect from an investment in a well-diversified portfolio of assets. It is common to use a historical risk premium, as expectations are not observable in practice. We have noted that the current market risk premium is 6%. The market risk premium is derived on the basis of capital weighted average return of all members of the S&P 200 Index minus the risk free rate is dependent on the ten year government bond rates. For the purpose of our report we have adopted a market risk premium of 6%. 69

74 Equity Beta Beta is a measure of the expected correlation of an investment s return over and above the risk free rate, relative to the return over and above the risk free rate of the market as a whole. A beta greater than one implies that an investment s return will outperform the market s average return in a rising market and underperform the market s average return in a falling market. On the other hand, a beta less than one implies that the business performance compared to that of a business whose beta is greater than one will provide an inverse relationship in terms of the market s average return. Equity betas are normally either a historical beta or an adjusted beta. The historical beta is obtained from the linear regression of a stock s historical data and is based on the observed relationship between the security s return and the returns on an index. An adjusted beta is calculated based on the assumption that the relative risk of the past will continue into the future, and hence derived from the historical data. It is then modified by the assumption that a stock will move towards the market over time, taking into consideration the industry risk factors which make the operating risk of the investment project greater or less risky than comparable listed companies when assessing the equity beta for an investment project. It is important to note that it is not possible to compare the equity betas of different companies without having regard to their gearing levels. Thus, a more valid analysis of betas can be achieved by ungearing the equity beta (β a ) by applying the following formula: β a = β / (1+(D/E x (1-t)) In order to assess the appropriate equity beta for the Gold One we have taken two steps: a) We have had regard to the equity beta of Gold One. The geared beta below has been calculated using weekly data over a two-year period. We note that the debt to equity structure is reflective of Gold One s structure as at 30 June Company Market Capitalisation (A$) Geared Beta (β) Debt/Equity (%) Ungeared Beta (βa) Gold One International Limited 319,846, % 0.47 Source: Bloomberg b) We have had regard to the equity betas of publicly listed companies with gold operations in Africa. The geared betas below have been calculated using weekly data over a two-year period. Company Market Capitalisation (A$) Geared Beta (β) Debt/Equity (%) Ungeared Beta (βa) Randgold Resources Limited 7,270,383, % 0.84 Anglogold Ashanti Limited 6,629,228, % 0.84 Gold Fields Limited 3,583,984, % 0.94 Harmony Gold Mining Co Limited 1,505,559, % 0.98 Sibanye Gold Limited 958,755, % 0.32 Pan African Resources PLC 454,837, % 1.05 Resolute Mining Limited 373,379, % 1.28 DRDGOLD Limited 191,790, % 0.75 Perseus Mining Limited 169,445, % 1.85 Teranga Gold Corporation 163,152, % 0.77 Stonewall Resources Limited 58,958, % 1.33 Avocet Mining PLC 48,507, %

75 Company Market Capitalisation (A$) Geared Beta (β) Debt/Equity (%) Ungeared Beta (βa) Vantage Goldfields Limited 11,129, % 1.02 Mintails Limited 10,818, % 0.77 Mean % 0.94 Median % 0.89 Weighted Average 0.86 Source: Bloomberg and BDO Analysis Selected Beta (β) In selecting an appropriate Beta for Gold One, we have considered the similarities between Gold One and the comparable companies selected above. The comparable similarities and differences noted are: With the exception of Resolute Mining Limited, the comparable companies are considerably smaller in terms of market capitalisation than Gold One; and Several comparable companies are only focussed on the production of gold whereas Gold One also has a focus on uranium production. Having regard to the above we consider that an appropriate ungeared beta to apply to the Gold One is between 0.90 and We understand that the capital structure of Gold One currently reflects a debt equity ratio of 80.72%. Therefore we have regeared Gold One s beta to 1.41 to Cost of Equity On this basis we have assessed the cost of equity to be: Input Value Adopted Risk free rate of return 7.81% 7.81% Low High Equity market risk premium 6.00% 6.00% Beta (geared) Cost of Equity 16.26% 17.20% Weighted Average Cost of Capital The WACC represents the market return required on the total assets of the undertaking by debt and equity providers. WACC is used to assess the appropriate commercial rate of return on the capital invested in the business, acknowledging that normally funds invested consist of a mixture of debt and equity funds. Accordingly, the discount rate should reflect the proportionate levels of debt and equity relative to the level of security and risk attributable to the investment. In calculating WACC there are a number of different formulae which are based on the definition of cash flows (i.e., pre-tax or post-tax), the treatment of the tax benefit arising through the deductibility of interest expenses (included in either the cash flow or discount rate), and the manner and extent to which they adjust for the effects of dividend imputation. The commonly used WACC formula is the nominal post-tax WACC, without adjustment for dividend imputation, which is detailed in the below table. 71

76 CAPM WACC = E K e + D K d (1 t) Where: K e K d T E D E+D D+E = expected return or discount rate on equity = interest rate on debt (pre-tax) = corporate tax rate = market value of equity = market value of debt (1- t) = tax adjustment Gearing Before WACC can be determined, the proportion of funding provided by debt and equity (i.e., gearing ratio) must be determined. The gearing ratio adopted should represent the level of debt that the asset can reasonably sustain (i.e., the higher the expected volatility of cash flows, the lower the debt levels which can be supported). The optimum level of gearing will differentiate between assets and will include: the variability in earnings streams; working capital requirements; the level of investment in tangible assets; and the nature and risk profile of the tangible assets. As described earlier, we understand the debt equity ratio of Gold One 80.72%. Gold One s cost of debt is between 9% and 10%. Calculation of Nominal WACC Based on the above inputs we have calculated the nominal WACC to be between 12.00% and 13.00%. Value Adopted WACC Low High Cost of equity, K e 16.26% 17.20% Cost of debt, K d 9.00% 10.00% Proportion of equity ((E/(E+D)) 55.3% 55.3% Proportion of debt ((D/(E+D)) 44.7% 44.7% Weighted average cost of capital (nominal) Calculated 11.81% 12.64% Weighted average cost of capital (nominal) - Adopted 12.00% 13.00% 72

77 The table below provides a brief description of each comparable company: Company Randgold Resources Limited Anglogold Ashanti Limited Gold Fields Limited Harmony Gold Mining Co Limited Sibanye Gold Limited Pan African Resources PLC Resolute Mining Limited DRDGOLD Limited Company Description Randgold Resources Limited engages in the exploration and production of gold in central and west Africa. Randgold primarily holds interests in the Loulo mine in Mali, the Morila gold mine in Mali, the Tongon gold mine in Cote d'ivoire and Kibali gold mine in the Democratic Republic of Congo. AngloGold Ashanti Limited is involved in the exploration and production of gold. In additional to gold, AngloGold is involved in the sale of uranium, silver and sulphuric acid. AngloGold holds interests in projects in central, southern and west Africa as well as North America, South America and Australia. Gold Fields Limited is involved in the exploration, development and production of gold as well as copper. Gold Fields holds projects located in South Africa, Mali, Ghana, Australia, Philippines and Peru. Gold Fields' flagship project is the 90% owned South Deep project located in South Africa which has an estimated mine life of 80 years. Harmony Gold Mining Co Limited is engaged in the exploration and production of gold, silver, copper and molybdenum. Harmony has projects located in South Africa and Papua New Guinea. Sibanye Gold explores for and produces gold in South Africa and is listed on the JSE. Sibanye has two operating mines, the Kloof Driefontein Complex and the Beatrix gold mine. Sibanye Gold is currently involved in a transaction with Gold One, see section 10.3 of this report for more details. Pan African Resources PLC engages in the acquisition, exploration and production of gold and platinum in South Africa and Mozambique. Additionally, Pan African also explores for palladium and rhodium. Resolute Mining Limited explores for, produces and develops gold in Ghana, Mali Queensland and Tanzania. The Company's gold exploration projects include Obotan, Syama, Ravenswood and Golden Pride. DRDGOLD Limited operates as a surface gold retreatment company in South Africa. The company's primary project is Ergo, a surface retreatment project that treats old slime and sand dumps as well as the east and central Rand goldfields. Perseus Mining Limited Perseus Mining Ltd is a gold mining company listed on the TSX and ASX with 650 square kilometres of tenements on the Ashanti Gold Belt in Ghana. The company commenced gold production of its lead project, Edikan gold mine, in August Perseus Mining also has other exploration targets including 2,724 square kilometres of tenement holding in Cote d'ivoire which includes the Sissingue Gold Project. Teranga Gold Corporation Teranga gold is engaged in the exploration, development and production of gold in West Africa. The Company's primary project is the Sabodala gold mine which is located in Senegal and has proved and probable gold reserves of approximately 1.6 million ounces. Stonewall Resources Limited Stonewall Resources Limited is a gold mining company. The Company has projects located in the Mpumalanga Province and Kwazulu-Natal Province of South Africa. In addition, Stonewall has an interest in the Lucky Draw gold project in New South Wales. 73

78 Company Avocet Mining PLC Vantage Goldfields Limited Mintails Limited Company Description Avocet Mining PLC operates as a gold mining and exploration company in the West African countries of Burkina Faso and Guinea. The company's flagship project is the Inata gold mining project located in Burkina Faso. Vantage Goldfields Ltd. is an emerging gold producer and mineral explorer with substantial assets and extensive operations based in South Africa. The Company currently has three producing gold mines in South Africa. Mintails Limited develops, processes and produces gold from mining tailings which are located in the West Rand region of the Witwatersrand Basin in South Africa. Source: Bloomberg, Capital IQ and BDO Analysis 74

79 Appendix 4 Technical Assessment and Valuation Report 75

80 Gold One International Technical Assessment and Valuation Report Report Prepared for BDO Corporate Finance (WA) Pty Ltd Report Number Report Prepared by November 2013

81 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page i Gold One International Technical Assessment and Valuation Report BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Australia SRK Consulting (South Africa) Pty Ltd 265 Oxford Rd Illovo 2196 Johannesburg South Africa johannesburg@srk.co.za website: Tel: +27 (0) Fax: +27 (0) SRK Proposal Number November 2013 Compiled by: Maurice Mostert Senior Mining Engineer Peer Reviewed by: Mark Wanless Principal Geologist mmostert@srk.co.za Authors: Andrew van Zyl; Maurice Mostert; Roger Dixon MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

82 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page ii Executive Summary SRK Consulting (South Africa) (Pty) Limited ( SRK ) has been commissioned by BDO Corporate Finance (WA) Pty Ltd ( BDO ) to prepare a technical assessment and valuation report of the mining and exploration assets belonging to Gold One International Limited ( Gold One ) for inclusion in BDO s independent expert s report. The independent expert s report will accompany a Notice of Compulsory Acquisition ( Notice ) by BCX Gold Investment Holdings Limited ( BCX ) to minority shareholders. The material mining and exploration assets included in the valuation are as follows: o o o Modder East Gold Mine, an operational property; Cooke 1-3 Section, operational properties consisting of Cooke 1, 2 and 3 Shafts; Randfontein Surface Operations consisting of: - Randfontein Surface Operations, operational entity considering tailings retreatment for reclamation of gold; and - Surface Uranium Project, Feasibility Project considering a tailings retreatment facility for reclamation of gold and uranium; o o o o o o Cooke 4 Shaft, an operational property; Ventersburg, an exploration property; Modder North Project, an exploration property; Tulo Project in Mozambique, an exploration property; New Kleinfontein and Turnbridge, exploration properties; 72% interest Goliath Gold Mining Limited ( Goliath ), an incorporation of several exploration assets, including: o Megamine, consisting of: o o o o o Sub Nigel Gold Mine, Including Sub Nigel 1, 2 and 3 Mining Rights, which is currently on care and maintenance; West Vlakfontein, an exploration property; Vlakfontein, an exploration property; Spaarwater, an exploration property; Wit Nigel, an exploration property; o o East Rand Targets, exploration properties acquired from the historic Pamodzi Gold Operations; Project Elephant, an exploration property in the Western Cape SRK notes that Gold One is planning to acquire a 17% stake in Sibanye Gold ( Sibanye ), a gold mining operation, in exchange for Gold One assets on the Gauteng West Rand (including the Cooke 1-3 Operations, Cooke 4 Operation and Randfontein Surface Operations). This was not taken under consideration in this report because the transaction was not completed at time of writing. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

83 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page iii Summary of principal objectives SRK has reviewed and provided an assessment on the reasonableness of the following technical assumptions used in the cash flows of Gold One s operational properties and included in BDO s independent expert s report: o o o o o o o o resources and reserves incorporated into the financial and operating models for the assets; mining physicals (including tonnes of ore mined, ore processed, recovery and grade); processing assumptions (including products and recovery, scheduling, mill production, refining recovery and plant utilisation); operating costs (including but not limited to surface mining, underground mining, general site costs, haulage, processing, corporate office, royalties); non-operating and other costs (including but not limited to reclamation, surface mining prestripping, discretionary capital costs, deferred development costs); capital expenditure (including but not limited to sustaining capital expenditure); any other relevant technical assumptions not specified above; and SRK also provided an independent opinion on the market value of Gold One s gold and uranium prospects across South Africa and any residual resources not already included in the cash flows of the operating properties. Reports submitted SRK was requested to provide the following: o Clearance on the technical project assumptions by 11 November 2013 o Draft report by 18 November 2013 o Final report by 25 November The valuation report is prepared in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Report ( VALMIN Code 2005 ). Competent Persons The competent persons are listed intable ES Table ES 10-1: Competent Persons Name Address Membership/s Mark Wanless SRK, 265 Oxford Road, Illovo, 2196 Pr Sci Nat [400178/05], SACNASP Roger Dixon SRK, 265 Oxford Road, Illovo, 2196 Pr Eng [No ], FSAIMM, Joseph Mainama SRK, 265 Oxford Road, Illovo, 2196 Pr Eng [No ], MSAIMM Andrew van Zyl SRK, 265 Oxford Road, Illovo, 2196 MSAIMM The consultants mentioned in Table ES 10-1 have the requisite experience and qualifications to act as Competent Persons. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

84 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page iv Mr Mark Wanless is a competent person responsible for the reporting of certain gold resources, who has 17 years experience as a geologist and 17 years experience with Witwatersrand gold deposits; The Competent Person with overall responsibility for report is Mr Roger Dixon, who has 40 years mining experience, 30 of which were in Witwatersrand Gold Mines. The Competent Valuator with overall responsibility for the valuation is Mr Andrew van Zyl, who has 7 years experience as a valuator of mining companies and mineral properties. Mr Joseph Mainama has been involved in the field of mining engineering for the past 17 years and serves as the competent person for reporting of reserves. Compliance The Mineral Resources and Reserve estimates presented in this report have been reported according to the SAMREC Code (2007 edition). SRK considers that the Mineral Resources estimates would be identical if reported in accordance with the JORC 2004 Standards. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

85 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page v Valuation of Gold One Resources Table ES 10-2 represents the consolidated Mineral Resource estimate for Gold One. Table ES 10-2: Consolidated Mineral Resource Statement for Gold One Gold Uranium Ton Grade Gold content Ton U 3 O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Measured Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Measured Indicated Modder East Cooke 1-3 Underground Cooke Randfontein Surface Ventersburg Turnbridge Modder North Goliath Gold Total Indicated Total Measured and Indicated Resource Inferred Modder East Cooke 1-3 Underground Cooke Randfontein Surface Ventersburg Turnbridge New Kleinfontein Modder North Goliath Gold Total Inferred Total Resources The Mineral Resources are not Mineral Reserves, and there is no guarantee that all or part of the Mineral Resource will be converted to a Mineral Reserve The Mineral Resources are reported inclusive of Mineral Reserves. The Mineral Resources are reported at a range of cut-off values, based on techno economic assumptions which are detailed in sections 5 and 6 Effective dates for each Mineral Resource are listed in Table Goliath Gold is reported on a 100% basis but only 72% is attributable to Gold One MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

86 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page vi The Table ES 3-3 represents the consolidated Mineral Reserve estimate for Gold One. Table ES 3-3: Consolidated Mineral Reserve Estimate for Gold One Gold Uranium Ton Grade Gold content Ton U 3 O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Proved Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Proved Probable Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Probable Total Proved and Probable Reserves Mineral Resources are reported at a range of cut-offs based on various commodity prices, as detailed in Table 6-1 to Table 6-4 Effective dates for each Mineral Reserves are listed in Table 3-2 SRK was requested to value the resources at Gold One that are not currently included in the Life of Mine plans and hence not included in the DCF models. SRK applied a number of valuation methods in order to determine a valuation range for these ounces. This included a review of Metals Economics ( and SNL Metals Economics Group ( for details on recently completed transactions that might be considered appropriate. The market capitalisations of Harmony and Sibanye were also reviewed to confirm the DCF valuations. This review, along with a review of the specific characteristics of the assets, suggested that there could be additional value at Cooke 4 and Randfontein Surface. In addition, SRK considered the historical costs at Goliath and Ventersburg and applied the Yardstick Approach for the ounces at Cooke 4 and Randfontein Surface. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

87 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page vii The estimated value for Gold One Measured, Indicated and Inferred ounces are described in Table ES 3-4 Table ES 3-4: Summary of Incremental Value of non-dcf ounces Range (ZAR million) Low Preferred High Ventersburg Randfontein surface Goliath Cooke Total SRK values the additional ounces (including Uranium expressed on a gold equivalent basis) at between ZAR 491 and ZAR 1120 million with a preferred value of ZAR 792 million. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

88 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page viii Table of Contents Executive Summary... ii Disclaimer... xiii List of Abbreviations... xiv 1 Introduction and Scope of Report Background and Brief Background of the project Nature of the brief Program Objectives and Work Program Program objectives Purpose of the Report Technical Reliance Legal Reliance Consultant Qualifications Reporting Standard Work program Effective Date Compliance Statement of SRK Independence Warranties Indemnities Consents Description of Gold One s Assets Legal Tenure History Modder East Gold Mine Cooke Underground (Cooke 1-3 section) and Randfontein Surface Operation Cooke 4 Shaft Ventersburg Project Modder North Project Tulo Project New Kleinfontein and Turnbridge Project Goliath Mineral Resources Modder East Cooke Randfontein Surface Operations Cooke 4 Shaft Ventersburg MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

89 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page ix 5.6 Modder North Tulo New Kleinfontein and Turnbridge Goliath Mineral Reserves Modder East Modifying factors Operational review SRK comments Cooke 1-3 section Conventional breast stoping The bord and pillar mining Double-cut with bench mining Pillar extraction Modifying factors Operational review SRK comments Randfontein Surface Operation Surface Uranium Project Existing Surface Operations Cooke 4 Shaft Modifying factors Operational review SRK comments Consolidated Resource and Reserve Statement for Gold One Financial Evaluation Reliance on information Site visit and analysis of information SAMVAL Methods Introduction Valuation Approach and Valuation Methods Materiality Transparency Valuations from Transactions Economic Assumptions Goliath and Ventersburg Assets considered non-material to the Valuation Value of Ounces at Other Mines Conclusions References MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

90 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page x Appendices Appendix A: Modder East LOM Plan Appendix B: Cooke 1, 2, 3 LOM Plan Appendix C: Cooke 4 LOM Plan Appendix D: Cooke Surface LOM Plan Appendix E: Consultant CVs Appendix F: SRK Report Distribution Record MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

