CIRCULAR TO BAUBA SHAREHOLDERS

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION The definitions and interpretations commencing on page 3 of this circular apply mutatis mutandis throughout this circular. If you are in any doubt as to the action you should take, please consult your broker, CSDP, attorney, accountant, banker or other professional adviser immediately. 1. If you have disposed of all of your shares in Bauba, then this circular, together with the attached notice of general meeting and form of proxy, should be forwarded to the purchaser to whom, or the broker, agent, CSDP or banker through whom you disposed of your shares. 2. The general meeting convened in terms of this circular will be held at 10:00 on Thursday, 19 September 2014 at the registered office of Bauba, First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Certificated shareholders and dematerialised shareholders with own name registration, who are unable to attend the general meeting and wish to be represented thereat, must complete and return the attached form of proxy in accordance with the instructions contained therein. Dematerialised shareholders, other than dematerialised shareholders with own name registration, who: are unable to attend the general meeting and wish to be represented thereat, must provide their CSDP or broker with their voting instructions, in terms of the custody agreement entered into between themselves and the CSDP or broker concerned, in the manner and within the time stipulated therein; wish to attend the general meeting, must instruct their CSDP or broker to issue them with the necessary Letter of Representation to attend, in the form of a Letter of Representation. 4. Bauba does not accept any responsibility and will not be held liable for any failure on the part of any CSDP or broker of a dematerialised shareholder to notify such shareholder of the general meeting or any business to be concluded thereat. BAUBA PLATINUM LIMITED Incorporated in the Republic of South Africa (Registration number 1986/004649/06) Share code: BAU ISIN: ZAE ( Bauba or the Company ) CIRCULAR TO BAUBA SHAREHOLDERS regarding: the acquisition by Bauba of a 60% beneficial interest in the prospecting rights over the farms Moeijelijk 412KS and Waterkop 113KT for a purchase price of R150 million to be settled through the issue of ordinary shares in Bauba; the conversion of the authorised ordinary shares in the share capital of the Company with a par value of R1 into authorised ordinary shares of no par value; an increase in the authorised ordinary share capital of the Company from shares to shares of no par value; the specific authority to allot and issue Bauba shares pursuant to section 41(3) of the Companies Act; the amendment of the conditions set out in the circular dated 17 May 2010 to allow for the issue of the Houtbosch Payment Shares for the effective 60% interest in the Houtbosch Prospecting Right; the amendment of the conditions set out in the circular dated 17 May 2010 relating to the claw back of shares in respect of the Southern Cluster; incorporating: Revised Listing Particulars; and enclosing: a notice convening the general meeting; and a form of proxy for use by certificated Bauba shareholders and own name registered dematerialised shareholders only Corporate Adviser and Sponsor to Bauba Competent Person and Independent Expert Auditors and Reporting Accountants to Bauba Legal adviser to Bauba Date of issue: 22 August 2014 Additional copies of this circular, in its printed format, may be obtained from the Sponsor at the address set out in the Corporate information section on this circular during normal business hours from Friday, 22 August 2014 up to and including Thursday, 19 September Copies of this circular are available in the English language only.

2 CORPORATE INFORMATION Bauba Platinum Limited Date of incorporation: 14 November 1986 Place of incorporation: South Africa Company secretary and registered address of Bauba Merchantec Proprietary Limited (Registration number 2008/027362/07) 1st Floor, Building 816/5 Hammets Crossing Office Park 2 Selbourne Road, Fourways Johannesburg, South Africa, (PO Box 1658, Witkoppen, 2068) Sponsor Merchantec Capital (Registration number 2008/027362/07) 2nd Floor, North Block Hyde Park Office Tower Corner 6th Road and Jan Smuts Avenue Hyde Park, Johannesburg, 2196 (PO Box 41480, Craighall, 2024) Legal adviser SA Redelinghuys & Co 15 Baleta Gardens, Baleta Avenue Boskruin, 2154 South Africa (PO Box 4005, Dainfern, 2055, South Africa) Competent Person and Independent Expert Venmyn Deloitte Proprietary Limited (Registration number 1988/004918/07) Deloitte Place Building 33, 1st Floor The Woodlands 20 Woodlands Drive Woodmead, 2052, South Africa (PO Box , Sandton, 2146) Transfer secretaries for Bauba Computershare Investor Services South Africa Proprietary Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg 2001 (PO Box 61051, Marshalltown, 2107) Bankers Nedbank Limited (Registration number 1951/000009/06) 2nd Floor, Block F Corporate Place 135 Rivonia Road Sandown, 2196 (PO Box 1144, Johannesburg, 2000) Auditors and reporting accountants to Bauba BDO South Africa Incorporated 22 Wellington Road, Parktown Johannesburg, 2193, South Africa (Private Bag X 60500, Houghton, 2041)

3 TABLE OF CONTENTS Page Corporate information Inside front cover Important dates and times 2 Definitions and interpretations 3 Circular to Bauba shareholders 6 1. Introduction 6 2. Nature of Bauba s business 6 3. The Acquisition 7 4. Pro forma financial effects 9 5. Share capital of Bauba Proposed amendments to the Memorandum of Incorporation Prospects Irrevocable letters of undertaking Major shareholders Directors of Bauba Borrowings Material changes Material contracts Litigation statement Working capital Directors opinions and recommendation Directors responsibility statement Experts consents Costs Documents available for inspection General meeting 18 Revised Listing Particulars Introduction Incorporation, history, nature of business and prospects for Bauba Share capital Borrowings Loans receivable Controlling and major shareholders Public shareholders Directors and management Material disposals and acquisitions Lease agreements Corporate Governance Statement Other Directors declaration 23 Annexure 1 Unaudited pro forma financial information of Bauba 24 Annexure 2 Independent reporting accountants limited assurance report on the unaudited pro forma financial information 26 Annexure 3 Opinion of the Independent Expert 27 Annexure 4 Competent Person s Report on the farms Moeijelijk 412KS and Waterkop 113KT. 37 Annexure 5 Proposed amendments to Bauba s Memorandum of Incorporation 109 Annexure 6 Report on the share conversion in terms of Regulation 31(7) of the Companies Act 110 Appendix 1 Historical financial information of Bauba for the six months ended 31 December Appendix 2 Historical financial information of Bauba for the three financial years ended 30 June Appendix 3 Extracts from Bauba s Memorandum of Incorporation 140 Appendix 4 Corporate Governance Statement 142 Appendix 5 Share capital of Bauba 148 Appendix 6 Share price history of Bauba on the JSE 152 Appendix 7 Details of directors directorship 154 Appendix 8 Competent Person s Report on Bauba 162 Notice of general meeting 267 Form of proxy 271 1

4 IMPORTANT DATES AND TIMES Record date to determine which shareholders are eligible to receive the circular Friday, 15 August 2014 Circular posted to Bauba shareholders on Friday, 22 August 2014 Last day to trade in order to be eligible to vote in respect of the general meeting Friday, 5 September 2014 General meeting record date in order to vote Friday, 12 September 2014 Last day to lodge forms of proxy for the general meeting by 10:00 on Wednesday, 17 September 2014 General meeting to be held at 10:00 on Friday,19 September 2014 Results of general meeting released on SENS on Friday,19 September 2014 Notes: 1. The above dates and times are subject to amendment. Any such amendment will be released on SENS. 2. Additional copies of this circular in its printed format, may be obtained from the Sponsor at the address set out in the Corporate information section of this circular during normal business hours from Friday, 22 August 2014 up to and including, Friday,19 September

5 DEFINITIONS AND INTERPRETATIONS In this circular, the annexures and appendices hereto, the notice of general meeting and form of proxy, unless the context otherwise indicates, references to the singular include the plural and vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic persons and associations of persons and vice versa, and the words hereunder have the meaning stated as follows: 2010 Agreement the agreement concluded on 12 February 2010 (as amended by the First Addendum, Second Addendum, Third Addendum, Fourth Addendum, Fifth Addendum and Sixth Addendum) in terms of which the Vendors disposed of certain assets to Bauba, in exchange for which Bauba issued and allotted to the sellers the 2010 Payment Shares in accordance with the provisions of section 42 of the Income Tax Act No 59 of 1962; 2010 Circular the bound document, dated 17 May 2010 regarding, inter alia, the acquisition of Bauba A Hlabirwa, which was subject to the 2010 Claw Back, as well as the Houtbosch Acquisition, which is available on the Company s website, Claw Back the potential reduction of the purchase consideration in terms of the 2010 Agreement through the cancellation or repurchase of shares against certain of the farms in the Southern Cluster as follows: Groot Vygenboom 284KT Bauba shares; and Genokakop 285KT Bauba shares, totalling a maximum possible cancellation or repurchase of Bauba shares as a result of the review application brought by the Applicant as further detailed in paragraph 3.3 of the circular; 2010 Claw Back Shares the aggregate of Bauba shares held in trust pro rata on behalf of the Vendors in accordance with the terms of clause 16 of the 2010 Agreement for a period of two years pending the final determination of certain legal proceedings seeking the revocation and/or cancellation of certain prospecting rights granted to the Holder in respect of the following properties falling within the Southern Cluster namely: Groot Vygenboom 284KT shares; and Genokakop 285KT shares; 2010 Payment Shares the shares issued and allotted by Bauba to the Vendors in exchange for which the Vendors disposed of certain assets to Bauba in terms of the 2010 Agreement; Acquisition Agreement the assets for shares agreement, entered into between Bauba and the Vendors on 16 May 2014, in terms of which the Transaction is governed; Acquisition the proposed acquisition by Bauba of a 60% interest in the prospecting rights over the farms Moeijelijk 412KS and Waterkop 113KT for a purchase price of R150 million; Acquisitions Applicant ASA Metals Bapedi Nation Bauba or the Company Bauba shares or shares Bauba shareholders BDO South Africa Inc. or reporting accountants or Auditors Board or directors business day certificated shareholder certificated shares collectively the Houtbosch Acquisition and the Acquisition; Rustenburg Platinum Mines Limited; ASA Metals Proprietary Limited (Registration number 1996/15726/07), a private company duly incorporated in accordance with the laws of South Africa; the Bapedi Nation of Sekhukhuneland, a material shareholder of the Holder; Bauba Platinum Limited (Registration number 1986/004649/06), a public company duly registered and incorporated under the laws of South Africa and currently listed on the Main Board of the JSE; Bauba ordinary shares currently with a par value of R1 each in the issued share capital of Bauba, which subject to shareholder approval at the general meeting will be converted into ordinary shares of no par value; registered holders of Bauba shares; BDO South Africa Incorporated, registered accountants and auditors (Registration number 1995/002310/21), a private company duly registered and incorporated under the laws of South Africa; the board of directors of Bauba at the last practicable date whose details are set out in paragraph 10 of this circular; any day other than a Saturday, Sunday or a public holiday in South Africa; a holder of certificated shares; shares which are not dematerialised, title to which is represented by physical documents of title; Chrome Ore Supply Agreement the chrome ore supply agreement entered into between the Holder and ASA Metals on 19 March 2014; circular Commission Companies Act Companies Regulations Conditions Precedent this bound document, dated 22 August 2014, including the annexures and appendices hereto and incorporating a notice of general meeting and a form of proxy; the Companies and Intellectual Property Commission established in terms of section 185 of the Companies Act; the Companies Act,008 (Act 71 of 2008), as amended; the Companies Regulations, 2011 published in terms of the Companies Act; the conditions precedent to which the Acquisition is subject, as set out in paragraph 3.5 of the circular; CSDP a Central Securities Depository Participant, accepted as a participant in terms of the Financial Markets Act, 2012 (Act 19 of 2012), as amended, appointed by an individual shareholder for the purposes of, and in regard to the dematerialisation of documents of title for purposes of incorporation into Strate; 3

6 custody agreement the custody mandate agreement between a dematerialised shareholder and a CSDP or broker governing their relationship in respect of dematerialised shares held by the CSDP or broker; Danene Trust Danene Trust (Master s reference IT2184/2004), duly represented by JH Wessels (ID number ); dematerialisation dematerialised shareholder dematerialised shares DMR Effective Date Excluded Prospecting Rights Excluded Rights general meeting Group Hlabirwa Mining Investments Proprietary Limited or HMI Holder or Bauba A Hlabirwa Houtbosch Acquisition Houtbosch Payment Shares Houtbosch Prospecting Right Highland Trading Investments Limited or HTI IFRS the process whereby share certificates, certificated transfer deeds, balance receipts and any other documents of title, to shares in a tangible form are dematerialised into electronic records for purposes of incorporation into Strate; a holder of dematerialised shares; shares which have been incorporated into Strate and which are no longer evidenced by physical documents of title, but the evidence of ownership of which is determined electronically and recorded in the sub-register maintained by a CSDP; the Department of Mineral Resources; the effective date of the Acquisition, being the fifth business day after all of the Conditions Precedent have been fulfilled; the prospecting rights granted in favour of the Holder in respect of the Previously Excluded Farms in terms of section 17(1) of the MPRDA under Protocol 55/2006, registered at the Mineral and Petroleum Titles Registration Office under 248/2007 which were identified as the Excluded Prospecting Rights in the 2010 Agreement and which have since been renewed in terms of Section 18(3) of the MPRDA under Protocol 025/2012; the indivisible right and interest that the Vendors have in and to 60% of the benefit, whether by way of interim dividend, dividend, or otherwise, arising from the disposal of unspecified minerals due to be extracted in respect of the Excluded Prospecting Rights which were expressly excluded from the transaction envisaged in terms of the 2010 Agreement; the general meeting of Bauba shareholders to be held at 10:00 on Friday, 19 September 2014 at the registered office of Bauba, Hammets Crossing Office Park Building 816/5, First Floor, 2 Selbourne Road, Fourways, 2067, which meeting is convened in terms of the notice of general meeting attached to this circular; Bauba and its direct and indirect subsidiaries; Hlabirwa Mining Investments Proprietary Limited (Registration number 2000/017808/07), a private company duly incorporated in accordance with the laws of South Africa, the controlling shareholders and directors of which are Victor Thulare and Maria Thulare of the Bapedi Nation; Bauba A Hlabirwa Mining Investments Proprietary Limited, (Registration number 2006/039054/07), a private company duly incorporated in accordance with the laws of South Africa, being the holder of certain prospecting rights over the Previously Excluded Farms and a subsidiary of Bauba (60%); the acquisition of the Houtbosch Prospecting Right in terms of the 2010 Agreement in consideration for which Bauba agreed to allot and issue the Houtbosch Payment Shares; the ordinary shares in Bauba approved for issue to the Vendors as sellers in respect of the Houtbosch Acquisition being part of the consideration for a 60% participation in the Houtbosch Prospecting Right, which were to be issued within seven days after the date of registration of the Notarial Deed of Cession of the Houtbosch Prospecting Right in the name of the Holder; the prospecting right granted over the farm Houtbosch 323KT in favour of the Holder; Highland Trading Investments Limited (BVI company number ), a company duly registered and incorporated in accordance with the laws of the British Virgin Islands, a non-resident and foreign company administered and controlled by Oak Trustees at Guernsey Channel Islands and the controlling shareholder of Bauba; International Financial Reporting Standards; Income Tax Act the Income Tax Act, 1962 (Act 58 of 1962), as amended; Independent Expert or Competent Venmyn Deloitte Proprietary Limited (Registration number; 1988/004918/07), a private company duly registered Person or Venmyn Deloitte and incorporated in accordance with the laws of South Africa and the Independent Expert to provide a fairness opinion for the purposes of section 10.4(f) of the Listings Requirements; Jibeng Investments Jibeng Investments Proprietary Limited (Registration number 2000/015199/07), a private company duly incorporated in accordance with the laws of South Africa and the land owners of the farm Moeijelijk 412KS; JSE JSE Limited (Registration number 2005/022939/06), a public company duly incorporated in accordance with the laws of South Africa and licensed as an exchange under the Financial Markets Act (Act 19 of 2012), as amended; Kumane Trust Kumane Trust (Master s reference IT2180/2004) duly represented by NPJ van der Hoven (ID number ); last practicable date 8 August 2014, being the last practicable date prior to the finalisation of this circular; Lease and Option Agreement the lease and option agreement entered into between the Holder and Jibeng Investments on 19 March 2014; Listings Requirements the Listings Requirements of the JSE, as amended from time to time by the JSE; Math-Pin Trust Math-Pin Trust (Master s reference IT7205/2001), duly represented by Dr Nakedi Mathews Phosa (ID number ); Moeijelijk 412KS the farm Moeijelijk 412KS, registered under MPTO 248/2006, Registration Division Limpopo, situated in the Magisterial/Administrative District of Sekhukhune measuring hectares in extent and held under prospecting right application REF: 30/5/1/1/2/390-PR awarded to the Bapedi Nation on 7 June 2006 in terms of section 17 of the MPRDA and subsequently ceded to the Holder on 3 March 2008 for the purposes of prospecting for unspecified minerals with the emphasis on platinum group metals, vanadium ore, titanium ore, chrome ore, iron ore and associated minerals; 4

7 Merchantec Capital or Sponsor Merchantec Proprietary Limited (Registration number 2008/027362/07), a private company duly registered and incorporated in accordance with the laws of South Africa; Mining Permit the mining permit over the farm Moeijelijk 412KS to be applied for by the Holder in terms of section 27 of the MPRDA in respect of an area extending at least 2,5 hectares within the Excluded Prospecting Rights; MPRDA the Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002); NAV Net Asset Value; Northern Cluster the prospecting rights held over the farms Schoonoord 462KS, Indië 474KS, Zwitzerland 473KS and Fisant Laagte 506KS; Panel the Takeover Regulation Panel established in terms of section 196 of the Companies Act; Parties the Vendors, the Bapedi Nation, the Holder and Bauba collectively and Party shall be any of them as the context requires; Pimlico Investment Trust Pimlico Investment Trust (Master s reference IT4574/96), duly represented by AM Slabber (ID number ); PGMs platinum group metals; Previously Excluded Farms collectively, farm Moeijelijk 412KS which includes the chrome mineral rights and the remainder of farm Waterkop 113KT (from which the chrome minerals were excluded); Prospecting Rights the prospecting right registered under MPTO 248/2006, Registration Division Limpopo, situated In the Magisterial/ Administrative District of Sekhukhune and held under prospecting right application REF: 30/5/1/1/2/390-PR which includes the farms Magneetsvlakte 541KS and Moeijelijk 412KS; and the prospecting right registered under MPTO 256/2006, Registration Division Limpopo, situated in the Magisterial/Administrative District of Sekhukhune and held under prospecting right application REF: 30/5/1/1/2/330-PR which includes the farms Waterkop 113KS Dingaanskop 543KS, Fisant Laagte 506KS, Zwitzerland 473KS, Indië 474KS, Schoonoord 462KS, Genokakop 285KT and Groot Vygenboom 284KT. Purchase Price an amount equal to R150 million; Rand or R South African Rand, the official currency of South Africa; SENS the Stock Exchange News Service of the JSE; Share Consideration Bauba shares which will be listed on the JSE and rank pari passu with all other Bauba shares; Signature Date the date of signature of the Acquisition Agreement, being Wednesday, 16 May 2014; South Africa the Republic of South Africa; Southern Cluster the farms Genokakop 285KT and Groot Vygenboom 284KT; Strate the settlement and clearing system used by the JSE, managed by Strate Limited (Registration number 1998/022242/06), a public company duly incorporated in accordance with the laws of South Africa; sub-register the record of dematerialised shares administered and maintained by a CSDP and which forms part of the Company s register of members as defined in the Companies Act, excluding nominees; subsidiary a subsidiary as defined in the Companies Act; Takeover Regulations the regulations published in terms of section 120 of the Companies Act; Transaction collectively the Acquisition, the issue of the Houtbosch Payment Shares and the cancellation of the 2010 Claw Back; transfer secretaries Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company duly incorporated in accordance with the laws of South Africa; VAT Value added tax, levied in terms of the provisions of the Value-Added Tax Act, 1991 (Act 89 of 1991), as amended. Vendors HTI, the respective trustees for the time being of the Danene Trust, the Kumane Trust, the Math-Pin Trust, and the Pimlico Investment Trust and HMI; VWAP volume weighted average price; and Waterkop 113KT the remainder of the farm Waterkop 113KT (the mineral chrome is excluded), registered under MPTO 256/2006, Registration Division Limpopo, situated in the Magisterial/Administrative District of Sekhukhune and held under prospecting right application REF: 30/5/1/1/2/330-PR, awarded to the Bapedi Nation on 19 December 2007, in terms of a notarial deed of amendment of the prospecting right No 256/2006 (PR), which had been awarded to the Bapedi Nation on 7 June 2006 in terms of section 17 of the MPRDA, and subsequently ceded to the Holder on 9 April 2008 for the purposes of prospecting for unspecified minerals with the emphasis on platinum group metals, vanadium ore, titanium ore, iron ore and associated minerals. 5

8 BAUBA PLATINUM LIMITED Incorporated in the Republic of South Africa (Registration number 1986/004649/06) Share code: BAU ISIN: ZAE ( Bauba or the Company ) Directors Executive SJM Caddy (Chief Executive Officer) WA Moolman (Financial Director) Non-executive J Best^ (Chairman) K Dicks^ S Dolamo^ KW Mzondeki^ Dr NM Phosa D Smith King T Thulare (Alternate to Dr NM Phosa) ^ Independent CIRCULAR TO BAUBA SHAREHOLDERS 1. INTRODUCTION On 19 March 2014, it was announced on SENS that Bauba had entered into an agreement with the Vendors in terms of which, subject to the fulfilment or waiver as the case may be, of the conditions precedent set out in paragraph 3.5 below, Bauba will acquire a 60% interest in the Excluded Prospecting Rights over the Previously Excluded Farms for a purchase price of R150 million to be settled by way of the Share Consideration to the Vendors. In addition the Acquisition as set out in the Acquisition Agreement is conditional on the cancellation of the restrictive conditions governing the 2010 Claw Back Shares so that these shares vest in the Vendors absolutely as well as the issue of the Houtbosch Payment Shares. The issue and allotment of the Share Consideration to the Vendors will result in an increase of Bauba s issued share capital by more than 25%, which in terms of paragraph 9.22 of the Listings Requirements, requires Revised Listings Particulars to be included in this circular. In order to be able to issue the Share Consideration to the Vendors in terms of the Acquisition Agreement, Bauba will be required to amend its Memorandum of Incorporation in order to convert its authorised ordinary shares of R1 each into ordinary shares of no par value and to increase its authorised share capital from 200 million to 750 million ordinary shares. The purpose of this circular is to provide Bauba shareholders with relevant information relating to the Acquisition, amendment and cancellation of the 2010 Claw Back, issue of the Houtbosch Payment Shares, the proposed amendments to the Memorandum of Incorporation of Bauba and to give notice of a general meeting of Bauba shareholders in order to consider and, if deemed fit, to pass the resolutions necessary to approve and implement the Acquisition amendment and cancellation of the 2010 Claw Back, issue of the Houtbosch Payment Shares and amendments to the Memorandum of Incorporation of Bauba in accordance with the Listings Requirements and the Companies Act. A notice convening such meeting is attached to and forms part of, this circular. The Acquisition described in this circular has been based on historical information together with the current legal status of the Excluded Prospecting Rights. The Board has not presented a maiden Mineral Resource for Moeijelijk 412 KS, albeit that the right to mine is in the process of being granted. The Board considered the contiguous nature of the ore body mined on the neighbouring mining operation, the geophysical data and the borehole data that is available. This data was considered to be adequate to establish the quality and continuity of the sub crop of the LG6 reef. Based on this data and confimatory drilling results, the ore body was found to be of a high enough quality to conclude a mining contract with an independent mining contractor and an off take agreement for the sale of the chrome ore to a local smelter as set out in paragraph 3.7 below. This provided the Board with a basis to establish a preliminary cash flow valuation without a SAMREC compliant Mineral Resource. Whilst these are unusual circumstances, the Board does not consider this information to be in any way misleading, and the Independent Expert has independently assessed the Board s assumptions and opined accordingly as set out in Annexure 3 to the circular. Bauba shareholders are advised that the Board will declare a maiden Mineral Resource in the near future, but the need to incorporate this potential chrome mining opportunity prior to the declaration of a maiden Mineral Resource, is considered critical to the survival of the Company. 2. NATURE OF BAUBA S BUSINESS Bauba was established in July 2010 and has been listed on the Main Board of the JSE since September The Company s primary business objective is the exploration evaluation and development of its platinum projects on a high quality PGM resource base located on the Eastern Limb of the Bushveld Igneous Complex. As a result of the 2010 Agreement and as set out in the 2010 Circular, the Company acquired prospecting rights from the Vendors over the farms Magneetsvlakte 541KS, Dingaanskop 543KS, Fisant Laagte 506KS, Zwitzerland 473KS, Indië 474KS, Schoonoord 462KS, Genokakop 285KT and Groot Vygenboom 284KT extending across an area of approximately hectares within a prime segment of the Eastern Limb of the Bushveld Igneous Complex, in the heart of the world s best-known platinum region, where a number of neighbouring companies are prospecting and successfully mining platinum group metals from the Merensky and UG2 reefs. Furthermore, the 2010 Agreement also provided for the Houtbosch Acquisition as detailed in paragraph 3.1 below. With the Acquisition of the Excluded Prospecting Rights, some of the focus of the Company will shift to the extraction of chromite from the LG6 reef on the farm Moeijelijk 412KS. The map below sets out the location of the farms, over which prospecting rights are held by Bauba A Hlabirwa. On completion of the Transaction, the beneficial ownership (60%) of the prospecting rights over all 11 farms will be held by Bauba. 6

9 3. THE ACQUISITION 3.1. History and nature of the Prospecting Rights and the Houtbosch Prospecting Right On 12 February 2010, Bauba entered into the 2010 Agreement to acquire beneficial ownership of certain prospecting assets by acquiring 60% (sixty percent) of the issued share capital of Bauba A Hlabirwa, the Holder of the Prospecting Rights. The Prospecting Rights included 10 farms of which the beneficial ownership of two farms was specifically excluded (Previously Excluded Farms) as the beneficial rights over these farms had been sold under a separate agreement to a third party. The conditions pertaining to this separate agreement were subsequently not met by the third party, which resulted in the separate agreement becoming null and void and allowing Bauba the opportunity to acquire the beneficial ownership of the prospecting rights in respect of the Previously Excluded Farms.. Further to the award of the Prospecting Rights to the Holder, the DMR also granted the Holder the right for the inclusion of the farm Houtbosch 323KT into the prospecting right application REF: 30/5/1/1/2/390-PR. In 2010, Bauba shareholders approved the Houtbosch Acquisition but the inclusion of the Houtbosch Prospecting Right was not notarially executed as the farm was included in a review application brought before the Northern Gauteng High Court by the Applicant, Rustenburg Platinum Mines Limited. The Houtbosch Prospecting Right is currently held by Bauba A Hlabirwa but as the issue of the Houtbosch Payment Shares was conditional upon notarial execution of the Houtbosch Prospecting Right, the Houtbosch Payment Shares have not been issued to the Vendors and the Houtbosch Acquisition is not yet effective Rationale for the Acquisition Given the current economic climate, generating any substantial funding for exploration activities in the junior mining environment has proven to be very difficult. This situation placed the future legal tenure of the Prospecting Rights under severe threat. As a result Bauba evaluated alternative options to secure future cash flow and considered the Previously Excluded Farms as such a source. The farm Moeijelijk 412KS contains a chrome mineral deposit, which has low cost open-cast exploitation potential. This chrome mineral deposit was assessed and determined to be economically viable by the board and Venmyn Deloitte, an independent competent person. Subsequent to the valuation process the Holder entered into a Chrome Ore Supply and a Lease and Option Agreement as set out in paragraph 3.7 below, and thereby secured the potential of a steady cash flow stream which may satisfy most of Bauba s financial requirements to advance its prospecting projects for the foreseeable future. The chrome rights on the farm Waterkop 113KT were specifically excluded from the prospecting right that was granted to the Holder and as a result, the Board and Venmyn Deloitte attached no value to this right for the purposes of determining the value of the Previously Excluded Farms. However, Waterkop 113KT does potentially contain PGMs, which could provide an upside in the future for Bauba. Based on the outcome of the valuations, it was determined that the Acquisition will provide partial funding of the future PGM exploration activities, which will secure the immediate future legal tenure of the Prospecting Rights by placing the Holder in a favourable position to apply for a mining right over its platinum project and potentially generate cash reserves for distribution as dividends Rationale for the amendment and cancellation of the 2010 Claw Back and the issue of the Houtbosch Payment Shares As set out in the 2010 Circular, the 2010 Claw Back and the issue of the Houtbosch Payment Shares were linked to the outcome of a review application brought by the Applicant. 7

10 On 30 September 2010, the Applicant launched a review application in the Northern Gauteng High Court against a decision of the Department of Mineral Resources to grant the prospecting rights in respect of two farms, namely Genokakop 285KT and Groot Vygenboom 284KT, to Bauba A Hlabirwa. The Applicant claims that they held an unused old order right over the farms mentioned. No prospecting or mining was conducted immediately before the MPRDA came into effect. The prospecting rights over the farms were applied for under the MPRDA and awarded to Thulare Rhyne Thulare on behalf of the Bapedi Nation who ceded these prospecting rights to Bauba A Hlabirwa. In terms of the 2010 Claw Back, if any one or all of the prospecting rights in the Southern Cluster, are at any time after the date of signature of the 2010 Agreement revoked by any requisite authority or cancelled in terms of a valid court order, and if the revocation or cancellation of any of the prospecting rights in the Southern Cluster is not overturned and all remedies of the Holder or its successor in title have been exhausted, including all appeals, reviews, administrative steps, new applications in respect of the prospecting rights in the Southern Cluster to the DMR and any appeals, reviews or administrative steps in respect thereof, and all court applications concluded with no further appeals or reviews possible, so as there is no prospect of the Holder retaining or acquiring afresh or any basis the prospecting rights in the Southern Cluster or any of them, then such number of claw back shares will be returned to Bauba by the Vendors for cancellation. Subsequent to the lodgement of the review application, the Holder applied for the renewal of the Prospecting Rights in 2011, which was granted on 18 July 2012 for a further three years. The Holder also approached the DMR to have the farm Houtbosch 323KT notarially executed, which consent was granted and the application lodged. Following the renewal having been granted, Bauba took advice from senior counsel on this matter and was informed that Bauba has a strong case in this instance and the judicial system should find in the Company s favour. As a result of this advice and the fact that the Applicant had not substantially advanced the matter, the Holder has requested that the Northern Gauteng High Court set this matter down. The Holder furthermore held meetings with the DMR and with the DMR s consent submitted an application for the farm Houtbosch 323KT to be notarially executed and added to the Holder s prospecting rights. In addition the DMR has subsequently awarded a mining right to the holders of prospecting rights on adjacent farms which were also cited in the same review application. Accordingly, the Board is of the opinion that the conditions that necessitated the 2010 Claw Back and the restriction on the issue of the Houtbosch Payment Shares have sufficiently been alleviated to justify the cancellation of the 2010 Claw Back and the issue of the Houtbosch Payment Shares. The resolutions to approve the cancellation of the 2010 Claw Back and the issue of the Houtbosch Payment Shares are included as Ordinary Resolutions Number 2 and 3 as set out in the Notice of General Meeting attached to and forming part of the circular. A Competent Person s Report on the Houtbosch Prospecting Right will be available on the Company s website, from no later than one week prior to the date of the General Meeting Related party implications HTI, as a material shareholder of Bauba is considered to be a related party in terms of paragraph 10.1(b)(i) of the Listings Requirements. Furthermore, as the respective trustees for the time being of the Danene Trust, the Kumane Trust, the Math-Pin Trust, and the Pimlico Investment Trust and HMI, are acting in concert with HTI, they are associates of HTI and therefore considered to be related parties in terms of paragraph 10.1(b)(vii) of the Listings Requirements. Accordingly, the Vendors are precluded from voting on the Acquisition, the cancellation of the 2010 Claw Back, and the issue of the Houtbosch Payment Shares at the general meeting. However, they may be taken into account in determining a quorum for the purposes of the general meeting, as shareholders in Bauba. Furthermore, in terms of paragraph 10.4(f)(ii) of the Listings Requirements, as the Transaction is between related parties, Bauba has obtained a fairness opinion on the Transaction from the Independent Expert, which is included as Annexure 3 to the circular, and the Board has included a statement in paragraph 16 below confirming that the Transaction is fair to shareholders Conditions Precedent and Effective Date The Transaction is subject to the fulfilment or waiver, as the case may be, of the following Conditions Precedent: the grant of the Mining Permit by the DMR within one year of the Signature Date, or such later date as the Parties may in writing agree; and Bauba shareholders passing in general meeting such resolutions as may be necessary for the Transaction to proceed and Bauba submitting written proof thereof to the Vendors within 130 days of the Signature Date. The effective date of the Transaction shall be the fifth business day after all of the Conditions Precedent have been fulfilled. The effective date of the Houtbosch Acquisition will be earlier of the date on which the last condition precedent to the Houtbosch Acquisition is fulfilled, that being the date of registration of the Notarial Deed of Cession of the Houtbosch Prospecting Right in the name of the Holder or the effective date of the Transaction Purchase consideration The Purchase Price is to be settled by way of the issue and allotment to the respective Vendors of the Share Consideration at an issue price of 65 cents per Bauba share to be registered in the names of each of the Vendors as follows: Vendor Number of shares HTI Math-Pin Trust HMI Danene Trust Kumane Trust Pimlico Investment Trust

11 In addition to the Share Consideration above, Bauba will bi-annually distribute 50% of the net profit after tax specifically emanating from the exploitation operation envisaged (mining, processing and disposal of chrome ore) of the Excluded Rights by way of an ordinary dividend subject to Companies Act requirements being met prior to distribution. The remaining 50% will, until a binding resolution to the contrary is passed, be retained in order to provide, inter alia, for re-investment in exploration of the platinum assets. The distribution will remain in effect for the full life of mine. There has been no change to the purchase consideration in respect of the Houtbosch Acquisition, that being the Houtbosch Payment Shares Chrome Ore Supply Agreement and Lease and Option Agreement On 27 March 2014, it was announced on SENS that the Holder had entered into a chrome ore supply agreement with ASA Metals for the offtake of chrome ore from the farm Moeijelijk 412KS. The Chrome Ore Supply Agreement also makes provision for a prepayment to Bauba of up to R5,6 million until the mining operations commence. As part of the conditions of the Chrome Ore Supply Agreement ASA Metals drilled confirmatory holes to verify the quality of the chrome ore. It was further announced that the Holder has concluded a lease and option agreement with Jibeng Investments to facilitate access to the chrome mining area for a period of 18 months from the date commencing 30 days after receipt by the Holder of a notice of grant of a mining permit over the chrome mining area by the DMR. The Lease and Option Agreement also provides for an option to acquire the portion of farm Moeijelijk 412 KS, on which mining operations will be established. 4. PRO FORMA FINANCIAL EFFECTS The table below sets out the pro forma financial effects of the Acquisitions on Bauba s basic earnings per share, headline earnings per share, net asset value per share and tangible net asset value per share. The pro forma financial effects have been prepared to illustrate the impact of the Acquisitions on the reported financial information of Bauba for the six months ended 31 December 2013, had the Acquisitions occurred on 1 July 2013 for statement of comprehensive income purposes and on 31 December 2013 for statement of financial position purposes. The pro forma financial effects have been prepared using accounting policies that comply with IFRS and that are consistent with those applied in the audited results of Bauba for the 12 months ended 30 June The pro forma financial effects, which are the responsibility of the directors, are provided for illustrative purposes only and, because of their pro forma nature, may not fairly present Bauba s financial position, changes in equity, results of operations or cash flow. The cancellation of the 2010 Claw Back will have no effect on the pro forma financial information of Bauba. The full financial effects are included in Annexure 1 to this circular and should be read in conjunction with the reporting accountants report on the pro forma financial information of Bauba as set out in Annexure 2 to this circular. Before the Acquisitions 1 Pro forma after the Acquisitions 2 % Change Basic loss per share (cents) 3 (3,07) (1,29) 58,02 Headline loss per share (cents) 3 (3,07) (1,29) 58,02 Net asset value per share (cents) 4 26,44 54,87 107,54 Tangible net asset value per share (cents) 4 1,51 (0,02) (101,32) Weighted average number of shares in issue (000 s) Total number of shares in issue (000 s) Notes: 1. The amounts in the Before the Acquisitions column have been extracted without adjustment from the published reviewed interim results of Bauba for the six months ended 31 December The Pro forma after the Acquisitions column reflects the unaudited financial effects of the Acquisitions on Bauba taking into account the following: Transaction costs of R2 million are expected to be incurred in respect of the Acquisitions. R1 million of the costs incurred are directly attributable to the issue of new shares and have been accounted for in share capital. The remaining R1 million is recorded as an expense. Interest income forgone (calculated using an interest rate of 4,9% per annum being the interest rate applicable to cash in the Bauba call account) on the amount paid in respect of transaction costs. This adjustment will not have a continuing effect. No tax effect is accounted for as the Company is not currently in a tax paying position and no deferred tax is recognised, as it is uncertain when a future taxable profit will be generated to utilise the tax loss. This adjustment will not have a continuing effect. Issue of new ordinary shares (Houtbosch Payment Shares) at an issue price of R0,70 per share, being the closing price on the day prior to the announcement of the Acquisitions, to the Vendors in respect of the Houtbosch Acquisition. An intangible asset in respect of the Houtbosch Prospecting Right is recognised in accordance with IAS 38 Intangible Assets. This intangible asset is recognised at cost. Issue of new ordinary shares (Share Consideration) at an issue price of R0,70 per share, being the closing price on the day prior to the announcement of the Acquisitions to the Vendors in respect of the Acquisition. An intangible asset in respect of the Excluded Prospecting Rights is recognised in accordance with IAS 38 Intangible Assets. This intangible asset is recognised at cost. 3. Basic loss per share and headline loss per share effects are calculated based on the assumption that the Acquisitions were effected on 1 July Net asset value per share and tangible net asset value per share effects are calculated based on the assumption that the Acquisitions were effected on 31 December

12 5. SHARE CAPITAL OF BAUBA The purpose of this paragraph 5 is to provide shareholders with information regarding the impact which the issue of the Share Consideration and Houtbosch Payment Shares will have on the share capital of Bauba. 5.1 Authority to issue ordinary shares Section 41(3) of the Companies Act requires that shareholders approve, by way of special resolution, an issue of shares, if the voting power of the class of shares that are issued as a result of the a transaction will be equal to or exceed 30% of the voting power of all the shares of that class held by shareholders immediately before the transaction. Accordingly, as set out in Special Resolution Number 4 as set out in the notice of general meeting attached to and forming part of this circular, shareholders are required to approve the issue of the Share Consideration and the Houtbosch Payment Shares as the Vendors are related parties of Bauba and the voting power of all the shares held by shareholders immediately before the Acquisition will be exceeded by 30% as a result of the issue of the Share Consideration and the Houtbosch Payment Shares. 5.2 Share capital of Bauba before and after the issue of the Share Consideration and Houtbosch Payment Shares Before the issue of the Share Consideration and Houtbosch Payment Shares Authorised ordinary shares of R1 each Issued ordinary shares of R1 each Share premium Treasury shares: Zero ordinary shares of R1 each. R After the issue of the Share Consideration and Houtbosch Payment Shares R Authorised Issued ordinary shares of no par value Stated capital Treasury shares: Zero ordinary shares of no par value. 5.3 Share trading history Appendix 6 to this circular contains the aggregate volume of the Company s shares traded on the JSE and the highest, lowest and closing prices traded in those shares: for each quarter over the previous two years; for each month over the previous 12 months; and for each trading day during the 30-day period ended Friday, 8 August 2014, being the last practicable day before the finalisation of this circular. 6. PROPOSED AMENDMENTS TO THE MEMORANDUM OF INCORPORATION In order to be able to issue the Share Consideration to the Vendors in terms of the Acquisition Agreement, Bauba will be required to amend its Memorandum of Incorporation in order to convert its par value shares to no par value shares and increase the authorised share capital of the Company. Accordingly, Bauba will be proposing the relevant amendments to the Memorandum of Incorporation as set out in Annexure 5 to the circular, which in terms of paragraph 5.92(A) and Schedule 10.5(d) of the Listings Requirements and section 16(1)(c) of the Companies Act, requires the approval by way of a special resolution (requiring at least a 75% majority of the votes cast in favour of such resolution) of all shareholders present or represented by proxy at the general meeting. 7. PROSPECTS The opportunities to raise capital in the current economic market have been very limited, especially for exploration companies, such as Bauba, operating in the junior mining environment. As a result, the acquisition of the Excluded Prospecting Rights were considered as they have the potential to generate cash to support the PGM exploration programme as well as to provide cash for distribution to shareholders in the form of a dividend. The Excluded Prospecting Rights were specifically evaluated based on the chrome mineral on the farm Moeijelijk 412KS, with a major portion of the valuation being based on the planned open-cast operation that provides for a low-cost mining operation, a relatively quick start-up process and a secured off-take arrangement. The expected life of mine of the open-cast operation is five to six years based on a mining plan of tonnes per month. Currently, there is a healthy demand for chrome in the local and international markets and management is of the opinion that this demand will continue in the medium to long term, supporting a future underground chrome mining opportunity once the surface material has been mined. Very little exploration work was done on the farm Waterkop 113KT and as a result no value was placed on this farm in determining the Purchase Price. However, exploration work is planned on this farm to determine the mineralisation which could provide a potential upside to the Acquisition. Current cash flow projections indicate that a major portion of the PGM exploration costs required for the mining licence application on the Northern Cluster can be supported from the chrome mining operations. 10

13 8. IRREVOCABLE LETTERS OF UNDERTAKING For purposes of the general meeting, the Company has received irrevocable letters of undertaking from shareholders holding or representing a total of shares, equivalent to 77,71% of all shares eligible for voting (which shares exclude those held as treasury shares) at the general meeting, or any adjournment thereof. All such shareholders or representatives have indicated that they will vote in favour or recommend to their clients to vote in favour of the Transaction. The table below to sets out the undertakings received: Shareholder Number of shares Percentage shareholding* % Trinity Asset Management Proprietary Limited ,24 # Calulo Resources Proprietary Limited ,30 Tucker Boys Trust ,88 Nomso Minerals Proprietary Limited ,76 Qinisele Resources Proprietary Limited ,93 Mr Grant Pitt , ,71 * Excludes the Vendors. # Represents shares held under its management, which includes the right to vote in terms of its mandate. 9. MAJOR SHAREHOLDERS 9.1 Major shareholders before the issue of the Share Consideration and Houtbosch Payment Shares Shareholders (excluding the directors whose interests are detailed in paragraph 10.4 below) who, at the last practicable date insofar as is known to Bauba, directly or indirectly, were beneficially interested in 5% or more of the issued share capital of Bauba, are listed below: Shareholder Number of shares Percentage shareholding* % Highland Trading Investments Limited ,0 Trinity Asset Management Proprietary Limited ,2 # PSL Client Safe Custody Account ,0 Math-Pin Trust ,7 Hlabirwa Mining Investments Proprietary Limited ,0 Total ,9 Total shares in issue Constituent of the Vendors. # Represents shares held under its management, which includes the right to vote in terms of its mandate. 9.2 Major shareholders after the issue of the Share Consideration and Houtbosch Payment Shares Those shareholders (excluding the directors whose interests are detailed in paragraph 10.4 below) who will insofar as is known to Bauba, directly or indirectly, beneficially hold 5% or more of the issued share capital of Bauba after the issue of the Share Consideration and Houtbosch Payment Shares are listed below: Shareholder Number of shares Percentage shareholding* % Highland Trading Investments Limited ,7 Math-Pin Trust ,2 Trinity Asset Management Proprietary Limited ,4 # Hlabirwa Mining Investments Limited ,9 Total ,8 Total shares in issue Constituent of the Vendors. # Represents shares held under its management, which includes the right to vote in terms of its mandate. 11