91 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page xi List of Tables Table ES 6-1: Competent Persons... iii Table ES 6-2: Consolidated Mineral Resource Statement for Gold One... v Table ES 3-3: Consolidated Mineral Reserve Estimate for Gold One... vi Table ES 3-4: Summary of Incremental Value of non-dcf ounces... vii Table 3-1: Effective date of Mineral Resource Estimates... 4 Table 3-2: Effective date of Mineral Reserve Estimates... 4 Table 3-3: Competent Persons... 5 Table 4-1: Gold One Material Assets... 7 Table 4-2: Goliath Gold Material Assets... 8 Table 4-3: Modder East Historical Development... 9 Table 4-4: Ventersburg Project Brief History Table 4-5: New Kleinfontein Brief History Table 4-6: Goliath Assets held by Gold One Table 5-1: Table 5-2: Mineral Resource Statement for Modder East Mine, South Africa, SRK Consulting (Pty) Ltd, effective 31 December Mineral Resource Statement for the Cooke 1, 2, and 3 Mines, South Africa, SRK Consulting (Pty) Ltd, effective 31 December Table 5-3: Classification criterion Table 5-4: Mineral Resource Statement for Cooke Surface operations as at 31 December Table 5-5: Cooke 4 Shaft Mineral Resources as at 28 February Table 5-6: Mineral Resource Statement, Ventersburg Project, SRK Consulting, 31 December Table 5-7: Table 5-8: Mineral Resource Statement for the Main Reef on the Modder North Project, South Africa, SRK Consulting (Pty) Ltd, as at 31 December Mineral Resource Statement for the Main Reef on the New Kleinfontein and Turnbridge Projects, South Africa, SRK Consulting (Pty) Ltd, as at 31 December Table 5-9: Mineral Resource Statement for Goliath (Megamine): 31 December Table 6-1: Table 6-2: Mineral Reserve Statement for Modder East Mine, South Africa, SRK Consulting (Pty) Ltd, as at 31 December Mineral Reserve Statement for the Cooke 1, 2, and 3 Mines, South Africa, SRK Consulting (Pty) Ltd, as at 31 December Table 6-3: Mineral Reserve Statement for Cooke Surface operations as at 31 December Table 6-4: Cooke 4 Shaft Mineral Reserves as at 28 February Table 7-1: Consolidated Mineral Resource Statement for Gold One Table 7-2: Consolidated Mineral Reserve Estimate for Gold One Table 8-1: Valuation Approach Table 8-2: South African gold project transactions since Table 8-3: South African Transactions with no Reserves Table 8-4: South African Transactions with Reserves and Resources Table 8-5: Valuation of Resource Ounces at Goliath and Ventersburg Table 8-6: Ventersburg Summary Valuation Table 8-7: Goliath Summary Valuation MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

92 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page xii Table 8-8: Implied Value of Ounces from Harmony and Sibanye Table 8-9: Randfontein and Cooke 4 Valuations Table 9-1: Summary of Incremental Value of non-dcf ounces List of Figures Figure 4-1: Location of the Modder East Mine Figure 4-2: Locality map of the Cooke surface operations Figure 4-3: Location of the Cooke underground mining area Figure 4-4: Location Map for Cooke 4 operation Figure 4-5: Cooke 4 Operation mining right, prospecting rights application, access and infrastructure Figure 4-6: Locality and Mineral Holdings for Ventersburg Project Figure 4-7: Locality and Mineral Holdings for the Tulo Project Figure 4-8: Location and Mineral Holdings of Modder East, New Kleinfontein and Turnbridge, and Modder North Figure 4-9: Location map of Gold One International and Goliath East Rand assets Figure 6-1: Modder East LoM production profile Figure 6-2: Modder East 2013 Production Performance Figure 6-3: Cooke 1, 2 and 3 production profile Figure 6-4: Cooke 1-3 Production performance Figure 6-5: Cooke 1, 2 and 3 Gold Kg s produced Figure 6-6: Cooke production profile Figure 6-7: Cooke 4 production performance MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

93 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page xiii Disclaimer The opinions expressed in this Report have been based on the information supplied to SRK Consulting (South Africa) (Pty) Ltd (SRK) by Gold One International Limited ( Gold One ). The opinions in this Report are provided in response to a specific request from BDO Corporate Finance (WA) Pty Ltd to do so. SRK has exercised all due care in reviewing the supplied information. Whilst SRK has compared key supplied data with expected values, the accuracy of the results and conclusions from the review are entirely reliant on the accuracy and completeness of the supplied data. SRK does not accept responsibility for any errors or omissions in the supplied information and does not accept any consequential liability arising from commercial decisions or actions resulting from them. Opinions presented in this report apply to the site conditions and features as they existed at the time of SRK s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which SRK had no prior knowledge nor had the opportunity to evaluate. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

94 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page xiv List of Abbreviations cmg/t g/t ha kg kg/t Klbs Koz Kt Lb m m 2 Mlbs mm Moz Mt oz t USD ZAR PRD D MIIF IDIF INFE Rsv Rsc centimetre gram per ton gram per ton hectares kilogram kilogram per ton Kilo pound Kilo ounce Kilo ton pound metre metre square Mega pound millimetres Mega ounce Mega ton ounce metric ton US Dollar South African Rand Production Dormant Measured, Indicated and Inferred Indicated and Inferred Inferred Reserve Resource MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

95 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 1 1 Introduction and Scope of Report SRK Consulting (South Africa) (Pty) Limited ( SRK ) has been commissioned by BDO Corporate Finance (WA) Pty Ltd ( BDO ) to prepare a Technical Assessment and Valuation report of the mining and exploration assets belonging to Gold One International Limited ( Gold One ) for inclusion in BDO s independent expert s report. The independent expert s report will accompany a Notice of Compulsory Acquisition ( Notice ) by BCX Gold Investment Holdings Limited ( BCX ) to minority shareholders. 2 Background and Brief 2.1 Background of the project This independent technical assessment and valuation report was initiated by Evelyn Tan, Associate Director, Corporate Finance of BDO on 7 November The contact person for BDO is Evelyn Tan. 2.2 Nature of the brief BDO was requested by their client, BCX Gold Investment Holdings Limited ( BCX ), to prepare an Independent Expert s Report for inclusion with a notice of compulsory acquisition to the minority shareholders of Gold One. On 22 July 2013 Gold One announced that BCX had increased its holding in Gold One to 90.03%. The breaching of the 90% mark gave BCX the right, although not the obligation, to compulsorily acquire the remaining Gold One shares under Chapter 6A of the Corporations Act. SRK were engaged to review the technical project assumptions contained in the cash flow models of the Modder East Operations, Cooke 1-3 section, Cooke 4, Randfontein Surface Operations and Surface Uranium Operations of the Independent Expert s Report. BDO requested a technical assessment report on the mining and geological inputs to the financial models of these operations. Gold One s material mining and exploration assets reviewed in the report are as follows: o o o Modder East Gold Mine, an operational property; Cooke 1-3 Section, operational properties consisting of Cooke 1, 2 and 3 Shafts; Randfontein Surface Operations consisting of: - Randfontein Surface Operations, operational entity considering tailings retreatment for reclamation of gold; and - Surface Uranium Project, Feasibility Project considering a tailings retreatment facility for reclamation of gold and uranium; o o o o o o Cooke 4 Shaft, an operational property; Ventersburg, an exploration property; Modder North Project, an exploration property; Tulo Project in Mozambique, an exploration property; New Kleinfontein and Turnbridge, exploration properties; 72% interest Goliath Gold Mining Limited ( Goliath ), an incorporation of several exploration assets, including: o Megamine, consisting of: o o o Sub Nigel Gold Mine, Including Sub Nigel 1, 2 and 3 Mining Rights, which is currently on care and maintenance; West Vlakfontein, an exploration property; Vlakfontein, an exploration property; MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

96 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 2 o o Spaarwater, an exploration property; Wit Nigel, an exploration property; o o East Rand Targets, exploration properties acquired from the historic Pamodzi Gold Operations; Project Elephant, an exploration property in the Western Cape SRK notes that Gold One is planning to acquire a 17% stake in Sibanye Gold ( Sibanye ), a gold mining operation, in exchange for Gold One assets on the Gauteng West Rand (including the Cooke 1-3 Operations, Cooke 4 Operation and Randfontein Surface Operations). This was not taken under consideration in this report because the transaction was not completed at time of writing. In relation to the technical assessment report BDO requested that SRK review and provide an assessment on the reasonableness of the following assumptions used in the preparation of the valuation of Gold One s operating assets: resources and reserves incorporated into the models; mining physicals (including tonnes of ore mined, ore processed, recovery and grade); processing assumptions (including products and recovery, scheduling, mill production, refining recovery and plant utilisation); operating costs (including but not limited to surface mining, underground mining, general site costs, haulage, processing, corporate office, royalties); non-operating and other costs (including but not limited to reclamation, surface mining prestripping, discretionary capital costs, deferred development costs); capital expenditure (including but not limited to sustaining capital expenditure); and any other relevant technical assumptions not specified above. SRK was also engaged to provide BDO with an independent opinion on the market value of Gold One s gold and uranium prospects with resources across South Africa and any residual resources not already included in the cash flows of the operating properties. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

97 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 3 3 Program Objectives and Work Program 3.1 Program objectives The objective of this report is to provide an independent technical evaluation of the technical project assumptions made by Gold One in the cash flow models of Gold One s operational assets. SRK is to also value the gold and uranium prospects across South Africa and any residual resources not already included in the cash flows of the operating properties. 3.2 Purpose of the Report The purpose of this Report is to provide an independent technical assessment and valuation report for inclusion in an independent expert s report to be prepared by BDO. The SRK report will be appended to the BDO independent expert s report and as such will be a public document. 3.3 Technical Reliance SRK places reliance on Gold One that all technical information provided to SRK at the time of writing is both valid and accurate for the purpose of compiling this report. The documents that have been considered in compiling this Technical Assessment and Valuation Report are as follows: 1. Independent Technical Expert Report on the Assets of Gold One International Limited, prepared for KPMG Corporate Finance (Australia) Pty Ltd by SRK Consulting, June 2011; 2. A media release by Gold One International Limited titled Gold One Declares Gold and Uranium Mineral Resources and Mineral (Ore) Reserves for Cooke 4 Shaft, 20 August 2013; 3. Independent Technical Report on the Modder East Underground operation, prepared for Gold One International Limited by SRK Consulting, October 2013; 4. Independent Technical Report on the Ventersburg operation, prepared for Gold One International Limited by SRK Consulting, August 2012; 5. Independent Technical Report on Gold One Cooke 4 Underground operation, prepared for Gold One International Limited by SRK Consulting, July 2013; 6. Independent Technical Report on the Cooke Surface Operations operations, prepared for Gold One International Limited by SRK Consulting, July 2013; and 7. Independent Technical Report, Cooke Surface and Cooke Underground Assets, prepared for Gold One International Limited by SRK Consulting, July Legal Reliance In consideration of all legal aspects relating to the Gold One assets, SRK has placed reliance on legal information provided by Pierre Kruger, Senior Vice President: Legal Counsel and Company Secretary, Gold One. SRK have, by personal inspection, confirmed the information supplied by Pierre Kruger. 3.5 Consultant Qualifications The individuals, who have provided input to this report, are listed below by name. All have extensive experience in the gold mining industry and are members in good standing of appropriate professional institutions: Roger Dixon, Pr Eng, BSc (Hons) Mining, FSAIMM; Mark Wanless, Pr Sci Nat, BSc (Hons); Andrew van Zyl, B Eng Chemical with Mineral Processing, M Com Financial Economics and Econometrics, MSAIMM; MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

98 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 4 Joseph Mainama, Pr Eng, BSc Mining, MBL, MSAIMM; Livhuwani Maake, Pr Sci Nat, BSc (Hons), MGSSA; Maurice Mostert, GDE Mining, BBA, N Dip Mining, MSAIMM. The Competent Person with overall responsibility for this report is Roger Dixon, who is a corporate consultant and chairman of SRK at the time of writing. 3.6 Reporting Standard The Mineral Resources and Reserve estimates presented in this report have been reported according to the SAMREC Code (2997 Edition). SRK considers that the Mineral Resources estimates would be identical if reported in accordance with the JORC 2004 Standards. This independent technical report is compliant with the SAMVAL Code, which is consistent with the CIMVal Code (Canadian Institute of Mining, Metallurgy and Petroleum), the Valmin Code (Australian Institute of Mining and Metallurgy), and international reporting practices. SRK is of the opinion that this independent technical report has been prepared to the same standards as those of the Valmin Code (Australian Institute of Mining and Metallurgy). 3.7 Work program SRK was requested to follow the following work program: Technical project assumptions clearance by 11 November 2013; Draft report completed by 18 November 2013; Final report provided by 25 November Effective Date The effective date (the Effective Date ) of this technical assessment report, valuation and the information on which it is based is deemed to be 15 November The effective dates for Mineral Resource estimates are shown in Table 3-1. Table 3-1: Asset Effective date of Mineral Resource Estimates Effective Date Modder East 31 December 2012 Ventersburg 31 July 2012 Modder North 31 December 2012 New Kleinfontein and Turnbridge 31 December 2011 Goliath 20 February 2013 Cooke 1,2,3 31 December 2012 Cooke 4 28 February 2013 Randfontein Surface 31 December 2012 The effective dates for Mineral Reserve estimates are shown in Table 3-2. Table 3-2: Asset Effective date of Mineral Reserve Estimates Effective Date Modder East 31 December 2012 Cooke 1,2,3 31 December 2012 Cooke 4 28 February 2013 Randfontein Surface 31 December 2012 MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

99 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Compliance The Competent Persons, Mark Wanless, Andrew van Zyl, Joseph Mainama and Roger Dixon, have all the relevant experience and qualifications for the style of a deposit being evaluated. All four are employed by SRK and have no financial interest in Gold One or any of its subsidiaries. Table 3-3: Competent Persons Name Address Membership/s Mark Wanless SRK, 265 Oxford Road, Illovo, 2196 Pr Sci Nat [400178/05], SACNASP Roger Dixon SRK, 265 Oxford Road, Illovo, 2196 Pr Eng [No ], FSAIMM Joseph Mainama SRK, 265 Oxford Road, Illovo, 2196 Pr Eng [No ], MSAIMM Andrew van Zyl SRK, 265 Oxford Road, Illovo, 2196 MSAIMM Pr Sci Nat SACNASP SAIMM MSAIMM - Professional Natural Scientist - The South African Council for Natural Scientific Professions - The Southern African Institute of Mining and Metallurgy - Member of the Southern African Institute of Mining and Metallurgy The consultants mentioned in Table 3-3 have the requisite experience and qualifications to act as Competent Persons. Mr Mark Wanless is a competent person responsible for the reporting of certain gold resources, who has 17 years experience as a geologist and 17 years experience with Witwatersrand gold deposits; The Competent Person with overall responsibility for report is Mr Roger Dixon, who has 40 years mining experience, 30 of which were in Witwatersrand gold mines. The Competent Valuator with overall responsibility for the valuation is Mr Andrew van Zyl, who has 7 years experience as a valuator of mining companies and mineral properties. Mr Joseph Mainama has been involved in the field of mining engineering for the past 17 years and serves as the competent person for reporting of the reserves Statement of SRK Independence Neither SRK nor any of the authors of this Report have any material present or contingent interest in the outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably regarded as being capable of affecting their independence or that of SRK. SRK has no prior association with BDO Corporate Finance (WA) Pty Ltd in regard to the mineral assets that are the subject of this Report. SRK has no beneficial interest in the outcome of the technical assessment being capable of affecting its independence. SRK s fee for completing this Report is based on its normal professional daily rates plus reimbursement of incidental expenses. The payment of that professional fee is not contingent upon the outcome of the Report. SRK s fee for completing this Report is ZAR Warranties SRK understands that Gold One International Limited have made full disclosure of all material information and that, to the best of its knowledge and understanding, such information is complete, accurate and true Indemnities As recommended by the VALMIN Code, BCX has provided SRK with an indemnity under which SRK is to be compensated for any liability and/or any additional work or expenditure resulting from any additional work required: MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

100 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 6 which results from SRK's reliance on information provided by Gold One or to Gold One not providing material information; or which relates to any consequential extension workload through queries, questions or public hearings arising from this Report Consents SRK consents to this Report being included, in full, in the BDO Corporate Finance (WA) Pty Ltd independent expert s report, in the form and context in which the technical assessment is provided, and not for any other purpose. SRK provides this consent on the basis that the technical assessments expressed in the Summary and in the individual sections of this Report are considered with, and not independently of, the information set out in the complete Report. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

101 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 7 4 Description of Gold One s Assets 4.1 Legal Tenure Gold One holds title over the properties as listed in Table 3-1. Table 4-1: Gold One Material Assets Holder Project Type Gold One Africa Ventersburg 1 PR Gold One Africa Ventersburg 2 PR Gold One Africa Ventersburg 3 PR Mining Title No. MPT 241/2009 Renewal pending MPT 235/2008 Renewal pending MPT 243/2009 Date Granted 15-Nov Apr Mar-09 Gold One Africa Ventersburg 4 PR MPT 12/ May-10 Gold One Africa Ventersburg 6 PR New Kleinfontein Goldmine New Kleinfontein Goldmine New Kleinfontein Goldmine New Kleinfontein Goldmine MPT 112/2013 Expiry Date 14-Nov Apr Mar May- 14 Period Hectares 5 years years years years Jul Jul-16 3 years Turnbridge RPR MPT 64/ Jul Jul-16 3 years Holfontein RPR 239/2006 PR 02-Jul Jul-16 3 years Modder East MR 46/ Apr-12 Modder East MP Recorded in MPT 10-Apr-08 Renewal pending Newshelf 1198 Grootvlei PR Pending 01-Nov Mar Apr Oct years years years Gold One Mozambique Tulo MC N/A 25-Jul Jul years Rand Uranium Millsite RPR Pending 02-Jul Jul-16 3 years Rand Uranium #4 Shaft Slimes Dam Rand Uranium Cooke 1-3 MR 09/2008 MR 18-Dec-07 Rand Uranium Ezulwini Mining Company Ezulwini Mining Company Surface Operations RPR Pending 02-Jul Jul-16 3 years MR 83/2011 MR 07-May-09 Cooke 4 MR 49/ Nov-06 Zuurbekom RPR Pending 09-Oct Dec May Nov Oct years years years years Goliath Gold holds title over the properties as listed in Table 4-2. Gold One has a 72% interest in Goliath Gold. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

102 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 8 Table 4-2: Goliath Gold Material Assets Holder Project Type Far East Gold SPV Far East Gold SPV Far East Gold SPV Far East Gold SPV Far East Gold SPV Mining Title No. Date Granted Expiry Date Period Hectares Sub Nigel 1 MR 31/ Jul Jul years Sub Nigel 4 and 5 Spaarwater RPR 32/ Mar Mar-15 3 years Sub Nigel 6 Vlakfontein RPR 33/ Mar Mar-15 3 years Sub Nigel 8 West Vlakfontein RPR Pending 09-Oct Oct-16 3 years Wit Nigel RPR Pending 09-Oct Oct-16 3 years Newshelf 1186 Nigel PR Pending Newshelf 1186 Cons Modder PR Pending Goliath Gold Elephant PR 142/2012 Goliath Gold Elephant PR 143/2012 Goliath Gold Elephant PR 151/2012 Goliath Gold Elephant PR 144/2012 Goliath Gold Elephant PR 152/2012 Goliath Gold Elephant PR 145/2012 Goliath Gold Elephant PR 153/2012 Goliath Gold Elephant PR 146/ Oct-18 5 years Oct-18 5 years Nov Nov Aug Aug Aug 12 3 August Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug years years years years years years years years SRK notes that Gold One is planning to acquire a 17% stake in Sibanye Gold ( Sibanye ), a gold mining operation, in exchange for Gold One assets on the Gauteng West Rand. This was not taken into consideration in this report because the transaction was not completed at time of writing. In consideration of the legal tenure of the Gold One assets, SRK has placed reliance on legal information provided by Pierre Kruger, Senior Vice President: Legal Counsel and Company Secretary, Gold One. All Gold One assets either have mining titles or the mining title is pending, having been applied for recently. The mining title periods range between 2 years and 30 years with expiry dates of between 11 months and 25 years from date of this report. SRK has also independently reviewed the status of the licences and the tenements appear to be in good standing. All licences appear to have met or exceeded their expenditure commitments and are on track to do so again in this current year. However it should be noted that SRK makes no other assessment on the legal tenure of the projects and are not qualified to do so. 4.2 History Modder East Gold Mine Modder East is the amalgamation of the old Modder East Mine and a portion of the old Modder B mining title area, which was initially registered in 1908 and ceased production in The Modder East Mine was initially incorporated in July 1917, and production began in By 1933, the milling rate had reached 1 million tons a year, with mining occurring principally from the Main Reef. In 1962, the Modder East Mine was closed and most of the surface infrastructure was partly reclaimed. No detailed production statistics or records of underground work can be located. During the 1980s, a small reclamation mining operation was carried out at Modder East by Modder B Gold Mines, a reorganized subsidiary of Modder B Gold Holdings Ltd. The UC Prospect property, which is contiguous with the southern boundary of Modder East, was initially registered in MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