14 10. DIRECTORS OF BAUBA 10.1 Details and experience of directors The full names, ages, qualifications, business addresses, functions in the Group and background of the executive and non-executive directors of the Company at the last practicable date are as follows: Sydney John Maurice Caddy (65) Qualifications: Business address: Function and committees: Background: PR Eng, National Higher Diploma in Metalliferous Mining First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Chief Executive Officer. Technical and social and ethics committees Syd has more than 40 years experience in both shallow and ultra-deep mining environments in the South African gold, uranium and base metal sectors. He has held the title of general manager for Black Mountain, Kloof and West Driefontein mines and has also been appointed to various positions within JCI, First Uranium and Gold One s operations, including as consulting engineer, chief operating officer and managing director. Syd is a registered Professional Engineer, and a Fellow of both the Southern African and Australian Institutes of Mining and Metallurgy. He is also a past president of The Association of Mine Managers. Willem Adriaan Moolman (51) Qualifications: Business address: Function and committees: Background: Fellow of the Institute of Professional Accountants (Australia), BCompt (Hons), MBL Unisa. First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Financial Director Willem completed accounting articles with KPMG and has over 25 years financial management experience in a number of industries including four years in mining. In recent years he focused on assisting companies with financial restructuring and turnaround strategies. Professionally he is a Fellow of the Institute of Professional Accountants (Australia). He holds a BCompt Honours and MBL from Unisa. Jonathan Best (65) Qualifications: Business address: Function and committees: Background: ACIMA Associate of the Chartered Institute of Management Accountants, ACIS Associate of the Chartered Institute of Secretaries and Administrators, MBA Master of Business Administration (Wits) First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Independent non-executive Chairman. Member of remuneration and nomination and technical committees Jonathan has over 40 years experience with companies associated with the mining industry. He brings strong financial expertise and experience from his previous role as chief financial officer and executive director of AngloGold Ashanti Limited. He currently holds the following additional board positions: non-executive director of the unlisted AngloGold Ashanti Holdings plc and a member of the audit committee non-executive independent director, member of the remuneration committee and chairman of the audit committee of Polymetal International plc, a Russian-based mining company listed on the London Stock Exchange, chairman and member of the remuneration and nomination committee of Sentula Mining Limited and non-executive independent director and member of the audit committee of Metair Investments Limited. He is an Associate of the Chartered Institute of Management Accountants and of the Chartered Institute of Secretaries and Administrators and has an MBA degree from the University of the Witwatersrand. Kenneth Victor Dicks (74) Qualifications: Business address: Function and committees: Background: PR Eng First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Independent non-executive director. Chairman of remuneration and nomination and technical committees and member of audit and risk. Ken joined the Bauba Platinum Board in September He has a mining engineering background with 39 years experience in the formal mining industry. He spent 37 years working in the Anglo American Corporation s Gold and Uranium division where he held several senior positions. He presently serves as an independent non-executive director on the boards of Harmony Gold Mining Company Limited and Witwatersrand Consolidated Gold Resources Limited. 12

15 Sholto Mokgoane Dolamo (42) Qualifications: Business address: Function and committees: Background: BSc (Chemistry), BTech (Ceramics Science), MSc (Materials Engineering) and an MBA from GIBS Stanlib, 3rd Floor, No. 17 Melrose Boulevard, Melrose Arch Independent non-executive director. Chairman of social and ethics committee and member of audit and risk and remuneration and nomination committees Sholto is currently the head of resources at Stanlib. He has had 10 years experience within the mining and manufacturing industry. This includes six years as a research scientist/engineer for De Beers research laboratory, where he was instrumental in developing a variety of new materials and technologies for applications both above and underground in rock drilling and cutting. Sholto was head of Lonmin Platinum s research and development for the Precious Metals Refinery for three years. Sholto has spent over seven years in mining investment research at Stanlib and Momentum asset management. He holds a BSc (Chemistry), BTech (Ceramics Science), MSc (Materials Engineering) and an MBA from GIBS. Kholeka Winifred Mzondeki (46) Qualifications: Business address: Function and committees: Background: FCCA (UK); Fellow of Charted Certified Accountants, United Kingdom (CA (SA) equivalent in South Africa), Bachelor of Commerce University of Botswana, Diploma in Investment Management RAU (University of Johannesburg) First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Independent non-executive director. Audit and risk and social and ethics committees Kholeka has over 20 years experience in governance and financial management, having held the roles of financial director and chief financial officer in various organisations including a Fortune 500 company. She has a Bachelor of Commerce degree and a Diploma in Investment Management. She qualified as a chartered accountant in the United Kingdom. Her experience includes, amongst others, being a risk manager at Eskom, director and general manager of finance responsible for sub-saharan Africa at 3M, CFO and general manager of corporate services at Mintek and holds directorships in other listed companies and non-profit organisations such as the United Nations World Food programme. In 2008 she had the privilege of being a finalist in the Nedbank/BWA Business Woman of the Year. Dr Nakedi Mathews Phosa (61) Qualifications: Business address: Function and committees: Background: BProc, LLB, LLD (hon causa), PhD (Law) Eveni Investments, Culross Court, South Block, 1 Ealing Crescent, Bryanston Non-executive director Dr Mathews Phosa, an attorney by profession, is a leading figure in South Africa s business and political world. Mathews opened the first black empowerment law practice in Nelspruit in He was elected as the first Premier of Mpumalanga province in Following the elections in 1999 Mathews resigned his seat in parliament in favour of focusing his attention on a career in business. Mathews re-entered the political arena in 2007 when he was appointed Treasurer-General of the National Executive Committee of the ANC. He is chairperson of Special Olympics South Africa and holds numerous chairperson positions, among them non-executive chairman of EOH Limited, executive chairman of Vuka Forestry Holding Proprietary Limited and Eveni Investments & Consulting Proprietary Limited. He is also a director of Hans Merensky Holdings Proprietary Limited and executive director of Value Group. Damian Smith (46) Qualifications: Business address: Function and committees: Background: BSc (Hons), Geology from the University of Liverpool, an MSc Exploration Geology from the Camborne School of Mines, PRSc.1 Nat Professional Natural Scientist Northam, 1A Albury Office Park, Cnr. Albury Road and Jan Smuts, Dunkeld Non-executive director. Member of the technical committee Damian holds a BSc (Hons) Geology from the University of Liverpool; an MSc Exploration Geology from the Camborne School of Mines; and is a registered Professional Natural Scientist. He has 22 years experience in mining and exploration for base metals, gold and PGMs but has had a particular focus on the Bushveld Complex geology for the last decade. Before becoming a geological consultant to various companies, Damian was the group Geologist for Northam Platinum Limited. He has conducted exploration programmes on projects in South Africa and internationally, and has undertaken due diligence, evaluation and feasibility studies on a number of PGM projects. Damian has published extensively on economic geology. King Thulare Victor Thulare (33) Qualifications: Business address: Function and committees: Background: N/A First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Alternate non-executive director to Dr NM Phosa. Member of the social and ethics committee His Majesty King Thulare III is King of the Bapedi Nation. He joined the mining industry in 2007 and has gained five years valuable experience in the industry. He is currently the executive chairman of the KT3 group of companies and has also served as a director of Bauba A Hlabirwa since 22 August All directors are South African citizens. 13

16 10.2 The names of all the companies and partnerships of which the directors of Bauba were a director or partner at any time during the previous five years are set out in Appendix 7 to this circular Extracts of the relevant provisions of Bauba s Memorandum of Incorporation and Corporate Governance Statement with regard to: qualification of directors; remuneration of directors; any power enabling the directors to vote remuneration to themselves or any members of the Board; any power enabling a director to vote on a proposal, arrangement or contract in which he is materially interested; any power enabling the directors, in the absence of an independent quorum of the Board, to vote on remuneration, including pension or other benefits to themselves or any members of the Board; borrowing powers exercisable by the directors and how such borrowing powers can be varied; and retirement or non-retirement of directors under an age limit, are set out in Appendices 3 and 4 to this circular Directors interests in securities Directors interests At the last practicable date, the following directors held an indirect beneficial interest in shares in Bauba, representing approximately 8,2% of the total issued share capital of Bauba as follows: Director Direct Beneficial Indirect Total shares Total % Dr NM Phosa ,7 TV Thualre ,5 Total , Directors interests after the issue of the Share Consideration and Houtbosch Payment Shares After the issue of the Share Consideration, the following director will hold an indirect beneficial interest in shares in Bauba, representing approximately 15,1% of the total issued share capital of Bauba as follows: Director Direct Beneficial Indirect Total shares Total % Dr NM Phosa ,2 TV Thulare ,9 Total , Former directors interests At the last practicable date, the following director who resigned during the last 18 months held a direct beneficial interest in shares in Bauba, representing approximately 0,8% of the total issued share capital of Bauba as follows: Director Direct Beneficial Indirect Total shares Total % GJ Pitt , Associates interests in securities At the last practicable date, as far as the Board is aware, the associates of directors (including those directors who had resigned within the past 18 months) held or controlled no shares in the issued share capital of Bauba Directors interests in transactions None of the directors, other than Dr NM Phosa as disclosed in paragraphs and above, have had any beneficial interest, either directly or indirectly, in any transactions effected by Bauba during the current or preceding financial year or during any earlier financial year, which remains outstanding or unperformed in any respect Directors emoluments The components of the executive directors emoluments in respect of the financial year ended 30 June 2013 are set out below: Compensation R 000 Travel R 000 Total R 000 SJM Caddy GJ Pitt WA Moolman Total

17 The non-executive directors fees in respect of the financial year ended 30 June 2013 are set out below: Compensation R 000 Total R 000 J Best K Dicks S Dolamo KW Mzondeki Dr NM Phosa D Smith King T Thulare Total During the last financial period none of the following were paid to directors other than as disclosed below: management, consulting, technical or other fees paid for services rendered (directly/indirectly); bonuses and performance-related payments; sums paid by way of expense allowance; any other material benefits received; contributions paid under any pension scheme; and any commission/gain/profit-sharing arrangements. Prospect Geoservices CC (Sole member: DS Smith director of Bauba) was paid an amount of R for geological service rendered during the year Appointment and remuneration The relevant provisions of Bauba s Memorandum of Incorporation and Corporate Governance Statement, which provide for the appointment, qualification and remuneration of its directors, are set out in Appendices 3 and 4 to this circular. There will be no change in the remuneration of any of the directors as a consequence of the Transaction Directors service contracts Written service contracts have been concluded between the Company and each of Messrs SJM Caddy and WA Moolman which, inter alia, provide for the duties and remuneration in respect of these directors, as well as a confidentiality and restraint provision. Each of the aforementioned service contracts are subject to a formal notice period of two months. SJM Caddy s service contract shall endure for a period of two years to 31 August 2015 and may be renewed by mutual consent. WA Moolman s service contract shall endure for an indefinite amount of time. In respect of both directors, the service contracts are subject to termination by either party giving notice or by the Company as a result of a breach or justifying circumstances or as a result of sustained illness Directors share options The Bauba Share Incentive Plan was approved at the annual general meeting held on 9 December To date no allocations have been made under the plan Interests in assets None of the directors (or his associates) the Competent Person, the Competent Valuer nor a related party has or, within two years of the date of the circular, had any direct or indirect beneficial interest in any asset (including any right to explore for minerals) of Bauba which has been acquired or disposed of by, or leased to or by, Bauba, including any interest in the consideration passing to or from Bauba, and in the share capital of Bauba Other In the three years preceding the date of this circular: no amount has been paid to any promoter, partnership, syndicate or other association; no director, or any partnership, syndicate or any other association of which he is a member, or any of his associates, has been paid to induce him, or qualify him to become a director, or for the promotion of Bauba; no amount has been paid to any underwriter; and no commissions, discounts or brokerages were paid, or any special terms granted, to any person in connection with the issue or sale of any Bauba shares, other than as disclosed in the annual financial statements. There is no degree of government protection or any investment encouragement law affecting the Group. 11. BORROWINGS 11.1 Borrowing powers Extracts from the Memorandum of Incorporation of Bauba pertaining to the borrowing powers of the directors are set out in Appendix 3 to this circular. There have been no circumstances during the past three years whereby the borrowing powers of the Company or its subsidiaries were exceeded. There are no exchange controls or other restrictions on the borrowing powers of the Company and its subsidiaries. 15

18 11.2 Material borrowings Bauba does not have any outstanding loan capital or material loans payable Material commitments, lease agreements and contingent liabilities Material commitments Bauba does not have any material capital commitments Lease agreements of the Bauba Group Bauba has entered into a lease agreement in respect of premises situated at First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Gauteng, comprising 145 square metres. The lessor is Moneyline 946 Proprietary Limited. The lease period began on 1 March 2013 and endures for a period of 12 months, with a 12-month renewal option which was exercised, at a monthly rental of R10 875,00 plus operational cost and an escalation of 10% on renewal of the lease agreement Contingent liabilities The non-executive directors voluntarily accepted a postponement of 50% of their fees, which will become due and payable once sufficient cash has been generated to sustain Bauba. The amount outstanding to the non-executive directors is R ,74 as at the last practicable date. Bauba is involved in two litigation matters. The details are as follows: A review application was lodged by the Applicant with regards the prospecting rights held over the farms Genokakop 285 KT and Groot Vygenboom 284 KT for which Bauba has requested the North Gauteng High Court (Pretoria) to have the matter set aside as set out in paragraph 3.3 above; and A previous employee of the Company has lodged a claim for compensation due to his resignation for alleged good cause. Bauba has taken advice from senior counsel on both these matters and was informed that the Company has a strong case in both instances and the judicial system should find in the Company s favour. The potential financial effect of the outcomes is uncertain in light of the outcome being subject to the judicial process. To the best of the Company s knowledge and belief there are no other contingent liabilities to third parties and/or contingent assets not set out or referred to in this report which may materially affect the financial position of the Group Loans receivable At the last practicable date, Bauba and its subsidiaries had no material loans receivable and had not made any loans or furnished any security to or for the benefit of any director or manager of any associates of any director or manager of Bauba. 12. MATERIAL CHANGES Save for the effects of the Acquisition the cancellation of the 2010 Claw Back, and the issue of the Houtbosch Payment Shares which have been disclosed in the pro forma financial information set out in paragraph 4 above and inannexure 1 to the circular, at the last practicable date there have been no material changes in the financial or trading position of the Company since the reported financial information of Bauba for the year ended 30 June The material changes to the business of Bauba and its subsidiaries during the past five years are set out as follows: At a general meeting held on 10 December 2008, shareholders approved the purchase of 25,1% of Qinisele Resources Proprietary Limited with effect from 1 July In terms of the sale of shares agreement, the consideration of R ,04 was settled through the issue of new ordinary shares in the Company at an issue price of 6 cents per share. On 29 July 2009, the Company acquired 49% of the issued share capital in and 49% of the shareholders claims against Dikopane NN Mining Proprietary Limited for R1 million, which was settled in equal proportions of cash of R and the issue of new ordinary shares in the Company at an issue price of 6 cents per share. In August 2009, the Company raised R7 million through the issue of new shares for cash at an issue price of 3,7 cents per share. On 17 February 2010, shareholders approved the consolidation of the share capital of the Company on the basis of 1 share for every 100 shares held as well as an odd lot offer to repurchase shares at R4,00 per share post the consolidation. At a general meeting on 7 June 2010, shareholders approved, inter alia, the acquisition of 60% of Bauba A Hlabirwa, through a reverse asset acquisition transaction resulting in the control of Bauba (then known as Absolute Holdings Limited) vesting in HTI and simultaneous change in name of the Company to Bauba Platinum Limited. In terms of the 2010 Agreement governing this transaction, all the assets held in the Company on the day immediately prior to the effective date of this transaction were ring fenced in favour of the loan owed to Calulo Resources Proprietary Limited at the same date. These assets were subsequently disposed of and the loan settled in terms of this agreement. On 26 July 2011, Bauba raised R50 million through the issue of new shares for cash at an issue price of R1,80 per share. 13. MATERIAL CONTRACTS Save for the Acquisition Agreement, Chrome Ore Supply Agreement and Lease and Option Agreement, neither Bauba nor its subsidiaries have entered into any restrictive funding arrangement or material contract other than in the ordinary course of business within two years prior to this circular, or entered into at any time and containing an obligation or settlement that is material to Bauba or its subsidiaries at the date of this circular. 14. LITIGATION STATEMENT Save for as set out below, there are no legal or arbitration proceedings, pending or threatened, of which Bauba is aware, that may have or have had, in the 12-month period preceding the last practicable date, a material effect on the financial position or rights to explore or mine the mineral rights of Bauba, the group, its subsidiaries, the Excluded Rights or the Houtbosch Prospecting Right. 16

19 Bauba is involved in two litigation matters. The details are as follows: A review application pending in the North Gauteng High Court of South Africa, Pretoria brought by the Applicant against a decision of the Department of Mineral Resources to grant the prospecting rights in respect of two farms, namely Genokakop 285KT and Groot Vygenboom 284KT. Bauba s subsidiary, Bauba A Hlabirwa, the legal holder of the prospecting rights, was cited as a party against whom relief is sought. After taking legal advice from senior counsel on the matter, Bauba A Hlabirwa is confident of a positive outcome. Bauba A Hlabirwa decided to progress the determination of the application by requesting the High Court to dismiss this matter as the Applicant has failed to take any meaningful steps to advance the review application since the onset date; and A previous employee of the Company has lodged a claim for compensation of R plus interest at 15.5% effective from 24 April 2011, following his resignation on 24 February 2011 for alleged good cause. The matter was set down for arbitration on a number of occasions. Completion of the arbitration process has been delayed and the claimant was ordered to bear the cost of the most recent delay. The management of Bauba has taken advice from senior counsel on this matter and is of the opinion that the arbitration process will find in the Company s favour. 15. WORKING CAPITAL The directors of Bauba are of the opinion that, subsequent to the Acquisition, the cancellation of the 2010 Claw Back, and the issue of the Houtbosch Payment Shares: Bauba and the Group will be able in the ordinary course of business to pay its debts for a period of 12 months after the date of approval of this circular; the assets of Bauba and the Group will be in excess of the liabilities of Bauba for a period of 12 months after the date of approval of this circular. For this purpose, the assets and liabilities have been measured in accordance with the accounting policies used in the latest audited annual Group financial statements; the share capital and reserves of Bauba and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of approval of this circular; and the working capital of Bauba and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of approval of this circular. 16. DIRECTORS OPINIONS AND RECOMMENDATION 16.1 Report of the Independent Expert Taking into consideration the terms and conditions of the Transaction, the Independent Expert is of the opinion that such terms and conditions are fair to Bauba shareholders. Shareholders are referred to Annexure 3 to this circular which sets out the full text of the report of the Independent Expert regarding the Transaction View of the Board The directors of Bauba have considered the report of the Independent Expert that states that the Transaction is fair to Bauba shareholders, has considered the terms and conditions of the Transaction and in addition, has considered the following in formulating their opinion: The report of the independent geological consultant, who has extensive experience in the immediate area of the farm Moeijelijk 412KS, that indicated that the total orebody resource amounts to 9,34 million tons. The detailed mine plan for an open cast mine that was developed for 1,34 million tons based on contract mining costs and offtake agreements already entered into. The DCF model for the open pit mine that was prepared by management and gives the following values: Discount rate 8% 10% 12% Value (R mill) Besides the open cast, the balance of the shallow underground chrome ore was considered and deemed to be of significant value but was not quantified for the purposes of this circular. Based on the above, the Board is of the opinion that the Transaction is fair to Bauba shareholders and accordingly, recommends that Bauba shareholders vote in favour of the resolutions, to be proposed at the general meeting, to approve the Transaction. 17. DIRECTORS RESPONSIBILITY STATEMENT The directors, whose names are given in paragraph 10.1 above, collectively and individually, accept full responsibility for the accuracy of the information given and certify that, to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the circular contains all information required by law and the Listings Requirements. 18. EXPERTS CONSENTS The Sponsor, auditors and independent reporting accountants, legal advisers, Independent Expert, Competent Person, company secretary and the transfer secretaries have consented in writing to act in the capacities stated and to their names being stated in this circular and, where applicable, to the inclusion of their reports in the form and context in which they have been reproduced in this circular in Annexures 2, 3 and 4, and Appendix 8, and have not, prior to the last practicable date, withdrawn their consents prior to publication of this circular. 17

20 19. COSTS The total costs relating of the Transaction amount to approximately R excluding VAT, are detailed in the table below: Estimated amount R Corporate Adviser and Sponsor Merchantec Capital Legal adviser to Bauba S A Redelinghuys & Co Auditors and reporting accountants to Bauba BDO South Africa Inc Independent Expert Venmyn Deloitte Competent Person Venmyn Deloitte JSE listings fees JSE document inspection fees Printing and postage Miscellaneous fees Total All the above amounts are stated exclusive of VAT. 20. DOCUMENTS AVAILABLE FOR INSPECTION The following documents, or copies thereof, will be available for inspection at the registered office of the Company, First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, 2055, and at the office of the Sponsor which address is set out in the Corporate Information section of the circular, during normal business hours from Friday, 22 August 2014 up to and including Friday, 19 September 2014: the Memorandum of Incorporation of the Company and its subsidiaries; a copy of the Acquisition Agreement entered into between Bauba and the Vendors on 16 May 2014; a copy of the 2010 Agreement; a copy of the Chrome Ore Supply Agreement; a copy of the 2010 Circular; a copy of the Lease and Option Agreement; copies of the irrevocable letters of undertaking referred to in paragraph 8 above; the service contracts entered into between the executive directors and the Company referred to in paragraph 10.8 above; the signed independent reporting accountants limited assurance report on the pro forma financial information of the Company, the text of which is included as Annexure 2 to this circular; the reviewed interim financial results of Bauba for the six months ended 31 December 2013; the audited annual financial results of Bauba for the three financial years ended 30 June 2013; a copy of the Opinion of the Independent Expert, a copy of which is included in Annexure 3 to this circular; a copy of the Competent Person s Report on the farms Moeijelijk 412KS and Waterkop 113KT, a copy of which is included in Annexure 4; a copy of the Competent Person s Report on Bauba, a copy of which is included in Appendix 8; the written consent letters referred to in paragraph 18 above; and a signed copy of this circular. 21. GENERAL MEETING A general meeting of Bauba shareholders will be held at 10:00 on Friday, 19 September 2014 at the registered office of Bauba, First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, 2055, in order to consider and approve the resolutions set out in the notice of general meeting included in this circular. A notice convening the general meeting and a form of proxy for use by certificated shareholders and dematerialised shareholders with own name registration who are unable to attend the general meeting, form part of this circular. Certificated shareholders and dematerialised shareholders with own name registration, who are unable to attend the general meeting and wish to be represented thereat, must complete and return the attached form of proxy in accordance with the instructions contained therein. Dematerialised shareholders, other than dematerialised shareholders with own name registration, who: are unable to attend the general meeting and wish to be represented thereat, must provide their CSDP or broker with their voting instructions, in terms of the custody agreement entered into between themselves and the CSDP or broker concerned, in the manner and within the time stipulated therein; wish to attend the general meeting, must instruct their CSDP or broker to issue them with the necessary written Letter of Representation to attend. SIGNED ON BEHALF OF THE BOARD OF BAUBA WA Moolman Financial Director 22 August

21 BAUBA PLATINUM LIMITED Incorporated in the Republic of South Africa (Registration number 1986/004649/06) Share code: BAU ISIN: ZAE ( Bauba or the Company ) REVISED LISTING PARTICULARS The Corporate Information and the Definitions and Interpretations section of the circular apply mutatis mutandis to these Revised Listing Particulars. These Revised Listing Particulars have been prepared on the assumption that the ordinary and special resolutions proposed in the notice of general meeting forming part of the circular to which these Revised Listing Particulars are attached will be passed at the general meeting of shareholders to be held at 10:00 on Friday, 19 September 2014 at the registered office of Bauba, First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, 2055, and that the transaction giving rise to these Revised Listing Particulars will be implemented. The directors, whose names are set out in paragraph 10 on page 12 of the circular, collectively and individually accept full responsibility for the information given herein and certify that to the best of their knowledge and belief, there are no facts which have been omitted which would make any statement false or misleading, and that they have made all reasonable enquiries to ascertain such facts have been made and that these Revised Listing Particulars contain all information required by law and the Listings Requirements. These Revised Listing Particulars do not constitute an invitation to the public to subscribe for shares in the Company, but are issued in compliance with the Listings Requirements, for the purpose of providing information to the public with regard to Bauba. The JSE has approved the listing of an additional Bauba shares of no par value, which shares rank pari passu with the existing Bauba ordinary shares in all respects, will be approved in due course and become effective Friday, 26 September At the date of listing of the additional Bauba shares, the Company s share capital will comprise authorised ordinary shares and issued ordinary shares of no par value. Bauba has no treasury shares in issue. The Sponsor, auditors and independent reporting accountants, legal advisers, Independent Expert, Competent Person, company secretary and the transfer secretaries have consented in writing to act in the capacities stated and to their names being stated in these Revised Listing Particulars, and, where applicable, to the inclusion of their reports in the form and context in which they have been reproduced in these Revised Listing Particulars in Annexures 2, 3 and 4, and Appendix 8, and have not, prior to the last practicable date, withdrawn their consents prior to publication of these Revised Listing Particulars. 19

22 TABLE OF CONTENTS Revised Listing Particulars Page 1. Introduction Incorporation history nature of business and prospects for Bauba Share capital Borrowings Loans receivable Controlling and major shareholders Public shareholders Directors and management Material disposals and acquisitions Lease agreements Corporate Governance Statement Other Directors declaration 23 20

23 BAUBA PLATINUM LIMITED Incorporated in the Republic of South Africa (Registration number 1986/004649/06) Share code: BAU ISIN: ZAE ( Bauba or the Company ) Directors Executive SJM Caddy (Chief Executive Officer) WA Moolman (Financial Director) Non-executive J Best^ (Chairman) K Dicks^ S Dolamo^ KW Mzondeki^ Dr NM Phosa D Smith King T Thulare (Alternate to Dr NM Phosa) ^ Independent REVISED LISTING PARTICULARS 1. INTRODUCTION These Revised Listing Particulars provide relevant information of Bauba as enlarged by the Transaction, in accordance with the Listings Requirements. 2. INCORPORATION, HISTORY, NATURE OF BUSINESS AND PROSPECTS FOR BAUBA 2.1 Incorporation and history The Company was incorporated in South Africa on 14 November 1986 as Raydo Proprietary Limited. On 17 February 1987 the Company was converted from a private company to a public company and subsequently listed on the Main Board of the JSE as an investment holding company. The Company became a cash shell pursuant to a scheme of arrangement announced on 12 May 1995, in terms of which scheme all the assets of the Company were disposed of. Gilboa (SA) Proprietary Limited and YH Investments Proprietary Limited acquired control of the Company on 19 July 1995 and the listing was transferred from the Main Board to the Venture Capital Market of the JSE and the Company s name changed to Gilboa Properties Limited. On 15 January 1999 CMT Trust acquired control of the Company through the injection of property assets which included property development and rental assets. At the beginning of 2001, the Company decided to diversify its activities away from long-term property development and to shift its focus to the mining sector. In doing so it acquired various rights to mine marine diamonds on the West Coast of South Africa and appointed directors with diamond and mining expertise to the Board. Unsuccessful capital raising efforts announced on 23 April 2003 resulted in the marine diamond mining rights lapsing. On 20 January 2005, shareholders approved the acquisition of 51% of Lenopodi Proprietary Limited ( Lenopodi ) from Calulo Investments. The assets acquired through Lenopodi included Diamond Quartzite and Picture Stone quarries which aligned with the vision to focus on mining activities going forward. Subsequently the Company s name was changed from Gilboa Properties Limited to Absolute Holdings Limited with effect from 31 January In terms of a circular to shareholders dated 22 September 2008, the Company raised R by way of an unconditional, fully underwritten, renounceable rights offer for new ordinary shares in the Company at a subscription price of 6 cents per rights offer share in the ratio of 1 right offer share for every 4,00160 shares held in the Company. This money was applied to fund the capitalisation of the mining projects acquired through the investment in Lenopodi. The rights offer was underwritten by Calulo Resources Proprietary Limited, which resulted in a change in control of the Company to Calulo Resources Proprietary Limited. At a general meeting held on 10 December 2008, shareholders approved the purchase of 25,1% of Qinisele Resources Proprietary Limited with effect from 1 July In terms of the sale of shares agreement, the consideration of R ,04 was settled through the issue of new ordinary shares in the Company at an issue price of 6 cents per share. On 29 July 2009, the Company acquired 49% of the issued share capital in and 49% of the shareholders claims against Dikopane NN Mining Proprietary Limited for R1 million, which was settled in equal proportions of cash of R and the issue of new ordinary shares in the Company at an issue price of 6 cents per share. In August 2009, the Company raised R7 million through the issue of new shares for cash at an issue price of 3,7 cents per share. 21

24 On 17 February 2010, shareholders approved the consolidation of the share capital of the Company on the basis of 1 share for every 100 shares held as well as an odd lot offer to repurchase shares at R4,00 per share post the consolidation. At a general meeting on 7 June 2010, shareholders approved, inter alia, the acquisition of 60% of Bauba A Hlabirwa, through a reverse asset acquisition transaction resulting in the control of the Company vesting in HTI and simultaneous change in the name of the Company to Bauba Platinum Limited. In terms of the 2010 agreement governing this transaction, all the assets held in the Company on the day immediately prior to the effective date of this transaction were ring fenced in favour of the loan owed to Calulo Resources Proprietary Limited at the same date. These assets were subsequently disposed of and the loan settled in terms of this agreement. On 26 July 2011, Bauba raised R50 million through the issue of new shares for cash at an issue price of R1,80 per share. 2.2 Nature of Bauba s business The Company s primary business objective is the exploration, evaluation and development of its platinum projects on a high quality PGM resource base located on the Eastern Limb of the Bushveld Igneous Complex. The Company holds prospecting rights over eight properties extending across an area of approximately hectares within a prime segment of the Eastern Limb of the Bushveld Igneous Complex, in the heart of the world s best-known platinum region, where a number of neighbouring companies are prospecting and successfully mining platinum group metals from the Merensky and UG2 reefs. With the acquisition of the Excluded Prospecting Rights, some of the focus of the Company will shift to the extraction of chromite from the LG6 reef on the farm Moeijelijk 412KS. 2.3 Prospects The opportunities to raise capital in the current economic market have been very limited, especially for exploration companies such as Bauba, operating in the junior mining environment. As a result, the acquisition of the Excluded Prospecting Rights was considered as they have the potential to generate cash to support the PGM exploration programme as well as to provide cash for distribution to shareholders in the form of a dividend. The Excluded Prospecting Rights were specifically evaluated based on the chrome mineral on the farm Moeijelijk 412KS, with a major portion of the valuation being based on the planned open-cast operation that provides for a low-cost mining operation, a relatively quick start-up process and a secured off-take arrangement. The expected life of mine of the open-cast operation is five to six years based on a mining plan of tonnes per month. Currently, there is a healthy demand for chrome in the local and international markets and management is of the opinion that this demand will continue in the medium to long term, supporting a future underground chrome mining opportunity once the surface material has been mined. Very little exploration work was done on the farm Waterkop 113KT and as a result no value was placed on this farm in determining the Purchase Price. However, exploration work is planned on this farm to determine the mineralisation which could provide a potential upside to the Acquisition. Current cash flow projections indicate that a major portion of the PGM exploration costs required for the mining licence application on the Northern Cluster can be supported from the chrome mining operations. 3. SHARE CAPITAL Details of the share capital of Bauba, before and after the issue of the Share Consideration and Houtbosch Payment Shares is set out in paragraph 5 of the circular, of which these Revised Listing Particulars form part. Additional details in respect of the share capital of Bauba are set out in Appendix 5 to this circular. 4. BORROWINGS Details of borrowings are set out in paragraph 11 of the circular of which these Revised Listing Particulars form part. 5. LOANS RECEIVABLE Details of the material loans received by Bauba and its subsidiaries are set out in paragraph 11.4 of the circular, of which these Revised Listing Particulars form part. Full details of all material inter-company transactions are set out in notes 11 and 22 of Appendix 2 of the circular. 6. CONTROLLING AND MAJOR SHAREHOLDERS As detailed in paragraphs 9.1 and of the circular, as at the last practicable date, the directors control 5,7% of the voting shares of the Company. After the issue of the Share Consideration, the directors will control 8,9% of the voting shares of the Company. No member of the key management controls any of the voting shares of the Company. 7. PUBLIC SHAREHOLDERS As at the Last Practicable Date, Bauba had public shareholders holding ordinary shares in the Company, representing 51,23% of Bauba s issued shares. 8. DIRECTORS AND MANAGEMENT Details of the directors of Bauba are set out in paragraph 10 of the circular, of which these Revised Listing Particulars form part, and Appendix 7, respectively, to these Revised Listing Particulars. There are no fees paid or accrued as payable to a third party in lieu of directors fees. Extracts from Bauba s Memorandum of Incorporation relating to the directors, executive management, appointment, qualification, remuneration and borrowing powers of directors is set out in Appendix 3 to the circular, of which these Revised Listing Particulars form part. Details on the appointment of directors and terms of office are set out in Appendix 3 to this circular 22

25 9. MATERIAL DISPOSALS AND ACQUISITIONS There have been no material disposals or acquisitions by Bauba, or its subsidiaries as at the effective date of the transaction in the three years preceding the date of these Revised Listings Particulars. 10. LEASE AGREEMENTS Bauba has entered into a lease agreement in respect of premises situated at First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Gauteng, comprising 145 square metres. The lessor is Moneyline 946 Proprietary Limited. The lease period began on 1 March 2013 and endures for a period of 12 months, with a 12-month renewal option, which was exercised, at a monthly rental of R10 875,00 plus operational cost and an escalation of 10% on renewal of the lease agreement. 11. CORPORATE GOVERNANCE STATEMENT The Corporate Governance Statement of Bauba is set out in Appendix 4 to the circular, of which these Revised Listing Particulars form part. Furthermore, in terms of paragraph 3.84(h) of the Listings Requirements, the audit and risk committee has satisfied itself that the financial director has the appropriate experience and expertise to fill that position. 12. OTHER In the three years preceding the date of this circular: no amount has been paid to any promoter, partnership, syndicate or other association; no director or any partnership, syndicate or any other association of which he/she is a member, or any of his/her associates, has been paid to induce him/her, or qualify him/her to become a director, or for the promotion of Bauba; no amount has been paid to any underwriter; and no commissions discounts or brokerages were paid, or any special terms granted, to any person in connection with the issue or sale of any Bauba shares, other than as disclosed in the annual financial statements. No royalties or items of a similar nature were paid or payable by Bauba or its subsidiaries. There is no degree of government protection or any investment encouragement law affecting the Group. 13. DIRECTORS DECLARATION Each director of Bauba and the Company Secretary has confirmed that he/she has not been involved in, and is not subject to, any: bankruptcies, insolvencies or individual voluntary compromise arrangement; any business rescue plans and/or resolution proposed by any entity to commence business rescue proceedings, application having been made for any entity to begin business rescue proceedings, notices having been delivered in terms of section 129(7) of the Companies Act, receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements, or any compromise or arrangement with creditors generally or any class of creditors of any company where the director is or was a director with an executive function at the time of or within 12 months preceding such events; compulsory liquidations, administrations, partnership voluntary arrangements of any partnership where the director was a partner at the time of or within 12 months preceding such events; receiverships of any asset/s of such person or of a partnership of which the individual is or was a partner at the time of or within 12 months preceding such events; public criticism by statutory or regulatory authorities or disqualified by a court from acting as a director or in the management or conduct of the affairs of any company; offence involving dishonesty; removal from an office of trust, on the grounds of misconduct, involving dishonesty; or any order granted by court declaring the person delinquent or placing the person under probation in terms of section 162 of the Companies Act and/or section 47 of the Close Corporations Act, 1984 (Act 69 of 1984) or if the person was disqualified by a court to act as a director in terms of section 219 of the Companies Act, Signed by WA Moolman, on his own behalf as a director and on behalf of all the other directors of the Company, he being duly authorised in terms of powers of attorney granted to him by such directors. Johannesburg 22 August

26 Annexure 1 PRO FORMA FINANCIAL INFORMATION OF BAUBA The table below sets out the pro forma financial information of the Houtbosch Acquisition and the Acquisition, together ( the Acquisitions ). The pro forma financial information, which is the responsibility of the directors of Bauba, has been prepared for illustrative purposes only and, because of its nature, may not present a fair reflection of Bauba s financial position, changes in equity, results of operations or cash flows. The cancellation of the 2010 Claw Back will have no effect on the pro forma financial information of Bauba. The pro forma financial information is merely intended to provide information on how the Acquisitions may have affected the statement of comprehensive income and statement of financial position of Bauba for the six months ended 31 December The pro forma financial effects have been prepared using accounting policies that comply with IFRS and that are consistent with those applied in the audited results of Bauba for the 12 months ended 30 June The pro forma figures have been given no greater prominence than unadjusted financial figures, are presented in a manner consistent with both the format and accounting policies adopted in the historical financial information and adjustments have been quantified on the same basis as would normally be calculated in preparing financial statements. PRO FORMA STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 DECEMBER 2013 Before 6 months ended 31 December Actual R 000 Pro forma adjustments Houtbosch Acquisition Pro forma R 000 Notes Pro forma adjustments Acquisition Pro forma R 000 Notes Pro forma after the Acquisitions 7 Pro forma R 000 General and administrative expenses (4 042) (84) 2 (916) 2 (5 042) Finance income 73 (4) 3 (45) 3 24 Loss before taxation (3 969) (88) (961) (5 018) Taxation 4 4 Loss for the period (3 969) (88) (961) (5 018) Attributable to: Equity holders of the Company (3 779) (88) (961) (4 828) Non-controlling interest (190) (190) Other comprehensive income (net of tax) Total comprehensive loss for the period (3 969) (88) (961) (5 018) Attributable to: Equity holders of the Company (3 779) (88) (961) (4 828) Non-controlling interest (190) (190) Reconciliation of headline earnings Loss for the period (3 969) (88) (961) (5 018) Adjustments net of taxation Headline loss for the period (3 969) (88) (961) (5 018) Basic loss per share (cents) (3,07) (1,29) Diluted loss per share (cents) (3,07) (1,29) Headline loss per share (cents) (3,07) (1,29) Diluted headline loss per share (cents) (3,07) (1,29) Weighted number of ordinary shares in issue Total number of ordinary shares at the end of the period Notes: 1. Extracted without adjustment from the published reviewed interim results of Bauba for the six months ended 31 December Total transaction costs of R2 million are expected to be incurred in respect of the Acquisitions. Expenses have been apportioned to each acquisition (the Houtbosch Acquisition and the Acquisition) with reference to the number of shares to be issued for each. R1 million of the costs incurred are directly attributable to the issue of new shares and have been accounted for in share capital. The remaining R1 million is recorded as an expense. This adjustment will not have a continuing effect. 3. Interest income forgone (calculated using an interest rate of 4,9% per annum being the interest rate applicable to cash in the Bauba call account) on the amount paid in respect of transaction costs. Income foregone has been apportioned to each acquisition with reference to the proportion of transaction costs allocated to each acquisition in terms of note 2 above. This adjustment will not have a continuing effect. 4. No tax effect is accounted for in terms of 2 and 3 above as the Company is not currently in a tax paying position and no deferred tax is recognised, as it is uncertain when a future taxable profit will be generated to utilise the tax loss. This adjustment will not have a continuing effect. 5. Issue of new ordinary shares (Houtbosch Payment Shares) to the Vendors in respect of the Houtbosch Acquisition. 6. Issue of new ordinary shares (Share Consideration) to the Vendors in respect of the Acquisition. 7. Pro forma statement of comprehensive income after taking account of the effects of the Acquisitions based on the assumption that the Acquisitions were effected on 1 July Basic loss per share, diluted loss per share, headline loss per share and diluted headline loss per share effects are calculated based on the assumption that the Acquisitions were effected on 1 July

27 PRO FORMA STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2013 Before 6 months ended 31 December Actual R 000 Pro forma adjustments Houtbosch Acquisition Pro forma R 000 Notes Pro forma adjustments Acquisition Pro forma R 000 Notes Pro forma after the Acquisitions 6 Pro forma R 000 ASSETS Non-current assets Intangible assets Property, plant and equipment Total non-current assets Current assets Trade and other receivables Cash and cash equivalents (168) 3 (1 832) Total current assets (168) (1 832) 936 Total assets Equity and liabilities Capital and reserves Share capital (84) 3 (916) Share premium ( ) 5 Reverse asset acquisition reserve ( ) ( ) Retained loss (83 465) (84) 3 (916) 3 (84 465) Non-controlling interest (1 549) (1 549) Total capital and reserves Current liabilities Trade and other payables Total current liabilities Total equity and liabilities Net asset value per share (cents) 26,44 54,87 Tangible net asset value per share (cents) 1,51 (0,02) Number of shares in issue Notes: 1. Extracted without adjustment from the published reviewed interim results of Bauba for the six months ended 31 December Issue of new ordinary shares (Houtbosch Payment Shares) at an issue price of R0,70 per share, being the closing price on the day prior to the announcement of the Acquisitions to the Vendors in respect of the Houtbosch Acquisition. An intangible asset in respect of the Houtbosch Prospecting Right is recognised in accordance with IAS 38 Intangible Assets. This intangible asset is recognised at cost. 3. Total transaction costs of R2 million are expected to be incurred in respect of the Acquisitions. Expenses have been apportioned to each acquisition (the Houtbosch Acquisition and the Acquisition) with reference to the number of shares to be issued for each. R1 million of the costs incurred are directly attributable to the issue of new shares and have been accounted for in share capital. The remaining R1 million is recorded as an expense and accounted for as an adjustment to the retained loss of the Company. No tax effect is accounted for as the Company is not currently in a tax paying position and no deferred tax is recognised, as it is uncertain when a future taxable profit will be generated to utilise the tax loss. 4. Issue of new ordinary shares (Share Consideration) at an issue price of R0,70 per share, being the closing price on the day prior to the announcement of the Acquisitions to the Vendors in respect of the Acquisition. An intangible asset in respect of the Excluded Prospecting Rights is recognised in accordance with IAS 38 Intangible assets. This intangible asset is recognised at cost. 5. As part of the Acquisitions Bauba s share capital is converted from par value to no par-value shares resulting in a reclassification of share premium to share capital on conversion from par-value to no par-value shares as part of the Acquisitions. 6. Pro forma statement of financial position after taking account of the effects of the Acquisitions based on the assumption that the Acquisitions were effected on 31 December The net asset value per share and tangible net asset value per share effects are based on the assumption that the Acquisitions were effected on 31 December

28 Annexure 2 INDEPENDENT REPORTING ACCOUNTANTS LIMITED ASSURANCE REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION The directors Bauba Platinum Limited Hammets Crossing Office Park Building 816/5, First Floor 2 Selbourne Road Fourways July 2014 INDEPENDENT REPORTING ACCOUNTANTS LIMITED ASSURANCE REPORT ON THE PRO FORMA FINANCIAL INFORMATION OF BAUBA PLATINUM LIMITED We have completed our assurance engagement to report on the compilation of pro forma financial information of Bauba Platinum Limited ( Bauba or the Company ) by the directors. The pro forma financial information, as set out in paragraph 4 and Annexure 1 of the Circular to be dated on or about 25 July 2014 ( the Circular ), consists of the pro forma consolidated statement of comprehensive income, the pro forma consolidated statement of financial position and related notes. The pro forma financial information has been compiled on the basis of the applicable criteria specified in the JSE Limited ( JSE ) Listings Requirements. The pro forma financial information has been compiled by the directors to illustrate the impact of the Houtbosch acquisition (the Houtbosch Acquisition ) and the acquisition of the excluded rights by way of an assets for shares transaction (the Excluded Rights Acquisition ), together (the Transactions ), on the results and financial position of the Company, assuming the acquisition is implemented on 1 July 2013 for the purposes of the pro forma consolidated statement of comprehensive income and 31 December 2013 for the purposes of the pro forma consolidated statement of financial position. As part of this process, information about the Company s financial position and financial performance has been extracted by the directors from the Company s reviewed, published results for the six months ended 31 December Directors responsibility for the pro forma financial information The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria specified in the JSE Listings Requirements and described in paragraph 4 of the circular. Reporting accountant s responsibility Our responsibility is to express an opinion about whether the pro forma financial information has been compiled, in all material respects, by the directors on the basis specified in the JSE Listings Requirements based on our procedures performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus. This standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all material respects, on the basis specified in the JSE Listings Requirements. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we in the course of this engagement performed an audit or review of the financial information used in compiling the pro forma financial information. A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used in the compilation of the pro forma financial information provides a reasonable basis for presenting the significant effects directly attributable to the corporate action or event and to obtain sufficient appropriate evidence about whether: the related pro forma adjustments give appropriate effect to those criteria; and the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information. Our procedures selected depend on our judgement, having regard to our understanding of the nature of the Company, the corporate action or event in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances. Our engagement also involves evaluating the overall presentation of the pro forma financial information. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria specified by the JSE Listings Requirements and described in paragraph 4 and Annexure 1 of the circular. Yours faithfully BDO South Africa Incorporated Registered Auditors Per Nick Lazanakis Chartered Accountant (SA) Registered Auditor 22 Wellington Road, Parktown,

29 Annexure 3 OPINION OF THE INDEPENDENT EXPERT The Board of directors Bauba Platinum Limited PO Box 1658 Witkoppen, 2068 South Africa 15 August 2014 Dear Sirs REPORT OF THE INDEPENDENT PROFESSIONAL EXPERT TO THE BOARD OF DIRECTORS OF BAUBA PLATINUM LIMITED ( BAUBA PLATINUM ) IN THE FORM OF A FAIRNESS OPINION AS PER SECTION 10.4(F) OF THE JSE LIMITED ( JSE ) LISTINGS REQUIREMENTS REGARDING THE PROPOSED TRANSACTION ( THE TRANSACTION ) BETWEEN BAUBA PLATINUM AND THE OWNERS OF CERTAIN PROSPECTING RIGHTS (COLLECTIVELY THE VENDORS ) A RELATED PARTY TO BAUBA PLATINUM Introduction The Board of directors (the Board ) of Bauba Platinum Limited ( Bauba Platinum ) has commissioned Venmyn Deloitte Proprietary Limited ( Venmyn Deloitte ) to prepare and sign off an Independent Fairness Opinion in accordance with section 10 of the JSE Limited ( JSE ) Listings Requirements, for their proposed transaction (the Transaction, described in full later in this section), with the following, collectively hereinafter referred to as the Vendors : Highland Trading Investments Limited; Danene Trust; Kumane Trust; Math-Pin Trust; Pimlico Investment Trust; and Hlabirwa Mining Investments Proprietary Limited. The Vendors hold 60% of the beneficial right over the prospecting rights for the farms Moeijelijk 412KS and Waterkop 113KT (the Excluded Rights ) and Bauba Platinum, as part of the Transaction with the Vendors, wishes to acquire the Vendors beneficial right to prospect for and mine the minerals on the Excluded Rights ( the Acquisition ) so as to use the proceeds to partially fund future exploration of platinum group elements ( PGE ) and to distribute to shareholders by way of dividends. The Vendors currently own a 53,57% shareholding in Bauba Platinum. Consequently, in keeping with Section 10 of the JSE Listings Requirements, the Vendors are considered to be a Related Party to Bauba Platinum in terms of the Transaction and as such, the proposed transaction constitutes a Related Party transaction. The Fairness Opinion will necessarily consider whether or not the terms of the proposed transaction are fair with respect to the shareholders of Bauba Platinum, excluding any Related Parties. In discharging our mandate to the board, Venmyn Deloitte conducted the following: Assessed, to our satisfaction, the value merits of the Transaction and the 2008 edition of the South African Code for the reporting of Mineral Asset Valuations (the SAMVAL Code ) compliant valuation on both the mineral assets of Bauba Platinum and Excluded Rights dated 1 March 2014; Considered the issues of fairness with respect to the strategic quantitative aspects of the Transaction; and Prepared a Fairness Opinion Letter with an Effective Date of 15 August 2014 outlining the results of our findings. We have taken into account the requirements of the SAMVAL Code prepared under the auspices of the Southern African Institute of Mining and Metallurgy ( SAIMM ) and the Geological Society of Southern Africa ( GSSA ) which is specifically relevant to mineral companies. Whilst the valuation of the farm Houtbosch 323KT, the mineral Assets of Bauba Platinum and the Excluded Rights was completed and signed off by fellow Venmyn Deloitte staff members, due care has been taken to ensure that this Fairness Opinion is completed independently, without any influence from the valuations team and that we have satisfied ourselves of the underlying mineral asset valuation as required by Schedule 5 of the JSE Listings Requirements. Importantly, however, we have taken cognisance of the difference between value and price value being the result independently calculated by Venmyn Deloitte in the mineral asset valuation on the farm Houtbosch 323KT, the Excluded Rights and Bauba Platinum s PGE assets and price being the share price and market capitalisation of Bauba Platinum. We understand that, in the assessment of Fairness, the Fair Value of the mineral assets that are part of the Transaction must be independently calculated and we have complied with this requirement as demonstrated in this Fairness Opinion Letter. 27

30 Historically, Bauba Platinum had entered into an assets for share agreement (dated 12 February 2010) whereby all prospecting rights over the farms Moeijelijk 412KS and Waterkop 113KT had been excluded from the mineral asset base created for Bauba Platinum. The basis for the Acquisition is that the Vendors 60% stake in the Excluded Rights will be acquired by Bauba Platinum through the issue of (two hundred and thirty million, seven hundred and sixty-nine thousand,two hundred and thirty-one) new ordinary shares. The chrome mine, to be developed initially as an open-cast operation (Phase 1) and then later as an underground operation (Phase 2), will be on the farm Moeijelijk 412KS and the independent valuation performed by Venmyn Deloitte, dated 1 March 2014, concentrated on the value of this right and the mining opportunity that it represents. It should be noted that, with respect to Waterkop 113KT, the chrome rights are excluded since there is an existing chrome operation on that property. However, PGE rights are attached to both properties. The farm Moeijelijk 412 K, registered under MPTO 248/2006, Registration Division Limpopo, is situated in the Magisterial/Administrative District of Sekhukhune. It measures 2 270,9257 hectares in extent and is held under prospecting right application ref: 30/5/1/1/2/390-PR awarded to the Bapedi Nation on 7 June 2006 in terms of section 17 of the Mineral and Petroleum Resources Development Act 2002 (Act 28 of 2002) ( MPRDA or the Act ) and subsequently ceded to Bauba A Hlabirwa Mining Investments Proprietary Limited ( Bauba A Hlabirwa ) on 3 March 2008 for the purposes of prospecting for unspecified minerals with the emphasis on PGEs, vanadium ore, titanium ore, chrome ore, iron ore and associated minerals. This prospecting right was renewed on 18 July 2012 for a three (3) year period ending 17 July The remainder of the farm Waterkop 113KT (the mineral chrome is excluded), registered under MPTO 256/2006, Registration Division Limpopo, is situated in the Magisterial/Administrative District of Sekhukhune and held under prospecting right application ref: 30/5/1/1/2/330-PR, awarded to the Bapedi Nation on 19 December 2007, in terms of a notarial deed of amendment of the prospecting right No. 256/2006 (PR), which had been awarded to the Bapedi Nation on 7 June 2006 in terms of section 17 of the Act, and which subsequently had been ceded to Bauba A Hlabirwa on 9 April 2008 for the purposes of prospecting for unspecified minerals with the emphasis on PGEs, vanadium ore, titanium ore, iron ore and associated minerals. This prospecting right was renewed on 18 July 2012 for a three (3) year period ending 17 July The February 2010 assets for share agreement between the Vendors and Bauba Platinum had stipulated that: the transaction contemplated in terms of that agreement excluded the benefit of the prospecting rights granted in favour of Bauba A Hlabirwa in respect of the Excluded Rights and the Excluded Rights were not valued in determining the Purchase Price payable to the Vendors; a total of ordinary shares were set aside to be returned to Bauba Platinum for cancellation ( 2010 Claw Back ) should the prospecting rights awarded over certain farms in the Southern Cluster be withdrawn and/or cancelled by the Department of Mineral Resources (the DMR ) as a result of a review application brought by Rustenburg Platinum Mines Limited ( the Applicant ); and an additional ordinary shares ( Houtbosch Shares ) were approved for issue for the farm Houtbosch 323KT which the DMR awarded to Bauba A Hlabirwa on 12 August 2008 for inclusion in the prospecting right MPTO 256/2006. The shares were to be issued within seven days after the date of registration of the Notarial Deed of Cession of the Houtbosch prospecting right in the name of Bauba A Hlabirwa. The Transaction sets out the following: The Vendors sell their interest in the Excluded Rights (amounting to a 60% stake in the Excluded Rights) to Bauba Platinum by way of an assets for shares transaction in terms of section 42 of the Income Tax Act as provided for in the Acquisition Agreement and require that, simultaneous therewith, the 2010 Claw Back provision be cancelled and that the terms governing the issue of the Houtbosch Shares be lifted in order that the Houtbosch Shares are issued at the latest to coincide with this Acquisition Agreement; The Acquisition Agreement provides for the details of the Transaction and the closing mechanics of this Transaction; Post the Transaction, Bauba Platinum will own 60% of the Excluded Rights; Bauba Platinum acquires the right to prospect for and mine the minerals on the Excluded Rights for an amount herewith referred to as the Transaction Consideration so as to use the proceeds to partially fund future exploration of PGEs and to distribute to shareholders by way of dividends; Bauba Platinum will settle the Transaction Consideration by issuing new ordinary Bauba Platinum shares (the Consideration Shares ) which will be listed on the JSE and rank pari passu with all other ordinary Bauba Platinum shares; The Transaction Consideration amounts to ZAR150 million (60% of the determined value of the Excluded Rights) payable to the Vendors in Consideration Shares; The Consideration Shares are new ordinary Bauba Platinum shares which will be listed on the JSE and rank pari passu with all other ordinary Bauba Platinum shares; The base price on which the number of Consideration Shares will be calculated is ZAR0,65 (sixty-five South African cents) per share; The total number of Consideration Shares to be issued is (two hundred and thirty million, seven hundred and sixty-nine thousand, two hundred and thirty-one) shares; and Bauba Platinum will, by way of an ordinary dividend, distribute 50% of the net after tax profit emanating from the Excluded Rights. The remaining 50% will be retained in order to provide for re-investment in exploration of the Bauba Platinum s PGE asset and to pay Discovery Drilling. Any dividend amount due to the Bapedi Nation will first be reduced by any loan due. The conditions precedent to the Acquisition are: The granting of a mining permit by the Department of Mineral Resources over the Excluded Rights within one year of the Signature Date, or such later date as the parties may in writing agree; and Bauba Platinum shareholders passing in general meeting such resolutions as may be necessary for the Acquisition to proceed and Bauba Platinum submitting written proof thereof to the Vendors within 130 days of the Signature Date. The 2010 Claw Back and the issue of the Houtbosch Payment Shares were linked to the outcome of a review application brought by the Applicant. On 30 September 2010, the Applicant launched a review application in the Northern Gauteng High Court against a decision of the Department of Mineral Resources to grant the prospecting rights in respect of two farms, namely Genokakop 285KT and Groot Vygenboom 284KT, to Bauba A Hlabirwa. The Applicant claims that they held an unused old order right over the farms mentioned. No prospecting or mining was conducted immediately before the MPRDA came into effect. The prospecting rights over the farms were applied for under the MPRDA and awarded to Thulare Rhyne Thulare on behalf of the Bapedi Nation who ceded these prospecting rights to Bauba A Hlabirwa. 28

31 In terms of the 2010 Claw Back, if any one or all of the prospecting rights in the Southern Cluster are at any time after the date of signature of the 2010 Agreement revoked by any requisite authority or cancelled in terms of a valid court order, and if the revocation or cancellation of any of the prospecting rights in the Southern Cluster is not overturned and all remedies of the Holder or its successor in title have been exhausted, including all appeals, reviews, administrative steps, new applications in respect of the prospecting rights in the Southern Cluster to the DMR and any appeals, reviews or administrative steps in respect thereof, and all court applications concluded with no further appeals or reviews possible, so as there is no prospect of the Holder retaining on acquiring afresh or any basis the prospecting rights in the Southern Cluster or any of them, then such number of claw back shares will be returned to Bauba by the Vendors for cancellation. Subsequent to the lodgement of the review application, the Holder applied for the renewal of the Prospecting Rights in 2011, which was granted on 18 July 2012 for a further three years. The Holder also approached the DMR to have the farm Houtbosch 323KT notarially executed, which consent was granted and the application lodged. Following the renewal having been granted, Bauba took advice from senior counsel on this matter and was informed that Bauba has a strong case in this instance and the judicial system should find in the Company s favour. As a result of this advice and the fact that the Applicant had not substantially advanced the matter, the Holder has requested that the Northern Gauteng High Court set this matter down. The Holder furthermore held meetings with the DMR and, with the DMR s consent, submitted an application for the farm Houtbosch 323KT to be notarially executed and added to the Holder s prospecting rights under prospecting right MPTO 256/2006. In addition the DMR has subsequently awarded a mining right to the holders of prospecting rights on adjacent farms which were also cited in the same review application. Accordingly the Board is of the opinion that the conditions that necessitated the 2010 Claw Back and the restriction on the issue of the Houtbosch Payment Shares have sufficiently been alleviated to justify the cancellation of the 2010 Claw Back and the issue of the Houtbosch Payment Shares. Fairness opinion requirement In order for the shareholders of Bauba Platinum to apply their minds to the Transaction, Venmyn Deloitte is providing a statement confirming whether the Transaction is fair insofar as the shareholders of Bauba Platinum (excluding the Related Parties) are concerned. In the case of mineral assets, Venmyn Deloitte will essentially consider the difference between the fundamental or intrinsic value of Bauba Platinum s PGE assets and the Excluded Rights, together with adjustments for the balance sheet values pre-transaction, and post-transaction relative to the market value (price) as measured by the Bauba Platinum share price. The market value is the amount determined on the basis of a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently and without compulsion. In this instance, the trading value of the Bauba Platinum shares. The intrinsic value represents the value of the PGE and chrome mineral assets together with adjustments for the balance sheet values to account for the value-in-use of the fixed property, plant and equipment as well as the net environmental liabilities, debt and cash, as at 30 June In this case the intrinsic value is the same as the fair value. Responsibility Compliance with section 10 of the JSE Listings Requirements is the responsibility of the Board of Bauba Platinum. Our responsibility is to report to the Board on the fairness of the terms and conditions of the Transaction. Explanation as to how the term fair applies in the context of the Transaction It should be noted that Schedule 5.7 of the JSE Listings Requirements states that the fairness of a transaction should be based on the quantitative issues of the proposed transaction. Consequently, Venmyn Deloitte reviewed the fairness of the terms and conditions of the Transaction where the term fairness was based upon quantitative issues. Broadly speaking, the Transaction would be considered fair to the shareholders of Bauba Platinum (excluding any Related Parties) if: the pre-transaction fair value of the shares of Bauba Platinum is less than or equal to the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum; and the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum, using the conditions set out in the Transaction agreement, is greater than or equal to the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum, using the market value of the shares of Bauba Platinum as the price of the Consideration Shares and also using the post Mining Right fair value of the Excluded Rights as the Transaction Consideration. The transaction would be considered unfair to the shareholders of Bauba Platinum (excluding any Related Parties) if: the pre-transaction fair value of the shares of Bauba Platinum is greater than the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum; and the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum, using the conditions set out in the Transaction agreement, is less than the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum, using the market value of the shares of Bauba Platinum as the price of the Consideration Shares and also using the post Mining Right fair value of the Excluded Rights as the Transaction Consideration. Details and sources of information In arriving at our opinion we have been supplied with extensive Company information of both a technical and financial nature from Bauba Platinum and the Vendors. Therefore, in broad terms, we have relied upon, but were not restricted to the following principal sources of information: audited financial statements of Bauba Platinum and its subsidiaries for the year ended 30 June 2013 and unaudited results for the period ended 30 June 2014; Bauba Platinum s Annual Reports for the years ended 30 June 2012 and 30 June 2013; the Acquisition Agreement between the Vendors and Bauba Platinum, dated 16 May 2014, outlining the terms and conditions of the proposed Transaction; the mineral asset valuation conducted by Venmyn Deloitte independent of this Fairness Opinion 1 March The team members involved in this Fairness Opinion have not been involved in the preparation and sign-off of the mineral asset valuation; the Competent Person s Report ( CPR ) on Bauba Platinum s mineral assets prepared by Venmyn Deloitte with an effective date of 1 December The team members involved in this Fairness Opinion have not been involved in the preparation and sign-off of the CPR; 29

32 management forecasts and estimates for the future; the historical exploration expenditures; information of a technical nature relating to both the PGE and chrome assets including mineral resource statements; information demonstrating the legal and mineral tenure of the Excluded Rights; cash flow forecasts of the open-cast chrome operations prepared by the management of Bauba Platinum; publicly available information relating to the mining sector; and publicly available information relating to Bauba Platinum and the Excluded Rights that we deemed to be relevant, including Company announcements and media articles. The information above was sourced from: directors and management of Bauba Platinum and their advisers; and third party sources, insofar as such information related to publicly available economic, market and other data applicable to or potentially influencing Bauba Platinum. Assumptions We arrived at our opinion based on the following assumptions: that the legal status of Bauba Platinum s mineral rights and statutory obligations were fairly stated; that the legal status of the Excluded Rights and statutory obligations were fairly stated; that the corporate structure and ongoing activities were fairly presented; that reliance can be placed on the audited financial statements of Bauba Platinum; that reliance can be placed on Mineral Resource and Reserve Statements in respect of Bauba Platinum s underlying operations; and that reliance can be placed on the technical information on both the PGE and chrome properties. Venmyn Deloitte made due enquiry into these issues to be satisfied of the potential impact on the Bauba Platinum corporate valuation as well as on the valuation of the Excluded Rights. Appropriateness and reasonableness of underlying information and assumptions We satisfied ourselves as to the appropriateness and reasonableness of the information and assumptions employed in arriving at our opinion by: placing reliance on audit reports in the financial statements of Bauba Platinum; assessing and placing reliance on the mineral asset valuation conducted by Venmyn Deloitte, dated 1 March The valuations were conducted for both the PGE assets currently owned by Bauba Platinum and the Excluded Rights. We have reviewed the mineral asset valuation and we confirm that we are satisfied with it; assessing the Chrome Ore Supply Agreement in place between Bauba Platinum and a confidential but well-established ferrochrome producer in South Africa; assessing historical performances from management accounts and evaluating future production forecasts; assessing the historical and recent exploration activities and the appropriateness thereof; assessing, to our satisfaction, and placing reliance on the CPR completed by Venmyn Deloitte, dated 1 March 2014; review of Mineral Resource and Reserve Statements in respect of Bauba Platinum s mineral assets; and determining the extent to which representations from management of Bauba Platinum was confirmed by documentary evidence as well as our understanding of the Company and the PGE and chrome industry environment in which it operates. Going Concern The going concern assumption is the assumption that an entity will continue to operate for the foreseeable future and that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. Where there is a reasonable expectation that a company will be unable to meet its current obligations as they become due, the going concern assumption may not apply. As is common with many junior mining companies, Bauba Platinum raises capital for exploration and other projects as and when required. Bauba Platinum has recently concluded a subscription agreement, dated 18 December 2013, whereby shares were issued at a total consideration of ZAR2,5 million. This addresses the short-term cash needs of the business. It is the intention that, when the Transaction is executed, the chrome operation will be self-sustaining and will generate sufficient cash to cater for the medium- to long-term liquidity needs of Bauba Platinum post-transaction. Consequently, the continued applicability of the going concern assumption to Bauba Platinum is justified. However, there can be no assurance that the Company s projects will be fully developed in accordance with current plans or completed on time or to budget. Future work on the development of these projects may be adversely affected by factors outside of Bauba Platinum s control. 30

33 Limiting conditions This opinion is provided to the Board of Bauba Platinum in connection with and for the purposes of the Transaction that has been outlined above. The Opinion does not purport to cater for each individual shareholder s perspective, but rather that of the general body of Bauba Platinum shareholders. An individual shareholder s decision as to whether to grant approval to the Transaction may be influenced by his particular circumstances. Accordingly, shareholders should consult an independent adviser if in any doubt as to the merits or otherwise of the Transaction. The assessment as to whether or not the Board decide to recommend the Transaction is a decision that can only be taken by the Board. We have relied upon and assumed the accuracy of the information provided to us in deriving our opinion. Where practical, we have corroborated the reasonableness of the information provided to us for the purpose of our opinion, whether in writing or obtained in discussion with management of Bauba Platinum, by reference to publicly available or independently obtained information. While our work has involved an analysis of, inter alia, the annual financial statements, and other information provided to us, our engagement does not constitute an audit conducted in accordance with generally accepted auditing standards. Where relevant, forward-looking information on Bauba Platinum relates to future events and is based on assumptions that may or may not remain valid for the whole of the forecast period. Consequently, such information cannot be relied upon to the same extent as that derived from audited financial statements for completed accounting periods. We express no opinion as to how closely the actual future results of Bauba Platinum will correspond to those projected. Where practical, we have compared the forecast financial information to past trends as well as discussing the assumptions inherent therein with the management of Bauba Platinum. Our opinion is based on current economic, regulatory, market as well as other conditions. Subsequent developments may affect this opinion, and we are under no obligation to update, review or re-affirm our opinion based on such developments. Independence and competence In terms of Section 10(f) and Schedule 5 of the JSE Listings Requirements, Venmyn Deloitte is an Independent Expert and is competent to act in respect of the Transaction. Venmyn Deloitte will be paid advisory fees of ZAR for this Opinion (excluding VAT and excluding expenses). Furthermore, we confirm that our professional fees are not contingent upon the successful implementation of the Transaction. Furthermore, as per Section 10(f) and Schedule 5 of the JSE Listings Requirements we confirm that Venmyn Deloitte has no direct or indirect interest in Bauba Platinum shares or the Transaction and no relationship exists between or among Bauba Platinum, the Vendors and/or Venmyn Deloitte. We also confirm in terms of Section 10(f) and Schedule 5 of the JSE Listings Requirements that we are independent and have the necessary qualifications and competence to provide a fairness opinion on the Transaction. VALUATION The authors of this Fairness Opinion, although fully competent in the valuation of mineral assets, have not conducted the latest mineral asset valuations of either the PGE assets of Bauba Platinum or the chrome asset ( the Excluded Rights ) belonging to the Vendors. The valuation of these mineral assets, dated 1 March 2014, was independently conducted by other staff members of Venmyn Deloitte who, in their own right, are competent to perform such work, as required by the SAMVAL Code. However, in keeping with our professional duty, we have taken all reasonable steps to ensure that the mineral asset valuation, which will form the basis of the fair value of Bauba Platinum pre- and post-transaction and consequently, our Opinion, is compliant with the SAMVAL Code. To this end, the authors of this Fairness Opinion carefully scrutinised the mineral asset valuation of both the PGE and chrome assets with the intention to satisfy ourselves that the valuation complied with the following: took into account all material information; that it is reasonable and robust; that it incorporated the mineral resources and mineral reserves prepared under the supervision of a Competent Person; and that the valuation was conducted in accordance with the SAMVAL Code. This was achieved by interviewing the experts responsible for the valuation of the PGE and Excluded Rights. Detailed step-by-step explanations were presented to the authors of this Fairness Opinion to provide sufficient clarity regarding the methodologies used and the results thereof. We can confirm that we are satisfied with the valuation results. From the outset, it must be noted that the strict definition of an asset is taken from the International Financial Reporting Standards ( IFRS ) which states that an asset is a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow. Therefore, if a Prospecting or Mining Right has not been granted and notarially executed, or has expired, the definition of an asset is not met and therefore, the value is deemed to be zero. For the purposes of mineral asset valuation, special circumstances exist with respect to the appreciation of the Mineral Resources that are the primary assets of the Company and are of a wasting nature over time. Generally these resources are also located in the ground and are not immediately obvious in quality and quantity. It is for this reason that qualified experts in technical analysis and valuation are required to assess the reasonable prospects for eventual economic extraction which is the primary objective of a mineral and mining company. Essentially, Bauba Platinum owns a 60% stake in one PGE asset, which comprises the Northern Cluster, the Central Cluster and the Southern Cluster. This project is still in the pre-development stage and requires further expenditure to develop it and take it up the value curve. 31

34 This is one of the conditions of the Transaction whereby post-transaction, Bauba Platinum will, by way of an ordinary dividend, distribute 50% of the net after tax profit emanating from the Excluded Rights. The remaining 50% will be retained in order to provide for re-investment in exploration of the Bauba Platinum s PGE asset. Bauba Platinum s long-term strategic position with respect to its existing PGE rights has been presented through the public disclosure of the technical and value merits of its prospective geology. These rights clearly border a number of existing PGE operations and the Company continues to explore synergies cooperation and linkages with its neighbours. In accordance with the SAMVAL Code, this project was valued using the Market Approach and the results are shown in Table 1. Table 1: Results of the mineral asset valuation exercise Bauba Platinum s PGE assets Cluster 4E In-situ pge value Cluster value* Bauba attributable value** Lower Upper Mean Lower Upper Mean Lower Upper Mean Moz USD/oz USD/oz USD/oz ZARm ZARm ZARm ZARm ZARm ZARm Exploration results Northern Cluster 71,24 0,01 0,05 0,03 7,65 38,26 22,96 4,59 22,96 13,77 Central Cluster 19,71 0,01 0,05 0,03 2,12 10,59 6,35 1,27 6,35 3,81 Southern Cluster 18,93 0,01 0,05 0,03 2,03 10,17 6,10 1,22 6,10 3,66 Sub-total 109,88 0,01 0,05 0,03 11,80 59,01 35,41 7,08 35,41 21,25 Inferred mineral resource Northern Cluster 9,76 0,25 0,75 0,50 26,21 78,62 52,41 15,72 47,17 31,45 Southern Cluster 7,46 0,25 0,75 0,50 20,03 60,10 40,07 12,02 36,06 24,04 Sub-total 17,22 0,25 0,75 0,50 46,24 138,72 92,48 27,74 83,23 55,49 Total 127,09 0,04 0,14 0,09 58,04 197,73 127,89 34,83 118,64 76,73 * ZAR:USD Exchange Rate used is 10,74. ** Bauba Platinum owns 60% of the legal entity that holds the prospecting rights. Note: Although the farm Houtbosch 323KT is part of the Southern Cluster, it has been valued at zero due to its early stage nature of development and the value given represents the value derived for the farms Genokakop 285KT and Groot Vygenboom 284KT. The properties comprising the Excluded Rights have already been discussed earlier in this report. Whilst these are still at the pre-development stage, their proximity to surface makes them amenable to open-cast mining. Bauba Platinum management has actively explored the commercial potential for the development of a shallow open-cast chrome mine and engaged local ferrochrome producer with whom an offtake agreement which Venmyn Deloitte has had sight of, has already been signed. This gives management the confidence, through a preliminary economic assessment, to proceed with this transaction and the registering of the rights to obtain bulk samples. The development work is proceeding and the Company intends using all means at its disposal to mine chromite profitably within the near future by applying for a mining right. In keeping with the requirements of the SAMVAL Code, the current value of the Excluded Rights (pre Mining Right) was calculated using the Market Approach, using the USD/km 2 variation of this Approach due to the absence of a SAMREC compliant Mineral Resource Statement on the Excluded Rights and the results are shown in Table 2. Table 2: Results of the mineral asset valuation exercise Excluded Rights (pre Mining Right) Area Unit value usd/km 2 Project value usdm Project value (100% attr) zarm* Project value (Babuba attr) ha km 2 LOWER UPPER LOWER UPPER LOWER UPPER MEAN ZARm** 2 270,93 22,71 218, ,405 4,95 5,35 53,22 57,43 55,33 33,20 * ZAR:USD Exchange Rate used is 110,74. ** Bauba attributable value is 60% of the total project value. The summary results of the mineral asset valuation are presented in Table 3. Table 3: Summary results of the mineral asset valuation exercise Asset Project value ZARm PGEs Chrome (the Excluded Rights) (pre Mining Right) Northern and Central Cluster 49,03 Southern Cluster Genokakop 285KT and Groot Vygenboom 284KT 27,70 Southern Cluster Houtbosch 323KT 0,00 Sub-total 76,73 Moeijelijk 412KS 33,20 Waterkop 113KT 0,00 Sub-total 33,20 Total 109,93 However, given that the granting of a Mining Permit is a condition precedent to the Acquisition, Venmyn Deloitte considers that it is not appropriate to use the value of the Excluded Rights as shown in Table 2 to assess the fairness of the Transaction as that value represents a pre Mining Right value. Therefore, to complete our assignment, we have assessed the management s view of the value of the Excluded Rights post the granting of the Mining Permit (post Mining Right value). A Discounted Cash Flow ( DCF ) model was provided to the authors of this Fairness Opinion by the management of Bauba Platinum for scrutiny. Venmyn Deloitte has satisfied itself that the views, technical assumptions and the economic assumptions presented in the DCF model are realistic, reasonable and represent the business case of the Excluded Rights post Mining Right as accurately as possible. 32

35 The DCF model input assumptions and results have been presented in Table 4. Table 4: DCF model input assumptions and results Description Value Units Production profile Chrome ROM (over life of mine) 1,35 Mt Average grade (over life of mine) 39% % Cr 2 O 3 Mine call factor 98% % Average chrome grade for pricing purposes 38% % Cr 2 O 3 Purchase Price 655 ZAR/t product Mining ROM (30) ZAR/t ROM Mining Overburden (188) ZAR/t ROM Operating expenditure Rehabilitation (9) ZAR/t ROM P&G (17) ZAR/t ROM Pit services (13) ZAR/t ROM Contingency, Management, DMR etc (50) ZAR/t ROM Capex requirements* Mining 0 ZAR million Processing 0 ZAR million Corporate tax rate 28% % Exchange rate 10,06 ZAR:USD DMR royalty rate (maximum) 7% % Discount rate 14% % NPV (100% attributable) 209,11 ZAR million NPV (60% Bauba Platinum attributable) 125,47 ZAR million * No capital expenditure will be incurred by Bauba Platinum as Bauba Platinum will engage the services of a mining contractor who will provide all mining equipment. No washing plant will be installed as the ROM is sold as is. A sensitivity analysis was conducted on the DCF model and the results showed that the project economics are robust, with the highest degree of sensitivity being due to factors affecting income such as price and exchange rate as shown in Figure 1. Figure 1: DCF sensitivity analysis Note: The exchange rate has the same sensitivity on the NPV as the chrome price. Other issues that affect the valuation of Bauba Platinum and the Excluded Rights that were considered included, but were not restricted to, the following: The level of development of the PGE and chrome assets; The effect of PGE and chrome prices on the value of the PGE and chrome mineral assets respectively; and The political and economic climate in South Africa. 33

36 The calculation of the Net Enterprise Value (Net Asset Value) of Bauba Platinum (pre- and post-transaction) has been based on an aggregation of the value quantities for: the value as derived for each of the individual mineral assets using the various valuation methods; the issuing of the Consideration Shares; the issuing of Houtbosch shares; and Bauba Platinum s balance sheet adjustments to account for the value-in-use of the fixed property, plant and equipment as well as the net debt and cash as at 30 June The balance sheet as at 30 June 2014 (actual and adjusted by Venmyn Deloitte for use in net asset value calculation) is shown in Table 5. Table 5: Bauba Platinum balance sheet as at 30 June 2014 Description Pre-transaction Actual ZAR million Adjusted ZAR million Post-transaction Pseudoactual ZAR million Adjusted ZAR million Assets Equity and liabilities Intangible assets 25,04 0,00 188,81 0,00 Non-current assets Property, plant and equipment 0,29 0,00 0,29 0,00 Total non-current assets 25,32 0,00 189,09 0,00 Trade and other receivables 0,17 0,17 0,17 0,17 Current assets Cash and cash equivalents 0,92 0,92 (1,09) (1,09) Total current assets 1,08 1,08 (0,92) (0,92) Total assets 26,40 1,08 188,18 (0,92) Issued capital (127,06) 0,00 (288,84) 0,00 Share premium (274,53) 0,00 (274,53) 0,00 Equity Reverse asset acquisition reserve 282,99 0,00 282,99 0,00 Retained (loss) 91,14 0,00 91,14 0,00 Non-controlling interest 5,42 0,00 5,42 0,00 Total equity (22,05) 0,00 (183,82) 0,00 Current liabilities Trade and other payables (4,35) (4,35) (4,35) (4,35) Total current liabilities (4,35) (4,35) (4,35) (4,35) Total equity and liabilities (26,40) (4,35) (188,18) (4,35) Net 0,00 (3,27) 0,00 (5,27) An assessment of the volume-weighted average price (VWAP) of Bauba Platinum shares at various time intervals from 30 June 2014 is shown in Table 6. Table 6: Bauba Platinum share price analysis Spot 30 day VWAP 60 day VWAP 90 day VWAP 180 day VWAP Units 55,00 57,62 58,29 62,20 68,24 ZA cent 0,55 0,58 0,58 0,62 0,68 ZAR As part of analysing the total shareholding pre- and post-transaction, an analysis has been conducted as follows: Using the terms and conditions as set out in the Transaction agreement; and Using the scenario whereby Bauba Platinum purchases the Excluded Rights from the Vendors at their undisclosed post Mining Right fair value and not for ZAR150 million and also settling the Transaction Consideration by issuing the Consideration Shares at spot (30 June 2014), 30 day VWAP, 60 day VWAP, 90 day VWAP and 180 day VWAP share prices (outlined in Table 6), and not at ZAR0,65 as set out in the Transaction agreement; and Using the scenario whereby Bauba Platinum purchases the Excluded Rights from the Vendors at their pre Mining Right fair value of ZAR116,77 million (as outlined in Table 2) and not for ZAR150 million and also settling the Transaction Consideration by issuing the Consideration Shares at spot (30 June 2014), 30 day VWAP, 60 day VWAP, 90 day VWAP and 180 day VWAP share prices (outlined in Table 6), and not at ZAR0,65 as set out in the Acquisition Agreement. It must be understood that the analysis of Fairness using the pre Mining Right is for comparative purposes only. The Acquisition is only deemed complete when the Mining Right is granted within one year of the Signature Date of the Acquisition Agreement (as a condition precedent), upon which the value of the Excluded Rights increases to the post Mining Right value as shown in Table 4 and at which point the valuation can be undertaken using the DCF approach. As mentioned above, Venmyn Deloitte has reviewed the DCF model provided by the management of Bauba Platinum and considers the model to be robust and to represent the business case of the Excluded Rights, post Mining Right, accurately. Consequently, the Fairness of the Transaction has been assessed using the post Mining Right fair value derived from the DCF model (and presented in Table 4), and not from the market valuation provided in Table 2. The results of this analysis are shown in Table 7. The summary net asset value analysis, as well as the quantitative analysis of whether or not the Transaction is fair to the shareholders of Bauba Platinum (excluding any Related Parties), is set out in Table 8. It is evident that the Transaction (post Mining Right) is value-accretive to the shareholders of Bauba Platinum and in accordance with the explanations given earlier in this report on how the term fair applies in the context of the Transaction, Venmyn Deloitte considers that the Transaction is fair to the shareholders of Bauba Platinum (excluding any Related Parties) under all circumstances considered in this Fairness Opinion. The exercise above was undertaken solely in respect of the Fairness Opinion and should not be used for any other purposes save that Venmyn Deloitte hereby consents that this Fairness Opinion be included in whole or in part in any required regulatory announcement or documentation. 34

37 Procedures In arriving at our opinion we have undertaken the following procedures and taken into account the following factors in evaluating the fairness of the Transaction: considered that the spot share price of Bauba Platinum Shares on the JSE is ZAR0,55 as at 30 June 2014; considered that the 30 day VWAP share price of Bauba Platinum Shares on the JSE is ZAR0,58; considered that the 60 day VWAP share price of Bauba Platinum Shares on the JSE is ZAR0,58; considered that the 90 day VWAP share price of Bauba Platinum Shares on the JSE is ZAR0,62; considered that the 180 day VWAP share price of Bauba Platinum Shares on the JSE is ZAR0,68; considered that the value of the Transaction Consideration is ZAR150 million; considered that the Consideration Shares amount to at ZAR0,65 per share; considered the Houtbosch shares amounting to shares; reviewed the audited and unaudited financial information related to Bauba Platinum as detailed above; reviewed Mineral Resources and Reserves Statements in respect of Bauba Platinum s underlying mineral assets; held discussions with certain directors and management of Bauba Platinum and considered such other matters as we consider necessary, including assessing the prevailing economic and market conditions and trends; evaluated, to our satisfaction, the 1 March 2014 mineral asset valuation conducted on Bauba Platinum s PGE assets and on the Excluded Rights for reasonableness. The outputs were consolidated into the valuation table shown as Table 3; the DCF model on the Excluded Rights provided by the management of Bauba Platinum; the Chrome Ore Supply Agreement between Bauba Platinum and a local ferrochrome producer; assessed comparable transactions based on the characteristics of each mineral asset; evaluated the relative risks associated with Bau0ba Platinum and the industry in which it operates; reviewed the nature of the PGE mineral assets of Bauba Platinum; reviewed the nature of the Excluded Rights; reviewed certain publicly available information relating to Bauba Platinum that we deemed to be relevant; and where relevant, representations made by management and/or directors were corroborated to source documents to examine and understand the industry in which Bauba Platinum operates, and to analyse external factors that could influence the business of Bauba Platinum. Table 7: Shareholding analysis of Bauba Platinum Phase Transaction Pretransaction Posttransaction Description Value Transaction Spot 30 day VWAP 60 day VWAP 90 day VWAP 180 day VWAP Units Shares in issue share Vendors shareholding share Vendors shareholding 53,57% 53,57% 53,57% 53,57% 53,57% 53,57% % Price of Excluded Rights paid by Bauba Platinum to Vendors ( Transaction Consideration ) ZAR million Share price 0,65 0,55 0,58 0,58 0,62 0,68 ZAR/share New shares for Excluded Rights ( Consideration Shares ) issued to Vendors by Bauba Platinum share Houtbosch shares issued to Vendors by Bauba Platinum share New shares issued to Vendors by Bauba Platinum during the Transaction share Shares in issue share Vendors shareholding share Vendors shareholding 84,44% 82,06% 81,60% 81,49% 80,85% 79,92% % 35

38 Table 8: Net asset value (fair value) calculation of Bauba Platinum and quantitative analysis of the fairness of the Transaction Post-transaction Description Pretransaction Agreement (pre Mining Right) Agreement (post Mining Right) Spot 30 day VWAP 60 day VWAP 90 day VWAP 180 day VWAP Units Mineral assets 76,73 109,93 266,40 266,40 266,40 266,40 266,40 266,40 ZARm Adjustment for balance sheet items (3,27) (5,27) (5,27) (5,27) (5,27) (5,27) (5,27) (5,27) ZARm Bauba Platinum net asset value 73,46 104,66 261,13 261,13 261,13 261,13 261,13 261,13 ZARm Issued shares share NAV per share 0,58 0,28 0,69 0,53 0,55 0,55 0,58 0,61 ZAR/share We have also considered the following conclusions as demonstrated by this Fairness Opinion after having applied to them the term fair in the context of the Transaction: The pre-transaction fair value of the shares of Bauba Platinum is less than or equal to the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum; and The post-transaction (post Mining Right) fair value of the shares of Bauba P latinum using the conditions set out in the Transaction agreement is greater than or equal to the post-transaction (post Mining Right) fair value of the shares of Bauba Platinum using the market value of the shares of Bauba Platinum as the price of the Consideration Shares and also using the post Mining Right fair value of the Excluded Rights as the Transaction Consideration. Opinion Venmyn Deloitte has considered the Transaction and based upon and subject to the conditions set out herein is of the opinion that the Transaction is fair to the shareholders of Bauba Platinum (excluding any Related Parties). Our opinion is necessarily based upon the information available to us up to 18 July 2014 (the Effective Date) and having avoided any cognisance of market and economic effects after 18 July 2014, including in respect of the financial information as well as other conditions and circumstances existing and disclosed to us. Accordingly it should be understood that subsequent developments may affect this opinion which we are under no obligation to update revise or re-affirm. Yours faithfully Venmyn Deloitte Proprietary Limited M Chirisa AN Clay BEng Hons (Chem Eng) MSc (Geol) MSc (Min Eng) Dip Bus. Cand Tech Eng MSAIMM MAusIMM Pr Sci Nat FAusIMM MSAIMM FGSSA MAIMA MSPE Senior Advisor Managing Director Signed on: 15 August 2014 Effective date: 15 August 2014 Venmyn Deloitte Proprietary Limited Deloitte Place Building 33 1st Floor The Woodlands 20 Woodlands Drive Woodmead 2052 South Africa 36