103 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 9 the name of Union Corporation (Prospecting) South Africa, which was subsequently amalgamated into Gencor South Africa Limited ( Gencor ). This property was successively held by Grootvlei Proprietary Mines Ltd, Harmony Gold Mines and Petrex (Pty) Ltd ( Petrex ) before being transferred to New Kleinfontein Mining Company Ltd ( NKMC ). In 1993, Gencor (now Gold Fields Ltd) drilled 10 diamond core holes on the UC Prospect and the southern portion of the Modder East area to investigate the Kimberley Reefs and the Black Reef to the NE of the Grootvlei Gold Mine. Seven of the drill holes intersected gold-bearing conglomerates at relatively shallow depths (200 m to 250 m below surface) across the Black Reef with gold grades varying between 1.4 g/t and 31.2 g/t gold over widths varying between 200 mm and 600 mm. Several holes also intersected gold mineralisation in the underlying UK9A Reef of the Kimberley group. In the first decade of the 21st century NKMC explored the property and confirmed the previously intersected grades and the lateral continuity of the Black Reef. During the second quarter of 2003, Aflease Gold acquired 100% of NKMC (including Modder East, UC Prospect, New Kleinfontein Gold Mine and Turnbridge) while exploration drilling continued to yield encouraging results on the Modder East project. Drilling continued until 2006, along with feasibility studies on the mining of the Black Reef. By end July 2006, drill holes DD53 to DD59 had been completed and the company issued a revised Mineral Resource statement at year-end. Gold production started from Modder East in July 2009 following the development of an access decline. A brief history of production and exploration in the Modder East area is set out in Table 4-3. The location of the Modder East mine is illustrated in Figure 4-3. Table 4-3: Modder East Historical Development Date Activity Production within the Modder B mining title area Extensive mining of the Main Reef in the Modder East area. 1980s Small reclamation mining at Modder East Limited mining of Main Reef Leader by subterranean mining General Mining acquires the mineral rights to the area General Mining explores the Black Reef channel, the Black Reef Buckshot Pyrite Leader Zone (BPLZ) and Kimberley Reefs using aerial geophysical surveys and diamond drilling A number of holes drilled by Harmony Gold Mine NKMC conducts exploration drilling for Black Reef and Kimberley Reef horizons. Feb 2003 Mar 2004 Feb 2005 Dec 2005 May 2006 Jun 2006 Oct 2006 Jun 2007 Dec 2008 July 2009 NKMC acquired by the Afrikander Leases Limited, as a 100% subsidiary. Mine-development study completed, to pre-feasibility study accuracy limits After further drilling, resource and reserve revised to include Channel Facies ores. After further drilling, resource and reserve revised to include UK9a and UK5 ores. Completion of Feasibility Study for Modder East by Turgis. NI Technical Report by SRK Mineral Resource and Mineral Reserves revised Mineral Resource and Mineral Reserves revised. Amendment to the Feasibility Study by Turgis. Competent Persons Report on the assets of Aflease Gold Limited in support of the proposed acquisition of Aflease Gold Limited by BMA Gold Limited and the dual listing of BMA Gold Limited on the JSE Limited. Gold One pours the first gold form the Modder East project. It should be noted that the Modder East operation was built in completely new ground and has no connections into the workings of the nearby mines, whether working or defunct. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

104 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 10 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Location of the Modder East Mine Project No Figure 4-1: Location of the Modder East Mine MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

105 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Cooke Underground (Cooke 1-3 section) and Randfontein Surface Operation Gold was discovered in the conglomerates of the Witwatersrand sedimentary basin in about 1886 (Robb and Robb, 1998). One of the earliest mines was the Randfontein Mine (established in 1886) operated by REGM. The Cooke 1-3 section was established as a section of REGM in the mid-1970s. The Cooke 1-3 section comprises three individual areas served by a shaft and associated underground infrastructure referred to as the Cooke 1, Cooke 2, and Cooke 3 Shafts. Cooke 1 began underground production in 1973 and reached full production in March In January 1974 shaft sinking of Cooke 2 commenced, and production started in Cooke 3 shaft sinking commenced in June Production from the shaft, sunk to a depth of m beneath collar, started in On 18 December 2007, REGM sold its business (Cooke 1-3 section) to Pamodzi and Harmony Gold Mining Company Ltd ( Harmony ) through a Special Purpose Vehicle ( SPV ) that was established, called Rand Uranium. This resulted in Harmony and the Pamodzi Resources Fund owning 40% and 60%, respectively of Rand Uranium. In May 2011, Gold One, through Newshelf 1114 (Pty) Limited, a SPV established for purposes of the transaction, bought 100% of Rand Uranium from Pamodzi and Harmony. The location of the Cooke surface and underground operations is illustrated in Figure 4-2 and Figure 4-3 respectively. GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Locality map of the Cooke surface operations Project No Figure 4-2: Locality map of the Cooke surface operations MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

106 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 12 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Cooke mining area Project No Figure 4-3: Location of the Cooke underground mining area MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

107 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Cooke 4 Shaft Activities at the Cooke 4 (previously known as Ezulwini) commenced in 1961 under the control of the then Western Areas Gold Mining Company ( WAGMC ), which also owned the South Deep Gold Mine. The South Deep Mine and the workings from Cooke 4 were formerly connected on two levels and dewatering of the main shaft at Ezulwini kept the South Deep Mine dewatered. The Ezulwini Mine was purchased by Randfontein Estates Limited ( REL ) in In January 2000, Harmony Gold Mine Limited (Harmony) acquired REL. Harmony continued operations until July 2001 after giving notice to the PDWAJV in April 2001 of its intention to cease mining and pumping operations. Harmony prepared a closure plan for the Ezulwini Mine and that plan was approved by the South African Department of Mineral Resources (DMR). The PDWAJV took over the pumping operations in March 2003 to allow the completion of the construction of plugs between the two mines and to verify the competency of the barrier pillar, the purpose being that once the dewatering of the Ezulwini Mine operations was stopped, the necessary measures would be in place to ensure the safety and health of the South Deep Mine. The work was completed and the PDWAJV gave notice to Harmony that pumping operations would cease on February 8, In May 2005, Simmers and Jack (Simmers) took its initial steps to acquire the Ezulwini Mine by submitting an application for a new order mining right in respect of the Ezulwini Mine. In October 2005, Simmers undertook the pumping operations as part of its purchase agreement with Harmony in respect of the Ezulwini Mine. Simmers commenced pumping and exploration work to determine the feasibility of reopening the mine. On 2 December 2006, the Ezulwini mining right was registered in the name of Simmers. On 19 October 2006, Ezulwini Mining Company (Proprietary) Limited (EMC), a company in which Simmers held a 90% interest, entered into an agreement (REL Purchase Agreement) with REL, a wholly-owned subsidiary of Harmony, and Simmers, pursuant to which EMC acquired the surface and underground assets relating to the Ezulwini Mine. Concurrent with the closing of the Initial Public Offering (IPO) on December 20, 2006, Simmers sold its 90% interest in EMC to First Uranium Limited (FUL), a wholly-owned subsidiary of First Uranium, and Simmers and EMC entered into an agreement pursuant to which Simmers agreed to take all necessary steps to effect a transfer of the Ezulwini mining right to EMC as soon as possible. DMR consented to the transfer of the Ezulwini mining right (38 MR) to EMC by way of a S11 transfer. The right was duly ceded to EMC and registered in EMC s name on 22 April In addition, Waterpan Mining Corporation (WM), FUL, and First Uranium Corporation (First Uranium) entered into a purchase agreement on 20 December, 2006, pursuant to which WMC agreed to sell its 10% interest in EMC. The transaction was completed on 14 December, 2007, resulting in EMC becoming a wholly-owned subsidiary of First Uranium. During mid-2012 Gold One completed its transaction with the First Uranium and acquired 100% of the Ezulwini Mining Company (Pty) Limited, giving the company access to gold and uranium processing plants with nameplate capacities of and tons per month respectively. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

108 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 14 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Location Map for Cooke 4 operation Project No Figure 4-4: Location Map for Cooke 4 operation MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

109 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 15 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Cooke 4 Mining and Prospecting rights Project No Figure 4-5: Cooke 4 Operation mining right, prospecting rights application, access and infrastructure Ventersburg Project The Ventersburg Project, an exploration property, is situated at latitude 28º 05' S, longitude 27º 00' E in the Free State province of South Africa, east and southeast of the main Free State goldfields and approximately 25 km southeast of Welkom. The area has been explored by a number of South African gold-mining groups since the mid-1940s and 77 holes were drilled between 1948 and In 2004, Sub Nigel Gold Mine ( SNGM ) drilled hole WT1, which recorded an A Reef intersection of 4.78 g/t over 1372 mm, i.e. 656 cmg/t, at a depth of 970 m below surface. The Ventersburg Project lease area covers some ha of largely agricultural land. A second New Order Prospecting Right of some ha contiguous with the Ventersburg Project, was granted on 16 April A third new prospecting right was granted on the 31 st March 2009, which added 416 ha to the project area. A fourth new prospecting right was granted on 25 May 2010 adding ha. One further application for a fifth prospecting right has been submitted to the Department of Mineral Resources. In the northern area of interest, where 49 of the 77 drill holes were drilled, 32 holes (65%) intersected the A Reef (Kimberley UK9 Horizon), so additional definitive delineation drilling was considered justified. A brief history of exploration, production and company development of the Ventersburg Project is shown intable 4-4. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

110 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 16 Table 4-4: Ventersburg Project Brief History Date Event Diamond drilling of 17 holes by Consolidated Free State Co., Gold Fields Mining & Development and Free State Development Diamond drilling of 60 holes by Union Corporation and Harmony Gold 2004 SNGM drilled WT1, which gave prospective results Aflease Gold commences diamond drilling in May 2007 and by the end of 2009, an additional 27 diamond drill holes had been completed The location plan for Ventersburg Project is shown in Figure 4-6. A definitive feasibility study is currently being been completed for the Ventersburg Project by Turgis Consulting (Pty) Ltd. In regard to the Ventersburg Project, there is an option agreement with GoldFields to buy 51% of the prospecting right over the property Ventersburg 1, but does not include the prospecting rights over the Ventersburg 2, 3, 4 and 5 properties. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

111 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 17 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Locality and Mineral Holdings for Ventersburg Project Project No Figure 4-6: Locality and Mineral Holdings for Ventersburg Project Modder North Project The Modder North Project, an exploration property, is made up of other geological prospects that are situated both on the existing Modder East Mining Right Area and adjacent areas to the north and east of the Modder East Gold Mine including the Holfontein Prospecting Right. The Holfontein project area, situated at approximately latitude 26º 09' S, longitude 28º 30' E, is contiguous with and due east of the Modder East Project. The Holfontein Prospecting Right straddles the N12 highway to Witbank and covers 3500 ha of largely agricultural land, with the Etwatwa Township at the far northern end of the property. The Holfontein Hazardous Landfill Facility and an open clay quarry of Holfontein Brick Works are situated MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

112 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 18 on the eastern side of the project area. The location of the Modder North project includes the northern portion of the Modderfontein East Mining Right, and the adjacent Holfontein Prospecting Right, which is illustrated in Figure Tulo Project The Tulo Project, an exploration property, is a greenfield project with limited data available on the geology or mineralisation. The Tulo Project is located in the Niassa Province in north-west Mozambique. It is a remote area with little infrastructure and poor access. The alluvial deposits, however, have been mined by artisanal miners from Tanzania and Mozambique for many years. The location and Mineral Holdings for the Tulo Project are illustrated in Figure 4-7. GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Locality and Mineral Holdings for the Tulo Project Project No Figure 4-7: Locality and Mineral Holdings for the Tulo Project MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

113 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page New Kleinfontein and Turnbridge Project The New Kleinfontein and Turnbridge Projects, exploration properties, are situated some 10 km west of Modder East, near the town of Benoni. A brief history of production and exploration in the New Kleinfontein and Turnbridge area is set out in Table 4-5. Table 4-5: New Kleinfontein Brief History Date Event 1894 Gold first discovered at New Kleinfontein Gold-mining operations on the Main Reef at the New Kleinfontein Mine December 1921 April s The Afrikander Lease incorporated as a company in South Africa The Afrikander Lease lists on the JSE Gencor conducts limited exploration work on Turnbridge 1996 East Rand Proprietary Mines conducts some re-sampling exercises, data reconciliation and limited geostatistical studies on the Glyn shaft, Turnbridge July 1998 The Klerksdorp assets are acquired from Anglo American Corporation 1999 New Kleinfontein mine reopened small-scale underground mining and vamping 2003 New Kleinfontein and Turnbridge placed on care and maintenance Jan 2006 Mar 2008 Part of an asset swap in the formation of Aflease Gold Limited Mineral Resource audit by SRK During 1894, gold was first discovered at New Kleinfontein property located on the northern flank of the East Rand goldfield and mining began at the New Kleinfontein Gold Mine ( NKGM ) in The mine ceased production in 1967, and it is estimated that over its life, the mine produced approximately kg (9.5 Moz) of gold from 45.7 Mt of ore, principally from the Main Reef. In 1999, an attempt was made to re-open the NKGM, by the rehabilitation of a number of shafts, and small-scale scattered underground mining and vamping on the Main Reef. A production rate of approximately t/month from five shafts (No. 2, No. 4, No. 5, No. 6 and May Shaft) was achieved. The ore was treated under a toll agreement with Grootvlei Gold Mine, an adjacent operational mine. In June 2002, a metallurgical plant was constructed at NKGM, with a capacity of t/month. However, because of various operational problems and high costs arising from the low tonnages to the plant, the operation failed to achieve profitability, and operations at New Kleinfontein and the Turnbridge property were placed on care and maintenance in May At Turnbridge, several studies were completed to evaluate the potential of re-opening mine. The studies cover three shafts areas, the Glyn Shaft, an inclined shaft and two vertical shafts, the No 7. and South Shafts. One of the last studies was conducted in 1996 by East Rand Proprietary Mines ( ERPM ), and included digitized plans of sample data, representing channel-sample data collected underground and recorded on the statutory plans as submitted to the Inspector of Mines. The information was reviewed by Camden Geoserve, Independent Geological consultants, on behalf of the then Aflease Gold. In addition, some geostatistical studies have been completed to support the Mineral Resource estimates prepared for the Glyn Shaft area by ERPM staff. ERPM also conducted some re-sampling activities within the Turnbridge section and reconciliation data were examined by Camden Geoserve. A Mineral Resource estimate was generated by Minxcon (Pty) Limited ( Minxcon ), an independent consultant to Gold One, in August 2010, and this was reviewed by SRK in March Minxcon compared historical stretch values with limited new sampling data. In May 2011, Gold One requested SRK to re-estimate the Mineral Resources on the Turnbridge Project using new sampling data which was completed in December (Table 3-1). The location of the New Kleinfontein and Turnbridge projects relative to the other East Rand Gold One assets is illustrated in Figure 4-8. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

114 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 20 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Location and Mineral Holdings of Modder East, New Kleinfontein and Turnbridge, and Modder North Project No Figure 4-8: Location and Mineral Holdings of Modder East, New Kleinfontein and Turnbridge, and Modder North MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

115 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Goliath Gold One also has a 72% interest in Goliath Gold Mining Limited ( Goliath ), which was previously named White Water Resources. Goliath includes: Megamine: o o o o o The Sub Nigel 1, 2 and 3 Mining Right; The Sub Nigel 1, 2, and 3 Surface Rights; The Vlakfontein Prospecting Right; The West Vlakfontein Prospecting Right; and The Spaarwater Prospecting Right; o Wit Nigel Prospecting Right. The Nigel and Cons Modder prospecting rights acquired from Pamodzi Gold Project Elephant prospecting rights in the Western Cape The mineral titles are shown in Table 4-6. Table 4-6: Goliath Assets held by Gold One Holder Project Type Mining Title No. Date Granted Expiry Period Hectares Far East Gold SPV Far East Gold SPV Far East Gold SPV Far East Gold SPV Far East Gold SPV Newshelf 1186 Newshelf 1186 Sub Nigel 1 ML 31/ Jul Jul years Sub Nigel 4 and 5 Spaarwater Sub Nigel 6 Vlakfontein Sub Nigel 8 West Vlakfontein RPR 32/ Mar Mar-15 3 years RPR 33/ Mar Mar-15 3 years RPR Pending 09-Oct Oct-16 3 years Wit Nigel RPR Pending 09-Oct Oct-16 3 years Nigel PR Pending 01-Nov Oct-18 5 years Cons Modder PR Pending 01-Nov Oct-18 5 years Goliath Gold Elephant PR 142/ Aug Aug-14 2 years Goliath Gold Elephant PR 143/ Aug Aug-12 2 years Goliath Gold Elephant PR 151/ Aug Aug-14 2 years Goliath Gold Elephant PR 144/ August Aug-14 2 years Goliath Gold Elephant PR 152/ Aug Aug-14 2 years Goliath Gold Elephant PR 145/ Aug Aug-14 2 years Goliath Gold Elephant PR 153/ Aug Aug-14 2 years The location of the East Rand assets is shown in Figure 4-9. MOSM/WANM Gold One Int Tech Assessment and Valuation SRK November 2013

116 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 22 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT LOCATION MAP OF GOLD ONE INTERNATIONAL AND GOLIATH ASSETS Project No Figure 4-9: Location map of Gold One International and Goliath East Rand assets MOSM/DIXR Gold One Int Tech Assessment and Valuation SRK November 2013

117 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 23 5 Mineral Resources The Mineral Resource estimates on all the properties have been classified and reported according the guidelines of the SAMREC code (2007 edition). SRK considers that the Mineral Resources would be identical if reported under the JORC Code 2004 Edition. 5.1 Modder East The Mineral Resource estimates reported for Modder East on the Black Reef, UK9A Reef and UK5 reef were generated by independent consultants to Gold One. The UK9A and UK5 Reefs were estimated by Mr Peter Camden-Smith and Mr Charles Muller in The Black Reef estimates (excluding the second cut of the Buckshot Pyrite Leader Zone ( BPLZ )) were completed by Mr Justin Glanville in 2012 and All estimates were reviewed by Mr Mark Wanless BSc (Hons), MGSSA. MGASA, Pr Sci Nat (Reg. No /05) an appropriate independent qualified person as this term is defined in National Instrument The effective date of the resource statement is 31 December The database used to estimate the Modder East project Mineral Resources was audited by SRK. SRK is of the opinion that the current drilling information is sufficiently reliable to interpret with confidence the boundaries for Witwatersrand conglomerate hosted placer gold mineralization and that the assay data are sufficiently reliable to support mineral resource estimation. There were a total of 3683 chip sample composites collected underground, of which only 2837 samples were considered valid and usable. A total of 300 boreholes were drilled within the Modder East lease boundary, 90 of them where parent holes while 210 were deflection holes. 248 Boreholes were found to have both collar and geology. 117 of the 248 boreholes (including deflections) were used for estimation of the Black Reef. For the UK9A reef only 45 valid intersections were available, and for the UK5 Reef only seven holes have intersected the mineralised zone. The Black Reef has been estimated in three parts. The first part is the majority of the Mineral Resource, for the BPLZ and the Basal zone of the Black reef, which are informed by surface drill holes. The second is the BPLZ close to the current mining operations, which has been informed by underground chip samples only. The third is a second cut estimate of the BPLZ, beneath the mined out area. This part is estimated by both chip sampling and surface drill holes. The drill hole and chip sampling data were extensively validated by Mr Glanville before being used in the estimates. The BPLZ surface drill holes are composited over a minimum 1 m length, and can include portions of the underlying Basal unit where the BPLZ is thinner than 1 m. Where the BPLZ is thicker than 1 m the full BPLZ is composited. The chip samples are similarly composited, however to avoid compositing with partial samples, a length as close to 1 m was selected for compositing, based on the thickness of the BPLZ and the continuity of the mineralisation. A single composite is created for the Basal unit of the Black Reef, with no minimum width, as this is expected to only be economically extracted in conjunction with or after the first cut on the BPLZ. The second cut chip samples and surface drill holes were composited over the remaining BPLZ after the first cut BPLZ compositing. Only intersections where the base of the BPLZ was sampled (current mining may not expose the full BPLZ except in very wide stopes and development ends) were accepted as valid sections and composited. The UK9A is typically less than 1 m thick, and as with the Black Reef, the intersections have been bulked up to 1 m thickness, assuming barren surrounding material to provide a 1 m composite. A selected cut of the UK5 was taken, and a single composite was created for the selected cut. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

118 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 24 For the BPLZ and Basal Reef, as well as the UK9A and UK5 estimates no capping of high grades was done. For the BPLZ a cap of 1612 cmg/t was used. No domaining was done on the BPLZ informed by chip sampling (for the first and second cut). For the BPLZ informed by surface drill holes nine domains were defined. Domains one to three reflect the gradual decrease in grade away from the sub-crop, and were used in previous Mineral Resource estimates to reinforce this trend. The remaining domains four to nine mainly represent uncertain areas where additional exploration is warranted but where there is insufficient information to generate a robust estimate and there is uncertainty in the extent of the mineralisation. These domains are all along the sub-crop of the Black Reef and have been assigned mean grades based on the data within and/or adjacent to the domains. Domain seven runs along the sub-crop and has been assigned a grade below the cut-off (i.e. will not be reported as a Mineral Resource) and is used to reflect the uncertainty in the location of the sub-crop. The Basal unit is divided into three domains, reflecting the higher grade found in the central portion of the deposit. The UK9A was divided into six domains, with two of them representing zones where higher grade channels are expected, flanked by lower grade inter-channel areas with poor potential for channel development. Due to the paucity of data for the UK5, no sub-domaining of the data was considered neccesary. For the chip sample dataset on the Black Reef, relatively robust experimental semi-variograms were calculated, which show relatively long ranges for Witwatersrand Gold deposits, of approximately 200 m for both cmg/t and channel width. For the surface drilling BPLZ data the semi-variograms are not well structured, however using the log of cmg/t an experimental semi-variogram can be calculated with an acceptable structure. The modelled semi-variogram has a very long range (2 000 m) which is probably partially due to the observed grade trend away from the sub-crop position of the Black Reef. A shorter range of approximately 500 to 600 m was identified in the domain 1 experimental semi-variograms calculated by SRK. No robust structure could be interpreted from the Basal unit experimental semi-variograms, and a shorter range of 220 m for cmg/t and 275 m for channel width were modelled. Similarly for the BPLZ second cut the experimental semi-variograms did not display a roust structure (in this instance primarily due to the paucity of data) and models with ranges between 20 and 111 m were fitted to the data. Because of the paucity of data in the UK9A at Modder East, a dataset from Grootvlei Mine, situated to the south of Modder East was used to model semi-variograms. The UK9A has been extensively mined at Grootvlei, resulting in a dataset of over composites over the full mineralised width. This data yielded a well-structured experimental semi-variogram in log space, which was applied to the UK9A estimates. The log variogram was used to determine the ranges and nugget, and the semi-variogram models were scaled to fit the variance of the data within a domain. Ranges between 70 m and 300 m were modelled. The same approach was used to generate semi-variograms for the UK5, using the same dataset, with a range of 52 m modelled. All of the estimates were done into 2D block models, and other than the Black Reef, an average dip correction was applied to the estimated blocks. For all estimates other than the domains five, seven eight and nine of the BPLZ, where arithmetic means of the data within the domains were assigned, Ordinary Kriging was used. Simple Kriging was utilised in the second stage search for the second cut BPLZ estimate. For the BPLZ chip sample estimate a block size of 25 m 2 was used, while for the rest of the Black Reef estimates a 50 m 2 block size was used. Validations of the models indicate that they acceptably reproduce the grade and width distributions of the underlying data. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

119 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 25 The UK5 and the majority of the UK9A Reefs are classified as Inferred because of the wide spacing and paucity of data within the domains. In addition, the inability to generate semi-variograms with an interpretable structure indicated that the grade continuity is most likely over a scale shorter than the inter drill hole spacing for these areas. Part of the central high grade domain and eastern most domain of the UK9A have denser drill hole spacing, and have been classified as Indicated Mineral Resources. The BPLZ second cut estimates have been classified as Indicated Resources where there is sufficient data within the first search pass to estimate the blocks, effectively within the semivariogram range. The remainder is classified as an Inferred Mineral Resource. The BPLZ first cut estimates are classified as Measured Mineral Resources where the blocks are within 40% of the range of the semi-variogram. Beyond this the resource estimates are estimated based on the surface drill holes only. Blocks within 205 m of an intersection (approximately 50% of the semi-variogram range) are classified as Indicated resources. All blocks beyond that are classified as Inferred Mineral Resources. Minor changes to the boundary were made to deal with gaps and holes that have resulted in islands or peninsulas of Indicated or Inferred. The Basal model classification was based solely on the search volume of the width estimation. Blocks estimated in the first search pass were classified as Indicated, while blocks estimated during the second and third search passes are classified as Inferred Mineral Resources. The Mineral Resources are reported above cut-off s calculated using a gold price of USD /oz, and an exchange rate of ZAR 8:1 USD. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

120 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 26 Table 5-1: Mineral Resource Statement for Modder East Mine, South Africa, SRK Consulting (Pty) Ltd, effective 31 December 2012 Gold Au Ton Grade Gold content (Mt) (g/t) (Moz) Measured BPLZ + Basal Unit Total Measured Indicated BPLZ + Basal Unit Black Reef Basal Unit UK9A BPLZ Total Indicated Total Indicated and Measured Inferred BPLZ + Basal Unit Black Reef Basal Unit UK9A UK BPLZ Total Inferred Total Resource The Mineral Resources are reported inclusive of Mineral Reserves. Cut-off values have been reported using a gold price of ZAR /kg (USD 1750 /oz and an exchange rate of ZAR 8:1 USD) 1 Reported at a cut-off of 171 cmg/t 2 Reported at a cut-off of 233 cmg/t 3 Reported at a cut-off of 166 cmg/t 4 Reported at a cut-off of 496 cmg/t 5 Reported at a cut-off of 141 cmg/t The information in this report that relates to Modder East Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the South African Council for Natural Scientific Professionals ( SACNASP ) with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. 5.2 Cooke 1-3 The Mineral Resource estimation work on the Cooke 1-3 section, was completed by Dr Carina Lemmer, Pr Sci Nat. (SACNASP reg. no /03, FGSSA, MGASA) an appropriate Independent Qualified Person as defined in National Instrument Historical data capture and validation for the underground workings was done by consultants at Shango Solutions ( SS ), an independent consulting group contracted to do the work on behalf of Gold One. Wireframe surfaces of the top of the mineralised horizons were modelled by Deswick Mining Consultants, an independent consulting group contracted to do the work on behalf of Gold One. The effective date of the resource statement is 31 December MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

121 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 27 In the opinion of SRK, the resource evaluation reported herein is a reasonable representation of the gold and uranium mineral resources found at the Cooke 1-3 section at the current level of sampling. A total of twelve mineralised horizons (or Reefs) have been estimated. Some of the reefs sub-crop against other reefs, and in places are combined into a single unit for estimation. The Reefs estimated are termed: A2, A3B, A5, E8, E9GB, K4, K7, K9, Ue1A, VCR, K9a, and UE7. The top or basal surface of the reefs are modelled as wireframe surfaces using several sources of information, including development and stope samples, surface and underground drill hole intersections, reef and structural mapping from underground voids, and underground surveyed pegs. The wireframes are used to estimate the dip of the reefs only, as the grade estimates are done in 2D block models. All samples are composited over the full reef width, or where a portion of the reef is selectively mined, over the full width targeted for mining. Where the composite length is less than 1 m (which is considered to be a minimum mining width) the composites are diluted with barren material and the diluted grade is re-calculated for use in Mineral Resource estimation. The metal accumulation (grade x channel width) values were not capped; however estimation was done in log space, which will minimise the impact of any outliers. For the channel width estimates, appropriate capping values were selected for each reef by evaluating the cumulative change in the mean and co-efficient of variation that each sample has on the population. The reefs were sub-divided into domains based on the observed and interpreted high and low grade distributions, structural discontinuities, and channel thickness variations. The interpreted extension of the high and low grade domains into the un-mined areas where the estimates are only informed by drill hole intersections prevents the uncontrolled extrapolation of grades into these areas, providing a mechanism for the inclusion of the geologists interpretation of the grade distribution and sedimentological characteristic to be incorporated into the estimate. The populations of the metal accumulation and channel width data from each domain of each reef were analysed, indicating that all domains showed strongly positively skewed distributions for metal accumulation and slightly skewed distributions for channel width. Semi-variograms were developed for all domains where there was sufficient data to do so. In some cases, particularly in the down dip extensions of the reefs, where there is insufficient information to characterise the population, or to derive properly structured semi-variograms, a semi-variogram of a domain from the same reef, which was adjudged to be similar to the poorly informed domains was borrowed and scaled to the calculated population variance of the poorly informed domain. The modelled semi-variogram ranges from the more than 140 domains used in the gold estimates vary between 15 m and 1200 m, but are typically in the range of 100 m to 200 m. A difference in the distribution characteristics of the development and stope chip sampling was observed in the data, which is attributed to the preferential mining of higher grade areas by the stopes. In order to reduce the influence of the higher grade stope samples, a mechanism was used to reduce the weighting assigned to the stope samples compared to the development and drill hole samples in the Kriging matrix. The stope samples were down weighted by the ratio of the variance of each dataset (stope and development) for each reef, or for each domain if the ratio in the domain deviated significantly from that of the reef on average. 2D block models were used in the estimation of all reefs with a block size of 30 m, with the exception of the Ventersdorp Contact Reef, where a block size of 10 m was used. The block sizes are optimised for short term planning, and are suitable for the estimates near to the dense chip sampling. SRK consider the block size to be too small for the areas informed by the development sampling and underground and surface drilling only. Validations done by SRK do however indicate that the estimates match the source data despite the sub-optimal block sizes. The blocks were informed using the Ordinary Kriging algorithm, using the log of the metal accumulation data and the MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

122 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 28 real space channel width data. The search radii were based on the semi-variogram ranges in each domain, although a second pass estimate with a search range longer than the semi-variogram range was used where blocks were not informed in the first search pass. On the eastern side of the operations, and particularly on the less extensively exploited domains, there is a significant paucity of data available within the domain for estimation. In some of these instances, where required to inform these domains, a soft boundary has been used for the domain, where data from the up-dip domain has been used to estimate the grades and widths in the eastern domain. In a small number of domains, on the eastern boundary of the operations, a trend of decreasing grade was observed in the composites. In these situations, a trend function was fitted to the data, and applied to the Kriging to mimic the observed grade reduction towards the east. SRK have conducted a range of validations on each of the grade estimates to be satisfied that the estimates are appropriate, that they reflect the tenor of the fundamental data, and are appropriately estimated and classified. The Mineral Resources are classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by Dr Carina Lemmer, an appropriate, Independent Qualified Person as this term is defined in National Instrument SRK argues that the estimates would be identical if reported according to JORC or SAMREC codes. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserve. The sampling information was acquired primarily by underground chip sampling, and diamond drilling. The underground sampling is typically on an approximately 6 m grid, while the diamond drilling is irregularly spaced. The underground diamond drilling is done from the footwall development drives, and the surface drilling is very widely spaced (i.e. several hundred meters apart). The classification has been done using the ratio between the Kriging variance and the Block variance, which is a similar measure to Kriging Efficiency. Using the ratio of Kriging Variance to Block Variance, very low values (approaching zero) are indicative of high quality estimates, while higher values approaching 1 and greater than 1 are indicative of poorer quality estimates. These criteria generally result in a small amount of Measured Resources close to the underground stope sampling, within the semi-variogram range. Indicated Mineral Resources are typically declared where there is development sampling and underground drill holes. Inferred Resources are declared where the blocks are informed by widely spaced drill holes only, and extrapolated a short distance beyond the data. Not all reefs have declared Mineral Resources over the entire property, because of a paucity of data on these horizons, particularly towards the eastern part of the operations where the data density is the lowest. The Mineral Resources are declared above a cut-off value that is calculated using a gold price of 1750 USD /oz, and an exchange rate of ZAR 8:1 USD. The Uranium price used for the cut-off calculation is 65 USD /lb. Table 5-2 presents the Mineral Resources above a cut off and after the application of geological loss factors (5% for Measured, 8% for Indicated and 10% for Inferred). MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

123 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 29 Table 5-2: Mineral Resource Statement for the Cooke 1, 2, and 3 Mines, South Africa, SRK Consulting (Pty) Ltd, effective 31 December 2012 Gold Ton Grade Gold content Uranium Ton 5 U 3 O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Measured Cooke Cooke Cooke Total Measured Indicated Cooke Cooke Cooke Total Indicated Total Indicated and Measured Inferred Cooke Cooke Cooke Total Inferred Total Resource The Mineral Resources are reported inclusive of Mineral Reserves. Gold Mineral Resources only are declared at a cut-off grade of 2.5 g/t if ore bypasses the uranium recovery plant. Where ore is to go through the uranium recovery plant, the gold Mineral Resources must have a gold equivalent cut-off of 2.9 g/t, or a combined gold cut-off grade of 2.5 g/t with a Uranium fraction cut-off at kg/t. The gold equivalent grade is calculated as 1 g/t Au = kg/t U 3O 8. The U 3O 8 Mineral Resource is declared at a cut-off grade of kg/t within the gold resource, or as a co-product with gold at the gold equivalent cut-off of 2.9 g/t. The gold equivalence ratio is calculated at a gold price of USD1750 /oz and at a uranium price of USD 65 /lb, and an exchange rate of ZAR 8:1 USD. The U 3O 8 tons are a subset of the Au tons. The balance of the Au tons contain gold above the gold cut-off grade but uranium below the uranium cut-off grade, and will therefore bypass the uranium recovery plant. The information in this report that relates to Cooke 1 to 3 Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. 5.3 Randfontein Surface Operations For the Surface Uranium Project, considering the retreatment of the Cooke Tailing Storage Facility ( TSF ), the grade estimation was undertaken in Isatis software by SRK using parameters derived from a search neighbourhood optimisation. Because of the relatively large semi-variogram range, relative to the typical drill hole spacing, the maximum number of samples used in the search neighbourhood typically has the greatest impact on the quality of the estimate. A Quantitative Kriging Neighbourhood Analysis (QKNA ) was undertaken to test this. A block was selected in a well sampled portion of the TSF, and repeatedly kriged using the modelled semi-variogram, but varying the maximum number of samples used and recording the results, including indicators of the quality of the estimate, such as Kriging Efficiency ( KE ) and Slope of Regression ( SoR ). MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

124 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 30 Ordinary Kriging ( OK ) was used for all variables. In order to inform all blocks within the wireframe a second estimation pass was run, with a longer search radius (1200 to 1400 m) and a smaller minimum number of samples (2 to 4). The classification is based on the following: Location and volume considered well understood. The additional intersections of the base of the dam have improved the confidence in the volume; The standards of drilling and sampling are considered industry standard; Density is still assumed, and has not been rigorously determined; QA/QC results indicate acceptable accuracy and precision; U 3 O 8 has the shortest variogram ranges, and therefore has lower Kriging quality indicators. Although sulphur has less data than the other variable, the ranges of continuity are greater, and therefore the sulphur estimates generally have higher Kriging confidence indicators than the associated U 3 O 8 estimates; The classification used U 3 O 8 slope of regression threshold of 0.5 to split Measured and Indicated Resources. This low value was used in consideration of the high confidence of other variables (i.e Au estimates, volume, and location). The majority of the dam is classified in the Measured Resource category. The Indicated Resources are on the periphery of the dam, and in the North Western portion, where problems with the drilling and sample recovery mean that the drilling density is still lower than required for Measured confidence classification. The upper portion of the dam (the barren cap) is very sparsely sampled and has a different source, and has therefore been excluded from the Mineral Resources. The upper to middle portions of the TSF below the barren cap are more densely sampled than the deeper portions of the dam, and the southern half is also more densely sampled, as the active central and northern sections of the dam have been difficult to drill, and some holes in those areas had to be abandoned. Because of the lower density of S results and the lack of control on the accuracy through CRMs, sulphur has been classified as Indicated Mineral Resources. For Dump 20, data was provided to Deswik Mining Consultants ( Deswik ) in the form of an excel spread sheet; the data validation process using the HOLES3D desurvey process returned no errors from the 35 drill holes provided. The sampling of the drill holes was mostly done on a 1.5 m sample length with the exception where the sample material changed from sand to slime or slime to soil. After conducting statistical analysis on the length of the samples a composition length of 1.5 m was decided upon by Deswik. This was in line with the compositing length elected by SRK for Cooke TSF. Examining the assay results through histogram plots it was found that there were no true outliers and therefore no capping was applied. Deswik used OK and Inverse Distance Squared ( ID 2 ) for the estimation of Au g/t grades into the block model. The numbers reported in the Mineral Resource statement are based on ID 2 estimates. SRK did a test to see if the ID 2 estimates honoured the data better than the OK estimates and found that the ID 2 estimates were better estimates. Deswik did some tests and decided that search volume distances gave the best classification criteria. The search volume distances are based on the variography used for Au and are tabulated below. SRK validated this using similar parameters to those described for the Cooke Dump and found that the classification was acceptable. Table 5-3: Classification criterion SVOL CLASS SEARCH DISTANCE MIN SAMPLES MAX SAMPLES 1 Measured Variogram range Indicated 2x Variogram range Inferred 3x Variogram range 2 10 MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

125 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 31 Drill hole data for Dump 4 and Mill Site Complex ( MSC ) were provided to Minxcon an independent consulting in the form of excel spread sheets. During the drill hole sample validation process Minxcon found errors in the data which were corrected with the assistance from the client, the errors had no material effect so the data could still be used in the modelling and estimation process for MSC. For Dump 4, one drill hole did not fit between the top and bottom surfaces provided and was removed from the data used in estimating. Compositing of the drill holes data was done on 1.5 m intervals. Top cuts were determined using histograms and probability plots done on the composited data. OK was used to estimate the TSF, the search parameters used in the kriging were primarily informed by the semi-variogram model. The drill hole spacing of 200 m x 200 m was considered sufficient to classify the TSF in the Measured Mineral Resource category. The MSC TSFs were classified as a Measured Mineral Resource as classified in previous Resource estimations. The Mineral Resource estimates were done by independent consultants. All but the Cooke TSF were also reviewed by SRK. Table 5-4: Mineral Resource Statement for Cooke Surface operations as at 31 December 2012 Gold Uranium Category TSF Au Ton Grade Gold content U 3O 8 Ton 5 U 3O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Measured Cooke TSF MSC Dump 20 Sand Dump 20 Slime Main Dump 20 Slime NW Total Measured Indicated Cooke TSF Dump Dump 20 Slime Main Dump 20 Slime NW Total Indicated Total Indicated and Measured Inferred Dump Total Inferred Total Resource The Mineral Resources are reported inclusive of Mineral Reserves. Gold Mineral Resources only are declared at a cut-off grade of 0.10 g/t for gold. The U 3O 8 Mineral Resource is declared at a gold equivalent cut-off grade of g/t within the gold resource. The entire dump is above both gold equivalent cut-off grade and gold cut-off grade. The average sulphur value for Cooke and MSC is estimated as 2.07% and 0.81% with a sulphur content of 1.78 Mt and Mt respectively. The sulphur content is classified into the Inferred resource category as there was no QA/QC data in the sulphur assays. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