39 Annexure 4 INDEPENDENT COMPETENT PERSONS REPORT ON THE MOEIJELIJK CHROMITE MINERAL ASSET PREPARED FOR BAUBA PLATINUM LIMITED AN CLAY MSc (Geol), MSc (MinEng), DipBusMan, PrSciNat, MSAIMM, FAusIMM, FGSSA, MAIMA, MSPE, MInstD Managing Director Competent Person TC ORFORD BSc Hons (Geol), GDE (MinEng), MGSSA, MGASA, MMINSA. Mineral Project Analyst JA MYBURGH BSc (Mathematics), MIASSA, MGASA Mineral Project Analyst K MPHAHLELE BSc Hons (Geol), PrSciNat, MGSSA Mineral Industry Advisor S DYKE MSc (EnvSci), CandSciNat, MIAIASA, MGSSA, MIAIASA Environmental Industry Advisor Reference number: VMD1582R v6 Effective date: 1 March 2014 [SR1.1A(ii); JSE12.9a] Final report date: 19 August 2014 SYNOPSIS SR1.1A(II)(III); SR1.2A(I); SV2.1 Bauba Platinum Limited (Bauba Platinum) is a platinum group metals (PGM) exploration company which holds a number of PGM projects in the Eastern Limb of the Bushveld Complex. It is Bauba Platinum s intention to acquire the Moeijelijk Chromite Project located in the Bushveld Complex of South Africa. The beneficial right to 60% of the Moeijelijk Chromite Project is held by Highland Trading Investments Limited, Danene Trust, Kumane Trust, Math-Pin Trust, Pimlico Investment Trust, and Hlabirwa (collectively, the Vendors). The directors of Bauba Platinum requested that Venmyn Deloitte Proprietary Limited (Venmyn Deloitte) prepare a Competent Persons Report (CPR) on a chromite asset in South Africa. It is understood that Bauba Platinum intends to purchase the chromite asset. Bauba Platinum is listed on the main board of the Johannesburg Stock Exchange (JSE). Venmyn Deloitte has undertaken an independent technical review of the mineral asset for Bauba Platinum, in order to identify all the factors of a technical nature that would influence the future viability of the Moeijelijk project. Venmyn Deloitte considered the strategic merits of the asset on an open and transparent basis. This CPR has been compiled in order to incorporate all currently available and material information that will enable potential investors to make a reasoned and balanced judgement regarding the economic merits of the chromite asset reviewed. The Moeijelijk Chromite Project is an early stage exploration project and consists of the farm Moeijelijk KS412. The farm covers an area of ha and is located on the R37 road between Burgersfort and Lebowakgomo, approximately 51km east of Lebowakgomo and approximately 57km northwest of Burgersfort in the Limpopo province of South Africa. The farm is approximately 72km southeast of the town of Polokwane and 58km north of Steelpoort as illustrated in the locality map to follow. This CPR has been prepared in compliance with the 2009 South African Code for Reporting of Mineral Resources and Mineral Reserves Code (SAMREC Code) and the 2009 South African Code for Reporting of Mineral Asset Valuation (SAMVAL) published under the joint auspices of the Southern African Institute of Mining and Metallurgy and the Geological Society of South Africa. This CPR details the early stage exploration completed on the Moeijelijk Project to date. Site visits have been conducted on a routine basis by the Moeijelijk Project Geologist Mr GPL van der Linde, including a site visit on 3 January The Moeijelijk Project is located in the northern regions of the Eastern Limb of the Bushveld Complex (BC), a world renowned. mafic-ultramafic layered intrusive, 2 060Ma in age and approximately 200km by 370km in extent. The BC comprises a set of interconnected intrusives that crystallised to form the three main layered mafic and ultramafic units known as the Rustenburg Layered Suite (RLS), the granites of the Lebowa Granite Suite (LGS) and the felsic extrusive of the Rashoop Granophyre Suite (RGS). The RLS comprises suites of mafic units that are consistently present throughout the BC and which host the target chromium, vanadium and nickel mineralisation. In general, the RLS comprises from the base upwards: the Marginal Zone; the Lower Zone; the Critical Zone; the Main Zone and the Upper Zone. The Moeijelijk Project is covered by recent sediments, with minimal outcrop of the underlying geology. The geology comprises essentially the pyroxenites of the Critical Zone, covered by recent sediments. The Critical Zone in the Moeijelijk Project area comprises well defined, and easy to correlate layers, which can be broadly sub-divided into the dunite, harzburgite, pyroxenite, norite, anorthosite and chromitite with both sharp and gradational contacts. Subtle variations in mineralogy result in leuco-cratic and melano-cratic variations of the medium grained intrusives and pegmatoidal pipes and segregations are known to occur in the surrounding regions. The target chromitite layers are confined to the Critical Zone and are sub-divided into Lower, Middle, and Upper Groups and the Moeijelijk Project focuses on the Lower Group (LG) chromitites, which occur within the pyroxenites of the lower critical zone (LCZ). The LG contains seven chromitite layers, and chromite mining in the region is typically focused on the LG-6 unit due to its favourable thickness and chemistry. The Moeijelijk Project focuses on the LG-6A, LG-6B and LG-6C layers, which are separated by pyroxenite partings and are referred together as the LG-6 Unit. The units dip typically 20 to the west and the average width of the LG-6 Unit is approximately 2,69m. The LG-6 B is the thickest chromitite layer with an average width of 1,29m. The pyroxenite parting betwenn the LG-6 A and the LG-6 B is typically less than 0,1m while the parting between the LG-6 B and the LG-6 C is thicker and varies between 0,51m and 1,16m. It should be noted that the exploration borehole information has been considered to be in a form that is insufficient to publicly declare a quantified SAMREC Code compliant maiden mineral resource. Therefore, many aspects of the SAMREC Code are not applicable in this report. Since additional scientific confidence has been considered to be required, only when this has been obtained will a resource be declared. 37

40 Venmyn Deloitte has independently compiled this CPR in terms of the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) as an independent review. The effective shareholdings of Bauba Platinum in the various assets are also presented in this table and in the associated corporate structure diagram is illustrated on page 39. The corporate structure also presents the companies in which the mineral asset is held. Venmyn Deloitte has conducted a valuation of the mineral assets in compliance with and to the extent required by the 2009 South African Mineral Asset Valuation Committee Code (SAMVAL Code), published under the joint auspices of the Southern African Institute of Mining and Metallurgy and the Geological Society of South Africa. This valuation aims to identify the attributable value of the asset by means of identifying the total asset value as at the effective date of this report. The asset has been valued according to its respective development stage by applying the applicable valuation methods. The mineral asset valuations have been based on exploration information available up to and including 1 March A summary of the results of these valuations is provided in the table to follow. The results of the Bauba valuations carried out by Venmyn Deloitte are given in the table below. Venmyn Deloitte used the Historic Cost Approach based on exploration expenditure provided by Bauba management, and the Market Approach based on a USD/km 2. Bauba Summary of valuation results Valuation method Lower ZARm Project value Upper ZARm Preferred ZARm Lower ZARm Bauba attributable value** Upper ZARm Preferred ZARm Cost approach 0,99 4,96 2,97 0,59 2,97 1,78 Market approach 55,39 59,76 57,57 33,23 35,86 34,54 **Based on 60% ownership of the licences. Location of the Moeijelijk Chromite Project in relation to the South African Bushveld Igneous Complex and major infrastructure 38

41 Bauba Platinum s Corporate Structure 39

42 Summary of Mineral asset details Project Farm name and number Total licence area ha Company holding rights Moeijelijk Moeijelijk 412KS 2 270,93* Bauba A Hlabirwa Mining Investments Proprietary Limited * Quoted as in the Prospecting Right Development status Early stage exploration Licence type Prospecting Right no. Mineral Prospecting LP30/5/1/1/2/390PRR Unspecified minerals with emphasis on PGM, vanadium ore, titanium ore, chrome ore, iron ore, and associated minerals and metals* Date issued Date of last renewal Expiry date SAMREC exploration target SAMREC mineral resource SAMREC mineral reserve 7 June July July

43 Disclaimer and Risks Venmyn Deloitte has authored this Competent Persons Report and, in so doing, has utilised information provided by Bauba Platinum and its contractors as to its operational methods and forecasts. Where possible, this information has been verified from independent sources with due enquiry in terms of all material issues that are a prerequisite to comply with the SAMREC and SAMVAL Codes. The authors of this Competent Persons Report are not qualified to provide extensive commentary on legal issues associated with Bauba Platinum s right to the mineral properties. Bauba Platinum has provided certain information, reports and data to Venmyn Deloitte in the preparation of this Competent Persons Report which, to the best of Bauba Platinum s knowledge and understanding, are complete, accurate and true and Bauba Platinum acknowledges that Venmyn Deloitte has relied on such information, reports and data in preparing this Competent Persons Report. No warranty or guarantee, be it express or implied, is made by the authors with respect to the completeness or accuracy of the legal aspects of this document. Operational Risks The businesses of mining and mineral exploration, development and production by their natures contain significant operational risks. The businesses depend upon, amongst other things, successful prospecting programmes and competent management. Profitability and asset values can be affected by unforeseen changes in operating circumstances and technical issues. Political and Economic Risks Factors such as political and industrial disruption, currency fluctuation, increased competition from other prospecting and mining rights holders and interest rates could have an impact on Bauba Platinum s future operations, and potential revenue streams can also be affected by these factors. The majority of these factors are, and will be, beyond the control of Bauba Platinum or any other operating entity. Forward-Looking Statements This report contains forward-looking statements. These forward-looking statements are based on the opinions and estimates of Venmyn Deloitte and Bauba Platinum at the date the statements were made. The statements are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those forward-looking statements anticipated by Venmyn Deloitte and Bauba Platinum. Factors that could cause such differences include changes in world platinum group metal markets, equity markets, costs and supply of materials, and regulatory changes. Although Venmyn Deloitte believes the expectations reflected in the forward-looking statements to be reasonable, Venmyn Deloitte does not guarantee future results, levels of activity, performance or achievements. 41

44 List of Contents SR1.1A(i) Page 1. Introduction Scope of the Opinion Statement of independence Reliance on other experts and sources of information Personal inspection Bauba Platinum s corporate structure Mineral assets Location and access Legal aspects Ownership Surface rights Royalties Environmental and social compliance status Material contracts Other legal issues Climate Topography Vegetation and Fauna Local resources Site infrastructure Roads Water and power supply Regional geological setting The Critical Zone Regional structure Local geological setting Deposit type and mineralisation Historical ownership Historical exploration and mining Recent exploration Mining Mineral processing Mineral Resource and Mineral Reserve Statement Environmental practices Environmental and social General disclosure Environmental and social permitting status Operational environmental management Operational social management Mine closure provision, closure planning and rehabilitation South Africa country profile Political and economic climate Minerals industry Legislative framework Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA) Mineral and Petroleum Resources Development Amendment Act 49 of Mineral and Petroleum Resources Development Draft Amendment Bill (2012) 65 42

45 Page Broad-Based Socio-Economic Charter Amendment of the Broad-Based Socio-Economic Empowerment Charter (2010) Promotion of Beneficiation Bill Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA) Institutional and administrative environmental and social regulatory structures Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 Noise Regulations) National Environmental Management Act (Act 107 of 1998) (NEMA) National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA) National Water Act (Act 36 of 1998) (NWA) National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA) National Heritage Resources Act (Act 25 of 1999) (NHRA) National Environmental Management Biodiversity Act (Act 10 of 2004) (NEMBA) Global chromite market review Global occurrence Ore processing Uses and applications Chromite supply Chrome ore prices Ferrochrome demand Ferrochrome supply Ferrochrome price Ferrochrome outlook Moeijelijk chromite market General mineral asset valuation approach Mineral asset valuation methodologies Cost approach Market approach General mineral asset valuation assumptions Mineral asset valuation Cost approach valuation Market approach valuation Valuation summary Valuation assumptions Previous valuations Audits, reviews and historic verification Adjacent properties Chrometco and Chromex Chromite Projects Sefateng Chromite Project Exploration programme and budget Risk analysis Conclusions Date and signatures 82 43

46 List of Figures SR1.1A(i) Page Figure 1: Bauba Platinum s corporate structure 50 Figure 2: Location of the Moeijelijk Chromite Project in relation to the South African Bushveld Complex and major infrastructure 51 Figure 3: Location of the Moeijelijk Project in relation to regional infrastructure and the adjacent chromite mines 52 Figure 4: Locality plan in relation to local infrastructure and legal tenure 53 Figure 5: Schematic regional geology 55 Figure 6: Local geological map 56 Figure 7: East-west sections over the Moeijelijk Project 57 Figure 8: Typical stratigraphic column and cross section 58 Figure 9: Photos of the Moeijelijk Project site 59 Figure 10: Global chromite resources 70 Figure 11: Chromite market material flow 71 Figure 12: Chrome ore and ferrochrome prices (August 2008 March 2013) 72 Figure 13: Project lifetime value and valuation methodology curve for mineral resource projects 77 Figure 14: Market valuation 78 44

47 List of Tables SR1.1A(i) Page Table 1: Summary of mineral asset details 49 Table 2: Stratigraphic Zones of the Rustenburg Layered Suite 54 Table 3: Environmental and social compliance status 60 Table 4: Types of rights applicable in South Africa 63 Table 5: Global chromite Mineral Resources and Mineral Reserves 69 Table 6: Global mine production 72 Table 7: South African chromite production in Table 8: Prospect exploration phase classification and the corresponding PEM 75 Table 9: Cost approach valuation results 76 Table 10: Market approach valuation results 79 Table 11: Bauba Summary of valuation results 80 45

48 List of AppendicesSR1.1A(i) Page Appendix 1: References 83 Appendix 2: Glossary and abbreviations 84 Appendix 3: Certificates of Competent Persons 86 46

49 1. Introduction SR1.1A(ii)(iii); SR1.2A(i); SV2.2; JSE12.9(a) Venmyn Deloitte Proprietary Limited (Venmyn Deloitte) was requested by Bauba Platinum Limited (Bauba Platinum) to compile and author an independent Competent Person s Report (CPR) on the Moeijelijk Chromite Asset (Moeijelijk Project) which is located in the northern regions of the Eastern Bushveld Complex (BC) of South Africa. Bauba Platinum s primary business objective is the exploration, evaluation and development of its platinum group metals (PGM) prospects situated within three prospective segments of the Eastern Limb of the Bushveld Complex. Bauba Platinum has been listed on the JSE Limited since September 2010 and is fully compliant with the requirements of the South African Mining Charter in terms of its Broad Based Economic Empowerment (BBEE) equity component. As part of its exploration project portfolio, Bauba Platinum is seeking to acquire a 60% shareholding in an eastern BC chromite asset which is currently wholly owned by a group of at least six different shareholders. Approximately 60% of the shareholders, collectively termed the vendors, are prepared to dispose of their shareholdings to Bauba Platinum. The CPR on the chromite asset, namely the Moeijelijk Project, is required by the JSE Limited as supporting technical documentation for this transaction which will be considered by the JSE Limited as a material and significant change to the Bauba Platinum holdings. The Moeijelijk Project CPR describes the historic and recent exploration data which has been prepared by Bauba Platinum in compliance with, and to the extent required by the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code). Venmyn Deloitte has undertaken an independent technical review of the technical information in order to identify all the factors that could influence the potential economic viability of the Moeijelijk project. Venmyn Deloitte considered the strategic merits of the Moeijelijk project on an open and transparent basis and provides an independent opinion as to whether or not all the scientific and technical information required to ensure the report is not misleading, has been disclosed. The Moeijelijk Project is classified as an early exploration project for which both historic and current exploration results are available. The Moeijelijk Project is located in the Limpopo province of South Africa as shown in Figure 1. The target horizon is the tabular, shallow dipping LG6 chromitite seam which is extensively mined in the eastern BC as illustrated in Figure 2 and for which comprehensive geological and mining information is available from numerous active mines in the area. The current owners of the Moeijelijk Project have not yet published a maiden Mineral Resource estimate and consequently full disclosure in terms of the SAMREC requirements is not possible. The requirement by the JSE Listings Requirement for a South African Code for the Reporting of Mineral Asset Valuation (SAMVAL Code) compliant valuation (Section 12.9 (f)) is possible as a valuation based on historic costs can be undertaken and a comparative value per hectare. The early exploration status of the Moeijelijk Project does not provide enough information to undertake a discounted cash flow analysis. However, the directors of Bauba Platinum have prepared an estimated cashflow based upon a potential of table agreements with a local smelter and by using a contract miner to produce chromite. 2. Scope of the Opinion SR1.1A(ii)(iii); SV2.2 Venmyn Deloitte has undertaken an independent technical review of the mineral asset for Bauba Platinum, in order to identify the factors of a technical nature that would influence the future of the Moeijelijk Project. Venmyn Deloitte considered the strategic merits of the Moeijelijk Project based upon its location in the prime chromite LG-6 area. This CPR has been compiled in order to incorporate currently available information that will enable potential investors to make a reasoned and balanced judgement regarding the potential of Moeijelijk. Venmyn Deloitte s professional advisers are Competent Persons as defined by the SAMREC Codes. Venmyn Deloitte s advisers are also internationally accredited. The Competent Persons involved in the preparation of this CPR are members in good standing with their respective professional institutions. The JORC, SAMREC, VALMIN and SAMVAL Codes are considered by Venmyn Deloitte to be a concise recognition of the best-practice due-diligence methods for these types of mineral projects and accord with the principles of open and transparent disclosure that are embodied in internationally accepted Codes for Corporate Governance. The work in this CPR has been based upon technical information that has been provided by Bauba Platinum and has been independently reviewed by Venmyn Deloitte, where possible. Venmyn Deloitte confirms that, to the best of its knowledge and having taken all reasonable care to ensure that such is the case, the information contained in the CPR is in accordance with the facts, contains no omission likely to affect its integrity. Venmyn Deloitte reserves the right to, but will not be obliged to, revise this report or sections therein, and conclusions thereto, if additional information becomes known to Venmyn Deloitte subsequent to the date of this report. It must be noted that this review does not form an assurance report in accordance with the International Auditing and Assurance Standards Board (IAASB) standards. 3. Statement of Independence SR1.1A(ii)(iii); SR8A(ii); SR9A(ii); SR11A(ii); SV2.2; SV2.14; JSE12.9(c)(e) This CPR has been prepared by Venmyn Deloitte, which is an independent advisory company. Its consultants have extensive experience in preparing Competent Persons, Technical Advisors and Valuation Reports for mining and exploration companies. Venmyn Deloitte s advisers writing this report have, collectively, more than 50 years of experience in the assessment and evaluation of chromite mining and exploration projects worldwide and are members in good standing of appropriate professional institutions. Neither Venmyn Deloitte nor its staff or subcontractors have, or have had, any interest in thi project capable of affecting their ability to give an unbiased opinion and, have not received, and will not receive, any pecuniary or other benefits in connection with this assignment, other than normal consulting fees. Neither Venmyn Deloitte nor any of its personnel involved in the preparation of this CPR have any material interest in Bauba Platinum. Venmyn Deloitte was remunerated a fixed fee amount for the preparation of this CPR, with no part of the fee contingent on the conclusions reached or the content. Competent Person (CP) Mr A Clay has the relevant and appropriate experience and independence to appraise the assets. Mr A Clay is considered a CP, having more than five years relevant experience in the assessment and evaluation of the types of exploration and mining properties discussed in this report. Mr A Clay can be considered a Competent Valuator as defined by the SAMVAL Code, by way of relevant education, qualifications and experience. Mr A Clay is responsible for the overall report. Competent Persons certificates are presented in Appendix 3. Venmyn Deloitte reserves the right to, but will not be obliged to, revise this report or sections therein, and conclusions thereto, if additional information becomes known to Venmyn Deloitte subsequent to the date of this report. The authors of this report are not qualified to provide extensive commentary on the legal issues associated with Bauba Platinum s and/or its subsidiaries right to the mineral properties. Venmyn Deloitte has obtained copies of the relevant mining and prospecting licences/authorisations, and these have been reviewed to the satisfaction of Venmyn Deloitte. No warranty or guarantee, be it express or implied, is made by the authors with respect to the completeness or accuracy of the legal aspects of this document. 47

50 4. Reliance on Other Experts and Sources of Information SR1.3A(ii); SV2.11; SV2.14 Venmyn Deloitte has not relied on any other experts during the preparation of this report. Venmyn Deloitte has based its review of Bauba Platinum s material chromite assets on information provided by Bauba Platinum and its subsidiary companies, along with technical reports by its contractors, associates and other relevant published data. A full list of all sources of information is provided in Appendix 1. Drafts of this CPR have been provided to Bauba Platinum, in order to identify and address any factual errors or omissions prior to finalisation. 5. Personal Inspection SV2.14 Site visits have been conducted on a routine basis by the Project Geologist, Mr GPL van der Linde, including a site visit on 3 January Mr Clay is familiar with the area, having worked on a number of LG-6 operations in the area. 6. Bauba Platinum s Corporate Structure In terms of the legal tenure sections of this report, specific reference is made to the associated subsidiary companies holding the various rights, as appropriate, and their relationship to Bauba Platinum as set out in the corporate structure. However, for ease of reference, and throughout the remainder of the CPR, references to Bauba Platinum should be understood to mean Bauba Platinum Limited and not Bauba A Hlabirwa Mining Investments Proprietary Limited (Hlabirwa) which is a subsidiary of Bauba Platinum. Bauba Platinum s corporate structure pre- and post-transaction, with respect to the chromite mineral assets to be discussed in this report, is presented in Figure Mineral Assets Bauba Platinum intends to acquire a chromite asset located in the Eastern Limb of the BC in South Africa (Figure 2). This asset includes a prospecting right in the early exploration phase. The mineral asset details are summarised in Table 1 and illustrated in Figure Location and Access SR1.2A(i); SR1.5A(i) Farm Moeijelijk KS412 covers an area of 2 271,4ha and is located on the R37 road between Burgersfort and Lebowakgomo, approximately 51km east of Lebowakgomo and approximately 57km northwest of Burgersfort in the Limpopo province of South Africa. The farm is approximately 72km southeast of the town of Polokwane and 58km north of Steelpoort as illustrated in Figure 4. The farm can be accessed from the east via the tarred R37 national road linking the town of Burgersfort and the Lebowakgomo township. 9. Legal Aspects SR1.2A(i); SR1.7A(i-iv); SR5.1A(i); SR5.2A(i); SV Ownership The Prospecting Right for the Moeijelijk Project is held by Bauba A Hlabirwa Mining Investments Proprietary Limited (Hlabirwa). Prospecting Right no. LP30/5/1/1/2/390PRR was granted to Hlabirwa on 7 June 2006 and was due to expire on 6 July 2011 but was renewed on 18 July The Prospecting Right expires on 17 July Bauba Platinum intends to purchase the Moeijelijk chromite asset of which 60% is held together with Hlabirwa by Highland Trading Investments Limited, Danene Trust, Kumane Trust, Math-Pin Trust, and Pimlico Investment Trust (collectively the Vendors). A summary of the Prospecting Right details is provided in Table 1. 48

51 9.2. Surface rights Bauba Platinum does not own surface rights to the Moeijelijk Project. Table 1: Summary of mineral asset details Project Farm name and number Total licence area ha Company holding rights Development status Moeijelijk Moeijelijk 412KS 2 270,93* Bauba A Hlabirwa Mining Investments Proprietary Limited Early stage exploration * Quoted as in the Prospecting Right Licence type Prospecting right no. Mineral Prospecting LP30/5/1/1/2/390PRR Unspecified minerals with emphasis on PGM, vanadium ore, titanium ore, chrome ore, iron ore, and associated minerals and metals* Date issued Date of last renewal Expiry date SAMREC exploration target SAMREC mineral resource SAMREC mineral reserve 7 June July July

52 Figure 1: Bauba Platinum s Corporate Structure 50

53 Figure 2: Location of the Moeijelijk Chromite Project in relation to the South African Bushveld Complex and major infrastructure 51

54 Figure 3: Location of the Moeijelijk project in relation to regional infrastructure and the adjacent chromite mines 52

55 Figure 4: Locality plan in relation to local infrastructure and legal tenure 9.3. Royalties There are no private royalties payable for the Moeijelijk Project. However, state royalties, as per the MPRRA (Section ), are payable Environmental and social compliance status Bauba Platinum s current environmental and social compliance requirements and status associated with the Moeijelijk Project are detailed in Section Material contracts Venmyn Deloitte is not aware of any material contracts pertaining to the Moeijelijk Project other than negotiations with a local FeCr smelter that wishes to purchase chromite. No details are available Other legal issues Venmyn Deloitte has not been made aware of any land claims, litigation or competing rights associated with the Moeijelijk Project. 10. CLIMATE SR1.6A(i) The climate of the area is typical of sub-tropical Highveld conditions, with warm humid summers (from September to April) ranging between 15 C and 38 C and cool dry winters (usually only June and July) ranging between 5 C and 22 C. The rainfall on escarpments is an annual average of 700mm compared to about 500mm in the valleys. Precipitation occurs mainly during the summer months from September to April, and occurs in the form of afternoon thunderstorms. The sudden downpours pose some risk of flooding in low-lying areas. Temperatures recorded at nearby town Steelpoort vary between 17,6 C and 30 C in January and 3,8 C to 21,6 C in July. Extremes of 40 and -2,3 C have also been recorded. The mostly moderate climate means that exploration and mining operations can be undertaken throughout the year, with no extraordinary measures required. 11. TOPOGRAPHYSR1.6A(i); SR1.6C(i) The Moeijelijk Project lies on the edge of a hill, with the majority of the property located within the valley floor at approximately 800mamsl. The valley floor is surrounded by mountains to the east and south, with the Brakfontein Peak situated in the southwest corner of the farm reaching a height of approximately 1 295mamsl. The mountains on the farm s eastern boundary reach a height of approximately 1 100mamsl. The elevation increases steadily from approximately 800m at the chromite sub-outcrop to 1 100m at the peak of the mountain to the east of the Moeijelijk Project area. 53

56 12. Vegetation and Fauna SR1.6A(i) The vegetation in the Moeijelijk Project area consists of sparsely distributed bushveld thornveld with grasses and a witgatwortelboom. The bushveld thornveld can be hampering. Several species of antelope are found in the area. Larger wildlife species occur only in the nature reserve and game farms in the area, whilst hares, gerbils and foxes are also found in the area. Birds are commonly found within the Moeijelijk Project area. 13. Local Resources The Bushveld Complex hosts some of the world s largest reserves of chromite and platinum group metals along with significant resources of iron, tin, chromium, titanium and vanadium. Numerous mines are currently exploiting these commodities within the vicinity of Moeijelijk. The well established mining industry in the area ensures that both skilled and unskilled labour is readily available from the surrounding towns of Lydenburg, Steelpoort, Burgersfort and Mokopane. In addition, the area will be well serviced due to good infrastructure and services in the surrounding mines and towns. 14. Site Infrastructure SR5.6C(i) The Moeijelijk Project is an exploration project and there is limited permanent infrastructure or equipment associated with activity on the property. The regional infrastructure is relatively good given the mining activities on numerous adjacent properties to the Moeijelijk Project area. All relevant logistics for the current activities have been considered Roads The main tarred R37 road linking Steelpoort and Burgersfort traverses the Moeijelijk Project from southeast to northwest. The Moeijelijk Project is accessible by gravel roads Water and power supply Water is transported to site as and when required and power is sourced from generators. More permanent water and power supply options will be investigated as part of any pre-feasibility studies that will be undertaken by the Moeijelijk Project as the Moeijelijk Project s development. 15. Regional Geological Setting SR1.2A(i); SR4.1A(i); SV2.5 The Moeijelijk Project is located on the northern part of the Eastern Limb of the BC. The Eastern Limb forms part of three layered mafic-ultramafic arcuate limbs, namely the Northern, Western and Eastern Limbs, which together form an ellipse in plan, approximately 200km by 370km in extent. The BC was intruded at approximately 2 060Ma into the Transvaal Supergroup sequence along the unconformity between the Magaliesburg quartzites and the overlying Rooiberg felsites. The total estimated area of the BC is km 2, approximately 55% of which is covered by younger formations. The BC comprises a set of interconnected intrusives that crystallised to form the layered mafic and ultramafic units known as the Rustenburg Layered Suite (RLS), the granites of the Lebowa Granite Suite (LGS) and the felsic extrusive of the Rashoop Granophyre Suite (RGS). The mafic RLS of the BC outcrop and can be divided into a number of units according to their representative gravity anomalies. The Steelpoort Fault is a major fault that runs approximately southwest-northeast through the Eastern Limb of the BC. The Steelpoort Fault has caused displacement locally as well as smaller scale associated faults. These faults have not materially impacted the Moeijelijk Project, which is located approximately 30km north of the fault. The RLS consists of remarkably consistent layering that can be connected over the extent of the BC and is the host of the chromium, vanadium and nickel mineralisation. The regional geology of the BC and stratigraphy of the RLS is illustrated in Figure 5 and Table 2, respectively. The target horizon for the Moeijelijk Project is the LG-6 chromitite layers. Table 2: Stratigraphic Zones of the Rustenburg Layered Suite Unit Width Dominant lithology Description Upper Zone Varies Gabbros with banded anorthosite and magnetite layers Main Zone 3 900m Norite, gabbro-norite, anorthosite and minor pyroxenite No chilled contact with the hanging wall rocks, which consist of rhyolites and granophyres. Comprises half of the RLS. Banding and layering not well developed. Critical Zone Upper Critical Zone (UCZ) 1 400m Layered pyroxenites, norites, anorthosites and chromitites The base of the UCZ is marked by cumulus plagioclase. Norites dominate the UCZ, with subordinate pyroxenites and anorthosites present at intervals through the sequence. Economic chromite mineralisation is hosted in the Upper Group (UG) and Middle Group (MG) chromitite layers. The MG series straddles the contact between the LCZ and UCZ, whereas the UG2 series occurs within the UCZ. Lower Critical Zone (LCZ) Pyroxenite inter-layered with hartzburgite and chromitite Economic chromite mineralisation is hosted in the Lower Group (LG) chromitite layers. The LG contains seven chromitite layers. This project considers LG-6 A, B and C. Lower Zone Varies, reaches a maximum of 1 700m Cyclically layered units of dunite-hartzburgite Thickness varies and thins over basement highs. The most complete exposure is in the northeastern part of the Eastern Limb of the RLS which occurs as a series of dunite-harzburgite cyclically layered units. Marginal Zone Several metres to hundreds of metres Unlayered, heterogeneous ultramafic rocks mostly norites Contamination of the basic magmas by the enclosing host rocks. Sedimentary rock fragments are contained as xenoliths in the lower portions. Exposures of this zone are poor. 54

57 15.1. The Critical Zone The Critical Zone contains generally well defined, and easy to correlate layers, which can be broadly sub-divided into the dunite, harzburgite, pyroxenite, norite, anorthosite and chromitite rock types. These layers have both sharp and gradational contacts and progress through subtle variations to produce leuco-cratic and melano-cratic variations of medium grained rocks. In places the rocks are pegmatoidal and can form pipes and segregations. Later dolerite dykes intruded into faults. Detail on the Critical Zone relevant to the Moeijelijk Project is included in the Section 16. The region has been extensively prospected in recent times; however, little exploitation is currently taking place. The Middle Group and the Upper Group (UG), which also occur within the upper critical zone, stratigraphically above the LG, are not present in the Moeijelijk Project area Regional structure Dykes of a Karoo to post-karoo age occur in the region generally trending north-south and showing a positive magnetic polarity. The dykes are commonly vertical to sub-vertical steeply dipping towards the east. Dolerite dykes tend to intrude along existing fault lines and structural zones of weakness. Faulting is generally minimal, although some dykes in the region have a throw of up to 65m. 16. Local geological setting SR1.2A(i); SR4.1A(i-iv); SV2.5 The Moeijelijk Project is located in the Eastern Limb of the BC. The Moeijelijk Project is covered by recent sediments, with minimal outcrop of the underlying geology. The geology comprises essentially the pyroxenites of the Critical Zone, covered by recent sediments. The more resistant Main Zone forms a steep hill to the southwest of the Moeijelijk Project as illustrated in Figure 6. Figure 5: Schematic regional geology 55

58 Figure 6: Local geological map The chromitite layers, the target horizons, are confined to the Critical Zone and are subdivided into Lower, Middle, and Upper groups and the Moeijelijk Project focuses on the Lower Group (LG) chromitites, which occur within the pyroxenites of the Lower Critical Zone (LCZ). The LG contains seven chromitite layers, the MG four, and the UG two layers in the western BC and three layers in the eastern BC. Chromite mining in the region is typically focused on the LG-6 unit due to its favourable thickness and chemistry. The Moeijelijk Project focuses on the LG-6A, LG-6B and LG-6C, together referred to as the LG-6 Unit in this report. The subcrop of the LG-6 Unit is developed to the southwest of the property and is subdivided into the LG-6A, LG-6B and LG-6C, as illustrated in Figure 7. The LG-6 Unit is separated by pyroxenite partings. The LG-6 Unit is typically continuous along strike and down dip, with minor variation in chromitite layer width. Average width of the LG-6 Unit is approximately 2,69m. The LG-6 B is the thickest chromitite layer with an average width of 1,29m. The pyroxenite parting between the LG-6 A and the LG-6 B is typically less than 0,1m while the parting between the LG-6 B and the LG-6 C is thicker and varies between 0,51m and 1,16m. Dip is typically 20 to the west. Flattening and steepening of dip associated with potholes may disrupt the chromitite in some areas. Pyroxenite lenses and partings are expected as they are common in the region, however no evidence for them has been found on the Moeijelijk Project area through the drilling completed. These partings tend to dilute the chromitite layers. The development of mafic pegmatites disrupts the reef thickness and may cause difficulties in mine support. Mafic pegmatites are found on a small scale throughout the area although they can reach up to 100m in diameter. These small scale pegmatites are intrusions that cut across layering, are generally related to late stage structures and may dilate the chromitite layers or cause downwarping of surrounding layers resulting in marginal synclines. Dolerite dykes occur throughout the Moeijelijk project, commonly along faults and joints. The faults are generally small scale. Faults, dykes and other structural features are generally not identifiable from surface due to cover obscuring outcrop Deposit type and mineralisation The LG-6 layers each consist of chromite spinel, orthopyroxenite and minor silicates. The quality of chromitite varies with depth. Shallow and outcropping chromitite is typically friable and produces fines. Below this weathered zone, chromitite tends to be less friable and can produce lumpy ore. The general stratigraphic column for the Moeijelijk Project is given in Figure HISTORICAL OWNERSHIP SR1.3A(i); SV2.4 No historical mining or associated activities have been conducted on the Moeijelijk Project prior to the current exploration work being conducted. No mining or exploration companies conducted any work on the Moeijelijk Project prior to acquisition of the prospecting right by the Vendors in

59 18. HISTORICAL EXPLORATION AND MINING SR2.3A(i); SR2.5A(i); SR1.3A(i)(ii); SR2.3B(ii); SV2.4 No historical mining has been documented on the Moeijelijk Project. The only documented historical exploration is for adjacent projects including two percussion boreholes that were drilled into the sub-outcrop area near the southern boundary of the farm. Both boreholes were drilled into the LG-6 chromitite unit on farm Zwartkoppies 413KS (The Sefateng Project). The borehole numbers are SKP27 and SKP29. Mr. NA Bleeker, the geologist that supervised the exploration on farm Zwartkoppies 413KS in 2007, also explained that an outcrop of the LG-6 A, B and C chromitite layers is found near the western boundary of Moeijelijk 412KS. All borehole information obtained from the exploration completed on Zwartkoppies 413KS in 2007 is available. A generalised 1: geological map is also available from the Council for Geoscience. Figure 7: East-West sections over the Moeijelijk Project 57

60 Figure 8: Typical stratigraphic column and cross section 58

61 19. RECENT EXPLORATION SR2.1A(i); SR2.3A(i); SR2.3B(i); SR2.5A(i) Recent exploration refers to all exploration carried out since the Moeijelijk Project was acquired by Hlabirwa, in An aeromagnetic survey and diamond drillhole and reverse circulation drilling programmes have been undertaken. The results of the combined geophysical and drilling campaigns will be consolidated into a geological model once the acquisition transaction has been completed. Bauba Platinum plans to report a maiden Mineral Resource shortly thereafter. Photos of the Moeijelijk project illustrate the typical site in Figure 9. Data is currently managed by the Project Geologist, GPL van der Linde, in Excel. The Project Geologist is responsible for acquisition, capturing, validation, control and backup of the databases. No detailed verification or QA/QC is provided as there is no Exploration Result or Mineral Resource. When the maiden Mineral Resource is reported upon, the relevant QA/QC and data management will be discussed in detail. The initial objective of drilling was to gain an indication of the outcrop position, basic structure, continuity and tonnage of the LG-6 chromitite unit. Hlabirwa completed a number of percussion boreholes, eight to intersect the LG-6 unit at a depth of 25m and eight to intersect the LG-6 unit at a depth of 50m. Digital terrain contours with 5m intervals that were recorded by Photogramentura during an aeromagnetic survey are also available. The 5m contours provided by Photogramentura were compared to the 5m contours provided by the office of the Surveyor General in Mowbray, Cape Town. The two sets of terrain information were in precise agreement with each other, although it appeared that the Photogramentura information was slightly more detailed. The digital terrain model was thus created using the information provided by Photogramentura and would serve as the basis for the 3-D geological model to be developed. The interpretation of the aeromagnetic survey was done by Campbell and Johnson of GAP Geophysics in Johannesburg. 20. MINING SR5.4A(i) There is no mine plan for the Moeijelijk Project. 21. MINERAL PROCESSING SR5.5A(i); SR5.6 No mineral processing activities are being carried out at Bauba Platinum due to the exploration phase nature of the Moeijelijk Project. Metallurgical testwork will form part of the advanced exploration programme. The results of the testwork programme will inform the selection of the preferred process route and plant description. 22. MINERAL RESOURCE AND MINERAL RESERVE STATEMENT No Mineral Resources or Mineral Reserves are declared for the Moeijelijk Project. No previous Mineral Resource or Mineral Reserves have been declared on the Moeijelijk Project. Therefore, this is not applicable. Figure 9: Photos of the Moeijelijk Project site 59

62 23. Environmental Practices SR5.2A(i) Bauba Platinum has an approved EMP, closure plan and financial provision, with associated compliance reporting conditions contained within the Prospecting Right. Performance assessment reports detailing compliance with EMP management practices and requirements, in addition to the financial provisions for closure and rehabilitation, are provided in the annual prospecting report submitted to the DMR Environmental and social General disclosure The following activities were undertaken in the performance of this CPR: A discussion with Bauba Platinum as to an overview of the current environmental and social compliance status (including management practices) for the Moeijelijk Chromite Project; and A review of all relevant documentation, inclusive of licences, internal and external audits, where available Environmental and social permitting status Table 3: Environmental and Social Compliance Status The environmental and social compliance status in relation to the South African legislative requirements for the Moeijelijk Chromite Project are summarised in Table 3. Act, regulation or by-law Requirements Sectional requirements Permitting requirements Current compliance status MPRDA, 2002 (Act 28 of 2002) An EMP must be approved in terms of Section 39(4) of the MPRDA as a prerequisite to the commencement of the mining/exploration permit. Sections 39(1) and (2) of the MPRDA require that all applicants for reconnaissance permissions, prospecting rights or mining permits must conduct an EIA and submit an EMP. Prescriptive details are provided in Section 39(3) a-d. Regulations 49, 50, 51 and 52 detail the requirements for the contents and processes for scoping, EIA, EMP and EMPRs. Approval of submissions subject to the conditions stipulated in Section 39(4) of the MPRDA. Bauba Platinum has an approved EMP for the Moeijelijk Chromite Project, and submits annual compliance audit findings in the prospecting report to the DMR. Financial provision must be made to allow for closure and rehabilitation must be annually adjusted. Sections 41 to 47 of the MPRDA address legislative closure requirements. GNR 527 of the MPRDA addresses the financial provision for mine rehabilitation and closure and requires that the quantum of financial provision, to be approved by the Minister, must be based on the requirements of the approved EMP and shall include a detailed itemisation of all actual costs required for: premature closure regarding: the rehabilitation of the surface of the area; the prevention and management of pollution of the atmosphere; the prevention and management of pollution of water and the soil; the prevention of leakage of water and minerals between subsurface formations and the surface; decommissioning and final closure of the operation; and post closure management of residual and latent environmental impacts. Regulation 54(2) requires annual financial closure estimation and associated financial adjustment. Annual closure and rehabilitation estimation and associated financial provision Bauba Platinum has made financial provision for both scheduled and unscheduled closure of the prospecting operations at Moeijelijk. This provision is adjusted annually and submitted to the DMR. An approved SLP is required for permitting approval, with annual compliance reporting submission. Sections of GNR 527 of 2004 and 39(1) and (2) of the MPRDA dictate the requirements of submission, approval and reporting of the SLP Approval and annual reporting to the regional DMR office on compliance in compliance with S, of GNR 527 Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require an SLP. This will be a future requirement should the PR be converted to a Mining Right. 60

63 Act, regulation or by-law Requirements Sectional requirements Permitting requirements Current compliance status NEMA, 1998 (Act 107 of 1998) EIAs and EMPs are required as defined by listed activities set out under Section 24 of NEMA, Section 14 details the contents of an EMP, with Regulations 543, 544, 545 and 546 establishing the processes to be followed to obtain an environmental authorisation and the listed activities requiring authorisation. Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require an Environmental Authorisation from the DEA. This will be a future requirement should the Prospecting Right be converted to a Mining Right. Section 28 addresses the duty of care and remediation of environmental damage. Section 28 details that all persons who cause, have caused or may cause significant pollution or degradation of the environment must take reasonable measures to prevent such pollution or degradation from occurring, continuing or recurring, or, in so far as such harm to the environment is authorised by law or cannot reasonably be avoided or stopped, to minimise and rectify such pollution or degradation of the environment. Bauba Platinum currently undertakes concurrent rehabilitation, and is compliant with Section 28 of the NEMA. NEM:AQA, 2004 (Act 39 of 2004) No listed activity in terms of the Act can take place without a licence. GN 1210 establishes national Ambient Air Quality Standards, and provides limits for SO 2, NO 2, PM 10, ozone, benzene, lead and CO. Atmospheric Emission Licence Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require an AEL permit. This may be a future requirement should the Prospecting Right be converted to a Mining Right. NEM: WA Act, 2008 (Act 59 of 2008) A licence is required to establish and operate a waste disposal site, as defined by the listed activities within the Act. Chapter 5 of the Act provides for the licensing of waste management activities, which include storage, transfer, recycling, treatment and/or disposal of waste. Radioactive waste and mine residues have been excluded from the Act. Waste Management Licence Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require an WML permit. This may be a future requirement should the Prospecting Right be converted to a Mining Right. NWA, 1998 (Act 36 of 1998) as amended A licence is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent. The NWA stipulates that a WUL is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act. Water Use Licence Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require a WULA. This may be a future requirement should the Prospecting Right be converted to a Mining Right Operational environmental management Exploration activities currently include mapping, sampling and reverse circulation core drilling. Bauba Platinum undertakes concurrent rehabilitation management practices for all exploration and drill holes. Bauba Platinum has made the following commitments in its environmental policy: Comply with relevant state and national legislation as a minimum; Ensure that management and reduction of environmental risks is an integral part of operations planning and long-term strategy; Develop, implement and monitor environmental management plans to achieve environmental targets; Set and meet environmental objectives and targets based on the prevention of pollution; Recognise and protect areas of special heritage and cultural value; Support and participate in community based environmental projects; and Maintain a close working relationship with government and other related industries to continually improve environmental management and performance. Regularly review and report on the environmental performance of the Company and ensure that this policy remains relevant to achieving its target of minimal impact to the environment. 61