126 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 32 The information in this report that relates to Randfontein Surface Operations Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

127 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Cooke 4 Shaft The Mineral Resource estimates for Cooke 4 were generated by Minxcon, an independent Consultant to Gold One. The resource estimates were reviewed by SRK. SRK has checked the processes used by Minxcon to select the mineralised units and to generate composites of the mineralised units. SRK conducted verification of the generation of the experimental semi-variograms, the modelling of the semi-variograms, and the search parameters used by Minxcon. SRK has validated the Mineral Resource estimates by comparing the estimation results to the original data used in the estimate. This was done globally, as well as in a spatial sense, by comparing the estimate and source data in parallel slices along the strike and dip of the orebodies. The data available in each of the project areas consist of historical boreholes and underground channel samples, with the exception of the Shaft Pillar, where additional drilling was undertaken in Reef coding for the project area s drillholes was recorded directly from the logs. These were broadly coded, for each reef, into the whole reef package of combined quartzite and conglomerate without differentiating the two different lithologies. Up to 26 individual reefs were modelled in different areas. Six areas of the mine were estimated, namely 50 level, 33 Level, E9EC, Shaft Pillar, Pillar 4, and SV 4. Minxcon considered the populations to be relatively homogenous and defined only one domain for each of the project areas 50 Level, 33 Level, SV4, Pillar 4 and Shaft Pillar. For the E9EC, Gold one defined 22 domains based on the gold value distributions with respect to channel width, as well as grade and content plots. The value distribution categories, with respect to channel width, were derived from cumulative sum analyses. Major structures were honoured, for example, the 150m fault (a scissor fault with vertical and lateral displacement with varying magnitude, (the maximum being ~150m)), and a major north-south trending dyke. Hard boundaries were used for domains which neighboured these major structures. The estimation was undertaken on channel width (CW) and content (cm.g/t) for all the project areas. Full reef composites were used for the project areas in the 2D geological and Mineral Resource models. Two dimensional models were created by compositing drillholes along full reef intersections and converting the elevation to zero. The Mineral Resource area or existing reef wireframes were also set to an elevation of zero before being filled with cells with a Z block height of 1 m. Channel width was estimated for each reef within the prospective project area and to give a true reflection of the reef intersection width or channel width. Two dimensional Variograms for CW and cm.g/t were modelled. Where feasible top cuts were applied to the variogram data based on the probability plots. The capping was to limit the excessive variances of the anomalously high grade from skewing the distribution away from the representative variance of the data distribution. Anisotropic variograms were modelled in most cases Ordinary Kriging ( OK ) and Simple Kriging ( SK ) were carried out on all the reefs for each of the project areas. Where the CW below was 100 cm this was re-set to 100 cm in order to dilute the grades in that reef. The grades reported are at g/t and these grades have been diluted in the areas where the CW is less than 100 cm. The E9EC uses two different block sizes. The first block size is a 20 m x 20 m x 1 m block size for the northern area because the data spacing is an average of 5 m for to the chip samples and the borehole samples combined. The second is a 60 m x 60 m x 1 m block size in the rest of the project area because the data spacing is an average of 100 m. This block size is applied to the Indicated and Inferred Resource areas in order to reduce the variance. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

128 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 34 All the other project areas use a block size of 30 m x 30 m x 1 m as the data spacing is an average of 50 m to 100 m. This block size also supports the SMU size of 30 m x 20 m and ensures a reduction of variance in the estimation. Dip corrections were applied to the 2D models in order to calculate the correct tonnage in 3D. The Mineral Resources were classified according to the data density, and the Kriging Efficiency. The Mineral Resources have been reported according to the definitions and guidelines of the South African Code for the Reporting of Exploration Results, Mineral Resources (the SAMREC Code ). SRK considers that the reporting of the Mineral Resources is consistent with the guidelines and definitions of the Australasian Code for Reporting of Exploration Results, Mineral Resources (the JORC Code ). The Mineral Resources are reported after the application of appropriate cut-off values, and geological loss factors. The Mineral Resources are reported in Table 5-5. Table 5-5: Cooke 4 Shaft Mineral Resources as at 28 February 2013 Cooke 4 Mineral Resources 1 Gold Uranium (U 3 O 8 ) Ton Grade Content Ton Grade Content Content (Mt) (g/t) (Moz) (Mt) (kg/t) (kgs)(000's) (Mlbs) Measured E9EC Total Measured: Indicated E9EC Shaft Pillar Level Level Pillar SV Total Indicated: Total Indicated and Measured: Inferred E9EC Shaft Pillar Level Level Pillar SV Total Inferred: Total Resource Mineral resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards). Mineral resources are reported inclusive of ore reserves. Gold mineral resources only are declared at a cutoff grade of 3 g/t. Mineral resources for the E9EC contain uranium and are therefore estimated at a gold equivalent cut-off of 3.4 g/t. The uranium tonnes are a subset of the gold tonnes. The balance of the gold tonnes contain gold above the gold cut-off grade but uranium below the uranium cut-off grade, and will therefore bypass the uranium recovery plant. The gold equivalence ratio is calculated at a gold price of USD /oz and at a uranium price of 65 USD/lb, and an exchange rate of ZAR 8:1 USD. Signed-off by Mr Antonio Umpire and Mr Charles Muller of Minxcon (Proprietary) Limited, independent resource consultant to Gold One, audited by SRK Consulting (SA) (Proprietary) Limited. The information in this report that relates to Cooke 4 Mineral Resources is based on information compiled by Victor Simposya, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /03. Mr Simposya is a full-time employee of SRK. Mr Simposya has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Simposya consents to the inclusion in the report of matters based on his information in the form and context in which it appears. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

129 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Ventersburg The Mineral Resource model reviewed by SRK considers 37 core boreholes drilled by Gold One during the period of 2004 to 2011 and 35 drilled by previous owners since A number of additional holes have been drilled within the permitted area, which do not form part of the estimation database, as they are either incomplete intersections, or did not intersect the A Reef because of faulting, or were drilled beyond the sub-crop of the A Reef. The holes have variable numbers of deflections, resulting in a total of 278 usable intersections. The resource estimation work was completed by Dr Carina Lemmer, Pr Sci Nat (SACNASP reg. no /03, FGSSA, MGASA ) an appropriate independent qualified person as this term is defined in National Instrument SRK is of the opinion that the estimates would be identical if reported according to the JORC or SAMREC codes. The database used to estimate the Ventersburg Project mineral resources was audited by SRK. SRK is of the opinion that the current drilling information is sufficiently reliable to interpret with confidence the boundaries for Witwatersrand conglomerate hosted placer gold mineralization and that the assay data are sufficiently reliable to support mineral resource estimation. The Geological logs of all drill holes are validated against the known stratigraphy of the area, to confirm that the mineralised conglomerates are the A Reef. Only the drill holes which intersect the A Reef inside the four estimation domains are used in the estimate. The individual samples taken across the conglomerate package are composited, and weighted by length. The density is not measured for each sample in the database, but does not vary significantly across the mineralised zone, and SRK do not consider that the results of the compositing would be materially different if weighted by density and length. Three sets of selective cuts were taken: 100 cm, 160 cm and 180 cm. All three cuts were evaluated, and the optimal cut was selected for reporting in each domain. The project area is sub-divided into four domains, based on stratigraphy, sedimentology, grade and density of information. Although the estimation domains are based on the geological characteristics, they ultimately define areas with generally similar reef thickness and metal accumulation. They are therefore suitable for use in defining areas which have second order stationarity, and are suitable as estimation boundaries. Outlier values were not capped, as the estimates were done in log space, which reduces the impact of high values on the estimates. The estimates were done in 2D as this is considered an appropriate simplification for the narrow reef tabular Witwatersrand deposits where there is no planned vertical selectivity, beyond what is incorporated in the Mineral Resource modelling. The block model cells (Panels) have dimensions of 240 m by 240 m in order to fit with the Smallest Mining Unit ( SMU ) size of 30 m and this approximates half of the typical drill hole spacing. Ordinary lognormal kriging was performed and the kriged values were then back-transformed to obtain the panel estimates. Ordinary kriging was performed for the widths all domains The 240 m panel was discretized into 8 x 8 points. The search radius was set to the variogram range, with minimum 2 values and maximum 24 values required for kriging. A second pass search was utilised in a few border cases and the minimum number of composites required was relaxed to 1 to cover what is essentially an Inferred area. An octant search was employed, with a maximum of 3 composites per octant. Mining of the A Reef in other parts of the Free State Goldfield has shown the reef to be channelized, and the higher grade channels have been mined selectively. In order to estimate the proportion of material that can be mined above a cut-off, the Lognormal shortcut was used to derive grade tonnage curves for each domain. The dispersion variances of the smu accumulated gold (Au acc.) distributions, that determine how wide or how narrow the distributions are, is calculated from the MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

130 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 36 variograms, and from the sample variances in each domain, for each cut. The smu size selected is 30 m by 30 m (recalling that the estimate is done in 2D), thus the smu dispersion variance refers to the variance of 30 m smu average gold accumulation values in a panel of 240m square. To obtain grade/tonnage curves, a smu distribution with the appropriate shape was centred on the kriged mean value in each panel, with the appropriate distribution width, and a series of cutoff values could be applied to the smu distribution. SRK is satisfied that the geological modelling honours the current geological information and knowledge. The location of the samples and the assay data are sufficiently reliable to support resource evaluation. The sampling information was acquired primarily by core drilling on an irregular grid of approximately 500 m square over the majority of the estimated area, excluding Domain 4. The density of drilling is sufficient to define the large scale faults that interrupt the mineralised horizon, and that will have a major impact on the mining activities. It also enables reasonable modelling of the depth, dip and strike of the ore body. The facies observed over the project area are also relatively consistent, and SRK consider that Gold One have developed a good understanding of the variability and continuity. In view of the above, the following classification criteria were considered: Measured reflects less than 10% error in the mean at the 95% confidence limit; Indicated reflects between 10% and 20% error in the mean at the 95% confidence limit; Inferred reflects more than 20% error in the mean at the 95% confidence limit. Previous Mineral resource estimates done by Gold one for the Ventersburg Project have been declared at a 350 cmg/t cut-off, based on the calculations done on the parameters assumed in Assuming all other variables remain as considered above, this would equate to a gold price of approximately 1240 USD per ounce. Gold One elected to retain this cut-off for the current declaration of the Mineral. SRK considers that the blocks above the cut-off show reasonable prospects for economic extraction and can be reported as a mineral resource. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

131 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 37 Table 5-6: Mineral Resource Statement, Ventersburg Project, SRK Consulting, 31 December Classification Domain Cut Cutoff Tons Net after Au Grade Au Ounces (cmg/t) Geol. Losses (M) Indicated cm (g/t) cm cm Total Indicated Inferred cm Total Inferred The information in this report that relates to the Ventersburg Project Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. (M) MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

132 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Modder North SRK was requested to audit the Mineral Resources of the Modder North Project. The Mineral Resource estimate was undertaken by Dr Carina Lemmer, an independent consultant to Gold One, with input from Gold One staff. The Mineral Resource estimate is for the Main Reef horizon, for selected areas, predominantly beyond the blocks which were previously mined. SRK s audit comprised a review of the historical underground stretch data, Gold One underground chip sampling data, and recently acquired surface drill hole data, quality control and quality assurance data for the Gold One surface drilling, and the grade estimates compiled by Ms Lemmer. SRK has previously audited the historical stretch database and Gold One underground chip sampling datasets, and this data was accepted on the basis of the opinions expressed in the previous audits. The quality assurance and quality control results for the recent Gold One surface drilling demonstrated acceptable accuracy and precision at the main analytical laboratory. The drilling, logging and sampling procedures in place for the Gold One drilling are considered acceptable and in line with industry standard. The Mineral Resource estimate considers all data sources however the lower confidence in the stretch values is recognised, and incorporated into the estimation process. The estimates were undertaken on full width composites, into a 2D block model, and the volumes corrected to incorporate average dip values derived from wireframes modelled for the Main Reef by Gold One. The block model is informed by ordinary log Kriging, back transformed to real space, with post processing using the log normal shortcut, to estimate recoverable portions of the larger panel estimates. The panel size in the estimates is 120 m by 120 m, with a 30 m by 60 m SMU. Some portions of the project area were too far from the data to be estimated. In these cases, the tonnage has been calculated assuming the same channel thickness as the estimated blocks in the same domain, and the grade tonnage curve for the domain applied. SRK have validated the estimates by visual comparison between the data and the estimates, comparison of grade of the data in each domain against the domain estimate and local comparisons between the source data and the estimates. SRK consider the estimates reasonably reflect the source data, and the grade distributions modelled in the post processing are reasonable for the Main Reef. The estimated Mineral Resources are reported in Table 5-7 below. Table 5-7: Mineral Resource Statement for the Main Reef on the Modder North Project, South Africa, SRK Consulting (Pty) Ltd, as at 31 December 2012 Ton Gold Grade Gold content (Mt) (g/t) (Moz) Indicated Main Reef Inferred Main Reef Total Resource The Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Cut-off values have been calculated using a gold price of USD1 750 /oz and an exchange rate of ZAR 8:1 USD The Mineral Resources are reported at a cut-off of 218 cmg/t The information in this report that relates to The Modder North Project Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

133 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Tulo There have been no historical mineral resources reported by previous owners on the exploration property since the introduction of reporting guidelines including SAMREC and JORC. The Tulo project represents a Greenfields exploration target where exploration activities are still at an early stage and insufficient to consider the declaration of Mineral Resources for this property. 5.8 New Kleinfontein and Turnbridge No detailed audit of the resource generation process was undertaken for these projects, as neither of them forms part of any immediate mining plan. The Mineral Resource estimates for New Kleinfontein are based on a March 2000 report compiled by CL Engelbrecht (MSc, MSAIMM), and audited and modified by Mr Camden-Smith. The estimate is based on production figures from 1897 till 1998, fifteen prospect drill holes, location of the claims relative to the Main and 60 m Leader Reef pay shoots, and results of check samples taken underground. New Kleinfontein is a pillar mine, and has a wealth of historical production data surrounding the mineable remnants. There are insufficient drill-hole data of sufficient quality to calculate a robust in situ grade estimate with geostatistics or similar techniques. Because of this, and the inability to adequately validate the data with modern quality control checks and repeat measurements, despite the volume of information, and the closed spaced nature of the sampling data, the Mineral Resource estimate is classified as an Inferred Mineral Resource. At Turnbridge, the sampling data comprises historical chip sampling stretch values, together with nine drill hole data points from a 2008 drilling campaign. In 2009/2010 Gold one undertook a new sampling campaign to verify the historical sampling data in the immediate vicinity of the main shaft (the Glynn shaft). In 2011 SRK undertook an updated Mineral Resource estimate for the Turnbridge project, based on the historical and recently acquired data. The high grade outlier values in the dataset were capped to avoid overestimation in the vicinity of these samples. The estimate was done using Ordinary Kriging, into a 2D block model with 60 m by 60 m square blocks where there was newly acquired data, and 120 m by 120 m where there was only historical data available. Estimation of the blocks was done with the search range used (264 m) being 10% greater than the range of the semi-variogram. The estimated grades in the areas informed by the historical data were reduced by 30% based on a comparison between the historical data and the newly acquired Gold One data. A dip correction was applied to the 2D estimate of the tonnage, using an average dip of 25 degrees. A 25% geological loss was applied to the tonnage and metal content. The areas informed by Gold One sampling data, for which there is an auditable quality assurance and quality control database and procedures, were classified as Indicated Mineral Resources, while the areas estimated from historical data only were classified as Inferred Mineral Resources. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

134 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 40 The estimated Mineral Resources for the two projects are reported in Table 5-8. Table 5-8: Mineral Resource Statement for the Main Reef on the New Kleinfontein and Turnbridge Projects, South Africa, SRK Consulting (Pty) Ltd, as at 31 December 2011 Gold One International Consolidated Mineral Resource Statement Ton Grade Gold content Indicated (Mt) (g/t) (Moz) Inferred Turnbridge Total Indicated: Turnbridge New Kleinfontein Total Inferred: Total Indicated and Inferred: Signed-off by S. Meadon, SRK Consulting 2 Signed-off by Camden Geoserve, independent resource consultants to Gold One, audited by SRK 3 Resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards) The information in this report that relates to New Kleinfontein and Turnbridge Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. 5.9 Goliath The Mineral Resources were estimated by Dr. Carina Lemmer, Pr.Sci.Nat (SACNASP reg. no /03, FGSSA, MGASA) an appropriate independent Competent Person as this term is defined in the SAMREC Code, who is an independent consultant to Goliath. Shango Solutions, also independent consultants to Goliath created the geological models which were utilised in determining dip domains, and consequently in the tonnage calculations. The effective date of the resource statement is 31 December The Mineral Resource model for the West Vlakfontein, Vlakfontein and Spaarwater ( WVVS ) and Sub Nigel areas was reported for the Nigel Reef and Big Pebble Marker by SRK in The subsequent amalgamation of Wit Nigel into the WVVS and Sub Nigel areas resulted in the formation of a consolidated project area for these resources. To incorporate the new data in the southern portion, the entire project area had to be re-domained. As a result, the Nigel Reef Mineral Resource estimate as presented here includes the entire project area, i.e. WVVS, Sub Nigel area and Wit Nigel. The NR estimate is based on a combination of historical stretch values from development drives, digitised from mine plans, stope sampling composites, and from surface drill hole information. The distributions of the data form each dataset were compared, and found to have similar enough distributions, that they could be used together. Nineteen outlier values from the dataset were capped MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

135 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 41 at a value of cmg/t for estimation. The full reef composites were also diluted where necessary to a minimum width if 100 cm. The data were domained into the high grade pay shoots that characterise the gold distribution in the East Rand Goldfield. The gold accumulation and reef width models were compiled using ordinary lognormal kriging and ordinary kriging respectively. The domains were kriged separately, using their respective variograms and enclosed data into 30 m square blocks (in 2D). The 30 m blocks are discretised into 1 x 1 points since, with the regularised data, point kriging is essentially applied. The search radii are set to the variogram ranges, except in a few cases where the range had to be extended beyond this to inform all the blocks in a domain. The minimum and maximum number of samples within the search area was set to 2 and 24 respectively. Due to the underlying strong anisotropy and the fact that geological trends responsible for the anisotropy had to be reproduced, octant searching was not employed. For domains with insufficient data to be estimated by kriging, a global grade for each domain was estimated. Domains 6b, 7b, 7c and 8 which have sparse or no data were assigned an estimated average grade using the following process: Data selection; Construction of a de-clustered histogram; Fitting a theoretical distribution to the histogram, and Calculating grade/tonnage curves based on the above distribution. In some instances, data surrounding a domain was also incorporated in the estimate in order to better inform the model of the distribution. For each domain, a theoretical distribution was fitted to the data, and a change of support applied to the distribution model using a 30 m SMU. From this distribution model, a grade tonnage curve is calculated, and forms the basis of the Mineral Resource estimate, above a cut-off. The 2012 resource statement as at 31 st December 2012 is detailed in Table 5-9. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

136 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 42 Domain Table 5-9: Mineral Resource Statement for Goliath (Megamine): 31 December 2012 Class Tonnage (Mt) Au Grade (g/t) Width (cm) Nigel Reef Au Accum. (cmg/t) Au (Moz) In Situ 1 (Bill. USD) USD/t a Indicated Houtpoort TOTAL a a bc Inferred 2, Houtpoort SUBTOTAL Big Pebble Marker Inferred 2, SUBTOTAL TOTAL RESOURCES NR Indicated NR and Inferred 2, BPM 1 A gold price of USD 1 750/oz is considered at an exchange rate of USD 8. 2 The Inferred resources are based on the assumption that every SMU above cut-off will be identified and economically viable to mine. 3 The Inferred resources have higher grades than the Indicated resources possibly due to depletion by mining of the latter. Mineral resources are not mineral (ore) reserves and do not have demonstrated economic viability. Mineral resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC standards). Cut-off values have been calculated using a gold price of ZAR450,000 / kg (US$1750/oz and an exchange rate of ZAR 8:1). The information in this report that relates to Goliath Gold Mineral Resources is based on information compiled by Mark Wanless, a Competent Person who is a Registered Natural Scientific Professional with the SACNASP with the registration number /05. Mr Wanless is a full-time employee of SRK. Mr Wanless has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wanless consents to the inclusion in the report of matters based on his information in the form and context in which it appears. The Mineral Resources are reported above a cut-off of 300 cmg/t based on a cut-off calculation using a gold price of USD /oz at and exchange rate of USD 1:8 ZAR, and assumed mining and MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

137 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 43 processing costs estimated by Goliath from previous mining at Sub Nigel between 2005 and The Mineral Resources were classified based on the quality of the estimates, as estimated from the kriging statistics. Zones which were assigned an average value are all classified as Inferred Mineral resources, while the remaining zones have a combination of Indicated and Inferred Resources. No Measured Mineral Resources are defined. Following the acquisition of Megamine, Goliath Gold undertook exploration activities during 2011 and 2012, including surface mapping and sampling, underground mapping and sampling and a surface exploration drilling program on The Wit Nigel property, immediately adjacent to the acquired Megamine Properties. In 2012, Wit Nigel was incorporated into the Megamine Project and on the basis of the additional information obtained from the exploration program, mineral resources were declared for the Megamine project including Wit Nigel. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

138 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 44 6 Mineral Reserves 6.1 Modder East The Modder East gold mine is a shallow operation and mining occurs from depths ranging from 300 to 500 m below surface. Underground access is through a decline shaft with a design capacity of ton per month. The mining method applied is conventional breast stoping with trackless development and trackless tramming through dump trucks. The mine has a dedicated metallurgical treatment facility with a capacity of ton per month. The production profile is illustrated in Figure 6-1. GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Modder East LoM production profile Project No Figure 6-1: Modder East LoM production profile Modifying factors The modifying factors applied are discussed: The mine call factor ( MCF ) applied in the LoM planning is 90%. A conservative estimate has been applied as the average achieved for 2012 was 109%; The dilution applied in the LoM plan is in line with what was achieved in 2012; SRK concurs with the method of calculation used and the parameters applied to estimate the recovered grades. SRK however cautions against the low grades mined during the mature stages of the LoM in the UK9A reef horizon. The impact of early high grade scheduling could reduce the extraction of the reserves. The plan should be optimized to mine at an evenly spread grade for the LOM; The development and stoping scheduling parameters are based on reasonable rates. The scheduling logic has also been appropriately delayed for construction and equipping activities. This is to ensure that the plan resembles what can be achieved in practice; and The average percent Recovery as at July 2013 by mass was on average 98.72%, % Recovery by assay 95.48% and progressive Plant Call Factor 103.3%. This is in line with the original metallurgical test work. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

139 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 45 SRK concurs with the modifying factors as applied and believes they are reasonable. The Mineral Reserves are reported above a cut-off calculated using recent operating costs, capital expenditure and technical parameters. The Black Reef and UK9A are reported above cut-off s of 192 cmg/t and 183 cmg/t respectively. The budgeted Mine Call Factor for the LOM of 90% is above that planned in the feasibility study (85%), but lower than the 2012 achieved value of 109%. The stope width, and dilution are in line with the recent achievements at the mine and are considered appropriate. Table 6-1: Mineral Reserve Statement for Modder East Mine, South Africa, SRK Consulting (Pty) Ltd, as at 31 December 2012 Gold Au Ton Grade Gold content (Mt) (g/t) (Moz) Proved BPLZ + Basal Unit Total Proved Probable 1 BPLZ + Basal Unit UK9A Total Probable Total Reserve The Mineral Reserves are planned for extraction using a pay limit that is based on a gold price of ZAR /kg (1 750 USD /oz and ZAR 8:1 USD) 1 Reported at a pay limit of 192 cmg/t 2 Reported at a pay limit of 183 cmg/t The information in this report that relates to Modder East Ore Reserves is based on information compiled by Roger Dixon, a Competent Person who is a Professional Engineer with the Engineering Council of South Africa ( ECSA ) No and is a Fellow of the South African Institute of Mining and Metallurgy ( SAIMM ). Mr Dixon is a full-time employee of SRK. Mr Dixon has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dixon consents to the inclusion in the report of matters based on his information in the form and context in which it appears. Operational review The mine is currently ramping up production. The 2013 production performance is illustrated in Figure 6-2. The production has mainly been sourced from the Black Reef as planned. The year-todate production performance is illustrated in Figure 6-2. The year to date production is down by 24% relative to the Life of Mine planning. The primary reason for the reduced production volumes was due to a slower than anticipated build up in labour force, following the dismissal of a large proportion of the Modder East workforce due illegal strike action during The mine however achieved a record for tonnes broken for the September 2013 quarter. The tonnage was achieved at a consistent grade of 5 g/t for the June and September 2013 quarters. Only the Black reef tonnes were treated at the metallurgical facility for the year to date. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

140 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 46 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT MODDER EAST 2013 PRODUCTION PERFORMANCE Project No Figure 6-2: Modder East 2013 Production Performance The mine has been recruiting to support the anticipated production ramp-up and employees have been deployed in the underground production and stoping operations. As a result of the increase in the number of teams the mined square metres have increased accordingly. SRK comments SRK concurs with the mining method selected for the extraction of the orebodies. The mining methods are widely practised within the underground gold mining sector. The achieved parameters are very close to those set out in the Life of Mine ( LoM ) for the year to date. The production ramp-up is progressing well and steady state operations should be achieved as planned. The mine plan is based on reasonable planning parameters. Replacement capital has been estimated and is extrapolated from the 2013 and 2014 budgets. SRK advocates for a more detailed estimate based on the needs of the operation. SRK believes the mine is positioned to deliver on the budgeted tons and ounces. The modifying factors applied are reasonable. No material issues have been identified in the LoM plans as laid out. 6.2 Cooke 1-3 section The shaft complex consists of three shafts referred to as the Cooke section. Multiple reefs are mined at the shafts. Bord and pillar, massive and conventional narrow reef stoping methods are employed. The underground loading and tramming is carried out through both trackless and rail-bound operations. The mining methods applied are as follows: MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

141 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Conventional breast stoping This mining method is widely practised in the South African narrow reef gold mining sector. This method has been successfully applied for decades at the Shafts and is based on proven technology The bord and pillar mining The wider reef areas found on Cooke 1 and 3 are extracted through bord and pillar methods. The 6 m wide bord layout has demonstrated success in the past Double-cut with bench mining This method is applied in areas where the reef is too wide for bord and pillar mining. The footwall is ripped and a bench is advanced horizontally or laterally. Dilution control is a critical success factor for the effectiveness of this mining method Pillar extraction Remnant pillars left in the past are mined. The pillars are risk assessed and the legally appointed rock engineer gives site specific procedures for their extraction The LoM plan for the Cooke Section is illustrated in Figure 6-3. kt 1,600 1,400 1,200 1, Cooke 1, 2 & 3 Production Profile Gold total tonnes treated Gold recovered 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Gold Kg's Uranium total tonnes treated g/t Gold Grade Recovered GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Cooke 1, 2 and 3 production profile Project No Figure 6-3: Cooke 1, 2 and 3 production profile Modifying factors The modifying factors are discussed: The scheduling rates are based on sound planning parameters. The scheduling rates have been appropriately delayed for construction and equipping activities; SRK believes the planned production rates for the shafts are achievable; The average % recovery for the period July 2012 to July 2013 (Ore + Waste) was The budget calls for %. This might be optimistic in view of past performance. SRK believes that 95.0 % might be a more conservative budget, and this is been used in the financial model. The average % Plant accountability for the period was 95.5% with the budget calling for 100%; and MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

142 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 48 The applied modifying factors are reasonable and based on the past performances of the shafts. Table 6-2 outlines the Mineral Reserve Statement for the Cooke 1, 2, and 3 Mines, as at 31 December Table 6-2: Mineral Reserve Statement for the Cooke 1, 2, and 3 Mines, South Africa, SRK Consulting (Pty) Ltd, as at 31 December 2012 Gold Au Ton Grade Gold content Uranium U 3 O 8 Ton 5 U 3 O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Proved Cooke Cooke Cooke Total Proved Probable Cooke Cooke Cooke Total Probable Total Reserve The Mineral Reserves are planned for extraction using a pay limit that is based on a gold price of ZAR /kg (1 750 USD /oz and ZAR 8:1 USD) and uranium price of 45 USD /lb and ZAR 8:1 USD up to end 2015 and uranium price of 65 USD /lb and ZAR 8:1 USD from Pay limit values are 4.55 g/t, 4.63 g/t and 4.15 g/t for Cooke 1, Cooke 2 and Cooke 3 respectively. The information in this report that relates to Cooke 1 to 3 Ore Reserves is based on information compiled by Roger Dixon, a Competent Person who is a Professional Engineer with the ECSA No and is a Fellow of the SAIMM. Mr Dixon is a full-time employee of SRK. Mr Dixon has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dixon consents to the inclusion in the report of matters based on his information in the form and context in which it appears. Operational review The Cooke underground production performance for the year-to-date is illustrated in Figure 6-4 and Figure 6-5. The tonnage produced for the year-to-date is down 14% compared to the plan. The gold produced is however close to plan. This is as a result of the adjustment in the cut-off applied. Grade management measures were introduced to counter the impact of the declining gold price experienced during The Cooke section forecasts to be only 1% down on the gold plan for the year. As at the end of October Kg of gold has been produced. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

143 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page Tons Kg of gold Cooke 1,2,3 Production Performance Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Cooke 1 actual tons milled Cooke 2 actual tons milled Cooke 3 actual tons milled Cooke 1 tons milled forecast Cooke 2 tons milled forecast Cooke 3 tons milled forecast GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT COOKE 1-3 PRODUCTION PERFORMANCE 2013 Project No Figure 6-4: Cooke 1-3 Production performance Cooke 1, 2, 3 Gold Produced Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Cooke 1 Gold Kg's forecast Cooke 2 Gold Kg's forecast Cooke 3 Gold Kg's forecast Actual Cooke 1 Gold Kg's Actual Cooke 2 Gold Kg's Actual Cooke 3 Gold Kg's GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT COOKE 1-3 GOLD PRODUCED 2013 Project No Figure 6-5: Cooke 1, 2 and 3 Gold Kg s produced MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

144 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 50 The factors impacting operational performance are described: The tonnes milled for the September quarter were marginally lower than the previous quarter s. Four days were lost at the three shafts due to industrial action. The NUM declared a dispute at the CCMA after the parties could not reach agreement; The yield for the September quarter increased by 18% on the previous quarter. The yield increased from 3.58 to 4.21 g/t. The shafts have reported an increase in the MCF as result of a focus on quality mining in higher grade areas; The turnaround initiatives implemented at shafts for cost control and the creation of face length have produced good results. The production costs have reduced from 1460 ZAR per ton to 1373 ZAR per ton for the Cooke shafts during the September quarter. SRK comments The business plans are based on reasonable modifying factors and parameters. SRK found no material issues in the technical reviews conducted during Another project is planned to treat RoM ore from Cooke 3 for Uranium at Cooke 4 Shaft. The RoM ore with Uranium content above the cut-off is planned to be transported, over land, to Cooke 4 shaft for treatment. This Uranium Project presents significant upside to the operation by increasing reserves and mining flexibility. This should result in a reduction in operating costs. An improvement is observed in the production performance of the shafts. SRK believes that a resolution of the production delays experienced and emphasis on the industrial relations will improve the production. The two-year wage agreement should reduce the impact of strike action over the period. The turnaround strategy employed will enhance the mine s performance further. This initiative is being managed at the appropriate level at the shafts. 6.3 Randfontein Surface Operation Surface Uranium Project The Cooke TSF forms the basis of the Surface Uranium Project and is planned to be mined in a sequential manner. The entire dump is above the calculated cut-off grade of g/t and kg/t for gold and uranium, respectively. From previous mining experience Gold One personnel expect that no loss of material or dilution will occur during the mining operation. As a result the Mineral Resource is converted to Mineral Reserve without change in the grade or volume. This technical report documents a Mineral Resource statement for the TSF prepared by Gold One s independent consultants. It was prepared following the guidelines of the National Instrument and Form F1. SRK has reviewed the Mineral Resources other than Cooke TSF and found them acceptable. The Mineral Resource statement reported herein was prepared in conformity with generally accepted CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines. For the Cooke TSF, considering the TSF is mined in its entirety, no modifying factors were applied to convert the Mineral Resources to Reserves. At present there is approximately 17 Mt of capping on the top of the TSF. This capping will be removed in advance of the mining and will be disposed in a separate facility; it is therefore assumed that there will be minimum dilution. Therefore the Reserve is equal to the Resource. SRK recommends that future studies incorporate an assessment of the likely loss or dilution that will take place at the interface between the barren cap and mineralised material. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

145 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 51 It has been assumed that that the total reserve will be mined and processed therefore cut-off grades have been applied to the total volume. Uranium process The uranium recovery rate of 80% as stated by Gold One is acceptable; The overall recovery rate for the gold is estimated at 50%; A percentage recovery of 91% is quoted and this is readily achievable; and SRK concurs with the applied recovery factors. The Surface Uranium Project has not yet commenced and the more realistic scenario is that the project does not go ahead as envisaged. Instead, the Surface Uranium Project will progress with the larger project with Sibanye. Accordingly, we have not carried out a technical assessment of the cash flow assumptions of this project as an operating property. The valuation of the Surface Uranium Project has been valued based on the reserves and resources instead Existing Surface Operations The Randfontein Surface Operations are currently and consistently processing surface tailings material at a rate of 300,000 tonnes per month. During 2013, the Randfontein Surface Operations has implemented the Cooke Optimisation Project (COP), at a total planned capital cost of ZAR 230 million, which is due for completion by the end of Upon commissioning during the fourth quarter of 2013, this project will facilitate the upgrading of the Cooke Gold Plant operations to 400,000 tonnes per month and mechanical sand reclamation will cease together with deposition onto the Cooke Tailings Dam. This will be replaced by hydraulically reclaimed slime which will be deposited into various open pits for which approval for the amendment to the EMP was recently awarded by the DMR. The EMP approval was conditional on the provision of the necessary closure guarantees, which have subsequently been provided. Residue disposal to the open pits is conditional upon Rand Uranium obtaining a water use licence from the Department of Water Affairs. Notwithstanding the imminent commencement of deposition into the pits and the commissioning of the Cooke Gold Plant upgrade to 400,000 tonnes per month, current levels of production at 300,000 tonnes per month can be sustained until April 2014 if required, utilising the Cooke Tailings Dam as the deposition site. Gold process The average percentage recovery over the period between 11 July 2011 and December 2012 for the plant was 67.9 %. The budget calls for 72 % with sand only. The average percent plant accountability for the period was 94.3%. As a sand treatment plant the aim is to maximize recovered grade and throughput. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

146 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 52 Table 6-3: Mineral Reserve Statement for Cooke Surface operations as at 31 December 2012 Gold Uranium Category TSF Au Ton Grade Gold content U 3O 8 Ton 5 U 3O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Proved Cooke TSF* Dump 20 Sand** Dump 20 Slime Main** Dump 20 Slime NW** Total Proved Probable Cooke TSF* Dump 20 Slime Main** Dump 20 NW** Total Probable Total Reserve *Reserves supporting the Surface Uranium Project **Reserves supporting the existing operations and Cooke Optimisation Project. The information in this report that relates to the Randfontein Surface Operations Ore Reserves is based on information compiled by Roger Dixon, a Competent Person who is a Professional Engineer with the ECSA No and is a Fellow of the SAIMM. Mr Dixon is a full-time employee of SRK. Mr Dixon has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dixon consents to the inclusion in the report of matters based on his information in the form and context in which it appears. SRK comments The imminent commencement of deposition into the pits and the commissioning of the Cooke Gold Plant upgrade to 400,000 tonnes per month, current levels of production at 300,000 tonnes per month can be sustained until April 2014 if required, utilising the Cooke Tailings Dam as the deposition site if all regulatory approvals are acquired; and The business plans are based on reasonable modifying factors and parameters. SRK found no material issues in the technical reviews conducted during Cooke 4 Shaft The mining methods employed at Cooke No 4 Shaft are conventional breast stoping with bord and pillar and drift and fill in the wide reef package areas. Five areas are planned to be mined and the mining methods applied are as follows: 50 Level is planned to be mined with bord and pillar The shaft Pillar is mined initially with a narrow de stress cut followed by massive conventional drift and fill mining methods above or below the de stress cut horizon. Cemented full plant tailings are used extensively as support in both the de stress cut and massive mining; MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

147 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 53 The 50 level area targets the already de stressed lower bands of the Upper Elsburg horizon. Where low middlings are encountered (less than 2 m) bord and pillar mining methods are used to stabilize the middling. Where middlings are not problematic conventional breast mining is practiced; The E9EC of the Middle Elsburg are planned to be mined using conventional breast mining methods utilising yielding strike pillars cut at inter panel distances. Backfill is not currently planned for the Middle Elsburg mining horizon; 33 Level is planned to be mined in conventional breast stoping with de-stressing cut as well as the bord and pillar method in the wider areas of the orebody; and. Pillar 4 is planned to be mined with conventional breast stoping. The Cooke 4 shaft LoM plan is illustrated in Figure 6-6. GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT Cooke production profile Project No Figure 6-6: Cooke production profile Modifying factors The applied factors are analysed: Only resources classified under the indicated and measured categories have been applied in the LoM planning process. The applied modifying factors are appropriate for each mining method selected. The scheduling rates for development and stoping are based on the past achievements of the shafts. The milling capacities of both the Gold and the Uranium Plants is tpm. Gold process The average percent gold recovery July 2011 to April 2013 was 96.0 % versus a budget of 95.0 %. The budget recovery anticipated is considered realistic. The average percent Plant Call Factor was 99.1 % against an expectation of 100 %. The accounting in general over the operation would seem to be satisfactory. Uranium process MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

148 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 54 For the period the indicated % recovery was 80% and the average % Plant Call Factor was 92.18%; SRK believes the applied recovery factors are realistic. Table 6-4 presents SRK s updated Mineral Reserve Statement for the Cooke No 4 Shaft, as at 28 February Table 6-4: Cooke 4 Shaft Mineral Reserves as at 28 February 2013 Cooke 4 Mineral (Ore) Reserves 1 Gold Uranium (U 3 O 8 ) Ton Grade Content Ton Grade Content Content (Mt) (g/t) (Moz) (Mt) (kg/t) (kg) (000's) (Mlbs) Proved E9EC Total Proved: Probable E9EC Shaft Pillar Level Level Pillar Total Probable: Total Proved and Probable: The mineral reserves are estimated using a pay limit that is based on a gold price of ZAR /kg (1 750 USD /oz and ZAR 8:1 USD) and an uranium price of 45 USD /lb and ZAR 8:1 USD up to end 2015, and an uranium price of 65 USD /lb and ZAR 8:1 USD from Gold pay limit value is 3.9 g/t. The information in this report that relates to Cooke 4 Ore Reserves is based on information compiled by Roger Dixon, a Competent Person who is a Professional Engineer with the ECSA No and is a Fellow of the SAIMM. Mr Dixon is a full-time employee of SRK. Mr Dixon has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dixon consents to the inclusion in the report of matters based on his information in the form and context in which it appears. Operational review The production performance is illustrated in Figure 6-7. The shaft produced 893 kg of gold year to date at the end of October The turnaround initiatives introduced by the mine have improved the production performance and efficiencies. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