64 Operational social management Bauba Platinum does not have a Social Labour Plan for the Moeijelijk Chromite Project, as the Moeijelijk Project is still in exploration phase. An SLP is not a requirement for prospecting operations in terms of Regulation 46 of the MPRDA (Act 28 of 2002) (as amended) Mine closure provision, closure planning and rehabilitation Financial provision and closure planning, informed by both an approved EMP and GNR 527 of the MPRDA, is a statutory legislative requirement when holding a prospecting licence. Sections 41 to 47 of the MPRDA address current legislative closure requirements. Section 41(1) requires that an applicant for a prospecting right, mining right or mining permit must, before the Minister approves the environmental management plan or environmental management programme (EMP) in terms of Section 39(4), make the prescribed financial provision for the rehabilitation or management of negative environmental impacts. Bauba Platinum has made provision for both scheduled and unscheduled closure of the prospecting operations. Closure and rehabilitation operations allow for the two borehole drill sites. The provision also accounts for closure and rehabilitation operations being performed according to the requirements of the EMP. Bauba Platinum has submitted a current financial guarantee of ZAR15 000,00 to the DMR. in respect of this Prospecting Right. Based on the revised rehabilitation and closure costs, the updated financial provision is calculated at ZAR13 189,80 (including VAT) resulting in an excess of ZAR1 810, South Africa Country Profile SR10A(i) Political and economic climate South Africa gained independence from Britain on 31 May 1910, and was declared a republic in From 1948 until 1990, the South African political and legal systems were based upon the concept of apartheid, a philosophy of separate racial development, enforced by a white minority government. The first multiracial elections in 1994 brought an end to apartheid and ushered in black majority rule under the African National Congress (ANC), with a number of different political parties participating in the elections. The country continues to hold democratic, peaceful, free and fair elections, the last of which was won by the ANC in 2014, under the leadership of President Jacob Zuma. South Africa is the most advanced economy in Africa and provides the gateway to sub-saharan Africa. It is classified as a middle-income emerging market, with well-developed financial, legal and judicial systems and modern infrastructure. Between 2004 and 2008 South Africa grew economically as a result of macroeconomic stability and a global commodities boom, but growth slowed in the second half of 2008 and 2009 due to poor global economic conditions, which influenced commodity prices and demand. Gross domestic product (GDP) fell almost 2% in 2009, worsening the country s already high unemployment levels. However, in 2010, 2011 and 2012, the country again reflected a positive economic growth rate, with 2,8%, 3,4% and 2,6% real GDP growth rates, respectively (CIA, 2013). South African economic policy is fiscally conservative but pragmatic. The country attempts to control inflation by keeping it within an acceptable range (3% 6%), maintains a budget surplus, uses state-owned enterprises to deliver basic services to low-income areas and provides social grants to a quarter of the population. Currency and inflation volatility, poverty, income disparities, and poor availability of public services continue to characterise the country. However, there has been an improvement in many of these areas. The country, for instance, returned to its target inflation range in 2010, 2011 and 2012, since inflation stood at an estimated 4.1%, 5% and 5,2%, respectively, in these years compared to an estimated 7,2% inflation rate in 2009 (CIA, 2013). A dent was also made in South Africa s high unemployment rate, as unemployment levels also fell from an estimated 24,9% in 2011 to an estimated 24,4% in 2012 (CIA, 2013) Minerals industry The minerals industry contributed 8.8% of South Africa s GDP in 2011, but this contribution is more significant if multiplier and induced effects of mining are taken into account (COM, 2012). South Africa has a mature minerals industry developed from gold and diamond discoveries in the late 1800s. The country is the world s largest producer of platinum, chromite and vanadium and ranks highly in the production of diamonds, coal, iron ore and base metals. South Africa hosts a number of large orebodies such as the Bushveld Complex and the Witwatersrand Basin, as well as rich diamond fields and extensive coalfields. One of the greatest challenges associated with the minerals and mining industry in South Africa is rising costs of labour, electricity, diesel and steel, among other costs. Another challenge, which has gained headline attention in 2012, is that of labour and community unrest caused by low wages particularly among contract workers and under-resourced communities a phenomenon that has been worsened by municipalities inability to provide adequate infrastructure to communities and an apartheid-era homeland system that has workers from labour-sending areas being impoverished by supporting two households. Other important concerns for the mining industry are the effect of HIV/Aids on the workforce, as well as uncertainty related to resource nationalism, including requirements for beneficiation, limitations on the export of strategic minerals, the introduction of a State mining company and calls for the nationalisation of mines Legislative framework The South African government has an extensive legal framework within which mining, environmental and social aspects are managed. Inclusive within the framework are international treaties and protocols, and national acts, regulations, standards and guidelines which address international, national, provincial and local management areas. South African statutory legislation and requirements relevant to the Moeijelijk Project and considered as part of this assessment included: Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA); Mineral and Petroleum Resources Development Amendment Act 49 of 2008; Mineral and Petroleum Resources Development Draft Amendment Bill (2013); 62

65 Broad-Based Socio-Economic Charter (and associated amendments, 2010); Promotion of Beneficiation Bill; Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA); National Environmental Management Act (Act 107 of 1998) (NEMA); National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA); National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA); National Environmental Management: Protected Areas Act (Act 57 of 2003) (NEM:PAA); Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 Noise Regulations); National Heritage Resources Act (Act 25 of 1999) (NHRA); National Forests Act (Act 30 of 1998) (NFA); National Water Act (Act 36 of 1998) (NWA); Hazardous Substances Act (Act 15 of 1973) (HAS); and Mine Health and Safety Act (Act 29 of 1996) and amendments (MHSA). The most important of these are summarised in the subsections to follow Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA) Table 4: Types of rights applicable in South Africa Types of rights and permits applicable to the mining industry in South Africa, as provided for in the MPRDA and amendments, are detailed in Table 4. The South African government enacted the MPRDA on 1 May It defines the State s legislation on mineral rights and mineral transactions in South Africa. The Act emphasises that the government did not accept the existence of the historic dual State and private ownership of mineral rights in South Africa and, as such, the Act legislated that all mineral and petroleum resources in South Africa now vest in the State. Additional objectives of the Act include the promotion of economic growth, the development of resources to expand opportunities for the historically disadvantaged, and the socio-economic development of the areas in which mining and prospecting companies are operating. It also provides for security of tenure relating to prospecting, exploration, mining and production. Licence type Purpose Duration Requirements Conditions Reconnaissance permission Exploration at the reconnaissance stage One year (nonrenewable) Financial ability; technical ability and work programme Holder does not have the exclusive right to apply for a New Order Prospecting Right (NOPR). New Order Prospecting Right (NOPR) Exploration at target definition stage Up to five years initially. renewable once for three years Financial ability; technical ability; economic programme; work programme and environmental plan Payment of Prospecting fees. Holder has the exclusive right to apply for NOMR. Retention Permit Hold onto legal rights between prospecting and mining stages Three years initially. Renewable once for two years Prospecting stage complete; feasibility study complete and Environmental Management Plan (EMP) complete. Project not currently feasible May not result in exclusion of competition, unfair competition or hoarding of rights. May not be transferred, ceded, leased, sold, mortgaged or encumbered in any way. New Order Mining Right (NOMR) Development and production stage 30 years initially. Renewable for further periods of 30 years. Effective for life of mine (LOM) Financial ability; technical ability; prospecting complete; economic programme; work programme; social plan; labour plan and completed EMP Payment of royalties (from 2010). Compliance with Mining Charter and Codes of Good Practice on broad based BEE. Mining Permit Small-scale mining Two years initially. Renewable for three further periods of one year at a time Life of project must be <2 years; areas must be <5ha and completed EMP Payment of royalties (from 2010). May not be leased or sold. A further objective of the Act was to advance BEE within South Africa s minerals industry, by encouraging mineral exploration and mining companies to enter into equity partnerships with BEE companies. The Act also makes provision for the implementation of social responsibility procedures and programmes by coal resource companies. The Act incorporated a use-it or lose-it principle, that has been applied to companies or individuals who owned mineral rights or the rights to prospect and mine prior to 2004 (Old Order Rights). These Old Order Rights were required to be transferred within specified timeframes, under the provisions of the Act, into New Order Rights to prospect and mine. Once the State has granted the conversion of the Old Order Rights to New Order Rights, or has granted a New Order Right for new applications submitted after the implementation of the MPRDA, a Notarial Agreement between the State and the holder of the New Order Right is entered into. This Agreement sets out all the conditions associated with the New Order Right. New Order Rights can be suspended or cancelled by the Minister if, upon notice of a breach from the Minister of its obligations to comply with the MPRDA, or the conditions prescribed as part of its New Order Right, a breaching entity fails to rectify such a breach. 63

66 In addition, in terms of the MPRDA, mining and exploration companies have to comply with additional responsibilities relating to environmental management and to environmental damage, degradation or pollution, resulting from their prospecting or exploration activities. Section 37 of the MPRDA establishes the framework for the inclusion of environmental management principles, with Section 39 establishing environmental management programme and EMP requirements. Requirements for the contents of exploration, scoping, Environmental Impact Assessment (EIA), EMPs and EMP reports are provided in Government Notice Regulations (GNRs) 49, 50, 51 and 52. Sections 41 to 47 of the MPRDA address legislative closure requirements. GNR 527 of the MPRDA addresses the financial provision for mine rehabilitation and closure and requires that the quantum of financial provision, to be approved by the Minister, must be based on the requirements of the approved EMP and include a detailed itemisation of all actual costs required for: premature closure regarding: the rehabilitation of the surface of the area; the prevention and management of pollution of the atmosphere; the prevention and management of pollution of water and the soil; and the prevention of leakage of water and minerals between subsurface formations and the surface; decommissioning and final closure of the operation; and post closure management of residual and latent environmental impacts. GNR527 establishes the requirements for the social and labour plan (SLP). Amongst other aims, the MPRDA strives to transform the mining and production industries. The Act requires the submission of the SLP as a prerequisite for the granting of mining or production rights. The SLP requires applicants for mining and production rights to develop and implement comprehensive suman resources development programmes including employment equity plans, local economic development programmes and processes to protect jobs and manage downscaling and/or closure (DMR). Monitoring and performance assessments, and waste management principles inclusive of pollution control and waste management, and the management of mine residue stockpiles and deposits are also included within the scope of GNR527. Blasting permits are required for any blasting activities as defined within the MPRDA Mineral and Petroleum Resources Development Amendment Act 49 of 2008 In 2008, an Amendment Bill proposed to make significant changes to the MPRDA. The Bill was signed by the President in 2009 but did not come into force at that time (Webber Wentzel, 2009). The 31 May 2013 Government Gazette noted the Act would come into force on 7 June 2013, but this announcement was followed by a further announcement in the 6 June 2013 Government Gazette that some of the amendments, including those relating to the transferability of MPRDA rights (which required ministerial approval) and the prohibition of the amendment of rights to include additional areas or minerals, would not come into effect. Van der Want (2013) suggests that the proclamation of this Act was an error. While not an exhaustive list, the Amendment Act is noteworthy because it addresses the following issues: It requires the prior written consent for disposal in various forms of a prospecting or mining right or an interest in such a right; It changes the duration of the reconnaissance permission from two years to one and allows a Regional Manager to reject a defective application with reasons within 14 days of receipt; It requires that the Minister refuse a prospecting right if there is a concentration of rights by the applicant and associated companies; It allows the Minister to impose further conditions on an applicant for mining rights to include participation by the community; It increases the area for which a mining permit can be issued to 5ha, but does not allow an applicant to have more than one mining permit on the same or adjacent land; It allows for the cancellation or suspension of mineral rights if there is non-compliance with the MPRDA; It discusses transitional arrangements for mineral rights, including documentary proof that holders of Old Order Mining Rights are in compliance with the BEE and socio-economic objectives of the MPRDA; It attempts to promote the development of input and downstream industries; It encourages the entry of HDSAs, including women and communities with interests or rights to land, into the industry; and It has various forward-looking environmental provisions that were to come into effect 18 months after the promulgation of the Act. These include: Making the Minister of Mineral Resources responsible for environmental matters that relate to mining; Requiring the simultaneous application for environmental authorisation with mineral tenure applications; and Requiring a report on compliance with environmental authorisation with renewal applications (Legalbrief Today, 2013; Webber Wentzel, 2013). 64

67 Mineral and Petroleum Resources Development Draft Amendment Bill (2012) An explanatory summary of the 2013 Amendment Bill was published in the same Government Gazette that announced that the 2008 Amendment Act was to come into force. The 2013 Amendment Bill proposes amendments to the 2008 Amendment Act and is seen as an important indicator of likely future mineral policy in South Africa (Legalbrief Today, 2013). The Bill has seen a significant amount of comment from industry players who suggest that irregularities and ambiguities are contained within. While not an exhaustive list, some of the key changes that are proposed in the Bill are the following: The Minister is given the right to initiate beneficiation, including setting the level required for beneficiation, the price required for beneficiation, and the percentage of raw material inputs that are set aside for local beneficiators; Persons who intend to export designated minerals are required to obtain written approval for this from the Minister. The term is not defined, but is thought to refer to what was known as strategic minerals, or minerals defined periodically by the State to be of strategic importance to the country; Historic tailings, the ownership of which was contested by a high-profile De Beers court case, are now held in custody by the State rather than the historic producer of those tailings; Associated minerals, discovered in mining, can be mined by the primary mineral rights holder. Third parties are also permitted to apply for rights over associated minerals, but will have to notify the primary rights holder of the application; The right to a mineral deposit is sub-divisible, but consent as to the transfer of any interest is required from the Minister; Environmental requirements will be implemented under NEMA, and rights holders will be responsible for environmental liabilities even after a closure certificate has been issued by the Minister; Penalties for non-compliance with various mining-related legislation and requirements are set as a percentage of annual turnover and exports; The Minister is prohibited from granting a right where this would result in anti-competitive conduct and dominance by the applicant in a particular sector of the mining industry; The State has a right to a share in the annual profits derived from exploration or production from all new petroleum exploration and production rights; BEE objectives are required to be complied with in prospecting rights, where they were required to be complied with in only mining rights in the past; In the case of liquidation, mineral rights held fall within the insolvent estate but ministerial approval is required when they are transferred to a new owner; and Historically disadvantaged persons are redefined to exclude white women (Tucker and Sibisi, 2013; Leon, 2013). The MPRDA Amendment Bill was approved by Parliament in Broad-Based Socio-Economic Charter Promulgation of the Broad-Based Socio-Economic Charter for the South African Mining Industry (also known as the Mining Charter) marked the end of protracted debates and varying interpretations of the legislation s requirements, paving the way for the full implementation of the MPRDA. All mining and prospecting companies are required to comply with the provisions of the Mining Charter. The objectives of the Mining Charter are to: promote equitable access to the State s resources by all the people of South Africa. It required that every mining company achieved a 15% level of ownership of its mining assets by historically disadvantaged South Africans (HDSAs) by 1 May 2009, and a level of 26% ownership by 1 May 2014; substantially and meaningfully expand opportunities for HDSAs, including women, to enter the mining and minerals industry and to benefit from the exploitation of the nation s resources. In terms of this requirement, 40% of management roles were to be held by HDSAs by 2010; expand the skills base of HDSAs to serve the community; promote employment and advance the social and economic welfare of mining communities, and the major areas from which labour is drawn to carry out exploration or mining; and promote the beneficiation of South Africa s mineral commodities, whereby the companies which have facilitated downstream, value-adding activities for products they mine, could achieve an offset against the HDSA equity participation requirement. Most mining companies are already implementing their own empowerment strategies. These strategies demonstrate their best endeavours to consider the issues and a willingness to accommodate the requirements when they are finally defined. Compliance with the Mining Charter is measured using a designated scorecard, which provides a practical framework against which the Minister can assess whether a company actually measures up to what was intended in the MPRDA and the Mining Charter Amendment of the Broad-Based Socio-Economic Empowerment Charter (2010) The Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (the Charter Amendment) was released in September It was unsurprising that it retained the minimum target of 26% HDSA ownership of mining assets by However, an offsetting of HDSA ownership by as much as 11% is now possible depending on the extent of a company s beneficiation strategies. BEE procurement targets in the Amendment are as follows: A minimum of 40% of capital goods will have to be sourced from BEE entities by 2014; and 70% of services and 50% of consumer goods will have to be purchased from BEE entities by

68 In addition, multinational suppliers of capital goods will have to contribute 0.5% a year of their annual income from South African mining firms towards a socio-economic development fund. HDSA targets for employment equity are also further refined and a minimum of 40% HDSA demographic representation is stipulated for executive management, senior management, core and critical skills, middle management and junior management by Specific annual targets are noted for human resources development, since a percentage of the annual payroll (excluding the mandatory skills levy) will have to be spent on skills development activities and be reflective of South Africa s demographics. Skills expenditure, as a percentage of payroll, increases by 0.5% each year, with an initial target of 3% of payroll in 2010, rising to 5% by The expenditure is intended to support South African-based research and development initiatives focused on solutions in sectors such as exploration, mining, processing, technology efficiency in the use of water and energy in mining, beneficiation and environmental conservation and rehabilitation. The Charter Amendment also supports SLPs by insisting on: an ethnographic community consultative and collaborative process prior to the start of a mining project; and a community development needs analysis, together with mining communities, of projects to be implemented in support of integrated development plans, the spend of which should be proportionate to the size of the mining investment. The Charter Amendment also calls for an upgrade of hostels to family units, a one-person-per-room occupancy rate, and support for home ownership options all of which should be implemented by Environmental management and an improvement in the industry s health and safety performance are also highlighted, and bestpractices in these areas are specifically mentioned. The Charter Amendment also calls for annual reporting by mining companies on their levels of compliance with the Mining Charter, and notes that non-compliance with the Charter and the MPRDA will result in mining companies being in breach of the MPRDA Promotion of Beneficiation Bill This is still being prepared, and is expected to provide incentives for upstream companies that facilitate downstream investments, in order to reduce the exporting of unprocessed mineral products and to promote local value addition Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA) This piece of legislation incorporates the government s intention to impose royalties on revenues derived from mineral production in South Africa. Enacted in 2008, the MPRRA was initially set to be implemented in May However, in an effort to mitigate job losses in the mining sector during the global financial crisis, the government decided to postpone the implementation of the new mineral and mining royalty regime until 31 March The main purpose of the Act was to provide legislation for the collection of royalties from mines, developed and operated in terms of the New Order Mining Right (NOMR), granted through the MPRDA process. The Act distinguishes between refined and unrefined resources, where refined minerals have been refined beyond a condition specified by the Act, and unrefined minerals have undergone limited beneficiation as specified by the Act. The royalty is determined by multiplying the gross sales value of the extractor, in respect of that mineral resource, in a specified year, by the percentage determined by the royalty formula. Both direct operating expenditure (Opex) and capital expenditure (Capex) incurred is deductible for the determination of earnings before interest and tax (EBIT). The quantum of the revenue royalty on all minerals is dependent on the profitability of the company based on the following formula. For refined mineral resources the formula is: Royalty rate = 0,5 + EBIT x 100 Gross sales (refined) x 12,5 The maximum percentage for refined mineral resources is 5%. For unrefined mineral resources the formula is: Royalty rate = 0,5 + EBIT x 100 Gross sales (unrefined) x 9 The maximum percentage for unrefined mineral resources is 7% Institutional and administrative environmental and social regulatory structures The government of South Africa is divided into national, provincial and local spheres which address environmental and social regulatory elements within the country. These spheres are distinct, but are closely interdependent and interrelated. The South African Constitution allocates legislative and administrative functions to all three spheres of government, providing for a broad and diverse platform from which government agencies can responsibly manage environmental and social aspects. The national elections, held in 2009, resulted in the allocation of environmental responsibility at national level to the Department of Water and Environmental Affairs (DWEA). Within this new ministerial function, there are two autonomous departments, namely, the Department of Water Affairs (DWA) and the Department of Environmental Affairs (DEA) (Patel, 2011). The National Environmental Advisory Forum and the Committee for Environmental Coordination are advisory bodies established by NEMA. The former has been established to advise the Minister on any matter concerning environmental management and governance, with the latter mandated to promote the integration and coordination of environmental functions by the relevant organs of state (Patel, 2011). The latter committee has not yet been constituted. 66

69 Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 Noise Regulations) ECA served as the national legislative environmental framework prior to the promulgation of NEMA in The majority of ECA has been repealed by NEMA, its subsidiary legislation and other Acts. Section 25 of ECA, which addresses noise and the associated regulations (GNR 154 of 1992), are still in effect. The Act and associated regulations control noise and regulate procedures relating to noise impact and nuisance. Section 4 of the regulations prohibits the generation of noise, or the allowance of noise produced or caused by any person, machine, device or apparatus or any combination thereof (ECA, 1989). Section 5 of GNR 154 of 1992 regulates the creation of a noise nuisance National Environmental Management Act (Act 107 of 1998) (NEMA) NEMA was promulgated in 1998 to replace ECA as the overarching national environmental legislative framework. NEMA was promulgated to give effect to the Environmental Management Policy (published in 2007), and has been subsequently amended, including the National Environmental Management Amendment Act of 2003, and the National Environmental Management Second Amendment Act, 8 of The EIA Regulations made in terms of ECA were replaced in 2006 by new EIA Regulations made in terms of Chapter 5 of NEMA. These Regulations have subsequently been revised and gazetted in GNR 543 on 18 June Regulations 543, 544, 545 and 546 establish the processes to be followed to obtain an environmental authorisation and the listed activities requiring authorisation. It should be noted that previously, mining authorisations, including environmental authorisations for mining, were issued under the MPRDA and the DEA was involved, through cooperative governance mechanisms, as a commenting agency. However, this process is currently undergoing a three-stage process of change in terms of the new provisions in the National Environmental Management Amendment Act, (Act 62 of 2008) (Patel, 2011). Phase 1 details that the status quo will remain until the MPRDA amendments come into effect, with Phase 2 then coming into effect for an 18-month period. In this time, all new mining, exploration and production rights applications and renewals thereof will have to comply with the NEMA EIA Regulations, but the competent authority will remain the Minister of Mineral Regulation. However, the Minister for Water and Environmental Affairs would hear any appeals. Thereafter, in Phase 3, it is envisioned that the DEA becomes the competent authority. As such, the future potential exists for the transfer of responsibility for environmental permitting from the DMR to the DWEA. Changes relevant to Bauba Platinum s assets at the time of transition will consist of the inclusion of mining as a listed activity and integrated environmental licensing. The principles set out in Section 2 of Chapter 1 of NEMA underpin all other related Acts and policies and form the basis of sustainable development in the country. These principles are also applicable to all organisations wishing to obtain an environmental authorisation and operate within the South African legislative framework. Chapter 5 of NEMA establishes the regulatory framework for integrated environmental management. Section 24 of NEMA establishes the requirements for obtaining environmental authorisations for listed activities, with the inclusion of undertaking impact assessment studies activities listed in terms of R544, R545 and R546. Section 24 also outlines the minimum conditions attached to environmental authorisations, monitoring and performance assessment requirements, and the procedure for mine closure on environmental authorisation. Chapter 7 of NEMA establishes compliance and enforcement, with Part 1, Section 28, detailing the duty of care principle (encompassing the remediation of environmental damage) National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA) Chapter 5 of NEM:WA states that a licence is required to establish and operate a waste disposal site. Chapter 5 establishes the procedures and requirements (in terms of footprint, volume, and waste type) for the licensing of waste management activities, inclusive of the storage, transfer, recycling, treatment and/or disposal of waste. Waste that has been excluded from the Act and its associated regulations include radioactive waste and mine waste residue. Regulations to manage contaminated land are currently being drafted, which may have future potential implications for BAUBA PLATINUM in terms of greater licensing and management requirements. Section 19 of the Act establishes activities which require a waste management licence. The activities listed include the following categories: Storage of waste; Reuse, recycling and recovery; Treatment of waste; Disposal of waste; Storage, treatment and processing of animal waste; and Construction, expansion or decommissioning of facilities and associated structures and infrastructure. Each of the listed activities has a threshold which would trigger the need for a waste management licence (various parameters are defined, inclusive of such thresholds as volumes, time, and throughputs). The Act provides considerations for all holders of any waste type. A holder of waste, must, within the holder s power, take all reasonable measures to: avoid the generation of waste and where such generation cannot be avoided, to minimise the toxicity and amounts of waste that are generated; reduce, reuse, recycle and recover waste; where waste must be disposed of, ensure that the waste is treated and disposed of in an environmentally sound manner; 67

70 manage the waste in such a manner that it does not endanger health or the environment or cause a nuisance through noise, odour, or visual impacts; prevent any employee or any person under his or her supervision from contravening the Act; and prevent the waste from being used for unauthorised purposes. Regulations to manage contaminated land are currently being drafted, which may have future potential implications for Bauba Platinum in terms of greater licensing and management requirements National Water Act (Act 36 of 1998) (NWA) The NWA stipulates that a Water Use Licence (WUL) is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act. Use of water for mining and related activities is also regulated through regulations that were updated after the promulgation of the NWA in 1999 Government Notice (GN) 704. GN 704 addresses the regulations on use of water for mining and related activities aimed at the protection of water resources (DWAF, 2007). Inclusive within GN 704 are the control measures for activities and its regulation of the sizing, control and monitoring of water management measures National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA) The National Environmental Management: Air Quality Act (NEM:AQA, Act 39 of 2004) results from the promulgation of the NEMA. The Act serves as the dominant legislative tool for the management of air pollution and related activities, and defines listed emission activities which require licensing. The overall objectives of the Act are to protect the environment by providing reasonable measures for: protection and enhancement of the quality of air in the Republic; prevention of air pollution and ecological degradation; securing ecologically sustainable development while promoting justifiable economic and social development; and giving effect to Section 24(b) of the Constitution to enhance the quality of ambient air for the sake of securing an environment that is not harmful to the health and wellbeing of people. The South African government has established National Ambient Air Quality Standards in Government Notice The standard provides for various emission limits, inclusive of particulate matter (PM 10 ), ozone (O 3 ), carbon monoxide (CO), sulphur dioxide (SO 2 ), and nitrogen dioxide (NO 2 ) National Heritage Resources Act (Act 25 of 1999) (NHRA) The South African Heritage Resources Agency (SAHRA) of 1999 (Act 25 of 1999) (NHRA) provides for the protection of all recognised heritage resources of South Africa that have been identified as culturally significant, or are of other special value. The Act provides an integrated system for the management of national heritage resources. Section 38 of the NHRA states that any person who intends to undertake a development must at the earliest stages of the development, notify the responsible Heritage Resources Authority and furnish it with details regarding the location, nature, and extent of the proposed development. Categories of heritage resources are recognised as part of the National Estate in Section 3 of the NHRA, and include: geological sites of scientific or cultural importance; objects recovered from the soil or waters of South Africa, including archaeological and paleontological objects and material, meteorites and rare geological specimens; and objects with the potential to yield information that will contribute to an understanding of South Africa s natural or cultural heritage National Environmental Management Biodiversity Act (Act 10 of 2004) (NEMBA) The State promulgated NEMBA to provide for: the management and conservation of South Africa s biodiversity within the framework of the NEMA; the protection of species and ecosystems that warrant national protection; the sustainable use of indigenous biological resources; the fair and equitable sharing of benefits arising from bio-prospecting involving indigenous biological resources; the establishment and functions of a South African National Biodiversity Institute; and for matters conducted therewith. Specifically, NEMBA has the following goals: Manage, conserve, and sustain South Africa s biodiversity and its components and genetic resources; and Progressive realisation of the objectives identified through the implementation of the Act. The piece of legislation is underpinned by various objectives described below. NEMBA provides for the management and conservation of biological diversity within the Republic and of the components of such biological diversity, and promotes the use of indigenous biological resources in a sustainable manner, in conjunction with the fair and equitable sharing among stakeholders of benefits arising from bio prospecting involving indigenous biological resources. NEMBA aims to give effect to ratified international agreements relating to biodiversity which are binding in the Republic to provide for co-operative governance in biodiversity management and conservation, and to provide for a South African National Biodiversity Institute (SANBI) to assist in achieving the objectives of this Act. 68

71 25. Global Chromite Market Review SR 5.8A; SV2.18 Chromite is a brownish-black cubic mineral belonging to the spinel group. It is the only ore mineral from which metallic chromium (Cr) and Cr compounds are commercially obtainable. It has the chemical formula FeCr 2 O 4, and a theoretical composition of 22-24% FeO and 38-40% Cr 2 O 3. In its natural form, it occurs in solid solution with other minerals in the spinel group, so Cr 2 O 3 grades are less than the theoretical 68%. Cr is the most abundant of the Group VIA family of metallic elements comprising Cr, molybdenum (Mo) and tungsten (W). At a concentration of nearly 400ppm in the earth s crust as various minerals, it is the 13th most common element. Chromite occurs exclusively in rocks formed by the intrusion and solidification of magma which is rich in the heavy, iron-containing minerals such as pyroxenes and olivines to form ultramafic igneous rocks. Within these rocks, Cr occurs as a chromium spinel, a highly complex mineral made up of varying compositions of MgO and Al 2 O 3. However, magnesium (Mg) can be substituted in varying proportions by divalent iron (Fe 2+ ), and aluminium (Al) can be substituted, also in varying proportions, by trivalent Cr 3+ and trivalent Fe 3+. This improves the Cr:Fe ratio. For this reason, the Cr spinel may be represented as (Fe,Mg)O(Cr,Fe,Al) 2 O 3. Commercial chromite deposits are found mainly in two forms, which are: stratiform seams in basin-like intrusions, often multiple seams through repeated igneous injections; and the more irregular podiform or lenticular deposits. Stratiform deposits are generally very large complexes and can be more than 5km thick and cover thousands of km 2 in area. The Bushveld Igneous Complex (BC) of South Africa is one of the best known examples of a stratiform igneous deposit. The BC contains approximately 72% of the world s chromite reserves. The other important stratiform deposit is the Great Dyke of Zimbabwe which traverses nearly the length of the country (NNE to SSW), measuring approximately 550km in length and is approximately 11km wide. Other stratiform deposits occur in Madagascar and in the Orissa district of India. Podiform deposits are relatively small in comparison and may be shaped as pods, lenses, slabs or other irregular shapes. Many have been extensively altered to serpentine and they are often faulted. They are generally richer in Cr than stratiform deposits and have higher Cr:Fe ratios. The chromite ore reserves in Kazakhstan are an example of podiform deposits. Podiform ores were originally highly sought after as the best source of metallurgical grade chromite for high-carbon ferrochrome. These ores also tend to be massive (hard lumpy) ores, as opposed to the softer, more friable ores from the stratiform deposits, and this makes for better electric smelting operation. There is a third type of chromite deposit but of very limited commercial significance. These are the eluvial and alluvial deposits that have been formed by weathering of chromite-bearing rock and release of the chromite spinels with subsequent gravity concentration by flowing water. Chromium may also be concentrated in high-iron lateritic deposits containing nickel and there have been attempts to smelt these to produce a chromium-nickel pig iron for subsequent use in the stainless steel industry Global occurrence According to the International Chromium Development Association (ICDA), world resources of chromite exceed 11Bt. South Africa and Zimbabwe hold approximately 90% of the world s chromite resources. South Africa contains approximately 5.5Bt of mineral resources and 3.1Bt of mineral reserves and accounts for 73% and 85% of the global chromite mineral resources and mineral reserves respectively. The country has sufficient chromite resources to sustain an estimated 200 years of mining at current production rates. Zimbabwe, the only country with both stratiform and podiform deposits, contains an estimated 1Bt of chromite resources and 140Mt of chromite reserves. Its podiform deposits can be found in the Shurugwi and Mberengwa areas. Finland and India each have 1% of the world s chromite reserves but Finland has 2% of the world s chromite resources, compared with 1% of India. India s podiform bodies lie on the east coast of the state of Orissa while Finland s are located near Kemi in northern Finland. Although the Cr 2 O 3 content in Finland s deposits is low, the ore is successfully mined, concentrated and smelted to ferrochrome, and converted to stainless steel thereafter. Various other countries are home to the remaining 1% of global chromite reserves and 7% of global chromite resources. The potential chromite mineral resources and mineral reserves that can be found in China have yet to be quantified although the country is known to have podiform and stratiform deposits. Kazakhstan, which ranks second in global chromite mineral reserves and third in global mineral resources, has podiform deposits in the Southern Ural Mountain region with greatly varying chromium content and in Cr:Fe ratios. South Africa and Kazakhstan host the majority of the chromite reserves globally, with South Africa estimated to host approximately 85% of reserves globally (Table 5). Table 5: Global chromite Mineral Resources and Mineral Reserves Country Resources Reserves Mt % Rank Mt % Rank South Africa Kazakhstan Zimbabwe Finland India Others Total Source: USGS Figure 10 shows the global producers of chromite with the approximate size of the resources and deposit type. 69

72 25.2. Ore processing Initial processing of chromite ores is generally by heavy media or gravity separation of ores to remove gangue and produce upgraded lumpy and chip ores followed by spiral gravity separation to produce fine concentrates. Magnetic separation and flotation techniques may also be applied. Approximately 93% of the world s chromite is converted into various ferrochrome alloys for use in the stainless steel and other alloy industries. Chromite is generally smelted in submerged arc furnaces, together with carbonaceous reductants and fluxes, although other technologies such as DC arc furnace smelting are also in use. Importantly, agglomeration of ore fines, especially those produced from South Africa s friable chromite, is an important aspect of processing prior to smelting. Pelletising of the fines is currently the preferred route. A wide range of possible technologies for smelting chromite to ferrochromium has been investigated. In the early days of high-carbon ferrochrome production, the furnaces were supplied only with highgrade, lumpy chromite especially from countries such as Zimbabwe but with the increasing demand for ferrochrome from the 1970s, most countries, particularly South Africa, began using the lower-grade ores. The ferrochrome produced from these ores is known as charge chrome because the chromium content is lower and the carbon content, and in particular the C:Cr ratio, is much greater than in high-carbon ferrochrome. Figure 10: Global Chromite Resources However, because stainless steel producers require as little carbon as possible entering their melts for each chromium unit, the introduction of the argon-oxygen decarburising (AOD) and vacuum-oxygen decarburising (VOD) processes has positively changed the ferrochrome smelting business as there is no longer a need to use larger quantities of the more costly low-carbon ferrochromium. These processes enabled the steelmakers to remove carbon from the stainless melts without excessive oxidation and losses of chromium. A more advanced attempt to overcome the problem of ore fines was the introduction of DC arc furnace (or plasma furnace) technology. Some of the advantages of DC arc furnace operation are: use of fine ores without a need for pelletising; use of lower cost reductants and greater choice of reductants; higher chromium recoveries; specific changes in the charge composition reflected in slag or metal, and the introduction of the closed top operation enabled furnace off-gas energy to be used for co-generation of power. Pelletising technology was introduced for friable chromite ores by binding, adding a reductant and fluxes, and then passage through a rotary kiln for hardening by sintering. This also enables a degree of pre-heating and pre-reduction of the chromite feed before charging to a submerged arc furnace to produce ferrochrome. A more recent approach, and one which is being installed by more plants, is pelletising. Pellets are produced with coke and these are sintered and partly pre-reduced on a steel belt sintering system. From there, the pellets are delivered to pre-heating shaft kilns that are located above submerged arc furnaces and which operate as direct feed bins, making use of the off-gas heat from the furnaces. Lump ore, coke and fluxes are also directed to the feed bins. Chromite in various sizes is typically charged into a submerged AC electric arc furnace with the addition of reductants (coke, coal and quartzite). The smelting process is energy intensive requiring up to 4MWh/t of material. Slag is separated from the liquid ferrochrome and tapped into ladles for further processing. Liquid ferrochrome is then poured into moulds and after cooling, is crushed into sizes as required by the customers. Crushed ferrochrome is railed to final customers or harbours for shipment. 70

73 25.3. Uses and applications Chromium is a versatile element and finds a wide variety of uses in applications in the steel and alloy, chemical, and refractory industries. Approximately 93% of chromite produced globally is used for smelting into ferrochrome alloys. These alloys are used in the stainless steel, steel, and other alloy industries. Chromium metal, which is produced by the aluminothermic or electrolytic process, is mainly used for specialty alloys. Only 3% of the world s production of chromite was used in 2009 for chromium chemicals. The primary chemical product from chromite is sodium chromate. From this, a variety of other chemical products are made and used, for example, for tanning leather, as coloured pigments in paints, plastics and ceramics, and metal finishing such as chromium plating. Production of chromite for refractory use and foundry sands is about 3% of global chromite production. Refractory chromite is used in sectors of ferrous and non-ferrous metallurgy, in cement kilns and in the glass industry. The specifications of chromite ore for smelting purposes in general are becoming less rigid. However, whilst the required Cr 2 O 3 grade for the production of high-carbon ferrochrome has decreased from 48% to 40% (minimum) and the Cr:Fe ratio from 2.8:2, the specifications of the ores for charge chrome production are still more rigid. A similar trend is also noted in the grades of the refractory-grade ore. In addition, the use of technologies such as pelletisation, agglomeration, plasma arc technology, and direct reduction has meant that ores that were previously considered uneconomic can now be used to produce ferrochrome. Figure 11 shows the end-uses of chromite. Figure 11: Chromite market material flow 71

74 25.4. Chromite supply South Africa is the leading producer of chromite mine production, having produced an estimated 46% of global chromite production in 2012 (Table 6). South African chromite production is primarily made up of chromite with less than 44% Cr 2 O 3, with a smaller fraction of its production being made up of chromite with a Cr 2 O 3 content of between 44% and 48% (Table 7). Table 6: Global mine production Mine production (Mt) Country * South Africa 10,20 11,01 India 3,85 3,80 Kazakhstan 3,80 3,80 Other countries 5,45 5,30 Total 23,30 23,91 Source: USGS (2013), DMR (2013) NA= Not available Table 7: South African chromite production in 2012 Production Local sales Export sales Total sales Mass mt Mass mt Value ZARm Unit value ZAR/t Mass mt Value ZARm Unit value ZAR/t Chromite 11,01 6, , , <44% Cr 2 O 3 9,94 5, * * * * * 44% to 48% Cr 2 O 3 1,07 1, * * * * * >48% Cr 2 O 3 0,00 0, * * * * * Source: DMR (2013) *= classified Mass mt Value ZARm Chrome ore prices LG6 and UG2 chrome ore prices have shown a downward price trend since March 2011, with LG6 ore consistently trading at a higher price than UG2 ore and the price difference between the two ore types increasing from the second half of 2011 (Figure 12). In March 2013, at the time of writing this report, the two ore prices were trading at USD195/t and USD175/t, respectively. LG6 ore refers to ore that is mined from lower group six, or the sixth chromite seam in the lower group of the BC, while UG2 ore refers to ore mined from upper group two, or the Upper Critical Zone of the BC Ferrochrome demand As discussed previously, approximately 93% of chromite produced globally is used for smelting into ferrochrome alloys. These alloys are used in the stainless steel, steel, and other alloy industries and, as a result, demand for ferrochromium is dependent on whether there is global growth in demand for stainless steel, steel and other alloys globally. Since approximately 85% of ferrochrome is used in the production of stainless steel, with the remaining ferrochrome being primarily used in the production of alloy steel as well as refractory, chemical and foundry uses, ferrochrome demand, and, therefore, chromite demand, is intricately linked to the demand for stainless steel in particular (Chirisa, 2009). Figure 12: Chrome ore and ferrochrome prices (August 2008 March 2013) 72

75 Analysts believe that stainless steel demand will increase on the back of urbanisation, particularly in the developing world, and the demand for infrastructure, with HSBC estimating the global stainless steel production will increase by 3,7% in 2013 and by 5,2% in The bank estimates that this will translate into a more than 3,7% increase in demand for ferrochrome in 2013 and a more than 8,6% increase in demand in 2014 (Chirisa, 2009) Ferrochrome supply Global ferrochrome supply has been gradually shifting from South Africa, which produced more than 50% of global ferrochrome ten years ago, towards other countries, and particularly China. As a result, the share of global ferrochrome production that is produced by South Africa has been falling and is estimated to have reached 31% of global production in China s ferrochrome production, meanwhile, has increased from 20% of global production in 2008 to an estimated 33% in 2012 (Chirisa, 2009). HSBC suggests that China s share of global ferrochrome production will be approximately 35% 36% of global production over the next four years, while South African production will comprise between 30% 31% of global production in the next four years. Other countries such as Kazakhstan and India will also become important producers of ferrochrome (Chirisa, 2009). South Africa s reducing contribution to global ferrochrome production figures can be attributed to its increased exports of chromite ore to China, as well as the increasing costs of ferrochrome production in the country due to rising electricity costs Ferrochrome price As can be seen in Figure 12, the ferrochrome price has been hovering between USD1,1/lb and USD1,36/lb since April At the time of writing this report (March 2013), the ferrochrome price stood at USD1,125/lb. However, the European benchmark ferrochrome price had been settled at USD1,27/lb for the second quarter of 2013, according to a JSE SENS announcement by Merafe Resources on 26 March 2013 (Merafe, 2013) Ferrochrome outlook The ferrochrome industry appears to be poised for growth, as a result of demand caused by urbanisation and increased infrastructure requirements from the developing world. However, the hopeful prospects for ferrochrome demand could be affected by the debt crisis in the Eurozone and in the United States that may influence the global economy adversely and result in a lower level of stainless steel growth than has been anticipated by analysts. In South Africa, ferrochrome production is likely to be influenced by the rising cost of electricity. For South African ferrochrome producers, it will be important to assess whether there is available electricity that makes it affordable to produce ferrochrome. The South African ferrochrome outlook will also be influenced by duties on chrome ore that are being proposed by various industry stakeholders. It will also be important to watch whether ferrochrome industry lobbying of the South African government, to impose a USD100/t duty on raw chrome exports from South Africa, comes to anything, since this is likely to make South African ferrochrome more competitive than ferrochrome that is produced elsewhere using higher input costs (Chirisa, 2009) Moeijelijk chromite market The Moeijelijk Project is targeting chromite for metallurgical use, specifically in the ferrochrome industry. The exploration results identify that the chromite content meets the requirements for supply to ferrochrome market. The Moeijelijk deposit contains an average of 41% Cr 2 O 3 and an FeO content of approximately 18% to 26% based on the early stage information available. The LG6 is considered appropriate for the market that has been identified, however detailed demand, supply and product details will be assessed during the advanced exploration stage. 26. General Mineral Asset VALUATION Approach SV2.1; SV2.8; SV2.9; SV2.10; SV2.11; SV2.12; SV2.14; SV2.15; SV2.17; SV2.19; JSE12.9(f) This section describes the general mineral asset valuation approach which has been used by Venmyn Deloitte in this CPR to value the chromite asset of Bauba. At the early exploration phase, mineral projects are valued dependent upon prospects for eventual economic extraction. A seller s view may not necessarily match that of a potential buyers and as such the eventual transaction price is usually a compromise. International mineral asset valuation codes set out clear methodologies for the valuation of mineral assets, with confidence in the mineral resource estimates being the primary value driver. The SAMREC Code guide Mineral Resource and Mineral Reserve classifications based upon geological confidence in the estimates through the exploration process. With respect to the contributing properties of Bauba, the chromitite resources have been classified by Venmyn Deloitte in compliance with the SAMREC codes. Consistent with this approach, Venmyn Deloitte has valued the contributing properties of Bauba in compliance with the reporting and assessment criteria stipulated for Mineral Asset Valuations in the SAMVAL codes. It must be noted as per SAMVAL 24, two valuation approaches must be applied. The Moeijelijk Project was created by a group of individuals who have not kept detailed records of historical costs. A historical cost approach valuation has been completed but has not been relied upon as the source information is not dependable. The selection of an appropriate valuation method depends on such factors as, inter alia: the nature of the valuation; the development status of the mineral asset; and the extent and reliability of available information. A mineral asset is defined, according to the International Financial Reporting Standards (IFRS) as a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise. The selection of an appropriate valuation method depends on such factors as the nature of the valuation, the development status of the mineral asset, and the extent and reliability of available information. 73

76 In conducting mineral asset valuations, Venmyn Deloitte considers the following categories of mineral assets: Exploration property A Mineral Asset that is being actively explored for mineral deposits but for which economic viability has not been demonstrated. Exploration Properties have asset values derived from their potential for the discovery of economically viable mineral deposits. Exploration property interests are bought and sold in the market. Many of these transactions involve partial-interest arrangements, such as farm-in, option or joint-venture arrangements; Development projects A Mineral Asset that is being prepared for mineral production and for which economic viability has been demonstrated by a Feasibility Study or Pre-feasibility Study and includes a Mineral Asset which may not be financed or under construction; Production property A Mineral Asset that is in production; Defunct property A Mineral Asset on which the Mineral Resources and Mineral Reserves have been exhausted and exploitation has ceased, and that may or may not have residual assets and liabilities; and Dormant property A Mineral Asset that is not being actively explored or exploited, in which the Mineral Resources and Mineral Reserves have not been exhausted, and that may or may not be economically viable. Any decision to apply a valuation technique depends principally on the stage at which the project has been developed, the geoscientific confidence and the potential of the asset to demonstrate reasonable and realistic prospects for eventual economic extraction. Changes in the value of a mineral asset are associated with increasing confidence through increased knowledge, as well as the greater degree of probability of it being brought to account. An appropriate valuation recognises these possibilities. As the confidence in a Mineral Resource estimate is increased, i.e. from an Exploration Result to an Inferred Mineral Resource through Indicated Mineral Resource to a Measured Mineral Resource, so the veracity of the valuation increases. Figure 13 illustrates the link between a mineral asset project s development status and the most appropriate valuation methodology that should be utilised Mineral asset valuation methodologies Where insufficient confidence exists in the technical parameters of a mineral deposit, or mineral asset, to classify resources, valuation methods mainly rely on the principle of historical cost. This implies that a mineral asset s value is related to the money spent on its acquisition, plus a multiple of the exploration expenditure, depending upon the degree to which its prospectivity has been enhanced by exploration. A market comparative approach based on values obtained in transactions of a similar nature can also be used. Once resources have been classified, then market comparisons can be made on a monetary value per unit of mineralisation (eg. ZAR/tonne). After technical studies establishing the basis for future economic exploitation have been carried out, discounted cash flow (DCF, or cash flow) methods are applicable and all the methods used to identify a reasonable transaction value. The Bauba chromite assets are pre-development with no SAMREC Code compliant resources declared. In performing the valuation of the Bauba mineral assets, Venmyn Deloitte has relied on the cost and market approaches. The effective date of this valuation is the 1 March Below, we briefly describe each of the appropriate methodologies employed Cost approach The cost approach relies on historical amounts spent on the mineral asset. Reference to historical costs implies that a mineral asset s value is related to the money spent on its acquisition, plus a multiple of the exploration expenditure, depending upon the degree to which its prospectivity has been enhanced by exploration. Through the introduction of a prospectivity enhancement multiplier (PEM), a premium (or discount) multiplier can be applied to the total cost of exploration to date, depending on whether the exploration expense being considered has relatively enhanced the prospectivity of the target or not. In conducting the mineral asset valuations using this method, Venmyn Deloitte considered the prospectivity of chromitite properties taking cognisance of the classification of exploration phases illustrated in Table 8, which represents Venmyn Deloitte s standard PEM schedule for chromitite deposits. The magnitude of the PEM is determined by the level of sophistication of the exploration for which positive exploration results, applying the concept of successful efforts, have been obtained. 74

77 Table 8: Prospect exploration phase classification and the corresponding PEM Phase completed Exploration phase PEM Fair Upper Lower Exploration activity 0 Exploration concept 0,0 0,2 0,0 Project about which nothing is known, but which has potential on a conceptual basis. 1 Desktop study 0,0 0,5 0,2 Historical and literature study, records or evidence of chromite findings in the area. Historical artisanal mining data if any. 2 Reconnaissance 0,8 1,0 0,5 Geological mapping if terrain suitable. Palaeo topographical mapping. Historical drilling with intercept data, no laboratory assay. 3 Ground follow-up 1,0 1,0 0,8 Detailed outcrop mapping, identification of chromite hosting strata, chromite seam outcrop mapping. Sampling of exposed chromite reefs where available. Historical drilling data with intercept and analyses, but of questionable authenticity. 4 Ground follow-up 2,0 2,0 1,0 Ground geophysics, remote sensing techniques (e.g. seismics). Reliable historical drilling, but correlations difficult due to density of drilling. 5 First-phase drilling 4,0 5,0 2,0 Large diameter core drilling, widely spaced grid with preliminary chromite analysis. First-pass tonnage estimate. Inferred Mineral Resource. 6 Resource drilling and laboratory testwork 8,0 11,0 5,0 In-fill drilling, detailed chromite analyses and metallurgical testwork. Establish market potential, detailed resource tonnage estimation. Advanced Inferred and Indicated Mineral Resource classification. 7 Historic mining 16,0 20,0 11,0 Previous commercial production, establishing reliable and well documented quality, tonnage, metallurgy etc. Measured Mineral Resource. 8 Reserve classification 20,0 >20,0 20,0 Complete feasibility assessment, establish economics, and design a mine of an appropriate nature. Classification of mineral reserves. In Venmyn Deloitte s opinion, these PEM values reflect fair and reasonable multipliers based upon on the amount of work associated with and/or development status of any particular project. In order to establish an appropriate PEM, a property valued using this method was classified taking cognisance of Table 8, with appropriate adjustments, knowing that each new exploration phase was carried out contingent upon the successful outcome of the preceding phase. In addition, the PEM selected, was reviewed taking into consideration proximity to well understood resource areas, drillhole density and a qualitative assessment of the prospects for eventual extraction. Venmyn Deloitte has analysed and rated the contributing properties according to the results achieved from historical and recent exploration activities as well as the success these activities have had on the classification of chromite resources over the various properties, and the prospects for development Market approach The market approach (or sales comparative approach) 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 is based upon other, preferably recent, arm s length transactions of a similar nature that determine a monetary value per unit of resource (ZAR/tonne) or area (ZAR/km 2 ). To this end, Venmyn Deloitte has compiled a transaction and valuation database in order to undertake the necessary comparisons. The results for Bauba are illustrated in Figure 14. For the project, chromite resources have not been classified. Venmyn Deloitte carried out a comparable transaction (market approach) valuation on the basis that recent market valuations of a similar nature provide the proxy for value based on the licence area. In order to arrive at a reasonable market value with which to compare the respective projects, appropriate recent and historical transactions must form the basis. The comparable transaction value range selected for the valuation of the contributing projects has considered the nature of this valuation and the associated risk factors. 75

78 26.2. General mineral asset valuation assumptions The mineral assets of the contributing projects have been valued using appropriate methodologies as described in the relevant project sections to follow. These valuations have been based on a number of specific assumptions as discussed in the relevant project sections, including the following general assumptions, as relevant: That all information provided to Venmyn Deloitte, by Bauba and its contractors can be relied upon; That the valuations are with respect to the face value of the mineral assets only; That the legal status of the mineral rights and statutory obligations were fairly stated; That the mineral licences will be kept valid and that they can be converted to Mining Licences in the future; That expired Prospecting Rights will be successfully renewed; That the Mining Rights will be kept valid; That all other regulatory approvals for exploration and mining will be timeously obtained; That the corporate structures and ongoing activities are fairly presented; That reliance can be placed on the exploration expenditures provided by Bauba; That reliance can be placed on the financial statements and management accounts provided by Bauba; That Bauba and its subsidiaries would continue as going concerns and would continue to be fully funded; and That Bauba would be able to secure markets and offtake for any future operations. Venmyn Deloitte made due enquiry into these issues to be satisfied of the potential impact on the mineral asset valuation. We have relied upon and assumed the accuracy of the information provided to us in deriving our opinion. Where practical, we have corroborated the reasonableness of the information provided to us for the purpose of our valuation, whether in writing or obtained in discussion with management of Bauba, by reference to publicly available or independently obtained information. Our valuations are based on current economic, regulatory, market as well as other conditions. Subsequent developments may affect these valuations, and we are under no obligation to update, review or re-affirm our valuation based on such developments Mineral asset valuation The contributing chromite assets of Bauba can be defined as an exploration. Consequently, the contributing properties were valued using the cost approach and market approach Cost Approach Valuation Table 9: Cost approach valuation results Exploration expenditure Zarm The Moeijelijk Project was created by a group of individuals who have not kept adequate records of historical costs. Bauba management provided historical cost estimates, but Venmyn Deloitte has low confidence in the accuracy of these numbers. Venmyn Deloitte has considered the prospectivity of the Moeijelijk Project taking cognisance of the classification of exploration phases illustrated in Table 8. To date, exploration costs on this project total ZAR0.99m as capitalised in the latest financial statements. A drilling program with detailed analysis on the project and a potential market has also been identified, however a Mineral Resource has not been defined. Based on Table 8, a Prospectively Enhancement Multiplier (PEM) of between 1 and 5 can be applied to the exploration costs. A summary of the results is presented in Table 9. Prospectivity Enhancement Multiplier Project value Bauba attributable value* Lower Pem Upper Pem Preferred Pem Lower Zarm Upper Zarm Preferred Zarm Lower Zarm Upper Zarm Preferred Zarm ,99 4,96 2,97 0,59 2,97 1,78 *Bauba owns 60% of the licences. The value range derived from the historic cost approach is between ZAR0,99 million (low valuation) and ZAR4,96 million (high valuation) on a 100% basis. This valuation range was calculated from the historic exploration expenditure on the project and the range of PEM values defined in Table 8. The value range reflects the level of value uplift based on the sophistication of the exploration for which positive exploration results, applying the concept of successful efforts, have been obtained. Venmyn Deloitte s preferred value is ZAR2,97 million. On an attributable basis, the value of the assets for Bauba s 60% shareholding ranges between ZAR0,59 million and ZAR2,97 million with a fair value of ZAR1,78 million. It should be noted that due to the low confidence in the input parameters, Venmyn Deloitte does not rely on the valuation results of the historic cost approach in determining the fair value of the asset. 76

79 Figure 13: Project lifetime value and valuation methodology curve for Mineral Resource projects 77

80 Figure 14: Market value 78

81 Market approach valuation Table 10: Market approach valuation results Area The market approach relies on the principle of willing buyer, willing seller and requires that the amount obtainable from the sale of the asset is determined as if in an arm s length transaction. However, in order to arrive at reasonable market values with which to compare any mineral asset undergoing valuation, appropriate recent and historical transactions must form the basis. The quantification of unit values is a subjective one but Venmyn Deloitte is of the opinion that the ranges defined are reasonable in light of historic transactions and considering the following: Stage of development of the project; Location of the mineral deposit; Proposed mining method; The quality of the deposits; The classified Mineral Resources; Infrastructure and logistics; and Timing of potential exploitation. Ordinarily, we would consider Mineral Resources declared on a mineral asset and perform a valuation based on the USD amount per contained unit of metal (the USD/t method). However, since no compliant Mineral Resources have been declared on Moeijelijk Project, we have relied on the USD/km 2 method, commensurate with the early stage nature of the project. This method is based upon other, preferably recent, arm s length transactions and valuations of a similar nature, which determines a monetary value per unit land area (USD/km 2 ). Venmyn Deloitte has plotted recent transactions and valuations of a similar nature in relation to their specific stage of exploration (as shown in Figure 14) in order to make the necessary comparisons. The valuation curve is denominated in US Dollars (USD). The valuation methodology for exploration properties is based upon transactions based upon the reported total exploration area compared to the price paid. This methodology is not adjusted the prospective areas only, as in most cases these early exploration properties do not yet have known areas of mineralisation. This is the basis of the comparative value curve. Figure 14 was created by separating various exploration projects on the basis of their development stage in the following manner: Category A projects where little work has been carried out and is mainly limited to regional exploration and geophysics; Category B projects where some work has been carried out. This work includes, but is not limited to geochemical sampling, preliminary drilling and trenching; and Category C projects where the development status has exceeded the Category B but no mining operations have been commissioned. Typically, some scoping and feasibilities studies have been carried out in these projects. Each transaction is represented on the curve as a dot. Each transaction is represented as a Category A, Category B and Category C project, depending on the stage of work completed on the asset under consideration for that transaction. The Moeijelik project is placed on the valuation curve in Figure 14 with a similar value as the two highest Category B transactions and the lowest Category C transaction. The curve does not illustrate value bands as there are no clean-cut boundaries between the different categories. The data presented in Figure 14 clearly shows a distinct difference in the transaction value associated with properties on which drilling has confirmed targets and/or drilling has taken place and on properties on which only geophysics has taken place. Empirically this makes good sense as drilling follows geophysics and represents a progression up the exploration value chain towards a declaration of Mineral Resources. It also demonstrates the premium that the market is prepared to pay for projects associated with historical estimates of mineralisation (i.e. projects for which a positive indication of potential economic viability has been made). It is worth mentioning that, from the transactions that form the basis of Figure 14, the areas transacted become smaller as the development stage progressively increases illustrating the fact that as a project moves up the value curve, exploration is concentrated on smaller, more prospective, areas. Furthermore, no clean-cut boundary exists between the different categories and this is reflective of reality, the different market forces at play and the strategic value each project represents to its prospective buyers. The Moeijelijk Project has been classified as a Category B project according to the criteria set out above. Consequently, we have used the entire Venmyn Deloitte exploration projects valuation curve to derive unit values for the Moeijelijk Project after studying the work that has been carried out on the project and its prospectivity. These unit values have been multiplied by the total land area of the project to derive a project value. The summary of the valuation dynamics of the Moeijelijk Project using the market approach is shown in Table 10. The unit values are clearly on the high end of the range. The large unit value range is indicative of the early stage nature of the project. Unit value usd/km 2 Project value usdm Project value (100% attr) zarm* Ha km 2 Lower Upper Lower Upper Lower Upper Mean Project value (Bauba attr) Zarm** 2 270,93 22, ,95 5,35 55,39 59,76 57,57 34,54 * ZAR:USD exchange rate used is 11,18 as at 1 February ** Bauba attributable value is 60% of the total project value. The market approach has therefore valued the Moeijelijk Project at between ZAR55,39 million (lower value) and ZAR59,76 million (upper value) with a mean value of ZAR57,57 million. The Market Approach Unit Values are based on the reported total exploration area compared to the price paid. This methodology is not adjusted the prospective areas only. It should be noted that the Moeijelijk project is only prospective for chromite in a small area with respect to the farm boundary, which is confined to the southwest corner of the property. The mineralised area is approximately m 2 and the rest of the project area hosts no chromite mineralisation. 79

82 Valuation summary Venmyn Deloitte has performed a valuation of the Moeijelijk Project using the cost and market methods in accordance with the SAMVAL Code and the results are summarised in Table 11. Table 11: Bauba summary of valuation results Valuation method Lower ZARm Project value Upper ZARm Preferred ZARm Bauba attributable value** Lower ZARm Upper ZARm Preferred ZARm Cost approach 0,99 4,96 2,97 0,59 2,97 1,78 Market approach 55,39 59,76 57,57 33,23 35,86 34,54 **Based on 60% ownership of the licences. Venmyn Deloitte concludes that the fair value of the the Moeijelijk Project attributable to Bauba is ZAR34,54 million with a lower value of ZAR33,23 and an upper value of ZAR35,86 million Valuation assumptions The valuation opinion has been informed on the assumption that the specific technical and financial information specific to the project, detailed in the preceding sections; is materially correct and can be relied upon Previous valuations Venmyn Deloitte is not aware of any other recent public valuations that have been completed on Moeijelijk Chromite Project within the past two years Audits, reviews and historic verification No audits or reviews of the mineral asset valuation have been conducted and no historic verification of the performance parameters on which the mineral asset valuation is based can be conducted. 27. Adjacent Properties SR1.4A(i) Chrometco and Chromex chromite projects The Moeijelijk Project is situated in between the Samancor-owned Mecklenburg and the Chromex Chromite Mines, both forming part of the Eastern Chromite Mines division (ECM). ECM is situated approximately 350km north-east of Johannesburg, not far from the town of Steelpoort. The Sefateng Project is located adjacent to the Moeijelijk Project and has been the subject of recent exploration. The Chromex Chromite Mine is currently not operating. The Mecklenburg Chromite Mine is an underground operating mine where the LG-6A and LG-6B chromitite reefs outcrop at the surface and comprise approximately 9Mt and 5,7Mt of chromite resources and reserves respectively ( Sefateng Chromite Project The Sefateng Project is located within the Central Area of the Eastern Limb of the Bushveld Complex over two farms neighbouring the Moeijelijk Project, namely, Zwartkoppies 413KS and Waterkop 113KT. The primary target for this project is the LG-6 Unit, which is regarded as the most important chromite target in the Bushveld Complex, combining the most favourable chemistry and thickness. The LG-6 Unit is located at the base of a prominent curvilinear chain of mountains which run along the central axis of the prospect, and whose orientation rotates from north north-west in the south to west north-west in the north. The hills form a chain of high points climbing from an altitude of 820m to 860m in the valleys to a height of 1 293,7m on a hill called Tshailane at the western corner of Zwartkoppies 413KS and to an altitude of 1 399,5mamsl on a hill called Serafa close to the southern corner of Waterkop 113KT. The tabular shaped mineralisation dips to the south-west under these hills and to explore these westerly dipping ore bodies, exploration was conducted using drill roads which were specially cut into the relatively steep mountainside and have been developed to contour levels which have allowed access over the mountains. In this area the Unit consists of a chromitite duplex composed of the lower LG-6 Unit (Steelpoort Seam), with an average thickness of 1,15m, overlain by the 0,35m thick LG-6A chromitite layer (Leader Layer) and parted by 0,97m of orthopyroxenite (Gain, 2008). The LG-6 Unit consists of a chromitite duplex composed of the lower LG-6 chromitite layer (Steelpoort Seam), which has a weighted average thickness of 1,15m, overlain by the 0,35m thick LG-6A chromitite layer (Leader Layer) ) which has a sharp footwall contact, a gradational hangingwall contact, and an average thickness of 0,35m (range 0,11 0,45m). Both layers are enclosed within medium- to coarse-grained orthopyroxenite which contains variable concentrations of disseminated chromite and erratically distributed clinopyroxene poikilocrysts. The orthopyroxenite parting has a weighted average thickness of 0,97m. All three components that constitute the LG-6 Unit combine to form a composite layer 2,47m thick This LG-6 layer is seen as suitable for conventional mining in areas close to the outcrop where the dip is between 14º to 16º. Drilling information from this project and information from nearby mines such as Dilokong has shown that the surface dip of the chromitite layer reduces between 10º and 12º with depth. With a shallower dip it is possible that mechanised mining could be conducted on the complete LG-6 Unit which is 2,46m thick (Gain, 2008). The LG-6 Unit is overlain by a relatively monotonous sequence of medium- to coarse-grained orthopyroxenite with irregularly distributed chromian augite oikocrysts. Between 22 and 30 metres above lies the LG-7 chromitite layer which has an average thickness of 0,39m. It typically has a relatively sharp basal contact with chromitite disseminations of between 20mm and 30mm thick and an upper chromitite disseminated zone up to 0,20m thick. The LG-7 is overlain by medium- to coarse-grained orthopyroxenite which contains occasional clinopyroxene phenocrysts. Minor anorthosite lenses are irregularly dispersed in the sequence. The incidence of intercumulus plagioclase and anorthosite lenses increases up through the sequence (Gain, 2008). 80

83 In the Sefateng Project area, most of the boreholes were drilled through the middle chromitite group. In the Central Area these layers are not as well developed as those in the Western Limb of the Bushveld Complex and can vary in thickness and continuity along strike. Borehole SKD 10, in which two chromitite layers are developed, was chosen as representative of these layers as it is the deepest borehole drilled on the property. It should however be noted that there is considerable variation of the middle group between the various boreholes. The lowermost of the layers, the MG-1 chromitite layer, is represented by a series of thin chromitite layers over an interval of 2,01m, with sharp contacts and enclosed in medium-grained orthopyroxenite. The core of this layer contains a prominent chromitite duplex 0,46m and 0,09m thick. This composite layer is overlain by a 2,78m thick pegmatoid. This layer is overlain by twenty metres of pyroxenite which gradually becomes more feldspathic upwards to present as medium-grained melanorite (Gain, 2008). The top chromitite layer of the middle group, the MG-4 chromitite layer is diagnostic. It contains a 1,53m thick, finely layered leuconorite to anorthosite footwall containing thin streaks and layerlets of chromitite. The layers show evidence of cross-bedding and folding. In this borehole the MG-4 chromitite layer is overlain by thin chromitite stringers which, in turn are overlain by fine-grained leuconorite and anorthosite. In borehole SKD-10 the top of the middle chromitite group is found 118m above the LG-6 Unit. The middle group chromitites are overlain by a sequence of medium-grained melanorite to norite for 96 metres until the UG-1 chromitite layer is encountered. This layer is again a composite found over an interval of 1,38m and typically associated with anorthosite and pegmatoids (Gain, 2008). Within the Sefateng Project area the LG-6 and LG-6A chromitites layers are essentially made up of chromite spinel, orthopyroxene (En91 En89) and other silicates. Within central parts of these layers, chromite spinel forms 80% to 90% of the mode with silicate minerals making up the balance according to the following percentages: orthopyroxene (bronzite); 70%, clinopyroxene (chromian augite): 10%, plagioclase: 5%, talc: 4%, chlorite: 5%, mica: 5% and minor carbonate and sulphide minerals. The weathered chromitite rock has a distinctive mottled appearance due to the presence of bronzite and occasionally chromian augite poikilocrysts. These form ovoid nodules which range in size from 10mm to 25mm in diameter and when examined under the microscope contain small grains of chromite. When examining the LG-6 chromitite layer within the various borehole cores and in surface exposures it was noted that the character of the ore can change. Closer to the surface, generally within the top 20m of core, the ore commonly produces black sand or fines. In other examples from ore below the weathered zone the ore can be much harder with a lower friability index. It is anticipated that a high percentage will probably survive the mining and transport to remain as coherent blocks or fragments producing a product called lumpy ore (Gain, 2008). Other mines close to Sefateng property have produced between 20% and 40% lumpy ore and given the borehole observations it is anticipated that lumpy production from a mining operation could be the same. It should also be noted that the proportion of lumpy ore can increase significantly closer to faults or other structural perturbations (Gain, 2008). 28. Exploration Programme and Budget JSE12.9e(ii-iii) The Prospecting Right for the Chromite Right was extended for three years in 2012 and expires on the 17 July No further exploration is planned for the Chromite Project by Hlabirwa or the Vendors at this stage. Bauba Platinum intends to bring the Moeijelijk Project into the development phase once the transaction is complete and will update the exploration programme and complete the relevant exploration work and Feasibility Studies as and when required. The transaction includes the condition that a Mining Right is successfully applied for. 29. Risk Analysis SR6 Many of the technical and infrastructural risks associated with the Chromite Project have been minimised due to its favourable location with respect to an established mining region. The fact that the Moeijelijk Project is located in a very well understood geological setting that is currently supporting numerous mining operations, and therefore has a well understood geology over which mining claims have already been issued, means that the time to bring the Moeijelijk Project into production, if results are favourable, will be reduced as less exploration will be required. The technical risks associated with the Mineral Resource estimation are low. Using this information, the early stage economic potential for the Moeijelijk Project can be assessed. The greatest risk to the Moeijelijk Project is the location of structural features such as faults and dykes, which are not well understood from exploration drilling. It is expected that further drilling will not improve confidence in locating these features and reliance is placed upon the geomagnetic survey. The Chromite Project represents a relatively low project risk to Bauba Platinum. 30. Conclusions This CPR includes the following conclusions: The Chromite Project is situated within a prime segment of the Eastern Limb of the BC, where numerous companies are prospecting and successfully mining chromite from various reefs. In addition, the Moeijelijk Project lies in close proximity to well drilled and explored properties, whose information would expedite the understanding of the geology and mineralisation in this area; Geologically the Moeijelijk Project should be suitable for mining as the mineralised reefs are expected to be continuous along strike and down-dip, as deduced from the neighbouring properties; Prospecting rights are still valid and the bulk mining right is under application; Bauba Platinum has an approved EMP, closure plan and financial provision, with associated compliance reporting conditions contained within the Prospecting Licence; and The exploration approach for the Moeijelijk Project is systematic and appropriate for the style of mineralisation and the expected target resource would be of a sufficient quantity to support the work programme being suggested. Venmyn Deloitte was still awaiting the required information at the time of this publication. An approved EMP, closure plan and financial provision, and associated environmental licences are conditions contained within the Prospecting Licence, and are mandatory for statutory legislative compliance. The information provided below details the information received from Bauba Platinum to date. 81

84 31. DATE AND SIGNATURES SR11A(iii); SV2.13; SV2.14 Yours faithfully, AN CLAY MSc (Geol), MSc (MinEng), DipBusMan, PrSciNat, MSAIMM, FAusIMM FGSSA, MAIMA, MSPE, IoD Competent Person/Valuator J.A. MYBURGH BSc (Mathematics) MIASSA, MGASA Mineral Project Analyst TC ORFORD BSc Hons (Geol), GDE (MinEng) MGSSA, MGASA, MMINSA Mineral Project Analyst S DYKE MSc (EnvSci), CandSciNat MIAIASA, MGSSA Environmental Industry Advisor K MPHAHLELE BSc Hons (Geol), PrSciNat MGSSA Mineral Industry Advisor Effective date: 1 March 2014 Final report date: 19 August

85 Appendix 1: References SR1.3A(i); SV2.11 Author Date Title Source Campbell and Johnson 2008 Interpretation of high resolution aeromagnetic survey data over the MTC- EBC project area M. Chirisa 2009, updated 2013 A Strategic Industry Review and Facilitation Report on the South African Chromite Supply Industry DMR 2013 July 2013 Provisional Mineral Production and Sales Statistics Venmyn Deloitte DMR DWAF 2007 Policy documents Gain, S 2008 Geologic Report on a Chromite Deposit on the farms Zwartkoppies 413KAS and Waterkop 113KT The Sefateng Project, Northern Province Internal document Legalbrief Today 2013 MPRDA amendment process fleshed out Leon, P 2013 MPRDA amendments may further damage investor confidence Papp, J 2013 Chromium Mineral Commodity Summaries USGS Patel 2011 Minister Edna Molewa and Minister Ebrahim Patel brief media at UNFCCC COP17 Merafe 2013 Further ferrochrome production cuts Roskill undated Roskill's new report on chromium will be published within six weeks Roskill Samancor undated Operations and Locations Tucker, C, Sibisi, S 2013 Brief overview of the main amendments proposed in the Mineral and Petroleum Resources Development Draft Amendment Bill USGS 2013 Chromium Van der Linde, GPL 2008 Ore resource and reserve calculations of the LG-6 chromitite on the farms Waterkop 113KT and Moejelijk 412KS Van der Want 2013 Amendments to the South African mining law a controversy in the making Webber Wentzel 2009 Mineral and Petroleum Development Amendment Act, 2008 Internal document Webber Wentzel Mining, Energy and Natural Resources e-alert 83

86 Appendix 2: Glossary and Abbreviations SR10A(ii) Abbreviation/term a 3D amsl ANC AOD AusIMM b BH BSc BSc (Hons) Bt Capex CPR CRIRSCO DCF DEA DEFR Dip DMR DWA D/V EAPs EBIT ECA ECSA EIA EMP EMPR EMRP EPA ESIA EU E/V FA FGSSA FSAIMM GDP GN GNR GSSA ha IAASB IFRS IRR JSE Kd Ke kg km Explanation Specific company risk premium 3 dimensional Above mean sea level African National Congress vacuum-oxygen decarburising Australian Institute of Mining and Metallurgy Beta value, is measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole Borehole Bachelor of Science degree Bachelor of Science Honours degree Billion tonnes Capital expenditure Competent Persons Report Committee for Mineral Reserves International Reporting Standards Discounted cash flow Department of Environmental Affairs (for South Africa/Botswana) Department of Forestry and Range Resources Diploma Department of Mineral Resources Department of Water Affairs Proportion of company funded by debt Environmental Assessment Practitioners Earnings before interest and tax Environment Conservation Act Engineering Council of South Africa Environmental Impact Assessment/ Energy Information Administration Environmental Management Plan/ Programme Environmental Management Programme Report Equity Market Risk Premium EPA Technical Services Proprietary Limited Environmental and Social Impact Assessment European Union Proportion of company funded by equity Forest Act Fellow of the Geological Society of South Africa Fellow of the South African Institute for Mining and Metallurgy Gross domestic product Government Notice Government Notice Regulations Geological Society of South Africa Hectare Internal Auditing and Assurance Standards Board International Financial Reporting Standards Internal Rate of Return Johannesburg Stock Exchange Limited Cost of Debt Cost of Equity Capital Kilogram Kilometre 84

87 Abbreviation/term LG-6 Unit LG-6A LG-6B LG-6C m m 2 m 3 MAusIMM MGSSA MinEng Mining Charter mm MPRDA MPRRA MR MSAIMM M.Sc. Mt Mtpa N/A NEMA NEM:AQA NEMBA NEM:PAA NEM:WA NFA NOPR NPV NWA Opex PL PM 10 PPP PrSciNat Ptn Q R186 RD RE ROM ROPO SAIMM SAMREC SAMVAL SHE SLP t tc USD Venmyn Deloitte VOD WA ZAR ZARm Explanation This includes the LG-6A, LG-6B and LG-6C for the purposes of this report This a seam A of the LG-6 Unit only This a seam B of the LG-6 Unit only This a seam C of the LG-6 Unit only Metre/million Square metres Cubic metre Member of the Australian Institute of Mining and Metallurgy Member of the Geological Society of South Africa Mining Engineer Broad-based Socio-Economic Charter for the South African Mining Industry Millimetre South African Minerals and Petroleum Resources Development Act Minerals and Petroleum Resources Royalty Act Mining Right Member of the South African Institute for Mining and Metallurgy Masters degree in Science Million tonnes Million tonnes per annum Not applicable National Environmental Management Act National Environmental Management: Air Quality Act National Environmental Management Biodiversity Act National Environmental Management: Protected Areas Act National Environmental Management: Waste Act National Forests Act New Order Prospecting Right Net Present Value National Water Act Operating expenditure Prospecting Licence Particulate Matter Purchasing Power Parity Professional Natural Scientist Portion Quarter South African government bond Relative density Remaining extent Run of mine Recognised Overseas Professional Organisation South African Institute for Mining and Metallurgy South African Code for Reporting of Mineral Resources and Mineral Reserves The South African Code for the Reporting of Mineral Asset Valuation Safety, Health and Environment Social and Labour Plan Tonnes Corporate Tax Rate United States Dollar Venmyn Deloitte Proprietary Limited vacuum-oxygen decarburising Water Act South African Rand Million South African Rands 85

88 Appendix 3: Certificates of Competent Persons SR11A(i)(ii); SV2.13; SV2.14 Name of staff: Andrew Neil Clay Position: Managing Director, Minerals Industry Advisor, Competent Person and Competent Valuator Name of firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa Proprietary Limited Address: 1st Floor, Building 33, The Woodlands Office Park, 20 Woodlands Drive, Woodmead Profession: Geologist Date of birth: 16 April 1955 Years with firm/entity: 27 Nationality: British Membership in Professional Societies Class Professional society Year of registration Member Canadian Institute of Mining, Metallurgy and Petroleum 2006 Adviser JSE Limited Listings Advisory Committee 2005 Advisor JSE Issuer Services 2008 Member JSE Issuer Mining Sub-committee 2009 Associate member American Association of Petroleum Geologists 2005 Member South African Institute of Directors 2004 Fellow Geological Society of South Africa 2003 Member American Institute of Mineral Appraisers 2002 Member South African Institute of Mining and Metallurgy 1998 Fellow Australasian Institute of Mining and Metallurgy 1994 Member SACNASP (Reg No /88) 1988 Member Investment Analysts Society of South Africa 1990 Member Society of Petroleum Engineers 2009 Member Project Management Institute 2011 Expert Hong Kong Stock Exchange 2012 Involvement in Code Writing Position Professional code Date of involvement Chairman South African Oil and Gas Committee (SSC) 2011 present Member South African (SAICA) extractive industries deliberations 2003 present Member International Minerals Valuation Code (IMVAL) 2012 present Representative Investment Analysts Society on the SSC (IAS) 2009 present Initiator SAMREC/IAS Award 2002 present Adviser JSE Listing Requirements (Section 3 On-going obligations) 2002 present Working group member SAMREC Code (Oil and Gas) 2005 present Working group member SAMVAL Code 2001 present Working group member SAMREC Code (Re-write Sections 1 5) 2005 present Working group member SAMREC Code (Re-write) 2003 present Working group member SAMREC Code (First Version) Mr Clay currently has a special interest in incorporating oil and gas reporting procedures into the general application of mineral asset valuation. 86

89 Involvement in Fund Management Position Fund Date of involvement Member of Investment and Audit Committee New Africa Mining Fund (NAMF) 2007 present Director Strategic African Mineral Investment Fund (SAMI) 2008 present Fair and Reasonable Opinions Year Client Securities exchange jurisdiction Transaction type Implied value (usdm) Description 2011 Optimum Coal JSE The specific offer of ZAR38,00 in cash per ordinary share by an external party Independent Professional Expert Report 2011 Chrometco JSE Acquisition of an Interest in Line-Chem 66,6 Independent Professional Expert Report 2011 Wesizwe JSE Financing Solution for the Development of Wesizwe s Project Independent Professional Expert Report 2010 Sylvania ASX Issuing new ordinary shares 34 Independent Professional Expert Report 2009 Chrometco JSE Acquisition of interest 8,3 Independent Professional Expert Report 2009 Metorex JSE Disposal of 6,3% interest 5,7 Independent Professional Expert Report 2009 Braemore Resources JSE Acquisition of interest 36,3 Independent Professional Expert Report 2007 Diamondcore/BRC JSE Acquisition 50 Independent F&R for Diamondcore 2006 LionOre International TSX Acquisition notification documentation 650 Independent Technical and Valuation Fatal Flaws Report and F&R opinion for the Board of LionOre. Not published as an F&R 2005 Diamond Core JSE Category/Merger 10,0 Independent CPR on the mineral assets of Samadi Resources SA Proprietary Limited and Diamond Core Resources Limited 2005 LionOre International TSX Acquisition notification documentation 110,0 Tati Nickel Review of Mineral Resources 2005 Aquarius JSE 26% BEE 150,0 Independent Techno-Economic Valuation and Fair and Reasonable Opinion on the PIC, IDC, DBSA 26% Empowerment Transaction. Documents waived for the secondary listing 2004 Barplats JSE Offer to Barplats Minorities 60,0 Offer by Platinum Consortium to take out Implats. The SRP insisted our report be prepared in full. In the end Investec wrote the Fair and Reasonable but was fully reliant upon the Venmyn work as demonstrated in the circular 2004 Zimplats ASX Collapse of the Makwiro Structure for shares to Implats 2003 Amplats JSE Acquisition price calculation for Unki Platinum 2003 Aquarius Platinum (South Africa) Proprietary Limited 2002 Consolidated African Mines Limited. ASX JSE Opinion on the value of a Refinery Agreement CAM acquired 40% of the Letseng diamond mine for CAM shares 2002 Zimplats ASX Implats acquired a controlling interest in Zimplats by acquiring Aurion Gold shares 2002 Aquarius ASX Aquarius acquires 65% in ZCE Platinum Limited Confidential 38,0 Fair Value calculation in a corporate restructure Preparation of an Independent Techno- Economic Valuation Report and Fair and Reasonable Opinion. Document not used as the transaction became immaterial for reporting purposes. 10,0 Fair & Reasonable Opinions for Aquarius Platinum for the Impala Refinery Commitments 10,0 Preparation of an Independent Techno- Economic Valuation Report and Fair and Reasonable Opinion. Document used in full 50,0 Preparation of an Independent Techno- Economic Valuation Report and Fair and Reasonable Opinion. Document used in full 50,0 Preparation of an Independent Techno- Economic Valuation Report and Fair and Reasonable Opinion. Document used in full 87

90 Year Client Securities exchange jurisdiction Transaction type Implied value (usdm) Description 2000 DiamondWorks TSX Lyndhurst a South African company takes control of Canadian junior Diamondworks 20,0 Preparation of an Independent Techno- Economic Valuation Report and Fair and Reasonable Opinion. Document used in full and special representation required in Toronto to explain the transaction and the assets 1999 New Mining Corporation JSE Listing and acquisition documentation 50,0 Complicated transaction and full Independent Techno-Economic Valuation prepared with Fair and Reasonable Opinion included in our report. This satisfied the JSE and the SRP 1996 West Witwatersrand Gold Holdings Limited JSE Section 440k Offer 20,0 Independent Competent Persons Report on the Offer by Durban Deep to West Wits under Section 440k. Document included in circulars to both shareholders. Our Fair and Reasonable Opinion was specifically requested by the SRP Detailed Tasks Assigned: Year Client Commodity Documentation 2013 Eureka Gold Technical Statement 2013 Aura Coal Exploration 2013 Nkwe PGE Technical Review 2013 Lesego Broadtec Beijing PGE Due Diligence 2013 Zyl Sentula Coal Valuation 2013 Samancor CITIC Chromite Valuation 2013 Jubilee Platinum Platinum Valuation 2013 Gold One Tulo Gold Gold Valuation 2013 Eureka Delta Gold Gold Technical Statement 2013 Exxaro Iron Valuation 2013 Deloitte Grindrod Manganese Audit 2013 Aquarius PGE Review 2012 Banro Lugushwa Gold Technical Review 2012 Araxa Rare Earths NI Bauba Platinum Platinum Technical and Economic Assessment 2012 IFC Mining Technical and Economic Assessment 2012 Central Rand Gold Gold CPR 2012 Lanxess Chromite Technical and Economic Assessment 2012 Loncor Ngayu Gold Mineral Resource Valuation 2012 Loncor Makapela/Mangajuripa Gold Mineral Resource Valuation 2012 Pering Listing Hong Kong Zinc Lead/Base metals CPR 2012 Stonebridge Hanieal Mozambique Gold Corporate Advice and Project setup 2012 Stonebridge Zim Gold Gold Corporate Advice and Project setup 2012 Terra Nova Manica Investment Gold Technical and Corporate Valuation 2012 PSIL Arbitration Expert Witness 2012 AngloCoal Coal Valuation 2012 Virgil Mining Gold Technical Report 2012 Sikhuliso Harmony Dumps Gold Corporate Transaction Advice 2012 Smart Carbon Combrink Coal Coal Technical Report and Valuation 2012 Optimum Coal Coal Independent Opinion 2012 Wits Gold Gold CPR and Valuation 2012 Pan African Resources Gold CPR and Valuation 2012 Banro Gold Technical Report and Valuation 2012 Harmony Evander Gold Full CPR and Valuation 88

91 Year Client Commodity Documentation 2012 Boynton PGM Pre-feasibility Study 2012 Sudor Coal Coal Valuation 2012 NMIC Gold Technical Report and Valuation 2011 SSC Mandarin Gold Independent Corporate and Technical Adviser 2011 Harmony Gold CPR 2011 Afrisam Cement Independent Valuation 2011 Chromex Chromite Hong Kong Listing 2011 Banro Gold Independent Technical Statement 2011 Xceed Capital Coal Independent Valuation Statement 2011 Chrometco Chromite Independent Valuation 2011 Scinta Coal Independent Technical Statement and Valuation 2011 Seque Manganese Manganese Prospectivity and Scoping Study 2011 Sable PGE Prospectivity and Drilling Density CP 2011 Taung Gold Hong Kong Listing 2011 Maghreb Minerals Zinc CPR 2011 Veremo Iron Updated Technical Statement on Veremo 2011 Smart Carbon Coal Strategic Adviser 2011 Sephaku Cement Technical and Economic Documentation 2011 Axmin Gold Technical and Economic Documentation 2011 Absa Vanadium Vanadium Vanadium Project Valuation 2011 BCL Dumps Nickel Scoping Study 2011 AMRT Copper/Gold Scoping Study 2011 Jindal Mining Coal Techno-Economic Statement on the Mbili Coal Project 2011 Essar RioZim Various Corporate Transaction 2011 SEW Trident Coal Transaction and Valuation Planning 2011 PSIL Uranium Strategic Valuation 2011 Kibo Mining Gold/Various Tanzanian Assets 2011 Moabsvelden Coal Coal Technical and Valuation Work 2011 Wesizwe PGE Fairness Opinion 2010 Namane Coal Technical Assessment 2010 Bauba Platinum Platinum Independent Strategic Technical Adviser 2010 Evraz Mapochs Independent Valuation 2010 African Copper Copper Independent Mass Balance and Orebody Fatal Flaws Assessment 2010 Advanced Mineral Recovery Technologies Gold Independent Sampling and Mass Balance Report 2010 Xstrata Coal Coal Independent Valuation Certificate 2010 Sephaku Cement Independent Technical Review 2010 White Water Resources Gold Independent Competent Persons Report 2010 White Water Resources Gold Independent Technical Statement 2010 Platmin Platinum Independent Techno-Economic Reports and Valuation 2010 West Wits Mining Gold Independent Prospectivity Review 2010 SSC Mandarin Gold Independent Corporate and Technical Review 2010 Ultra Tech Cement Independent Techno-Economic Statements 2010 Taung Gold Independent Technical Review 2010 Taung Gold Independent Valuation Statement 2010 Sylvania PGMs Independent Technical and Valuation Experts Report 2010 Mzuri Capital Gold Independent AIM Compliant Competent Person s Report 2010 Kalagadi Manganese Independent High Level Techno-Economic Review 2010 Lesego Platinum Independent Techno-Economic Valuation Report 2010 Lesego Platinum Independent Executive Summary 2010 G&B Resources Li Independent Prospectivity Review 2010 Miranda Coal Independent Technical Resource and Valuation Statement 89

92 Year Client Commodity Documentation 2010 Loncor Gold Independent Techno-Economic Valuation Report 2010 Gentor Resources Copper Indpendent Techno-Economic Report 2010 ETA Star Coal Independent Valuation Report 2010 AfriSam Cement Independent Technical Review 2010 Buildmax Cement Independent Short-Form Competent Report 2010 Anglo Platinum Platinum Independent Valuation of the PGM Assets 2010 Nyota Minerals Gold Independent Inferred Resource Estimate 2010 Absolute Holdings Platinum Independent Competent Persons Report 2010 AfriSam Cement Independent Technical Review 2010 African Copper Copper Mass Balance and Orebody Fatal Flaws Assessment 2010 Ruukki Platinum Short-Form Techno-Economic Statements 2010 Umbono Capital PGMs Independent Competent Persons Report 2010 Anglo Platinum PGMs Independent Mineral Asset Valuation 2010 Zambia Copper Investments Copper Mineral Asset Valuation 2010 White Water Resources Gold Short-Form Valuation Statements 2010 Central African Gold Gold NI Technical Report 2010 Platmin Platinum Updated NI Technical Report 2009 G & B Resources Uranium Independent Competent Persons Report 2009 Kalagadi Manganese Independent Techno-Economic Review 2009 Sephaku Cement Cement Indendent Competent Persons Report 2009 Metorex Gold Independent Fairness Opinion 2009 Kivu Resources Pegmatites Independent prefeasibility study 2009 Kalagadi Manganese Manganese Independent Tehno-Economic Review 2009 Taung Gold Gold Independent Competent Person s Report 2009 Sylvania Resources Platinum Independent Technical and Valuation Expert s Report 2009 Ernst & Young Jordan Gold Independent Valuation Report on mineral assets of a Gold Mining Concession in Ethiopia 2009 Dwyka Resources Gold Independent Technical Statement on Tulu Kapi Gold Project 2009 G & B African Resources Pot Ash Independent Prospectivity Review 2009 Central African Gold Gold Information Memorandum in the form of NI Compliant Technical Statement 2009 Braemore Resources Platinum Fairness Opinion 2009 New Dawn Gold Independent Technical Statement 2009 Investec Cement Independent Technical Review of CILU Cement assets 2009 IBI Iron ore Independent Technical Resource Statement 2009 Chrometco Chromite Fairness Opinion 2009 Rand Uranium Uranium Mineral Resource Review and Modelling 2008 Signet Mining Coal Independent Valuation of Coal Assets 2008 Lesego Platinum PGMs Independent Competent Person s Report for JSE Listing 2008 Norilsk Nickel Nickel Review of business strategy 2008 Minero Group Zinc/Lead Review of business strategy and Competent Person s Report 2008 Paramount Mining Diamonds Independent Technical Statements 2008 Anglo Platinum PGMs Independent Technical Report and Valuation 2008 Demindex Diamonds Review of business strategy and Technical Advice 2008 Investec Cement Due Diligence and Valuation of Cilu Cement 2008 DGI Copper/Cobalt Independent Technical Statements 2008 Abalengani Platinum Review of plant and Valuation 2008 Absolute Holdings Quarry Valuation 2008 Metorex Copper/Cobalt Fairness Opinion 2008 Investec Cement Due Diligence on Sephaku Assets 2008 Kivu Resources Tantalite Tantalite Strategic Planning and Valuation 90