149 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 55 GOLD ONE INTERNATIONAL TECHNICAL ASSESSMENT AND VALUATION REPORT COOKE 4 PRODUCTION PERFORMANCE 2013 Project No Figure 6-7: Cooke 4 production performance 2013 The following factors have impacted the production performance at the shaft: The Cooke 4 shaft has realised an increase in production during the year. The shaft is nine months into the execution of its turnaround strategy. A substantial increase in production was realised during September and is continuing into the month of October. The improvement has been brought about by enhanced backfill placement volumes and a focus on quality mining. The MCF has increased to 74% for the September quarter and the gold produced has reached a record high for the month of September oz were produced during this month SRK comments The shaft is executing a turnaround strategy to reduce operating costs and increase volumes thus positively impacting on unit mining costs due to the high fixed cost base. The backfilling applied is assisting the mine initiative on quality mining. The mine design and scheduling supports ventilation, equipment access and logistic requirements adequately. The business plans are based on reasonable modifying factors and parameters. SRK found no material issues in the technical reviews conducted during MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

150 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 56 7 Consolidated Resource and Reserve Statement for Gold One Table 7-1 presents the consolidated Resources and Reserve estimates for Gold One. Resources are not equal to Reserves. Resources are reported inclusive of Reserves. These figures are reported at a range of cut-offs and based on various gold prices with effective dates as stipulated in Table 3-1. Table 7-1: Consolidated Mineral Resource Statement for Gold One Ton Gold Grade Gold content Ton Uranium U 3 O 8 Grade Uraniu m content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Measured Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Measured Indicated Modder East Cooke 1-3 Underground Cooke Randfontein Surface Ventersburg Turnbridge Modder North Goliath Gold Total Indicated Total Measured and Indicated Resource Inferred Modder East Cooke 1-3 Underground Cooke Randfontein Surface Ventersburg Turnbridge New Kleinfontein Modder North Goliath Gold Total Inferred Total Resources The Mineral Resources are not Mineral Reserves, and there is no guarantee that all or part of the Mineral Resource will be converted to a Mineral Reserve The Mineral Resources are reported inclusive of Mineral Reserves. The Mineral Resources are reported at a range of cut-off values, based on techno economic assumptions which are detailed in sections 5 and 6 Effective dates for each Mineral Resource are listed in Table Goliath Gold is reported on a 100% basis but only 72% is attributable to Gold One MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

151 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 57 The Table 7-2 represents the consolidated Mineral Reserve estimate for Gold One. Table 7-2: Consolidated Mineral Reserve Estimate for Gold One Gold Uranium Ton Grade Gold content Ton U 3 O 8 Grade Uranium content (Mt) (g/t) (Moz) (Mt) (kg/t) (Mlbs) Proved Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Proved Probable Modder East Cooke 1-3 Underground Cooke Randfontein Surface Total Probable Total Proved and Probable Reserves Mineral Resources are reported at a range of cut-offs based on various commodity prices, as detailed in Table 6-1 to Table 6-4 Effective dates for each Mineral Reserves are listed in Table 3-2 MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

152 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 58 8 Financial Evaluation 8.1 Reliance on information SRK believes that its opinion must be considered as a whole and that the selection of portions of the analysis or factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying the opinions presented in this document. The derivation of a technical review is a complex process and should not be subjected to partial analysis or summary. The technical review in this report is effective at 15 November 2013 and is based on information provided by Gold One throughout the course of SRK s investigations, which in turn reflect various technical-economic conditions prevailing at the date of this report. 8.2 Site visit and analysis of information Inspection visits to the mine, processing facilities, surface structures and associated infrastructure have been undertaken by several members of the SRK team, followed by discussion and enquiry with key on-mine personnel. Planning and scheduling information was analysed, together with associated costs and capital assumptions. In consideration of all financial statements and financial position at the technical-review date, legal tenure and mineral rights, and other aspects relating to the assets under review, SRK has placed reliance on the managers and staff of the assets. 8.3 SAMVAL Methods Introduction There are numerous recognised methods applied in valuing Gold and Uranium Assets. There is also a diversity of situations in which a valuation may be required and hence no simple formula or recipe can be used without critical appraisal of the specific situation at hand. Valuation methods in common usage for Gold and Uranium Assets are dependent on numerous factors including and not necessarily limited to: the nature of the valuation undertaken; the development status of the mineral or petroleum assets; and the extent and reliability of available information. Regardless of the technical application of various valuation methods and guidelines, the valuer should strive to adequately reflect the considered risks and potentials of the project in the valuation ranges and the preferred values Valuation Approach and Valuation Methods The valuation of the Gold and Uranium Assets has been prepared in accordance with the SAMVAL Code. In general there are three main and generally accepted analytical valuation approaches that are in common use for determining the Fair Market Value of the Assets, each of which is described below and which largely rely on the principle of substitution, using market derived data. The Fair Market Value in respect of a mineral asset is defined as the amount of money (or the cash equivalent of some other consideration) determined by the relevant expert for which the Mineral or Petroleum Asset or Security should change hands on the Valuation Date in an open and unrestricted market between a willing buyer and a willing seller in an arm s length transaction, with each party acting knowledgeably, prudently and without compulsion. The fair market value of a mineral asset usually comprises two components: the underlying or technical value of the assets and a premium MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

153 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 59 or discount relating to market, strategic and other considerations. The fair market value is therefore more likely to fluctuate with time. The Technical Value is an assessment of a Mineral or Petroleum Asset s future net economic benefit at the Valuation Date under a set of assumptions deemed most appropriate by an Expert or Specialist, excluding any premium or discount to account for factors such as market or strategic considerations. SRK has determined the Technical Value for the Gold and Uranium Assets. The three generally accepted approaches to mineral asset valuation, as given in Section 20 of the SAMVAL Code and shown in italics below, are: Cash Flow Approach which relies on the value-in-use principle and requires determination of the present value of future cash flows over the useful life on the mineral asset. The most widely used valuation method for pre-development, development and operating mines is the discounted cash flow ( DCF ). This method considers the majority of factors that can influence the value of a business enterprise, including expected changes in the mineral asset or property s operating activity. Under this approach, it is necessary to utilize projections of revenues, operating expenses, depreciation, income taxes, capital expenditures and working capital requirements. The present value of the resulting cash flows provides an indicated value of the operating business enterprise. In order to eliminate the impact on value of the different long-term financing arrangements that have been or could be implemented, analysis is generally done on a debt-free basis. The net present value ( NPV ) of the projected real terms pre-finance cash flows, using either mid-year or end-year discounting, provides an indication of the value for the mineral asset or property appraised. This NPV at the appropriate discount rate would have to be reduced by the value of the debt at the valuation date to derive the net value of the property or asset. Market Approach which relies on the principle of willing buyer-willing seller and requires that the amount obtainable from the sale of the mineral asset is determined as if in an arm s-length transaction. The Market Approach utilises information relating to transactions in either public or private firms similar to the subject. The approach is based on the principle of substitution and the assumption that comparable opportunities yield appropriate values. The various methods apply multiples from such data to the subject s financial information in order to obtain comparable measures of value (Hanlin and Claywell, The Market Approach generally provides fair value, since it is based on transactions that are normally consummated between willing buyers and willing sellers in an open market. Hanlin and Claywell (2010) present two primary valuation methods in the Market Approach: o Completed Transaction Method ( CTM ) looks at completed sales transactions in the subject s industry that are a qualified substitute, i.e. the comparable businesses or items need only to be substantially quantitatively and qualitatively similar. o Guideline Company Method ( GCM ), also known as the Market Capitalisation Method share prices of actively-traded publicly owned companies are applied to the subject through valuation multiples. The valuation multiple is derived from the market capitalisation, adjusted for the value of options, convertible securities, preference shares and debt. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

154 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 60 Where Comparable Transactions relating to the sale, joint venture or farm-in/farm-out of PGM Assets are known, such transactions may be used as a guide to, or a means of, valuation. For a transaction to be considered comparable it should be similar to the asset being valued in terms of location, timing and commodity, and the transaction should be regarded as of arm s length (that would take place between a willing buyer and willing seller) (Lawrence, 2010). If the transaction was the result of a forced or distressed sale, the resulting unit value would not be applicable. The Comparable Transactions method is best suited to Exploration and Advanced Exploration areas, and Pre-Development Projects. Its application to more advanced PGM Assets is generally restricted to recent sales (whole or part) of the actual assets under consideration. An alternative market approach that is frequently appropriate is the In Situ Resource (or "Yardstick") method of technical valuation for such assets. The In Situ Resource technique involves application of a heavy discount to the value of the total in-situ metal contained within the resource. The discount is usually taken as a range of a certain percentage of the spot metal price as at the valuation date. The actual range varies for different commodities, being typically between 2% and 4.5% for gold (Lawrence, 1994) and diamonds, and between 0.5% and 3% for base metals (including platinum group elements) (van der Merwe and Erasmus, 2006), but may also vary substantially in response to a range of additional factors such as physiography, infrastructure and the proximity of a suitable processing facility. The depth (and hence cost) of a potential mining operation on the asset is also a determining factor. It is mostly used for exploration, pre-development and development properties. Cost Approach which relies on historical and/or future amounts spent on the mineral asset. Where previous and future committed exploration expenditures are known, or can be reasonably estimated, the Multiple of Exploration Expenditures ( MEE ) method can be applied to derive a cost-based technical value. The method requires establishing a relevant Expenditure Base ( EB ) from past and future committed exploration expenditure. A premium or discount is then assigned to the EB through application of a Prospectivity Enhancement Multiplier ( PEM ), which reflects the success or failure of exploration done to date and the future potential of the asset. The PEM usually ranges between 0.5 and 3.0, but can be as low as 0 and as high as 5 (Lawrence, 2010). The lower factor would reflect disappointing exploration results and the higher identification of potentially economic mineral resources. The basic tenet of this approach is that the amount of exploration expenditure justified on a property is related to its intrinsic technical value. This reasoning is usually valid in a qualitative sense, but the quantity (i.e. the actual amount expended) may vary greatly for properties of similar intrinsic value, hence the experience of the valuer in carefully weighing up the PEM and the final result is of great import. The MEE method is best suited to Exploration and Advanced Exploration Areas. The applicability of the three valuation approaches to the different property types as set out in the SAMVAL Code is shown in Table 8.1. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

155 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 61 Table 8-1: Valuation Approach Valuation Approach Cash Flow Market Cost Exploration Properties Not generally used Widely Used Quite widely used Development Properties Production Properties Dormant Properties Economically Viable Widely Used Widely Used Widely Used Less widely used Not generally used Quite widely used Not generally used Quite widely used Not generally used Not Viable Not generally used Widely Used Less widely used Defunct Properties Not generally used Widely Used Quite widely used The SAMVAL Code requires that at least two valuation approaches must be applied and the results from the valuation approaches and methods must be weighed and reconciled into a concluding opinion on value. A range of values is provided, together with the estimated value. The currency of valuation used in this report is South African Rand ( ZAR ) Materiality The SAMVAL Code definition for materiality requires that a public report contains all the relevant information that investors and their professional advisors would reasonably require, and expect to find, for the purpose of making a reasoned and balanced judgement regarding the mineral asset valuation. Materiality as defined within the VALMIN Code means that (a) the contents and conclusions of the MER; (b) any contributing assessment, calculation or the like; and (c) data and information; are of such importance that their inclusion or omission from a technical assessment or valuation may result in a reader of the MER reaching a different conclusion than would otherwise be the case. The determination of what may be material depends on both qualitative and quantitative factors. Something may be material in the qualitative sense because of its very nature, e.g., country risk. In the case of quantitative issues in this MER, SRK considers that if omission or inclusion of an item could change the value or post-tax pre-finance annual operating cash flow by more than ten per cent (10%), the item is material and would have to be included Transparency In terms of the SAMVAL Code, the reader of a Public Report (this MER) must be provided with sufficient information, the presentation of which is clear and unambiguous, to understand the report and not be misled. 8.4 Valuations from Transactions SRK reviewed recently completed transactions on Metals Economics ( and on SNL Metals Economics Group ( for details on recently completed transactions that might be considered appropriate when estimating the value of project ounces held by Gold One. The following table shows some recent South African transactions (since 2009). All the transactions involved relatively large deposits, typical of South African deposits. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

156 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 62 Table 8-2: South African gold project transactions since 2009 Target Commodities Development Stage Rsv Cont Primary Resources only Certainty Rsv & Rsc Cont Primary (Moz) (Moz) Ezulwini Au, U PRD 0 MIIF 28 Ezulwini Au, U PRD 0 MIIF 28 Sub Nigel Au D 0 IDIF 13 Transvaal Gold Mining Estates Au D 0 MIIF 2.8 Armgold/Orkney Au PRD 2.2 MIIF 32 Blyvooruitzicht Au PRD 7.1 IDIF 26 Cooke Au PRD 2.9 MIIF 13 Evander Au PRD 8 IDIF 31 Mine Waste Solutions Au, U PRD 2.7 INFE 2.8 President Steyn Au PRD 2 MIIF 14 Tau Lekoa Au PRD 0.9 MIIF 6.2 Tau Lekoa Au PRD 0.5 MIIF 12 Metals Economics PRD = Production D = Dormant MIIF = Measured, Indicated and Inferred IDIF = Indicated and Inferred INFE = Inferred Rsv = Reserve Rsc = Resource Of the above, only Sub Nigel Gold Mine (SNGM) and Transvaal Gold Mining Estates were not producing at the time of the transaction. Mine Waste Solutions is a surface deposit. The transactions that included only resources showed the following range of values: Table 8-3: South African Transactions with no Reserves Asset oz USD /oz Ezulwini Ezulwini Sub Nigel Transvaal Gold Metals Economics MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

157 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 63 The review of the other transactions is summarised as: Table 8-4: South African Transactions with Reserves and Resources Asset Reserve - oz Resource - oz USD/RSV oz USD/RES oz Definition Grade (Au g/t) Armgold/Orkney MIIF Blyvooruitzicht IDIF Cooke MIIF Evander IDIF Mine Waste Solutions INFE President Steyn MIIF Tau Lekoa MIIF Tau Lekoa MIIF Metals Economics The overall valuation for the above ranges from USD 0.70 to USD (ZAR 7.2 to 689) per resource ounce. Reserve ounces and Resources that are at Measured and Indicated level (and hence could be converted into a reserve) are more valuable than Inferred ounces Economic Assumptions Where required SRK has converted values using the following economic assumptions: Conversion of ZAR to USD at 10.28, the spot rate on 15 November 2013 Conversion of Uranium pounds to Gold equivalent ounces at the long-term forecast prices of USD 63 per pound and USD 1424 per ounce Goliath and Ventersburg SRK has selected the Market and Cost Approaches for the valuation of these assets. A DCF model is not considered appropriate for these assets that are not currently in production and for which mine schedules are not available. The only recently completed South African transaction noted that contained only resources was the Ezulwini/Cooke 4 transaction. In this transaction, First Uranium received an unsolicited offer from Gold One of USD 70 million (approximately ZAR 560 million at the prevailing exchange rate and ZAR 720 million at the current rate) for the gold and uranium resources. Cooke 4 is a marginal operation but is currently a producing asset. This is in contrast to Goliath where the assets are either exploration projects or on care and maintenance in the case of SNGM. The official purchase price for the resource ounces at Ezulwini was approximately USD 2.50 (ZAR 25.7) per resource ounce. Including the gold equivalent ounces attributable to the uranium resources, this reduces to between USD 1.90 and USD 2.30 (ZAR 19.5 to 23.6) depending on the assumed prices for conversion (long-term or spot). The valuation of these ounces could reasonably be considered to be an upper limit to the value of the ounces currently held by Goliath. Inferred ounces are typically only mined after the measured and indicated ounces. As such, their value can be discounted to reflect the time it will take to realise their value. If it is assumed that it will take 10 to 12 years to realise the value from the inferred MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

158 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 64 ounces then, at a 10% discount rate, the value should be between a quarter and a third that of Measured and Indicated ounces. Assuming a value of up to USD 1.94 (ZAR 19.9) per ounce and considering a higher value attached to indicated (three times that of inferred) resources, this implies a value of up to USD 1.63 (ZAR 16.8) for inferred and up to USD 4.89 (ZAR 50.3) for indicated resources. The selected range is ZAR to ZAR 30 per ounce with a preferred of ZAR 20.8 for indicated. This is reduced by a factor of three for the inferred ounces. This translates into up to USD 1.94 on a weighted basis as the ceiling for the valuation of the resource ounces. This gives approximately ZAR 13 per ounce overall for the preferred with a high value of approximately ZAR 20 per ounce, in line with the above limit of USD 1.94 at the upper limit. Table 8-5: Valuation of Resource Ounces at Goliath and Ventersburg Resource Confidence Moz ZAR million Low Preferred High Indicated ZAR/oz Ventersburg M&I Goliath M&I Inferred ZAR/oz Ventersburg Inferred Goliath Inferred Total This gives a range of ZAR 111 to ZAR 268 million with a preferred value of ZAR 166 million (note that Goliath ounces are the attributable ounces). The historical costs associated with the upgrading or maintenance of the resources at Ventersburg and Goliath were also reviewed. This showed that there was approximately ZAR 36 million spent from 2006 to 2013 at Goliath and approximately ZAR 106 million spent at Ventersburg. Preference has been given to the market comparative valuation. Table 8-6: Ventersburg Summary Valuation Range (ZAR million) Ventersburg historical 106 Ventersburg comparative Low Preferred High Selected MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

159 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 65 Table 8-7: Goliath Summary Valuation Range (ZAR million) Goliath historical 36 Goliath comparative Low Preferred High Selected Assets considered non-material to the Valuation The following assets are not considered material to the valuation and have not been valued: New Kleinfontein and Turnbridge Tulo Modder North East Rand Value of Ounces at Other Mines SRK then further considered the possible value of the ounces at the producing assets that might not be captured in the DCF model for the company. SRK developed DCF models for each of the assets purely for comparison with the values of the ounces based on market information. These models were not developed with the intention of valuing the company and do not consider debt and overhead costs that would be relevant for an overall valuation. These DCF models were used in conjunction with the Market Approach to determine where incremental value may be identified. Table 8-8: Implied Value of Ounces from Harmony and Sibanye Mark Cap Reserve Ounces EV/RSV Oz Resource EV/RES oz USD m Moz USD/oz ZAR/oz Moz USD/oz ZAR/oz Harmony Sibanye Average The above table shows that resource ounces at Harmony and Sibanye are valued at an average of ZAR per ounce with a range of ZAR 89 to ZAR 104. This is considered comparable to the ounces at the portfolio of producing operations at Gold One. SRK applied the above range to the various assets and then compared these to the values implied by the DCF models. The only asset where this implied additional value possibly not captured by the DCF models was at Cooke 4 and for the Randfontein Surface operation. The ounces at the other assets showed more value in the DCF analysis than with the application of the ZAR per ounce values. This implies that there is no incremental value in these ounces. This is confirmed by the technical work done by SRK and the work done by Gold One that was reviewed by SRK. Resource ounces at the other producing operations tend to be below the reserve cut-off grade and would not be of value to a third party without the infrastructure associated with the respective mines. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