93 Year Client Commodity Documentation 2008 Tantilite Resources Tantalite Independent Technical Report 2008 DGI Copper/Cobalt Independent Technical Statement and Valuation 2008 Uramin Uranium, Resourse Review and Technical Statements 2008 Harmony Gold Mining Au, Uranium Independent Technical Statements and Strategic business plan 2008 Harmony Gold Uranium Cooke Dump Resource and Finacial Valuation 2008 Harmony Gold Au Uranium Resevre and Resource Audit for the group 2008 Nkwe Platinum PGMs Independent Technical Statement and Competent Person s Report 2008 Highveld Steel & Vanadium Corporation Steel, Vanadium Independent Resource and Reserve planning 2008 African Minerals Diamonds Independent Technical Statements 2008 Continental Coal Coal Independent Technical Report 2008 Industrial Base Metals Base Metals Base Metal Refinery Audit 2007 Crushco Industrial Minerals Independent Valuation 2007 Kimberley Consolidated Mining Diamonds Independent Valuation 2007 LionOre Mining Nickel. PGMs Technical and Economic Valuation 2007 PBS Group PGMs Project Review 2007 Western Areas Au Independent Valuation 2007 Harmony Gold Mining Au. Uranium Independent Scoping and Valuation 2007 Great Basin Gold Au Independent Valuation for BEE Transaction 2007 BRC/Diamondcore Resources Diamonds Valuation and Opinion Provider 2007 Urals Investors Diamonds Au. PGMs and Oil and Gas Independent Transaction Report 2007 Energem Diamonds Indepndent Technical Statement for Koidu 2007 Xstrata Cr Independent CGT and Valuation advice 2007 PWC Magnetite Mine Review Magnetite Independent Mineral Resource Review and Valuation for apportionment calculations 2007 Magnum Resources Ta Independent Mineral Resource Review 2007 Gaanahoek Coal Deposit Coal Prospectivity Review 2007 DRDGold Au Emperor Gold Mines Independent Forensic Review 2007 Kimberley Diamonds Corporation Diamonds Independent Listings Documentation 2007 Rockwell Diamonds Transhex Transaction Documentation 2007 Rockwell Diamonds Independent Mineral Resource Review 2007 Caledonia Mining Au Independent Disposal Documentation Eersteling 2007 Caledonia Mining Au Independent Disposal Documentation Barbrook 2007 Adsani Tantalite Refinery Ta Independent Technical Report 2006 LionOre Ni Base Metals Independent Valuation of Falconbridge International and Nikkelverk Refinery 2006 LionOre/BCL Ni Base Metals Independent Technical and Economic Valuation 2006 Vanamin V Independent Report for disposal 2006 Kurils Islands Au Independent Technical Report NI Mgart Armenia Au Independent Assessment and Valuation for AIM 2006 Zimbabwe Mining Bill All Preparation of industry submission to government 2006 Energem Oil and Gas Preparation of National Instrument Compliance 2006 Ncondedzi Coal Coal Technical and Corporate Listing Documentation 2006 Metallon International Armenia Gold and Base Metals Prospectivity and Exploration Programme Preparation 2006 Hood Tantalite Tantalite Independent Techno-Economic Valuation Report 2005 Letseng Diamonds Independent Competent Person s Report for disposal 2005 Zimplats Tenements Platinum Group Metals Independent Competent Person s Report for disposal 2005 DRD Gold Fair and Reasonable 2005 ARM Madikwa Platinum Group Metals Independent Valuation for Impairment Calculation 2005 Harmony Competitions Tribunal Gold Independent Expert Witness 2005 Ecca Holdings Bentonite Independent Industry Review 2005 Harmony Randfontein 4 Shaft Gold Independent Valuation 91

94 Year Client Commodity Documentation 2005 Gallery Gold Gold Independent Competent Person s Report for disposal 2005 Stuart Coal Coal Independent Competent Person s Report for disposal 2005 Elementis Chrome Chromite Independent Industry Review 2005 Diamond Core Diamonds Independent Competent Person s Report 2005 Diamond Core Diamonds Fair and Reasonable Statement 2005 Kensington Resources Diamonds Independent Inspection and Certification of Laboratory 2005 Bayer Valuation Chromite Independent Valuation for Economic Empowerment Transaction 2005 Pangea Diamonds Diamonds Independent Competent Person s Report 2005 LionOre International Nickel Tati Nickel Review of Mineral Resources Aquarius PSA2 Independent Competent Person s Report 2005 Aquarius Platinum Marikana Mineral Resources Review 2005 LionOre International Nickel Nkomati Due Diligence and Transaction Value Calculations 2005 LionOre International Nickel World Nickel market study for group corporate work 2004 Avgold Limited Gold Fair and Reasonable Opinion on the Methodologies applied and Values attributed to the Mineral Assets of ET Cons 2004 Aquarius Platinum Update of Independent Valuation of Mimosa 2004 Aquarius Platinum Independent Techno-Economic Report and Fair and Reasonable Opinion to the PIC, DBSA and IDC on the 26% BEE Transaction for AQPSA Document waived by the JSE 2004 Mimosa Mining Company Platinum Mineral Resource and Ore Reserve Review 2004 Zimplats Platinum Zimplats Makwiro Valuation and Corporate Restructuring 2004 Assmang Manganese CGT Valuation 2004 Aquarius Platinum CGT Valuation 2004 Sishen South Iron CGT Valuation 2003 Unki Platinum Project Platinum CGT Valuation 2003 Hernic Ferrochrome Proprietary Limited, Itochu Corporation Chromite Independent Valuation of the Stellite Chromite Mine Joint Venture 2003 African Diamond Holdings Proprietary Limited Diamonds Independent Techno-Economic Due Diligence and Valuation of African Diamond Holdings marine diamond concessions and diamond cutting operation in Walvis Bay, Namibia 2003 Unki Platinum Project, Zimbabwe Platinum Techno-Economic Valuation Report and Fair and Reasonable Opinion 2003 Transvaal Ferrochrome Limited Ferrochrome Independent Competent Person s Report and Valuation as a bankable Document for Australian Stock Exchange 2003 Aquarius Platinum (SA) Proprietary Limited Platinum Independent Competent Person s Report and Valuation for the Everest South Project 2002 Zimbabwe Platinum Mines Limited Platinum Independent Valuation of Zimplats relative to the value of the Impala Platinum Limited/AurionGold Limited Transaction 2002 Mitsubishi Corporation Ferrochrome Expansion Report and Valuation on Hernic Ferrochrome Proprietary Limited 2002 Aquarius Platinum Limited Platinum Acquisition Report on ZCE Platinum Limited including the Due Diligence and Valuation of Mimosa Mine in Zimbabwe 2002 Freddev Gold Valuation of Mineral Rights and Royalties 2002 Barnex Gold Valuation of Mineral Rights and Royalties 2002 Western Areas Gold WA4 Project: Valuation of Mineral Rights and Royalty Agreement 2002 Mitsubishi Ferrochrome Expansion Report and Valuation 2002 Aquarius Platinum Acquisition Report 2001 Northam Platinum Valuation 2001 Mitsubishi Corporation Ferrochrome Due Diligence, Valuation and Acquisition Report 2001 Amcol Due Diligence Bentonite Independent Due Diligence and Valuation on G&W 2001 Zimplats Impala Raising Platinum Circular to Shareholders Valuation Report 2000 African Minerals Varied Independent Competent Person s Report 92

95 Year Client Commodity Documentation 2000 Barnato Exploration Limited Varied Competent Person s Report 2000 Durban Deep Gold Independent Valuation Report 2000 Iscor Limited Varied Independent Valuation of Exploration Assets 1999 Harmony Gold Mining Co Limited Gold Harmony/Kalgold/West Rand Cons 1999 Leighton Contractors Tin Pre-feasibility Study Pemali Tin (Indonesia) 1999 Mitsubishi Ferrochrome Techno-Economic Valuation of Hernic Chrome 1998 Barnex Limited Wits Gold Due Diligence 1998 Camco Diamonds Independent Competent Person s Report and Valuation 1998 Crown Mines and DRD Wits Gold Valuation 1998 Egyptian Government Phosphate Due Diligence and Valuation 1998 Great Fitzroy Mines Copper Competent Person s Report and Valuation 1998 Iscor Mining Greenstone Gold Due Diligence and Valuation 1998 JCI Limited Wits Gold Competent Person s Report 1998 Randgold & Exploration Co Limited Gold Competent Person s Report 1998 Western Areas Wits Gold Competent Person s Report 1997 CBR Mining Coal Due Diligence 1997 Durban Roodepoort Deep Limited Wits Gold Competent Person s Report 1997 G&W Base Bentonite Due Diligence 1997 JCI Limited Wits Gold Competent Person s Report 1997 Opaline Gold Greenstone Gold Competent Person s Report 1997 Penumbra Coal Due Diligence 1997 Randgold & Exploration Co Limited Greenstone Gold Competent Person s Report 1997 Rondebult Colliery Coal Due Diligence 1996 African Mining Corporation* Alluvial Gold Project Valuation 1996 Australian Platinum Mines NL Platinum Due Diligence 1996 Benoni Gold Holdings Limited Wits Gold Competent Person s Report 1996 Consolidated Metallurgical Industries Ferrochrome Competent Person s Report and Valuation 1996 Durban Roodepoort Deep Limited Wits Gold Competent Person s Report 1996 Harmony Gold Mining Co Limited Wits Gold Competent Person s Report 1996 JCI Limited Wits Gold Valuation 1996 Rand Leases Properties Limited Wits Gold Competent Person s Report and Valuation 1996 Randgold & Exploration Co Limited Wits Gold Due Diligence 1995 African Mines Limited* Greenstone Gold Project Valuation 1995 Barney-Seidle Arbitration Granite Project Valuation Arbitration 1995 Mopet Oil* Oil and Gas Market Analysis Facilitator 1995 Randgold and Exploration Co Limited Wits Gold Competent Person s Report and Valuation 1995 Randgold Durban Deep Wits Gold Competent Person s Report and Valuation 1995 Randgold Harmony Unisel Merger Wits Gold Competent Person s Report and Valuation 1994 Aurora Exploration Varied Industrials Competent Person s Report and Valuation 1994 Consolidated Mining Corp Wits Gold Due Diligence and Valuation 1994 CRA (Australia) Iron Ore Due Diligence 1994 Durban Roodepoort Deep Limited Wits Gold Competent Person s Report and Valuation 1994 Ghana Gold Mines* Greenstone Gold Due Diligence and Valuation 1994 Gold Fields of SA Limited Wits Gold Competent Person s Report and Valuation 1994 Hernic Chrome Ferrochrome Valuation and Strategic Analysis 1994 Inca Magnesium Due Diligence and Valuation 1994 Mitsubishi Ferrochrome Due Diligence and Valuation 1994 Namco* Diamonds Competent Person s Report and Valuation 1994 Randgold and Exploration Co Limited Wits Gold Due Diligence 1993 Namibia Oil and Gas licence applications Oil and Gas Working with Paul Blair Licence Applications 1993 Atomic Energy Commission Uranium Strategic Analysis 1993 Eskom Base metals Strategic Analysis 93

96 Year Client Commodity Documentation 1993 JCI Wits Gold Financial Planning Analysis (Rehabilitation) 1993 Lonrho Platinum Financial Planning Analysis (Rehabilitation) 1993 Rand Mines Properties Varied Mineral Rights Evaluation 1992 Barbrook Gold Mines Greenstone Gold Ore Resource Modelling and Mine Valuation 1992 Rand Merchant Bank Copper Ore Resource Modelling and Project Valuation 1992 Rembrandt Platinum Mine Valuation (Northam Platinum) 1992 West Rand Cons Wits Gold Ore Resource Modelling and Mine Valuation 1991 Rand Merchant Bank Wits Gold Ore Reserve Evaluation (Westonaria Gold Mine) 1991 Rembrandt (Gold Fields of SA) Varied Due Diligence, Valuation and Strategic Analysis 1991 Standard Merchant Bank Greenstone Gold Due Diligence and Valuation (Eersteling Gold Mine) 1990 Sequence Oil and Gas Oil and Gas Due Diligence Report 1990 Atomic Energy Corporation Nuclear Fuels Strategic Analysis 1990 Consolidated Mining Corp Wits Gold Due Diligence and Valuation 1990 Eskom Copper/Zinc Strategic Market Analysis (Toll Smelter potential) 1990 Freddies Minerals Feldspar Industrials Due Diligence 1990 Industrial Machinery Supplies Coal Strategic Analysis and Valuation (Bricketting plant) 1990 Knights Gold Mine Wits Gold Competent Person s Report 1990 Rand Merchant Bank Diamonds Due Diligence and Valuation (Alluvial Mine) 1990 Corex Oil and Gas Evaluation of Prospectivity 1990 Rand Merchant Bank Lead/Zinc Due Diligence and Valuation (Miranda Mine) 1990 Rand Mines Varied Corporate Strategic Analysis 1990 Rhogold Wits Gold Ore Resource Modelling 1990 Rice Rinaldi Coal Due Diligence and Valuation 1990 Sub Nigel Gold Mine Wits Gold Due Diligence and Valuation 1990 Zaaiplaats Tin Mine Tin Due Diligence and Valuation 1989 Avontuur Diamond Mines Diamonds Due Diligence and Valuation 1989 Granite Consolidated Mining Granite Due Diligence and Valuation 1989 Osprey Gold Mine Greenstone Gold Due Diligence and Valuation 1989 Rand Leases Gold Mine Wits Gold Ore Resource Modelling 1989 Rand Merchant Bank* Varied Mineral Portfolio Analysis (Swanson Rights) 1989 Rhovan Vanadium Competent Person s Report and Valuation 1989 Vanamin Severrin Mining Vanadium Due Diligence and Valuation 1989 Zimco Andalusite Competent Person s Report and Valuation 1988 Mullet Slate Slate Due Diligence and Valuation 1988 Rand Merchant Bank Wits Gold Risk Assessment Analysis (Peritus Exploration) 1988 Wits Nigel Gold Mine Wits Gold Ore Resource Modelling 94

97 Key Qualifications Mr Clay has been a serving professional in the minerals industry since 1977 when he undertook field mapping and a professional apprenticeship within the Rhodesian Geological Survey. This was at a time when fieldwork and practical application of geological principles was still fundamental to the development of geology as a science. Following this, Mr Clay has dedicated his career to the commercial incorporation of first principles scientific process to the description, reporting and valuation of mineral assets. Having worked for a number of years with mining companies, both underground and in corporate, Mr Clay became a founding member of Venmyn in At this time the company was closely associated with Rand Merchant Bank. This relationship enabled him to pursue the process of linking technical and financial valuation. Since that time Mr Clay has been involved in growing Venmyn and is presently the Managing Director and major shareholder. He has been involved in developing a style of reporting at Venmyn which has become internationally recognised as compliant shorter form reporting. The emphasis of the work is on concise and graphical reporting, bullet points and descriptive graphics for ease of presentation and shareholder appreciation. He has been involved in the writing of numerous codes including the South African Code for the Reporting of Mineral Resources and Reserves (SAMREC Code) and is currently on the committee writing the South African Code for the Valuation of mineral projects (SAMVAL Code). He is presently involved in the oil and gas industry where his expertise in valuation is being used to determine the relationship between the reporting methodologies in this industry relative to the rest of the mineral industry. Mr Clay s key areas of expertise lie in the detailed financial valuation of mineral and mining projects using discounted cashflow models. In this regard he has undertaken over 25 valuations for eight different commodities over the last four years. Details of the valuations and other assignments are tabled above. These valuations have been used in listing and merger documentation both in local and international stock exchanges and for the private use of the companies concerned. Education Degree/diploma Field Institution Year BSc Hons Geology University College Cardiff 1976 MSc Econ Geol Economic Geology (awarded Corstorphine Medal for Best MSc Thesis) University of the Witwatersrand 1981 GDE Graduate Diploma in Mining Engineering University of the Witwatersrand 1986 MSc Mining Engineering University of the Witwatersrand 1988 Dip Bus M Diploma in Business Management Damelin College 1983 Tax Mgmt Tax Management and Planning University of the Witwatersrand 1988 Employment Record Position Company Job description Duration Managing Director Venmyn Deloitte Mr Clay serves as the Managing Director of Venmyn Deloitte and is responsible for the company s strategic process as well as finances, budgeting and operations 2012 present Venmyn Deloitte operates as a subsidiary of Deloitte Consulting, serving as a techno-economic consultancy for the resources industry on a worldwide basis Mr Clay has been a key member of the SAMREC Working Group, responsible for compiling the SAMREC Code Served on the JSE/SAMREC working committee for the development of the JSE Section 12 requirements Serves on the Readers Panel for the JSE Mr Clay is director of the advisory business and provides handson services to all the company s major clients His expertise in financial valuation is particularly appropriate for ensuring market to market presentation of both the technical and financial issues of resources projects Course leader for the Witwatersrand University and Continuing Education programme on Compliance in the Minerals Industry Mr Clay has a special interest in the proposed International Accounting Standards IAS Extractive Industries rules for determining NAV and NPV calculations in the minerals industry 95

98 Position Company Job description Duration Managing Director and founding partner Venmyn Rand Proprietary Limited Mr Clay serves as the Managing Director of Venmyn and is responsible for the company s strategic process as well as finances, budgeting and operations Venmyn operates as a techno-economic consultancy for the resources industry on a worldwide basis Mr Clay has been a key member of the SAMREC Working Group, responsible for compiling the SAMREC Code Served on the JSE/SAMREC working committee for the development of the JSE Section 12 requirements Serves on the Readers Panel for the JSE Mr Clay is director of the advisory business and provides handson services to all the company s major clients His expertise in financial valuation is particularly appropriate for ensuring market to market presentation of both the technical and financial issues of resources projects Course leader for the Witwatersrand University and Continuing Education programme on Compliance in the Minerals Industry General Manager Managing Director and founding partner RMB Resources Rand Merchant Bank Venmyn Rand Proprietary Limited Mr Clay has a special interest in the proposed International Accounting Standards IAS Extractive Industries rules for determining NAV and NPV calculations in the minerals industry Continuing business functions detailed below Also valuing, managing and marketing investment projects of the Resources division including deal structuring and corporate finance Techno-economic evaluation of a wide range of mineral resource projects using cashflow, market capitalisation, option pricing and other comparative methods Senior Geologist Rand Mines Limited Resident senior gold mine geologist responsible for the development and implementation of modern computerised ore reserve evaluation techniques at Harmony Gold Mine and Durban Roodepoort Deep Gold Mine Senior Geologist Zimro Proprietary Limited (Industrial Minerals Division of AAC) Transferred to head office where he was responsible for all gold mine ore reserve valuation functions. This computer work involved the development and planning of very large databases for orebody modelling Market development and application of a wide range of industrial and base minerals Geologist Geological Survey of Zimbabwe Mapped a 100 km² area of granite-greenstone terrain and assisted in the compilation of a Bulletin over the area Assisted the small mining sector with geological advice on gold, copper, gemstones and industrial minerals LANGUAGES English: Excellent CERTIFICATION I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. Full name of staff member: Andrew Neil Clay 96

99 Name of staff member: Tarryn Claire Orford Position: Mineral Project Analyst Name of firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa Proprietary Limited Address: First Floor, Building 33, The Woodland Office Park, 20 Woodlands Drive Profession: Geologist Date of birth: 26 March 1987 Years with firm/entity: Joined March 2010 Nationality: South African Membership in Professional Societies Class Professional society Year of registration Member Geological Society of South Africa 2010 Member Geostatistical Association of South Africa 2011 Member Mineralogical Society of South Africa 2011 Fair and Reasonable Opinions Year Client Securities exchange jurisdiction Transaction type Implied value (usdm) Description 2012 Chrometco JSE Purchase of assets for shares. 21,6 Independent Professional Expert Report. Detailed Tasks Assigned Year Client Commodity Project description 2012 Hambledon Gold Gap Analysis and CPR on the Sekisovskoya Gold Mine in Kazakhstan Bauba PGEs Completed a CPR on their South African PGE assets for updated listing on the JSE Ecobank Gold Completed a review of a financial model to assist a client to obtain financing for a gold asset located in the Democratic Republic of the Congo Village Main Reef Water Assessment of Flooding and Pumping arrangements in the Klerskdorp Gold Basin, South Africa Banro Gold Completed a feasibility study for the Namoya Project, Democratic Republic of the Congo Ashkari Chromite Fatal Flaws Analysis on 11 chromite assets in Zimbabwe. Bauba PGEs Update of the Mineral Resource estimates for the Bauba Projects, Bushveld Complex, South Africa African Nickel Nickel Completed a market review for Nickel in South Africa. Western Utilities Corporation Intangible assets Independent high level evaluation of intangible Acid Mine Drainage technology assets for Financial Year end statements Capital Works Clay Review of a Clay Mine, in South Africa, for Fatal Flaws to assist with an Investment Decision Loncor Gold Compiling several sections for a NI Preliminary Economic Assessment on the Makapela Prospect, Democratic Republic of the Congo Banro Gold Verifying geological model and Mineral Resource estimates for the Lugushwa Project, Democratic Republic of the Congo ZYL/Sentula Valuation Coal Valuation for various coal assets in the Kangwane Coalfield, South Africa, for potential merger discussions 97

100 Year Client Commodity Project description 2012 Deloitte UK Iron ore Review of Technical and Business Model on an Iranian Gold Project for guidance on an investment decision Eureka Gold Short Form Technical Report and guidance on a defunct gold mine, Zimbabwe Deloitte Canada Iron ore Audit Assistance on Mont Wright Mine, Canada SARS Coal Mineral Asset Valuation on various assets within South Africa held by Umthombo Resources G&B African Resources REE s, W, Li Compilation of a CPR as part of listing requirements for their Zimbabwean assets SEW Trident Iron ore Technical on-site assistance in identifying mineralisation concessions in Guinea Chrometco Chromite Compilation of a valuation letter for mineral assets in the Bushveld Complex, South Africa Rukwa Coal Compilation of a CPR and technical documentation on their coal assets in Tanzania Bauba PGEs Update of Bauba s Mineral Resources in the Bushveld Complex, South Africa Loncor Gold Verification of geological modelling and Mineral Resource estimation and parameters for the Makapela Project, Democratic Republic of the Congo Izingwe and BRL Magnetite Techno-Economic Statement on the Mokopane Magnetite Project, Northern Limb, Bushveld Complex, South Africa Razita Mining Various Short Form Prospectivity Reviews on various New-Order Prospecting Rights under application over South Africa 2011 Lesego PGEs Strategic Assistance during exploration, project development and resource estimation for a Bushveld Project, South Africa Evraz Highveld Steel and Vanadium Magnetite and Iron Ore Update of Annual Resource Statement for Mapochs Mine and technical assistance for future development of the asset in the Bushveld Complex, South Africa Sable Platinum Platinum and Vanadium Strategic Technical Assistance on geology and exploration on some Bushveld Complex platinum projects, South Africa Sylvania Chromite Techno-Economic Statements on chromite dump projects, South Africa PSIL Uranium Techno-Economic Statement on a uranium deposit in Kazakhstan African Consolidated Resources Gold Review and Geostatistical Analysis on some greenstone belt gold projects located in Zimbabwe Realm Resources PGEs Techno-Evaluation Statement on some Bushveld Complex platinum assets, South Africa Lesego PGEs Mineral Resource Update for their Bushveld Complex project, South Africa Boynton PGEs Pre-Feasibility Study on the Western Bushveld Complex Magazynskraal Project, South Africa Aura Coal A Prospectivity Review on a Coal Project in Nigeria Pan African Resources Gold A Fatal Flaws Review of a gold tailings retreatment project near Barberton, South Africa National Mining Corporation Gold and Base Metals A Scoping Study on gold and base metal projects in Ethiopia 98

101 Year Client Commodity Project description 2010 Central African Gold Gold Technical Statement and Update of Resource Statement on a greenstone gold deposit in Zimbabwe JCI Exploration Uranium Technical Review document on a Greenfields uranium project in the Northern Cape, South Africa Absolute Holdings PGEs Compilation and research on three Bushveld Complex platinum projects for three Techno-Economic Valuations and a CPR AfriSam Cement Data collection, research and proofreading for a Technical Review of numerous limestone, aggregate, sandstone, and dolomite assets, South Africa Keldoron Coal Mining Coal Independent Valuation on coal assets in the Klipriver Coalfield, KwaZulu-Natal, South Africa Banro Gold Assistance with compilation of CPRs on a number of gold projects in the Democratic Republic of Congo Buildmax Sand Short Form CPR on some sand mineral assets, South Africa Ultratech Coal Technical and Valuation report on various coal projects, South Africa Gentor Base Metals CPR and Technical Review of ophiolite deposits in Oman Coal of Africa Coal Supporting documentation for valuation of coal assets in the Ermelo, Soutpansberg, Limpopo and Highveld Coalfields, South Africa Bauba Platinum PGEs Technical Assistance and Technical Statement on three Bushveld Complex platinum projects, South Africa Key Qualifications Tarryn Orford studied at the University of Pretoria where she received her Bachelor of Science degree in Geology and later, her Honours in Geology. As part of her honours degree, she undertook a study detailing the effect of metamorphism by the Bushveld Complex on the Transvaal Supergroup. Tarryn joined the Venmyn team in March She brought with her one year s experience in tutoring at University of Pretoria as well as vacation work for Digby Wells and Associates. Her current area of expertise includes preparation of SAMREC and National Instrument compliant technical documents, interpretation and analysis of mineral project data, preparation of technical diagrams and geostatistics to provide technical assistance during early stages of exploration. In 2013, Venmyn became Venmyn Deloitte, a wholly owned subsidiary of Deloitte Consulting South Africa. Since joining Venmyn, Tarryn has been involved in a number of projects including Competent Person s Reports, Technical Reports, Due Diligence Studies, Mineral Resource and Mineral Reserve Statements and Techno-Economic Valuations, Fatal Flaw Evaluations and has provided technical assistance to a number of companies over a wide range of commodities including platinum group minerals, gold, coal, uranium, base metals, iron ore, manganese, magnetite, rare earth elements, sand and clay. These projects included many technical field visits throughout South Africa and globally, including Ethiopia, Guinea, Botswana, Tanzania, Benin, Zimbabwe, the DRC and Kazakhstan. Tarryn has completed her Graduate Diploma in Engineering (GDE) in Mining Engineering specialising in Mineral Resource Evaluation through the University of the Witwatersrand. Education Degree/diploma Field Institution Year BSc Geology University of Pretoria 2008 BSc (Honours) Geology University of Pretoria 2009 Graduate Diploma in Engineering Mining Engineering specialising in Mineral Resource Evaluation University of the Witwatersrand

102 EMPLOYMENT RECORD: Position Company Job description Duration Mineral Project Analyst Venmyn Deloitte (previously Venmyn Rand) Venmyn Rand operates as a techno-economic consultancy for the resources industry on a worldwide basis. Responsibilities at Venmyn include: data processing for technical reports; compilation of due diligences, prospectivity reviews, technical reports, mineral resource and mineral reserve statements; compiling technical and geological information into reports which are compliant with the SAMREC and JSE listing rules; and high level research for multiple facets of mineral projects Geology tutor University of Pretoria Assisted students with practical tasks and assignments including identification of hand specimens and preparation for tests and exams Geography tutor University of Pretoria Assisted students with practical tasks and assignments. Marking and overseeing tasks and exams Student Geologist Digby Wells and Associates Assistance on project specific work and a desktop study in the environmental field, secretarial work and general assistance to employers March 2010 to present January to July 2009 January to July 2009 June 2009 to July 2009 LANGUAGES English: Excellent Afrikaans: Excellent French: Basic CERTIFICATION I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. Tarryn Claire Orford 100

103 Name of staff member: Jacobus Adriaan Myburgh Position: Mineral Project Analyst Name of firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa Proprietary Limited Address: First Floor, Building 33, The Woodlands Office Park, 20 Woodlands Drive Profession: Analyst Date of birth: 31 December 1984 Years with firm/entity: Joined January 2010 Nationality: South African Membership in Professional Societies Class Professional society Year of registration Member Investment Analyst Society of South Africa 2012 Member Geostatistical Association of South Africa 2012 Fair and Reasonable Opinions Year Client Securities exchange jurisdiction Transaction type Implied value (USDm) Description 2011 Wesizwe JSE Acquisition 280 F&R opinion document to the exchange 2010 Sylvania ASX Share conversion 190 F&R opinion letter to the board 2010 Ultratech Cement JSE Acquisition 50 Independent F&R for Ultratech Cement on Xstrata assets 2011 Optimum Coal JSE Acquisition 400 F&R opinion letter to the board 2011 Forbes Manhattan RSAs Acquisition 20 SARB approval 2011 Sikhuliso RSA Acquisition 30 Value determination 2012 Chrometco JSE Acquisition 10 F&R opinion letter to the board Detailed Tasks Assigned Year Client Commodity Project description Site visit 2013 Gold One Gold Techno Economic Statement Y Citic and Samancor Ferrochrome Independent Mineral Asset Valuation Zyl and Sentula Coal Independent Mineral Asset Valuation Platinum Australia PGM Independent Mineral Asset Valuation Y 2012 Tanzania Royalty PEA PEA Y Frontier Rare Earths PEA PEA Umcebo Coal Valuation Statement NMIC Gold PFS Andulela Kilken PGE Valuation Statement Y Chrometco Chrome Valuation Statement Central Rand Gold Gold CPR Coal of Africa Coal Corporate Model Sekoko Coal Valuation Statement Gem Diamonds Diamonds Valuation Statement Metmar Coal Valuation Statement Jimbe Minerals Nickel Prospectivity Review Glencore Coal Deloitte Audit Richards Bay Minerals Mineral sands Deloitte Audit Y 101

104 Year Client Commodity Project description Site visit 2011 Nkomati Capital Coal Techno Economic Valuation PSIL Uranium Techno Economic Valuation Wesizwe Platinum Techno Economic Valuation Gem Diamonds Diamonds Independent Project Valuations Lesego Platinum Statistical Analysis Y Sephaku Fluorspar Independent Project Valuations Nkomati Capital Coal Valuation Statement Wesizwe Platinum Valuation Statement Namane Elandslaagte Diamonds Valuation Statement Y PSIL Uranium Valuation Statement Sudor Coal Coal Valuation Statement Realm Resources Platinum Valuation Statement Y AEMFC Coal Valuation Statement Lodestone Namibia Iron ore Valuation Statement African Copper Copper Valuation Statement Y Karbochem Power generation Valuation Statement Miranda Minerals Coal Valuation Statement Anglo Namibian Prospects Base metals Valuation Statement Umcebo Coal Valuation Statement Gem Diamonds Diamonds CPR Banro Gold CPR Y Sephaku Fluorspar CPR Platmin Platinum CPR Y Harmony Gold CPR Y Miranda Minerals Coal PEA and PFS Pan African Resources, BTRP Gold Fatal Flaws Review 2010 African Copper Copper Feasibility Study Miranda Mineral Holdings Coal Independent Project Valuations White Water Resources Gold Independent Project Valuations Chrometco Limited Chromite Independent Project Valuations Sekoko Coal Independent Project Valuations West Wits Gold/Uranium Statistical Analysis Central African Gold Gold Statistical Analysis Worldwide Mineral Strategists Gold Statistical Analysis Rooderand Chromite Chrome Valuation Statement African Copper Copper Valuation Statement Sekoko Coal Valuation Statement Key Qualifications Mr Iaan Myburgh has a degree in Mathematics from the University of Pretoria. He joined Venmyn in January During the time he has worked with Venmyn, he has specialised mainly in the market review for different commodities as well as valuation of mineral projects using the market approach method and discounted cash flow method. He is also a candidate in the CFA programme, having passed the second level exam in Education Degree/diploma Field Institution Year BSc Mathematics University of Pretoria

105 EMPLOYMENT RECORD Position Company Job description Duration Mineral Industry Analyst Venmyn Rand Proprietary Limited Venmyn provides compliance and valuation reporting services to the minerals industry. Responsibilities at Venmyn include: Compiling technical and geological information into reports which are compliant with the SAMREC and JSE listing rules; High level research for multiple facets of mineral projects; Valuation of mineral projects; and Background research of information for CPRs and Technical Statements present LANGUAGES English: Excellent Afrikaans: Excellent CERTIFICATION I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. Jacobus Adriaan Myburgh 103

106 Name of specialist: Sarah Dyke Position: Consultant, Environmental Industry Advisor Lead Name of firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa Proprietary Limited Address: First Floor, Building 33, The Woodland Office Park, 20 Woodlands Drive Profession: Natural Environmental Scientist Date of birth: 2 December 1985 Years within field of practice: 5 Nationality: South African Education Degree/diploma Field Institution Year BSc Zoology and Biochemistry University of Johannesburg 2007 BSc Hons Zoology University of Johannesburg 2008 MSc Zoology University of Johannesburg 2012 Certification Course Environmental Law University of Potchefstroom 2011 Certification Course Environmental Management Systems University of Potchefstroom 2012 Lead Auditor Course Environmental Management Systems University of Potchefstroom 2013 Membership in Professional Societies Registered Natural Scientist SA (Reg. No /12) International Association of Impact Assessors (IAIA) SA Geological Society of South Africa (GSSA) South African Institute for Mining and Metallurgy (MSAIMM) Registered Prince 2 Project Manager Practitioner Key Areas of Expertise and Experience Socio and environmental governance planning Programme management of implementations Environmental strategy development and execution planning Impact management and planning Socio-environmental management planning and implementation Management systems alignment and implementation Performance and assurance Due diligence 104

107 Detailed Tasks Assigned Year Client Commodity Project description 2013 Cronimet Chrome Mining Proprietary Limited Chrome High level review of the rehabilitation and closure quantum estimates for the Cronimet Chrome Mine, Limpopo province, South Africa Banro Gold Review of the status of the environmental permitting, performance and compliance in alignment with requirements for a NI listing NECSA Uranium Independent Competent Person s Review of Provisions for the Decontamination and Waste Disposal provisions for the South African Nuclear Energy Corporation SOC Limited and its group companies Continental Coal Coal Review of the status of the environmental permitting, performance and compliance in alignment with requirements for a JSE listing Keegan Resources Gold Review of the status of the environmental permitting, performance and compliance in alignment with requirements for a TSX listing Rockgate Capital Uranium Current acting as independent advisory consultant to the investment team for all environmental licensing and permitting requirements for the project from PFS to DFS phases ResGen Coal High level review of the status of the environmental permitting, performance and compliance, and reasonability of environmental liability provision for a technical Competent Person s Report Citic UA & IMR Ferrochrome Review of current ESIA as composed by a local practitioner, gap analysis with reference to public consultation, specialist assessments, international best practices, standards and guidelines Review of national legislation and international socio-environmental commitments, treaties and obligations Project management and composition of updated environmental impact assessment report, including assessment and integration of all relevant international best practices, guidelines and standards (International Finance Corporation, World Bank Group Equator principles and specific environmental health and safety guidelines, equator principles) 2012 Kumba Iron Ore Iron ore Revision of current closure plans, the standardisation of a closure reporting framework and risk assessment methodology as well as alignment to existing company policy. Scope of work included a high level review of the status of the clients mining permits, environmental and social authorisations, and approvals required from regional and local agencies. Also undertaken was the verification of the procedures to be executed before the mine and processing plant could be commissioned Uranium One/Mantra Resources Uranium Review of current ESIA as composed by a local practitioner, gap analysis with reference to public consultation, specialist assessments, international best practices, standards and guidelines Review of national legislation and international socio-environmental commitments, treaties and obligations Project management and composition of updated environmental impact assessment report, including assessment and integration of all relevant international best practices, guidelines and standards (International Finance Corporation, World Bank Group Equator principles and specific environmental health and safety guidelines, equator principles) 2011 Eurasian Natural Resources Corporation Platinum Amendment to an environmental feasibility study for the second largest proposed mine in Zimbabwe. Assessment included gap analysis, assessment of the liabilities associated with the activities as well as the environmental legal compliance of the sites. Scope of work undertaken inclusive of the following: Lead Project Manager Baseline assessment and descriptions Definition of scope of work for project Specialist ToR provision and management Scoping report Consultation with I&APs, Authorities and Traditional Leaders Compilation of socio-economic impact assessment Budget control and invoicing Administration and project management Review and incorporation of National and International legislation, and associated necessary permits and licences 105

108 Year Client Commodity Project description 2011 Boynton Investments Coal Scoping study, focus on the environmental permitting requirements, focus on environmental issues relating to mine residue disposal and management, compliance with national legislative requirements and international IFC standards 2010 Chromex Chrome Water Use Licence Applications, update of water use licence application report following alterations in surface infrastructure, compilation and submission of additional information required by the competent authority, stakeholder consultation Confidential Nickel Environmental scoping study, focus on the environmental permitting requirements, specifically environmental issues relating to mine residue disposal and management. Assessment of compliance with national legislative requirements and international IFC standards Eurasian Natural Resources Corporation Coal Environmental feasibility study for the proposed mine, including background data gathering, gap analysis, compliance with national legislation and international requirements, background information documentation compilation, compilation of scoping study for licensing and authorisation process, and to provide the baseline for Environmental Impact Assessment. Compilation of Exploration EMP, and water monitoring programme LANGUAGES English: Excellent Afrikaans: Good CERTIFICATION I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. Sarah Dyke 106

109 Name of specialist: Karabo Mphahlele Position: Minerals Industry Adviser Name of firm: Venmyn Deloitte, a subsidiary of Deloitte Consulting South Africa Proprietary Limited Address: Building 33, The Woodlands Office Park, 20 Woodlands Drive, Woodmead, Sandton Profession: Geologist Date of birth: 1 June 1983 Years within field of practice: Joined July 2012 Nationality: South African Membership in Professional Societies Class Professional society Year of registration Member (Reg. No /08) The South Africa Council for Natural Scientific Professions 2008 Member Geological Society of South Africa 2005 Detailed Tasks Assigned Year Client Commodity Project description 2013 Letseng Diamonds Diamonds Reserve and Resource Review RSM Bird Corporation Coal Expert s Report Unimin African Resources Diamond, Iron ore, Lithium Competent Person s Report Memor Chromite Technical Statement Bayer Chromite Valuation ZCI Limited Various Fairness Opinion Sekota Iron ore Techno-Economic Review Coal of Africa Coal Competent Person s report Bauba Platinum Platinum group metals Competent Person s Report 2012 Stantons International Securities Various Independent Mineral Asset Valuation on Jubilee Platinum Plc and Platinum Australia Mineral Assets Kadgame Mine Iron ore Kadgame Prospectivity Review of the Iron Ore Exploration Project Banro Gold Techno-Economic Review Sars Coal Mineral Asset Valuation of various assets held by Umthombo Resources Cluff Africa Coal Techno-Economic Review Key Qualifications Mrs Mphalele is a geologist specialising in mineral resource reviews, analysis and exploration management. She has more than five years experience in the minerals industry, in diamond mining and more recently, in mineral project assessments, technical and economic prospectivity reviews. Karabo has worked on projects involving precious metals, industrial minerals and energy related commodities. Her experience has mostly been working on projects located in Zimbabwe and in South Africa. Education Degree/diploma Field Institution Year BSc Geology University of the Witwatersrand 2006 BSc (Hons) Geology University of the Witwatersrand

110 EMPLOYMENT RECORD Position Company Job description Duration Mineral Industry Adviser Venmyn Deloitte Venmyn Rand was bought out by Deloitte Consulting South Africa Proprietary Limited in November Employment transferred to new entity in similar capacity Mineral Industry Adviser (July 2012 November 2012) Senior Geologist (August 2011 June 2012) Geologist (July 2008 July 2011) Geologist in Training (February 2008 June 2008) Venmyn Rand Proprietary Limited De Beers Consolidated Mines (Kimberley) De Beers Consolidated Mines (Kimberley Mine) De Beers Consolidated Mines (Finsch Mine) Part of the consulting team with the majority of assignments being valuations. Projects worked on include: Techno-economic reviews of mineral projects; Advising clients on exploration programme development and implementation; and Research and evaluation of exploration projects Grade control Ore/waste management Geological ore body modelling Mine planning Running sampling programmes Evaluating potential cost saving measured to mining Diamond analysis Core logging Trench mapping Grade control Data room management Data verification QAQC of geological database SFD analysis Regular mapping of underground geology Core logging Grade control Management of ore body drilling programmes 2012 present LANGUAGES Sepedi: Excellent Zulu: Good English: Excellent Afrikaans: Fair CERTIFICATION I, the undersigned, certify that to the best of my knowledge and belief, these data correctly describe me, my qualifications, and my experience. Karabo Mphahlele Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (DTTL), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Deloitte provides audit, tax, consulting and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world class capabilities and high quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of professionals, all committed to becoming the standard of excellence Deloitte & Touche. All rights reserved. Member of Deloitte Touche Tohmatsu Limited 108

111 Annexure 5 PROPOSED AMENDMENTS TO BAUBA S MEMORANDUM OF INCORPORATION The amendments to the Memorandum of Incorporation of Bauba are set out below. A copy of the complete amended Memorandum of Incorporation is available for inspection at Bauba s registered office. For the purpose of this Annexure 5, Act refers to the Companies Act, 2008 (Act 71 of 2008), as amended, consolidated or re-enacted from time to time, and includes all schedules to such Act and the Regulations. A reference to a section by number refers to the corresponding section of the Act, notwithstanding the renumbering of such section after the date on which the Company is incorporated. A reference to a clause by number refers to a corresponding provision of the Memorandum of Incorporation. 2. AMENDMENT OF MEMORANDUM OF INCORPORATION 2.2 Should the Memorandum of Incorporation be amended in compliance with a court order, the amendment must, in compliance with section 16(4), be effected by a resolution of the board of directors and will not require a special resolution of shareholders as contemplated in clause 2.1 above. 8. ISSUE OF SHARES AND VARIATION OF RIGHTS 8.1 The Company is authorised to issue (seven hundred and fifty million) ordinary shares of no par value, of the same class, each of which ranks pari passu in respect of all rights and entitles the holder to: vote, whether in person or by proxy, on any matter to be decided by the shareholders of the Company; participate proportionally in any distribution made by the Company; and receive proportionally the net assets of the Company upon its liquidation. 109