160 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 66 Cooke 4 inferred ounces could add substantial value to the operation if the confidence can be increased and they are converted to reserves. A preliminary mine plan utilising these ounces shows that approximately ZAR 1 billion in additional NPV could be realised. Given the high level of uncertainty associated with these ounces this is discounted by 50 % implying a possible incremental value of ZAR 500 million. The value of the ounces as determined by the Market Approach suggests that there is approximately ZAR 200 million more value than reflected in the DCF. The incremental value relative to the DCF is thus between ZAR 200 and ZAR 500 million with a preferred value of ZAR 350 million. The Randfontein surface ounces have limited potential without synergy value. Gold One is understood to be investigating possible synergies with Sibanye and may be able to realise value from a transaction that is not yet clear. The potential to realise significant value in the absence of such a transaction is limited. Mine Waste Solutions was considered as a comparative transaction but was rejected as work on the surface ounces suggests that these are more marginal and hence should attract a value in line with the transactions associated with other marginal assets. Valuing the resource ounces using the same ZAR per ounce derived from the Harmony and Sibanye market capitalisation implies a value of around ZAR 500 million for the surface ounces (Randfontein). As discussed above, realising value from these ounces will require these ounces to be pooled with other ounces to improve economies of scale. It is not clear to what extent Gold One would be compensated for these ounces or what assets might be included in such a transaction. Given the likelihood of this deposit being included in a transaction along with other assets it is considered appropriate to apply a value derived from mines with a range of producing assets (surface and underground). Finally, SRK also considered the yardstick approach for the Randfontein surface and Cooke 4 ounces. This approach is described by M Lawrence in a paper entitled Considerations in Valuing Inferred Resources. Here the author recommends a range of 0.4 % to 3 % of the value of the contained metals for the valuation of resources in the inferred category and those in higher categories where other methods cannot be easily applied. A review of the South African transactions above shows a range of 0.1 % of contained value to 5.4 % of contained value. These transactions include transactions where there were reserves and resources. South African gold mining companies typically have substantial resource bases but with relatively low resource to reserve conversion. Harmony convert about 1/3 of their resources to reserves, Sibanye approximately 1/5 and Gold One about 1/6. This can be ascribed to a range of factors including the understanding of the orebodies with long mining histories and high levels of continuity. However, the depth of the orebodies and the high associated costs of extraction make the conversion to reserves difficult, particularly in a low gold price environment. SRK thus prefers to value these ounces at a lower value than that prescribed in the article where the ounces considered come from a wider range of deposits and would include more ounces that are part of prospective projects with the potential to create new mining opportunities rather than in the South African case where these ounces are associated with specific infrastructure and where the value can often only be realised over a longer timeline in a jurisdiction with a higher discount rate than in Australia or other developed economies. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

161 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 67 SRK has thus selected a range of 0.1 % to 0.2 % for Inferred resources with a preferred value of 0.15 %. The multiple for Indicated is, as previously discussed, estimated at three times that of the Inferred. Table 8-9: Randfontein and Cooke 4 Valuations Range (ZAR million) Randfontein ounce value 0 (in the absence of a transaction) 500 Randfontein Yardstick Randfontein summary Cooke 4 ounce value Cooke 4 DCF Cooke 4 Summary In summary, the Randfontein surface ounces are considered to have a valuation range of ZAR 180 to ZAR 350 million with a preferred value of ZAR 275 million. The ounces at Cooke 4 that are not in the current plan are valued at between ZAR 200 and ZAR 500 million with a preferred value of ZAR 350 million. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

162 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 68 9 Conclusions Gold One is a complicated conglomerate of projects in various life stages. In this report SRK has done a review of the resource and reserve estimation of all Gold One projects. The non-operating projects, those in the inferred category, were valued by SRK for inclusion in a report on the value of all Gold One projects. The value of the ounces at Gold One that are not captured in the DCF models is summarised as: Table 9-1: Summary of Incremental Value of non-dcf ounces Range (ZAR million) Low Preferred High Ventersburg Randfontein surface Goliath Cooke Total The valuation of these additional ounces (incremental value not captured in the DCF models) is between ZAR 491 and ZAR 1120 million with a preferred value of ZAR 792 million. SRK deems the resources and reserves estimations to be compliant with the SAMREC Code (2007 Edition) and consider that the estimates would be identical if reported in accordance with JORC Code (2004 Edition). In terms of operational performance for the operating projects SRK noted that the actual performance is lower than the planned production for the year to date. However, a marked upward trend is visible in all the production performances. This upward trend is due to a successful turnaround strategy by Gold One management. The factors that caused the lower performance are well understood and documented and their impacts should be reduced going forward. Competent Person Mineral Resources Competent Person Ore Reserves Mark Wanless Partner and Principal Geologist Roger Dixon Chairman and Corporate Consultant All data used as source material plus the text, tables, figures, and attachments of this document have been reviewed and prepared in accordance with generally accepted professional engineering and environmental practices. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

163 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page References 1. Independent Technical Expert Report on the Assets of Gold One International Limited, prepared for KPMG Corporate Finance (Australia) Pty Ltd by SRK Consulting, June 2011; 2. A media release by Gold One International Limited titled Gold One Declares Gold and Uranium Mineral Resources and Mineral (Ore) Reserves for Cooke 4 Shaft, 20 August 2013; 3. Independent Technical Report on the Modder East Underground operation, prepared for Gold One International Limited by SRK Consulting, October 2013; 4. Independent Technical Report on the Ventersburg operation, prepared for Gold One International Limited by SRK Consulting, August 2012; 5. Independent Technical Report on Gold One Cooke 4 Underground operation, prepared for Gold One International Limited by SRK Consulting, July 2013; 6. Independent Technical Report on the Cooke Surface Operations operations, prepared for Gold One International Limited by SRK Consulting, July 2013; 7. Independent Technical Report, Cooke Surface and Cooke Underground Assets, prepared for Gold One International Limited by SRK Consulting, July 2013; and 8. Robb L.J. and Robb V.M., 1998: Gold in the Witwatersrand basin. In The mineral Resources of South Africa (M.G.C. Wilson and C.R. Anhaeusser, eds): Handbook, council for Geoscience. MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

164 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 70 Appendices MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

165 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 71 Appendix A: Modder East LOM Plan MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

166 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 72 CATEGORY Unit Mined Production Milled Production Tons Mined tons Belt Grade g/t Kilograms Mined Kg's Plant Recovery Factor 96% Tons Milled tons Recovered Grades g/t Kilograms Produced Kg's Ounces Produced Oz Total On Mine Strength No.s Contractors No.s Total TEC No.s Gold Price USD/oz Exchange Rate R/USD Gold Price R/KG Modder East Revenue R' Modder East Working Costs Payroll 1 - D, E & F Band R' Payroll 2 - C Band R' Payroll 3 - A & B Band R' Total Consumables R' Contractors R' Consultants R' Power & Water R' Other Costs R' Capitalisation of development work R'000 (16 262) ( ) ( ) ( ) ( ) ( ) (89 796) (47 209) (18 458) (8 144) Total ME Operating Costs R' Development Capital R' Other Capital Expenditures R' Net Operating Cash Flow from ME R' Non Operating Costs Net Profit/(Loss) R' Royalty Tax R' Non Cash Costs Depreciation R' ME Net profit/(loss) before tax R' Taxation R' Net profit/(loss) after tax R' Nett Profit / (Loss) R' ME Nett Cash Flow R' Total ME Cost R/ton milled R/ton Total ME Cost R/kg R/kg Total ME $ cost / ounce USD/oz MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

167 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 73 Appendix B: Cooke 1, 2, 3 LOM Plan MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

168 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 74 Cooke 1-3 Shafts Consolidated Budget 15 Nov to Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget & LOM Summary Unit Total Dec Production Gold Production Total Tonnes Treated kt Gold Grade Recovered g/t Gold Recovered kg U308 Production Total Tonnes Treated kt U308 Grade Recovered g/t U308 Recovered Kg Total Production Total Tonnes Treated ton Gold Grade Recovered g/t Gold Recovered kg U308 Recovered Kg Sold Production Gold Sold Oz Gold Sold kg U308 Sold Kg Pricing Parameters Gold Price US$/oz U308 Price US$/Lbs Exchange rate R/US$ Gold Price - Effective Received R/kg U308 Price - Spot Received R/kg Revenues Gold Revenue R' U308 Revenue (Cash flow delayed) R' Total Revenue R' Operating Costs Operating Costs R' Total Operating Costs R' Total Operating Profit/(Loss) R' Capital Costs Capital Costs R' Total Capital Expenditure R' Total Cash Production Costs R' Nett Cash Profit/(Loss) R' Total Gold Co-product Operating Cost (Excl Capital) R/kg Total Gold Co-product Operating Cost (Excl Capital) US$/oz Total Gold Co-product Cost (Incl Capital & other) R/kg Total Gold Co-product Cost (Incl Capital & other) US$/oz Cash Flow before Tax and Royalty MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

169 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 75 Appendix C: Cooke 4 LOM Plan MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

170 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 76 Total LOM Monthly gold tons milled Gold tons milled Gold kg's recovered Gold recovered grade Monthly uranium tons milled Uranium tons milled Uranium kg's recovered Uranium recovered grade Gold price Uranium price - US$ Uranium price - Rand Exchange rate Franco Nevada Gold revenue Uranium revenue Other revenue Total revenue Effective gold price received Effective uranium price received Opex 0 Skilled Labour Costs (Incl Mngt) Semi Skilled Labour Costs Stores and Materials Consultants Contractors Electrical Power Water Transport and Toll Legal Fees Refinery Charges Mineral Royalty Tax Other Cost Pre-Production Costs Plant opex On mine assesed cost Total opex Opex cost per ton Opex cost per kg Operating profit Other cost Capex - reserves Profit after capex Royalty Tax MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

171 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 77 Appendix D: Cooke Surface LOM Plan MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

172 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 78 Dump 20 reserves Units LOM 15 Nov to 31 Dec Milled Production Gold - Tons Milled 000's Gold - Recovered Grades g/t Gold - Kilograms Produced kg's Gold - Ounces Produced oz Gold Price $/oz Exchange Rate R/$ Gold Price R/kg Gold revenue R 000's Uranium revenue R 000's Total Revenue R 000's Working Costs Operating cost R 000's Total - Operating Costs R 000's Working cost per ton milled/treated R/t Total Other Cost R 000's Capital R 000's Total - Capital Costs R 000's Free Cash Flow - Before Royalty & Tax R 000's MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

173 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 79 Appendix E: Consultant CVs MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

174 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 80 Roger Dixon Chairman / Corporate Consultant Profession Mining Engineer Education EDP, University of Witwatersrand, 1995 MDP, Unisa, 1975 BSc (Hons), Mining Engineering, RSM, 1971 Registrations/ Affiliations Pr Eng (South Africa), (Hon Life Fellow) SAIMM Committee Member SAMREC / SAMVAL SA Representative CRIRSCO Specialisation Gold mine management; project development; mine valuation; due diligence studies; engineering studies; mineral resource and reserve reporting. Expertise Roger Dixon has been involved in the field of mining engineering for the past 39 years. His expertise includes: mineral reserve estimation; due diligence studies; concept, pre-feasibility and feasibility studies on open pit and underground operations; development of underground mines; mineral reserve and resource definition and reporting; compilation of regulatory documents for stock exchange transactions. Employment 2004 present SRK Consulting (Pty) Ltd, Chairman and Corporate Consultant Turgis Consulting (Pty) Ltd, Director Metorex Limited, Operations Manager Avgold, General Manager / Anglovaal Limited, Consulting Mining Engineer Anglo American Gold and Uranium Division, Various positions to Assistant Mine Manager Languages English read, write, speak Afrikaans read, write, speak MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

175 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 81 Profession Geologist Mark Wanless Principal Resource Geologist Education BSc (Hons), Geology, University of Cape Town, 1995 Registrations/ Affiliations Pr Sci Nat (South Africa), /05 Specialisation Geological and resource modelling, geostatistical grade modelling and computerised mine planning Expertise Mark Wanless has been involved in the field of mine geology, geological and ore body computer modelling, geostatistical and resource modelling and computerised underground mine planning for the past 16 years. His expertise includes: resource estimation for a range of commodities including Gold, PGEs, base metals, Iron and Manganese, and Mineral sands; due diligence auditing of a range of mineral commodities; resource estimation process auditing; quality assurance and quality control systems for exploration and analytical programs; extensive experience in the use of isatis, datamine and GEMS software. Employment 2003 present SRK Consulting (Pty) Ltd, Principal Resource Geologist, Johannesburg RSV Consulting Engineers and Project Managers, Project Mine Designer Bambanani Mine, Mining Graphics Systems Co-ordinator Joel Mine, Chief Designer Joel Mine, Mine Designer Joel Mine, Mine Geologist Joel Mine, Graduate Geologist Languages English read, write, speak Afrikaans read, write, speak MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

176 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 82 Profession Principal Mining Engineer Joseph Mainama Principal Mining Engineer Education MBL, University of South Africa, 2008 PBL, University of South Africa, 2003 BSc(Eng) Mining, University of Witwatersrand, 1996 Registrations/ Affiliations Pr Eng, ECSA (South Africa), Member, SAIMM Member, Association of Mine Manager s of SA Specialisation Mining Engineering: Mining studies from scoping to feasibility level of study across different commodities; project management, mine operations management, due diligence and project reviews. Mine optimization studies. Expertise Joseph Mainama has been involved in the field of Mining Engineering for the past 17 years. His expertise includes: scoping, desktop and concept studies on platinum, gold, and diamond deposits; pre-feasibility studies on platinum, gold, diamond and copper projects; feasibility studies on platinum, gold and diamond projects; project reviews on platinum and diamond projects; mining engineering reviews for platinum projects; project management in gold and platinum mines; mine optimization studies in diamond, platinum and gold mines; mining project close-outs in platinum mines; production management in gold and diamond mines; resources and reserves audits in gold and platinum mines; independent technical review of mining projects. Employment 2013 present SRK Consulting (Pty) Ltd, Principal Mining Engineer, Johannesburg, RSA Anglo American Platinum, Principal Projects Mining Engineer, RSA Goldfields Kloof Gold Mine, Projects Manager, RSA Read, Swatman and Voigt Consulting Engineers and Project Managers, Senior Mining Engineer, RSA and Botswana De Beers Consolidated Mines Operations and Head office, Divisional Mining Engineer, RSA Languages English read, write, speak (Excellent) Afrikaans read, write, speak (Excellent) Tswana read, write, speak (Excellent) MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

177 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 83 Profession Education Registrations/ Affiliations Awards Principal Consultant Andrew Van Zyl Principal Consultant M.Com (cum laude), Financial Economics & Econometrics, University of Johannesburg, 2006 B.Eng, Chemical with Mineral Processing, University of Stellenbosch, 1999 Economics Society of South Africa, International Health Economics Association, MSAIMM Top Student M.Com, Financial Economics and Econometrics Specialisation Mine and project valuation, mining conventions, economics. Recent valuations greater than $ 1 billion for Chrome, Copper, Gold. Expertise Andrew has been involved in the fields of mining and engineering for over 13 years. His expertise includes technical advice during mining convention negotiations; financial/techno-economic modelling; exchange rates and macroeconomics; research and reporting; precious and base metals due diligence; project management (managing tenders, the detailed design of processes and equipment, estimation, the procurement and erection of the equipment and have managed the cold and hot commissioning of process plants; tender management (analysis of project financials and risk); general management (developing, budgeting, marketing and completing projects); quantitative analysis including model development and strategic analysis; process engineering and commissioning experience; operation of process plants, including a rapid train loading terminal. Employment Mar 2011 present Sep 2009 Jan 2011 Jun 2006 present Aug 2008 Sep 2009 Oct 2006 Aug 2008 Oct 2001 Sep 2006 Jan 2000 Sep 2001 SRK Consulting (Pty) Ltd, Principal Consultant, Mine and Project Valuation, AngloGold Ashanti, Strategic Business Development Analyst, Continental Africa Region University of Johannesburg, Lecturer, M.Com (Financial Economics) and Guest Lecturer, M.Com (Finance) Self Employed, Professional Consultant, Valuation Aurum Institute for Health Research, Health Economist/Manager, Health Economics Weir Techna/VWS Envig, Tendering Engineer/Manager and Process and Commissioning Engineer Anglo Coal, Metallurgist/Senior Plant Metallurgist Languages Publications and Presentations English read, write, speak Afrikaans read, write, speak 13 Presentations at Local and International Conferences in Mining and Economics MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

178 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 84 Profession Education Registrations/ Affiliations Geologist Livhuwani Maake Resource Geologist MSc, Geology, University of Cape Town, Current BSc (Hons), Geology, University of Cape Town, 2006 Pr.Sci.Nat (South Africa), /11 Member, GSSA Specialisation Optimising extraction of the ore body in deep gold mines through mapping and exploration. Expertise Livhuwani Maake has been involved in the field of resource geology for the past 5 years. His expertise includes: management of geological database (boreholes); interpretation of underground exposures and borehole data into geological preferred mining / selective cut (stope width optimisation within a conventional Goldmine); management of the exploration schedule and budget; planning, layout, logging and sampling of underground geological boreholes and cover drilling; lab audits- to ensure the lab are compliant to the required quality assurance and quality control; ensure quality assurance and quality controls are adhered to as per the Sox compliance requirements on boreholes database; task observations on drilling contractors and geologists; involved in strategic and operational planning process. Employment Apr 2012 present 2010 Mar 2012 Aug Aug 2008 SRK Consulting (Pty) Ltd, Senior Geologist, Johannesburg Goldfields KDC, Senior Geologist, South Africa Goldfields Driefontein, Senior Geologist, South Africa Goldfields Driefontein, Junior Geologist, South Africa Publications Suspended load of the Orange River, South Africa, 2007 Languages English read, write, speak (Excellent) Tshivenda read, write, speak (Excellent) sepedi read, write, speak (Moderate) setswana read, write, speak (Moderate) sesotho read, write, speak (Moderate) IsiZulu read, write, speak (Moderate) MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013

179 SRK Consulting: Project No: Gold One Technical Assessment and Valuation Report Page 85 Maurice Mostert Senior Mining Engineer Profession Education Registrations/ Affiliations Mining Engineering GDE, Mining Engineering (Distinction), University of Witwatersrand, 2012 B. Business Administration, University of South Africa, 2008 N. Dip., Mining Eng., Technikon Witwatersrand, 2002 Member, SAIMM, Specialisation Mining engineering Expertise Maurice Mostert has been involved in the field of mining engineering for the past 17 years. His expertise includes: extensive ultra-deep mining production experience. Narrow tabular reef orebodies as well as massives. Emphasis placed on "safety first" and achieving optimal production; underground mine design; sustainability in mining; short, medium and long term mine planning and scheduling for optimal production and efficiency of resources both human and technical; strong focus on mine design using CAD packages. Employment Oct 2013 present Mar 2010 Oct 2013 Jan 2008 Mar 2010 Feb Apr 2006 Feb 2007 Nov 2005 Apr 2006 Jan 2005 Oct 2005 Jan 2002 Jan 2005 Jan 1997 Jan 2002 Jan 1996 Dec 1996 SRK Consulting (Pty) Ltd, Senior Mining Engineer, Johannesburg Goldfields of SA - Southdeep Goldmine, Sectional Short term planner - Trackless and destress sections Mechanised mining Lower Quartile Solutions (LQS), Consulting Mining Engineer, South Africa Lower Quartile Solutions (LQS), Business Development Manager Software Micromine Africa, Business Development Manager GBIS, Micromine, Fieldmarshall, Africa Giri Construction, Owner, South Africa Kloof Gold Mine #4, Mine Overseer (Acting), South Africa Kloof Gold Mine #4, Production Supervisor, South Africa Gold Fields Training Services, Learner Official Mining, South Africa East Driefontein Gold Mine, Computer Operator Grade ll, South Africa Languages English read, write, speak Afrikaans read, write, speak Fanakalo speak MOSM/WANL Gold One Int Tech Assessment and Valuation SRK November 2013