112 Annexure 6 REPORT ON THE SHARE CONVERSION IN TERMS OF REGULATION 31(7) OF THE COMPANIES ACT Extract from resolution of the Board: Share conversion from par value shares to no par value shares in terms of Regulation 31(7) of the Companies Act, 2008 (Act 71 of 2008), as amended ( the Companies Act ) On 30 May 2014, the board of directors approved the Report on the share conversion in terms of Regulation 31(7) of the Companies Act explaining the effect of the conversion of the issued share capital from par value shares to no par value shares. 1. Background 1.1 Under the Companies Act, all companies having par value shares are no longer enabled to create and authorise any further par value shares. The Company proposes to its shareholders the special resolution required to convert the Company s par value shares to no par value shares. 1.2 The independent Board has satisfied itself that the conversion from par value shares to no par value shares will have no effect on the rights of the shareholders. 1.3 Accordingly, the Bauba Platinum Limited ( Bauba ) shareholders will be requested to approve the special resolution necessary to convert Bauba s authorised and issued ordinary shares with a par value of R1 each into shares of no par value on the basis that each existing share will be converted into one no par value share. 1.4 The special resolution approving the conversion of Bauba s existing shares into shares of no par value is subject to 75% of Bauba s shareholders present, in person or by proxy, voting in favour of the resolution. 1.5 The Companies Regulations, 2011 ( the Regulations ) require the board of a company, when converting its shares, to effect a report to be prepared in respect of the proposed conversion which, inter alia, evaluates any adverse effects of the conversion on the Bauba shareholders. As already indicated, there will be no adverse effect of the conversion on the Bauba shareholders. 1.6 In terms of Regulation 31(7) of the Regulations the Report is required to, at a minimum: state all information relevant to the value of the securities affected by the proposed conversion; identify holders of the Company s securities affected by the proposed conversion; describe holders of the Company s securities affected by the proposed conversion; describe the material effects that the proposed conversion will have on the rights of the holders of the conversion of the Company s securities affected by the proposed conversion; and evaluate any material adverse effects of the proposed arrangement against the compensation that any of those persons will receive in terms of the arrangement. 2. Information relevant to the value of the securities affected by the proposed conversion 2.1 The securities affected by the proposed conversion are the authorised ordinary shares in the share capital of Bauba, currently comprising shares of R1 each, of which shares of R1 each have been issued. 2.2 Bauba has no other class of authorised or issued shares. 2.3 Given that the number of Bauba shares in issue and the rights attaching to those shares will be unaffected by the proposed conversion, the proposed conversion will have no impact on the historic net asset value, earnings, headline earnings and distributions per Bauba share and should have no impact on the price at which Bauba shares trade on the JSE. 3. Holders of the Company s securities affected by the proposed conversion The proposed conversion will affect the holders of Bauba s ordinary shares who comprise the holders of all of Bauba s issued shares of R1 each. However, the only effect on Bauba shareholders will be that such holders will now become the holders of an identical number of shares of no par value. 4. Material effects of the proposed conversion of Bauba shareholders 4.1 The proposed conversion results in the conversion of each share of R1 each into a share of no par value. 4.2 Accordingly, after the proposed conversion, each shareholder will own the identical number of Bauba shares as they held before the proposed conversion and the no par value shares they hold will represent the same proportion of the total issued share capital of Bauba as the par value shares they held represented of the total issued share capital of Bauba before the conversion. 4.3 A shareholder enjoys the same effective voting rights on a poll whether the shares in question are par value or no par value shares. 4.4 The proposed conversion has no other impact on any of the rights attaching to the Bauba shares and the no par value shares will confer a Bauba shareholder all of the same rights as they enjoyed as the holder of par value shares before the proposed conversion including (without limitation) rights to participate in the profits of Bauba on winding up. 5. Evaluation of material adverse effects of the proposed conversion against compensation offered 5.1 The proposed conversion has no adverse effects on Bauba shareholders as they are in the same position and enjoy the same rights before and after the proposed conversion. 5.2 There is no compensation being offered in the context of the proposed conversion as there are no adverse effects of the proposed conversion on Bauba shareholders. 110

113 Appendix 1 HISTORICAL FINANCIAL INFORMATION OF BAUBA FOR THE SIX MONTHS ENDED 31 DECEMBER 2013 INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2013 Reviewed 31 December 2013 R 000 Reviewed 31 December 2012 R 000 Audited 30 June 2013 R 000 ASSETS Non-current assets Intangible assets Property, plant and equipment Current assets Trade and other receivables Cash and cash equivalents Total assets Equity and liabilities Capital and reserves Share capital Share premium Reverse asset acquisition reserve ( ) ( ) ( ) Retained loss (83 465) (75 629) (79 686) Non-controlling interest (1 549) (1 400) (1 359) Current liabilities Trade and other payables Total equity and liabilities Net asset value per share (cents) 26,4 32,1 28,8 Tangible net asset value per share (cents) 1,5 12,3 4,1 INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2013 Reviewed 31 December 2013 R 000 Reviewed 31 December 2012 R 000 Audited 30 June 2013 R 000 General and administrative expenses (4 042) (6 171) (10 445) Finance income Loss before taxation (3 969) (5 557) (9 573) Taxation Comprehensive loss for the period (3 969) (5 557) (9 573) Loss for the period attributable to: (3 969) (5 557) (9 573) Equity holders of the Company (3 779) (5 145) (9 202) Non-controlling interest (190) (412) (371) Headline loss for the period 1 (3 779) (5 145) (9 202) Undiluted and diluted earnings per share Loss per share (cents) (3,1) (4,2) (7,5) Undiluted and diluted headline earnings per share Headline loss per share (cents) (3,1) (4,2) (7,5) Weighted average number of shares in issue (000 s) Total number of shares in issue at the end of the period (000 s) There is no adjustment required to the loss for the period to arrive at the headline loss for the period. 111

114 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2013 Reviewed 31 December 2013 R 000 Reviewed 31 December 2012 R 000 Audited 30 June 2013 R 000 Net cash outflow from operating activities (3 481) (6 366) (10 428) Net cash outflow from investing activities (1 040) (6 479) (12 389) Net cash inflow from financing activities Net decrease in cash and cash equivalents (2 521) (12 485) (22 817) Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2013 Share capital R 000 Share premium R 000 Retained loss R 000 Noncontrolling interest R 000 Reverse acquisition reserve R 000 Total R 000 Balance at 31 December (75 629) (1 400) ( ) Comprehensive loss for the period (4 057) 41 (4 016) Balance at 30 June (79 686) (1 359) ( ) Shares issued (1 288) Cost for the period (500) (500) Comprehensive loss for the period (3 779) (190) (3 969) Balance at 31 December (83 465) (1 549) ( ) Commentary Results The focus of the Group during the period under review has been the ongoing exploration of its platinum assets, and the raising and preservation of cash. The Group did not generate any revenue and in line with the Group s dividend policy, no dividend was declared. The Group raised R2,5 million cash with a cost of R0,5 million during the period under review. R1,1 million was spent on exploration activities, which was capitalised in line with the Group s accounting policies and R3,4 million on general and administration costs. Exploration The third borehole ( BAU-042 ) on the Northern Cluster was completed during the period under review, after which the drilling programme was suspended until sufficient cash is raised. BAU-042 had pleasing assay results indicating 3PGE+Au grades of 5,82 g/t over a width of 1,22 metres on the Merensky reef and 6,97g/t over a width of 1,20 metres on the UG2 reef. Notes to the reviewed interim financial statements Basis of preparation The board of directors ( Board ) present the reviewed condensed consolidated interim financial results for the six months ended 31 December 2013 which have been prepared in accordance with the framework concepts and the measurement recognition requirements of International Financial Reporting Standards ( IFRS ) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and its successor, the Companies Act, 2008 (Act 71 of 2008) as amended and the Listings Requirements of JSE Limited and contains the information required by IAS 34 Interim financial reporting. The accounting policies are in terms of IFRS and are supported by reasonable and fair judgements and estimates. These condensed consolidated interim financial results have been prepared under the supervision of Mr Willem Moolman, the Financial Director of Bauba. The directors of Bauba are responsible for the preparation and fair presentation in accordance with IFRS of the historical financial information of Bauba for the six months ended 31 December 2013, as well as for such internal controls as they determine is necessary to enable the preparation of this historical financial information in a manner that is free from material misstatement, whether due to fraud or error. Review opinion These condensed consolidated interim financial results for the six months ended 31 December 2013 have been reviewed by the Company s auditors, BDO South Africa Incorporated. A copy of their unqualified review opinion is available for inspection at the registered office of the Company. 112

115 Segmental information The Group has classified two segments namely: (1) Exploration, being activities associated with the Bauba Project and platinum exploration; and (2) Corporate expenses, being administration, regulatory and corporate expenses incurred. Exploration R 000 Corporate R 000 Total R December 2013 External interest received General and administrative expenses (475) (3 473) (3 948) Depreciation and amortisation (72) (22) (94) Comprehensive loss for the period (547) (3 422) (3 969) Total segment assets Total segment liabilities (950) (321) (1 271) 31 December 2012 External interest received General and administrative expenses (1 016) (5 112) (6 128) Depreciation and amortisation (19) (24) (43) Comprehensive loss for the period (1 035) (4 522) (5 557) Total segment assets Total segment liabilities (795) (427) (1 222) Capital raising The Company successfully raised R2,5 million under its General Authority by way of issuing shares for cash during December 2013 at an issue price of R0,66 per share. This cash will be utilised as bridging finance until the chrome project becomes cash generative. Legal tenure The Group s two prospecting rights were renewed in July 2012 for a further period of three years. Legal There is currently a review application pending in the North Gauteng High Court of South Africa, Pretoria brought by Rustenburg Platinum Mines Limited ( the Applicant ) against a decision of the Department of Mineral Resources to grant the prospecting rights in respect of two farms, namely Genokakop 285KT and Groot Vygenboom 284KT. Bauba s subsidiary, Bauba A Hlabirwa Mining Investments Proprietary Limited ( Hlabirwa ), the legal holder of the prospecting rights, was cited as a party against whom relief is sought. After taking legal advice on the matter Hlabirwa is confident of a positive outcome. Hlabirwa decided to progress the determination of the application by requesting the High Court to dismiss this matter as the Applicant has failed to take any meaningful steps to advance the review application since the onset date. Going concern The condensed consolidated interim financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. As is common with many junior mining companies, the Group raises capital for exploration and other projects as and when required. Future work on the development of these projects may be adversely affected by factors outside of the control of the Group. Subsequent events Assets for shares agreement The Board released a cautionary announcement on SENS on 25 September 2013 advising shareholders that Bauba had entered into negotiations with certain existing shareholders to raise funding to enable the Group to continue with its drilling programme. The initial cautionary announcement was followed up with a number of renewal of cautionary announcements and a terms announcement which was released on SENS on 19 March 2014 advising shareholders of the details of the outcome of the negotiations. The negotiations resulted in the Company entering into an assets for shares agreement ( Acquisition Agreement ), which is subject to approval by shareholders at a general meeting of the Company. In terms of the Agreement, the Company will: acquire 60% of the beneficial ownership of the farms Moeijelijk 412KS and Waterkop 113KT; cancel the claw back conditions over ordinary shares previously issued for the farms subject to the review application brought by the Applicant; and issue ordinary shares for the acquisition of the farm Houtbosch 323KT which notarial execution was delayed due to the same review application. The Venmyn Deloitte competent person report and the Board declared the chrome resource on the farm Moeijelijk 412KS to be 9,3 million metric tonnes of which approximately 1,3 million metric tonnes have been identified as suitable for open-cast mining operations up to a high wall of 50 metres. 113

116 Chrome Ore Supply Agreement On 27 March 2014, Bauba released a detailed announcement on SENS advising shareholders of the chrome ore supply agreement ( Chrome Ore Supply Agreement ) entered into between Hlabirwa, the legal holder of the prospecting rights, and ASA Metals Proprietary Limited ( ASA ). The Chrome Ore Supply Agreement has for the time being been capped by Hlabirwa at a run of mine off-take total of metric tons which will endure over an approximate period of 24 months with ASA having expressed an interest to materially increase the aforesaid quantity, should Hlabirwa be agreeable thereto at some future date. The Chrome Ore Supply Agreement further makes provision for a prepayment of up to R5,6 million over the next seven months until the mining operations commence. Lease Agreement Hlabirwa has also entered into a lease and option agreement ( Lease and Option Agreement ) with Jibeng Investment Proprietary Limited, the land owners of the farm Moeijelijk 412KS, to facilitate access to the chrome mining area. The Lease and Option Agreement also provides for an option to acquire the portion of the farm on which the mining operations will be established. Bulk sample authorisation and mining permit Hlabirwa has applied for both a bulk sample authorisation and a mining permit over the farm Moeijelijk 412KS. The Company has been advised that the issuance of the bulk sample authorisation is now imminent and furthermore anticipates that the mining permit will be awarded by the Department of Mineral Resources during June This will allow for site establishment to commence in July 2014 and resulting cash flow by the delivery of run of mine chrome ore to ASA by mid-august Conclusion The acquisition of the beneficial rights over the chrome assets, which has a low cost open-cast exploitation potential, and the signing of the Chrome Ore Supply Agreement with ASA, secures the potential of a steady cash flow stream which may satisfy all of the Company s financial requirements to advance its projects for the foreseeable future. With a major portion of the net cash proceeds from the chrome operation being diverted into the exploration programme, it will place the Group in a favourable position to apply for a mining right over its platinum project and to further develop and exploit its platinum resources. Directorate There was no change to the Board during the period under review. On behalf of the Board JG Best Chairman SJM Caddy Chief Executive Officer 31 March 2014 Board of directors: Non-executive Mr JG Best* (Chairman), Mr KV Dicks*, Mr SM Dolamo*, Ms KW Mzondeki*, Dr NM Phosa, Mr D Smith, King TV Thulare (Alt to Dr NM Phosa). * Independent Executive Mr SJM Caddy (CEO), Mr WA Moolman (FD) Sponsor Merchantec Capital Registered office 1st Floor, Building 816/5 Hammets Crossing Office Park 2 Selbourne Road, Fourways Johannesburg, Gauteng South Africa. Company secretary Merchantec Proprietary Limited 2nd Floor, North Block Hyde Park Office Tower Cnr 6th Road and Jan Smuts Avenue Hyde Park, 2196 (PO Box 41480, Craighall, 2024) Auditor BDO South Africa Incorporated 114

117 Appendix 2 HISTORICAL FINANCIAL INFORMATION OF BAUBA FOR THE THREE FINANCIAL YEARS ENDED 30 JUNE 2013 The historical information of Bauba was extracted from the published results of Bauba for the three financial years ended 30 June The directors of Bauba are responsible for the preparation and fair presentation in accordance with IFRS of the historical financial information of Bauba for the three years ended 31 June 2013, as well as for such internal controls as they determine is necessary to enable the preparation of this historical financial information in a manner that is free from material misstatement, whether due to fraud or error. There has been no material change in the nature of the business of Bauba during the past three years and there are no other material facts or circumstances that have occurred between the latest financial year-end of Bauba and the last practicable date. The audited financial information for the three financial years ended 30 June 2013 has been extracted from the audited results to 30 June 2013 and 30 June The Company s auditors, BDO South Africa Inc., issued an unqualified audit opinion on the financial statements for the three years ended 30 June The audit report for the year ended 30 June 2013 contained an emphasis of matter as set out below: Without qualifying our opinion, we draw attention to the consolidated and separate annual financial statements which indicate that the Group incurred a net loss of R for the year ended 30 June 2013 and, as at the date of this report, the Group s cash resources will not be sufficient to sustain the operations of the Group for more than 12 months subsequent to year-end. The note 23 also indicates that these conditions, along with other matters, indicate the existence of a material uncertainty which may cast significant doubt on the Company s ability to continue as a going concern. Highlights Results overview The highlights of the results for the year ended 30 June 2013 include: The Company, in furthering its stated objective to increase the value of the Group through a well planned and executed exploration programme, has expended R13,2 million on exploration related activities which has significantly increased its current resource base. In support of the exploration programme and in compliance with all corporate governance requirements the Group expended R9,6 million on general and administration costs during the 2013 financial year. Further to the investigation and pursuance of a number of capital raising opportunities during the same period, the opportunities have not proved to be in the best interests of the Group and executive management has thought it prudent during the prevailing financial climate to reduce expenditure to a minimum and to ride out the storm. In line with this effort the non-executive directors have agreed to postpone 50% (fifty percent) of their approved fees until sufficient cash has been raised. The Company is currently in an advanced stage of negotiations with shareholders to secure short- to medium-term funding that underpins the going concern status of the Group. Exploration Bauba Platinum was granted the renewal of its two new order Prospecting Rights for a period of three years, effective 18 July The Prospecting Rights cover all eight farms that make up the Bauba Project. The renewed rights have been notarially executed and were registered on 27 February To date 10 boreholes with deflections have been completed, these being four in the Southern Cluster, three in the Central Cluster and three in the Northern Cluster. Drilling on the Northern Cluster was initiated during April 2012, with ten boreholes initially planned. Three boreholes have been completed on the farm Schoonoord, and have intersected both the Merensky and UG2 Reefs, at depths between metres below surface and metres below surface. Intersection depths are in line with the regional dip estimate. The 4E resource generated from the three boreholes drilled in the Northern Cluster has significantly increased the declared SAMREC compliant, discounted inferred resource from 8,6Moz (4E) to 17,2Moz (4E). The resources were compiled by Bauba Platinum s geologists and verified and signed off by an independent competent person, Mr AN Clay of Venmyn Deloitte. The exploration planning for the next year includes continued drilling of planned holes in the Northern Cluster. The number of drill rigs in operation will depend on the economic climate and the ability of the Company to raise capital when required. Risks In our previous report to shareholders we noted that Bauba Platinum has been cited as a respondent in a legal process initiated by Rustenburg Platinum Mines ( RPM ) against the Department of Mineral Resources ( DMR ) in respect of the farms Genokakop and Groot Vygenboom being included in the Southern Cluster of Bauba Platinum s Prospecting Rights. The legal process has not yet been resolved; however, as the holder of the renewed Prospecting Rights, we are confident that these rights will not be set aside, a view which is confirmed by a legal opinion which we have obtained. We have been in constant contact with the DMR and now find it necessary to approach the courts to finally resolve this matter. We will however endeavour to interact with and keep the DMR fully apprised of all issues related to this matter. Access to capital remains a key risk, not only for Bauba Platinum, but for many other junior exploration and mining companies who are competing for limited funds in difficult economic and political conditions which are facing the industry, and particularly in the platinum sector. Our approach is to manage the economic sustainability of the Company by managing our exposure rate. We will both monitor and manage the progress of our exploration programme in the context of the funds available and, if necessary, we will slow down the programme until the investment appetite has been revived in the sector. We will continue with all possible initiatives to find ways of adding value to ensure our sustainability. We are confident that as we continue with our exploration programme we will be able to demonstrate, to current and potential investors, the long-term value in Bauba Platinum. 115

118 Sustainability The Bapedi Nation is a shareholder in the Bauba Project holding a 40% stake which exceeds the 26% required by South African mining legislation. Our BEE partners are also actively involved in the day-to-day activities on the ground so that there is an open and meaningful understanding of the business. We have had a number of meetings with the community and its representatives in the past year to help them understand the scope of our activities and for us to gauge the impact of our business on our host communities. This engagement takes place through the recognised community structures, such as the Royal council or the traditional councils, and we work on the basis that support is directed to the community as a whole and not to individuals within the broader community. This includes payment for access to land in a way that benefits the community. The nature of drilling programmes is such that employment opportunities are mostly short term but, as far as possible, we encourage our contractors to employ local labour in positions which do not require specialist skills and to provide basic training required by the job, which will enhance employment opportunities in the future. Even from the earliest stages of exploration, our intention is to adopt the best practices in safety, health and environmental management and to ensure that any contractors we use do the same. CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 June 2013 Note Audited 2013 R 000 Audited 2012 R 000 Audited 2011 R 000 ASSETS Non-current assets Intangible assets Property, plant and equipment Current assets Trade and other receivables Cash and cash equivalents Assets classified as held-for-sale Total assets EQUITY AND LIABILITIES Equity Issued capital Share premium Reverse asset acquisition reserve 16 ( ) ( ) ( ) Retained loss (79 686) (70 484) (65 714) Non-controlling interest (1 359) (988) (732) Liabilities Current liabilities Trade and other payables Liabilities classified as held-for-sale Total equity and liabilities Net asset value (cents) 28,8 36,6 0,3 Tangible net asset value per share (cents) 4,1 22,6 (7,6) 116

119 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2013 Note Audited 2013 R 000 Audited 2012 R 000 Audited 2011 R 000 Continuing operations Operating expenditure 2 (3 872) General and administrative expenses 2 (10 445) (8 369) (10 421) Reverse asset acquisition cost 16 (25 913) Finance cost 3 (7) (157) Finance income Loss before taxation (9 573) (6 565) (40 225) Taxation 4 (29) Total loss for the year from continuing operations (9 573) (6 565) (40 254) Loss from discontinued operations (no tax effect) Profit/(loss) for the year from discontinued operations: (31 873) Loss for the year (9 573) (5 026) (72 127) Other comprehensive income for the year (no tax effect) Reclassification adjustment of losses on financial assets held-for-sale Total comprehensive loss for the year (9 573) (5 026) (68 127) Loss for the year attributable to: (9 573) (5 026) (72 127) Equity holders of the Company (9 202) (4 770) (71 140) Non-controlling interests (371) (256) (987) Total comprehensive loss for the year attributable to: (9 573) (5 026) (68 127) Equity holders of the Company (9 202) (4 770) (67 140) Non-controlling interests (371) (256) (987) Basic loss per share (cents) diluted and undiluted 5 (7,5) (3,9) (59,9) Loss per share (cents) continued operations (7,5) (5,2) (42,2) Profit/(loss) per share (cents) discontinued operations 1,3 (34,3) Headline loss per share (cents) diluted and undiluted 5 (7,5) (7,0) (40,6) Headline earnings per share (cents) continued operations (7,5) (5,2) (37,7) Headline earnings per share (cents) discontinued operations (1,8) (2,9) Weighted average number of shares in issue (excluding treasury shares) ( 000) Diluted weighted average number of shares in issue (excluding treasury shares) ( 000) Number of share in issue at end of year ( 000) Adjustment to arrive at headline earnings Net loss before taxation for the year (9 202) (4 770) (71 140) Fair value profit/(loss) of discontinued operations (3 820) Impairment of financial assets held-for-sale Headline earnings (9 202) (8 507) (37 806) 117

120 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2013 Share capital R 000 Share premium R 000 Retained income/ (loss) R 000 Noncontrolling interest R 000 Reverse acquisition adjustment R 000 Total equity R 000 Balance at 1 July 2010 (1) Comprehensive loss for the year (67 140) (987) (68 127) Loss for the year (71 140) (987) (72 127) Other comprehensive income of the year Issue of shares Reverse acquisition adjustment (2 500) 255 ( ) ( ) Payment of dividend (292) (292) Balance at 1 July (65 714) (732) ( ) 284 Comprehensive loss for the year (4 770) (256) (5 026) Loss for the year (4 770) (256) (5 026) Issue of shares Share issue costs (3 086) (3 086) Balance at 30 June (70 484) (988) ( ) Comprehensive loss for the year (9 202) (371) (9 573) Loss for the year (9 202) (371) (9 573) Balance at 30 June (79 686) (1 359) ( ) Note The share capital of Bauba on 1 July 2010 was R125 and due to rounding to the nearest thousand Rand, it is not shown. CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2013 Note Audited 2013 R 000 Audited 2012 R 000 Audited 2011 R 000 Cash flows from operating activities (10 428) (19 340) (10 897) Adjustments for: Interest paid 3 (7) (157) Tax paid 4 (29) Net cash outflow from operating activities (10 428) (19 347) (11 083) Cash flows from investing activities Cash utilised associated with disposal group held-for-sale 14 (1 962) (1 122) Investment in intangible assets 8 (13 249) (9 856) (7 450) Acquisition of property, plant and equipment 9 (36) (150) (53) Sale of property, plant and equipment Sale of financial assets Dividends received from associates held-for-sale Interest received Net cash outflow from investing activities (12 389) (6 657) (3 882) Cash flows from financing activities Shares issued for cash Share premium repaid 19 (1 863) Costs associated with the issue of new shares 15 (124) (8 487) Shareholders loans repaid 18 3 Dividends paid to shareholders of Bauba 6 (292) Net cash used in financing activities Total cash and cash equivalents for the year (22 817) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year The complete set of audited annual financial statements for the years ended 30 June 2013, 30 June 2012 and 30 June 2011 are available on the Company s website, 118

121 1. Accounting policies Statement of compliance The financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards ( IFRS ), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and its successor, the Companies Act, 2008 (Act 71 of 2008) as amended, and the Listings Requirements of JSE Limited. Basis of measurement The Group s financial statements are prepared on the historical cost basis except for the revaluation of certain financial instruments which are measured at fair value, as appropriate, and incorporate the following principal accounting policies which have been consistently applied. All transactions are recognised under the accrual basis of accounting. Functional and presentation currency The consolidated financial statements are presented in South African Rand, which is the presentation currency and functional currency of all of the operations within the Group. All amounts in the financial statements, reports and supporting schedules are stated to the nearest thousand Rand (R 000) except where otherwise indicated. Use of estimates and judgements The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The use of estimates and judgements are further discussed in the note Critical accounting estimates and judgements. Reverse asset acquisition On 29 July 2010, Bauba Platinum Limited ( Bauba Platinum ) acquired the majority holding of the issued ordinary shares in Bauba A Hlabirwa Mining Investments Proprietary Limited ( Bauba A Hlabirwa ). As disclosed in the circular to shareholders on 17 May 2010, this transaction resulted in a change of control and the restructuring of the Board of Bauba Platinum. IFRS treatment The result of the transaction required that the principles of both IFRS 3 Business combinations, and IFRS 2 Share-based payments, be considered. IFRS 3 applies where an acquirer acquires control of a business. IFRS 3 also requires that the acquirer and acquiree be determined based on which entity (or its shareholders) acquires control of the newly created combined group; this may sometimes result in what is termed a reverse acquisition, which occurs when the legal acquirer is in actual fact the acquiree for the purposes of applying IFRS 3. It is the view of management that this reversed situation applies to the transaction between Bauba Platinum and Bauba A Hlabirwa, as it is Bauba A Hlabirwa s shareholders that have obtained control of the combined entities by obtaining 81% of the issued shares and who nominated the members of the board of directors that was subsequently appointed at the annual general meeting held on 15 October In order for IFRS 3 to be applicable to this transaction however, the acquirer ( Bauba A Hlabirwa ) must be obtaining control of a business as defined by IFRS 3. A business is defined by IFRS 3 as follows: An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other owners, members or participants. The previous Absolute Holdings Limited group at the time of the reverse asset acquisition transaction consisted of: Directly held: Lenopodi Proprietary Limited 100% (subsidiary); Dikopane NN Mining Proprietary Limited 37,5% (associate); and Qinisele Resources Proprietary Limited 25,1% (financial asset). Indirectly held through Lenopodi Proprietary Limited: Canyon Springs Investments 116 Proprietary Limited 100%; Niemoller Marmer Proprietary Limited 100%; Lubtalk Investments Proprietary Limited 90%; and Diamond Quartzite Processing Proprietary Limited 90%. Diamond Quartzite Processing Proprietary Limited was put on care and maintenance and was the only business with an operational history in the group of companies. An analysis of the only operational business (Diamond Quartzite Processing Proprietary Limited) in the previous Absolute Holdings Limited group of companies indicated that: The demand for its product in the local market was not sufficient to support the production cost; The transportation costs of exporting the product proved to be prohibitive due to the weight of the product; and The infrastructure of the operational processes required substantial capital investment to lower the production cost, which investment could not be justified based on the assessment of the local and foreign markets demand for the products. It is the view of management that the assets brought into the transaction by Bauba Platinum did not meet the accounting definition of a business either in Bauba Platinum or in the hands of any other market participant and consequently the transaction could not be accounted for as a reverse acquisition in terms of IFRS

122 IFRS 2 could have applied to the transaction; however, as the transaction involved the acquisition of financial assets as well as acquiring liabilities it was scoped out of that standard as well. Under these unusual circumstances, management is required by IAS 8 Accounting policies, changes in estimates and errors to develop an accounting policy that results in relevant and reliable information for users. Management has defined the transaction as a reverse asset acquisition, as opposed to a reverse business combination. In terms of this description the consolidated financial statements are issued under the name of Bauba Platinum but it represents a continuation of Bauba A Hlabirwa, except for the capital structure. This is considered appropriate as the control of Bauba Platinum was transferred into the hands of the previous Bauba A Hlabirwa shareholders and therefore it is appropriate that the financial effects be considered from their perspective. As the legal parent in the transaction, the capital structure is that of Bauba Platinum, following an approach similar to what would have been required had IFRS 3 been applicable to the transaction. The assets of Bauba Platinum which are now controlled by the previous shareholders of Bauba A Hlabirwa were brought into this new combined entity at fair value. The difference between the cost of the purchase and the fair value of these assets was recognised in profit or loss as a reverse acquisition cost, which differs from the treatment that would have applied in terms of IFRS 3, had it been applicable, which would have recognised an intangible asset in the form of goodwill. Under these unique circumstances, we believe this accounting policy to be largely consistent with key principles of recognition and measurement in IFRS, balanced, and results in reliable relevant information for users. Basis of consolidation Subsidiaries Where the Group has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Group as if they formed a single entity. The results and cash flows of subsidiaries are included from the date that control commences until the date that control ceases. Inter- Group transactions and balances between Group companies are eliminated in full. The accounting policies of the subsidiaries have been changed where necessary to align them with the policies adopted by the Group. With the acquisition of a non-controlling interest, the transactions are accounted for with the owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interest are based on a proportionate amount of the net assets of the subsidiary. In the financial statements of the Company, investments in subsidiaries are measured at cost less accumulated impairment losses. Associates Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are accounted for using the equity method and are initially recognised in the consolidated statement of financial position at cost. The Company s share of post-acquisition profits and losses is recognised in the consolidated income statement, from the date significant influence commences until the date significant influence ceases, except that losses in excess of the Company s investment in the associate are not recognised unless there is an obligation to make good those losses. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated investors interests in the associate. The investor s share in the associate s profits and losses resulting from these transactions is eliminated against the carrying value of the associate. Any premium paid for an associate above the fair value of the Group s share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the associate. The carrying amount of the investment in an associate is subject to impairment assessment at each reporting date. In the financial statements of the Company, the investment in an associate is measured at cost, less accumulated impairment losses. Foreign currency transactions Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Foreign currency differences resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities are recognised in profit or loss as incurred. Intangible assets Exploration for and the evaluation of mineral resources Exploration assets include expenditure incurred after the award of the legal licence, to explore a specific area for mineral resources, has been obtained. Pre-licence costs are recognised as an expense in profit or loss as incurred. Exploration and evaluation costs are capitalised as exploration assets on a project-by-project basis pending determination of the technical feasibility and commercial viability of the project. Exploration assets include costs of acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Administration and other general overhead costs, which are not directly attributable to the specific exploration assets, are expensed as incurred. When a licence is relinquished or a project is abandoned, the capitalised expenditure is recognised in profit or loss immediately. Exploration and evaluation assets are assessed for impairment if: (i) sufficient data exists to determine technical feasibility and commercial viability or (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity related. The cash-generating unit shall not be larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from intangible assets to mining property and development assets within property, plant and equipment. Due to the early stage of the exploration programme the capitalised cost was not amortised. Amortisation of the cost will only occur once the project moves from the exploration and evaluation phase to the mining phase. The value of the capitalised cost was however subjected to an impairment test. 120

123 Property, plant and equipment Recognition and measurement Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, and any costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment and depreciated separately. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income in profit or loss. Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that future economic benefits within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of day-to-day servicing of the property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is recognised in profit or loss on a systematic basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most clearly reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives, unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. Residual value is the amount that the entity could recover for the asset at the reporting date if the asset was already of the age and in the condition that it will be in when the entity expects to dispose of it. The estimated residual value is based on similar assets that have reached the end of their useful lives at the date that the estimate has been made. If the residual value of an asset increases to an amount equal to or in excess of the asset s carrying value, then the asset s depreciation charge will be zero. Depreciation will resume when the asset s residual value falls below the asset s carrying value. The estimated useful lives for the current and comparative periods are as follows: Motor vehicles: five (5) years Furniture, fittings and equipment: three (3) years. Depreciation methods, useful lives and residual values are reviewed annually and adjusted, if appropriate. Impairment of non-financial assets The carrying amount of the Group s assets is reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, the asset s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of an asset is the greater of its value-in-use and its fair value less the cost to sell. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. When the carrying value of an asset exceeds its recoverable amount, the asset is written down accordingly. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset s cash-generating unit. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment had been recognised. Impairment charges are disclosed separately on the consolidated statement of comprehensive income, except to the extent that they reverse gains previously recognised in the consolidated statement of changes in equity. Non-current assets held-for-sale Non-current assets that are expected to be recovered primarily through sale rather than through continuing use, are assets classified as held-for-sale. Immediately before classification as held-for-sale or distribution, the assets are remeasured in accordance with the Group s accounting policies. Thereafter generally the assets are measured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on re-measurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. Intangible assets and property, plant and equipment, once classified as held-for-sale are not amortised or depreciated. For financial assets that are heldfor-sale refer note 14. Provisions Provisions are recognised when the Group has a present obligation, whether legal or constructive, for liabilities of uncertain timing or amount that have arisen as a result of past events and are discounted at a pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability. In accordance with the applicable legal requirements, a provision for rehabilitation of land and the related expense is recognised when the damage occurs, it is probable that a restoration expense will be incurred and a reasonable estimate of the costs can be made. 121

124 Financial instruments Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Fair value determination The fair values for a financial asset that is traded in an active market (and for listed securities) the Group establishes fair value by quoted market prices that are available to the industry. The fair values for a financial asset that is not traded in an active market (and for unlisted securities) the Group establishes fair value by using valuation techniques. These valuation techniques include the use of recent arm s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs. A gain or loss arising from the change in the fair value of a financial asset or liability that is not part of a hedging relationship is recognised as follows: A gain or loss on a financial asset or financial liability classified as at fair value through profit and loss is recognised in profit and loss; and A gain or loss on an available-for-sale financial asset is recognised in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised. At that time the cumulative gain or loss previously recognised in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment. Impairment of financial assets Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. For all other financial assets, objective evidence of impairment could include: significant financial difficulty of the issuer or counterparty; or breach of contract, such as a default or delinquency in interest or principal payments; or it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or the disappearance of an active market for that financial asset because of financial difficulties. For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective interest rate. For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the consideration received. On derecognition of a financial asset in its entirety, the difference between the asset s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. On derecognition of a financial asset designated through other comprehensive income at fair value, the difference (if any) between carrying amount and consideration received is recognised in profit or loss. On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised is recognised in profit or loss. Financial assets Financial assets are classified as: at fair value or amortised cost. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. 122

125 The Group at present identifies the following financial assets: Financial assets available-for-sale at fair value through other comprehensive income; and Loans and receivables. Financial assets available-for-sale at fair value through other comprehensive income These financial assets are non-derivatives. The Group had investments in unlisted shares that are not traded in an active market, are classified as financial assets available-for-sale through other comprehensive income and stated at fair value at the end of each reporting period. Fair value is determined in the manner described in the note on fair value determination. Changes in the carrying amount of these financial assets relating to dividends are recognised in profit or loss. Other changes in the carrying amount are recognised in other comprehensive income. When the investment is disposed of the difference (if any) between the carrying amount and consideration received is recognised in profit or loss. Dividends are recognised in profit or loss when the Group s right to receive the dividends is established. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including trade and other receivables, bank balances and cash and others) are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Financial liabilities Financial liabilities are classified as either financial liabilities at fair value through profit and loss or other financial liabilities. The Group does not have any financial liabilities at fair value through profit and loss at present. Other financial liabilities Other financial liabilities (including borrowings and trade and other payables) are initially recorded at cost and subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Taxation Income tax comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income. Current taxation is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: The initial recognition of goodwill; The initial recognition of assets and liabilities that affect neither accounting nor taxable profit; and Differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the temporary differences when they reverse based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: the same taxable entity; or different Group entities which intend either: to settle current tax assets and liabilities on a net basis; or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered. Additional income taxes that arise from the distribution of dividends are recognised at the same time that the liability to pay the related dividend is recognised. Share capital The Group s ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of tax effects. When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of tax effects, is recognised as a deduction from total equity as a treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is transferred to/from retained earnings. 123

126 Revenue The invoiced values of goods sold, excluding value added tax, discounts and other non-operating income, in respect of manufacturing and trading, are recognised at the date when the significant risks and rewards of ownership are transferred to the buyer. The sale of goods was specific to the disposal group held-for-sale, which group was sold during the previous financial year. Finance income and finance expense Finance income comprises interest income received on funds invested that are recognised in profit or loss. Interest income is recognised as it accrues, using the effective interest method. Finance expenses comprise interest expense on borrowings that are recognised in profit or loss using the effective interest method. Dividends Dividends to equity holders are only recognised as a liability when declared and are included in the statement of changes in equity. Leased assets Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the Group (a finance lease), the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the lower of the fair value of the leased asset and the present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown as a liability. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Lease payments are analysed between capital and interest. Operating lease cost is recognised on a straight-line basis over the term of the lease. Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. All operating segments operating results are reviewed regularly by the Group s CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and other intangible assets. Employee benefits Short-term employee benefits The cost of all short-term employee benefits is recognised during the year in which the employee renders the related service. The accruals for employee entitlements to remuneration and annual leave represent the amount which the Group has a present obligation to pay as a result of the employee s services provided to the reporting date. The accruals have been calculated at undiscounted amounts based on current remuneration rates. Contingent assets and liabilities A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Contingent assets are not recognised as assets. A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognised as liabilities. Share-based payments Share-based payment arrangements in which the Group receives services as consideration for its own equity instruments are accounted for as equitysettled share-based payment transactions, regardless of how the equity instruments are obtained by the Group. The costs for such services received are expensed when incurred. Equity-settled share-based payments are measured at the rating price of the shares of the Company on the grant date. Critical accounting estimates and judgements The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Useful lives of intangible assets and property, plant and equipment As described in note 3.5, the estimated useful lives of property, plant and equipment are reassessed at the end of each annual reporting period. The Group depreciates/amortises its assets over their estimated useful lives, as more fully described in the accounting policies for property, plant and equipment and intangible assets. The actual lives of these assets can vary depending on a variety of factors, including technological innovation and maintenance programmes. Changes in estimates can result in significant variations in the carrying value and amounts charged to profit or loss in specific periods. 124

127 Rehabilitation provision Long-term environmental obligations are based on the Group s environmental plans, in compliance with current environmental and regulatory requirements. Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has occurred up to the reporting date. Annual increases in the provisions relating to the change in the net present value of the provision and inflationary increases are included in administration expenses in the income statement. The estimated cost of rehabilitation is reviewed annually and adjusted as appropriate for changes in legislation or technology. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-up at closure, in view of the uncertainty of estimating the potential future proceeds. Drill site rehabilitation is done on an ongoing basis and no provision is carried in the accounting records. Income taxes The Group is subject to income tax in a single jurisdiction and significant judgement is required in determining the provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. As a result, the Group recognises tax liabilities based on estimates of whether additional taxes and interest will be due. The Group believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgements about future events. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax expense in the period in which such determination is made R R R Results from operating activities Results from continued operations After considering the following: Expenses Auditor s remuneration Auditor fees Tax services 2 Contributions to socio-economic development Depreciation Motor vehicles Furniture and equipment Personnel expenses Salaries and wages Medical aid contribution Property rental Operating lease office equipment Finance income and cost Finance income Financial institutions SARS 2 Finance expenses Other financial liabilities 133 Suppliers (7) (6) Financial institutions (18) 125

128 2013 R R R TAXATION Current 29 Secondary tax on companies 29 No provision has been made for normal taxation by the Group as the Group had no taxable income for the 2013 financial year. A deferred tax asset is not recognised as at 30 June 2013 as it is uncertain when a future taxable profit will be generated to utilise the tax loss. The calculated tax loss is During the 2011 financial year a liability for secondary tax on companies became due and was paid in Hlabirwa due to dividends that were declared and paid to shareholders prior to the conclusion of the asset-for-share transaction Reconciliation of effective tax rate Loss for the year before taxation (9 573) (5 026) (72 097) Taxation (29) Loss for the year after taxation (9 573) (5 026) (72 126) Statutory income tax rate of 28% (%) 28,00 28,00 28,00 Unrecognised deferred tax asset (%) (28,00) (28,00) (28,00) Secondary tax on companies (%) 0,04 Effective tax rate 0,04 The tax rate used for the 2013, 2012 and 2011 reconciliation above is the corporate tax rate of 28% payable by corporate entities in South Africa on taxable income. 4.2 Other comprehensive loss The Company incurred no taxation obligation nor was there a deferred tax asset recognised with regard to the fair value loss associated with the financial assets R R R Headline earnings per share (cents) Basic loss per share (7,5) (3,9) (76,5) Continued operations (7,5) (5,2) (42,2) Discontinued operations 1,3 (34,3) Diluted loss per share (cents) (7,5) (3,9) (76,5) Continued operations (7,5) (5,2) (42,2) Discontinued operations 1,3 (34,3) Headline loss per share (cents) (7,5) (7,0) (40,6) Continued operations (7,5) (5,2) (37,7) Discontinued operations (1,8) (2,9) Diluted headline loss per share (cents) (7,5) (7,0) (40,6) Continued operations (7,5) (5,2) (37,7) Discontinued operations (1,8) (2,9) Weighted average shares in issue ( 000) Diluted weighted average shares in issue ( 000) Number of shares in issue at end of year ( 000) Adjustment to arrive at headline earnings: Net loss before taxation for the year (9 202) (4 770) (71 140) Fair value (loss)/profit of discontinued operations (3 820) Impairment of financial assets held-for-sale Headline loss (9 202) (8 507) (37 806) Headline earnings per share have been calculated in accordance with SAICA Circular 3/2012 entitled Headline Earnings which forms part of the Listings Requirements of the JSE Limited. 126

129 6. Dividend The board of directors of Bauba Platinum did not declare a dividend for the years ended 30 June 2013, 30 June 2012 and 30 June During the 2011 financial year the board of directors of Hlabirwa declared and paid a dividend of R2 336 per ordinary share to shareholders prior to the conclusion of the reverse asset acquisition transaction, amounting to a total dividend of R being paid R R R Cash flow information Loss for the year before tax (9 573) (5 026) (72 097) Adjustments for: (765) (3 149) Interest paid in profit or loss Depreciation Impairment of financial assets Investment income recognised in loss before tax (872) (1 811) (4 298) Loss associated with group held-for-sale Reverse asset acquisition cost Fair value (loss)/profit for the year discontinued operations (3 820) Changes in working capital (90) (11 165) Trade and other receivables 435 (37) (425) Trade and other payables (525) (11 128) Net cash from operating activities (10 428) (19 340) (10 897) 8. Intangible assets Mineral rights Exploration and evaluation assets Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Company has obtained the legal rights to explore an area are recognised in the income statement. Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are assessed for impairment if: (i) sufficient data exists to determine technical feasibility and commercial viability or (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity related. The cash-generating unit shall not be larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from intangible assets to mining property and development assets within property, plant and development. Bauba Platinum has an effective 60% holding in Bauba A Hlabirwa who holds prospecting rights over the following farms in Limpopo province: Magneetsvlakte 541KS; Dingaanskop 543KS, Fisant Laagte 506KS, Zwitzerland 473KS, Indië 474KS, Schoonoord 462KS, Genokakop 285KT and Groot Vygenboom 284KT. The prospecting rights held over Genokakop 285KT and Groot Vygenboom 284KT are subject to a review application brought by Rustenburg Platinum Mines Limited which to date has not been concluded (refer to note 20). Bauba A Hlabirwa was granted a prospecting right over Houtbosch 323KT which right is pending notarial execution and registration in the Mining Titles Registration office once the review application has been set aside. Upon this being achieved Bauba Platinum will issue an additional new shares to the Vendors as communicated in the circular to shareholders on 17 May

130 Motor vehicles R 000 Furniture and equipment R 000 Total R Property, plant and equipment Cost At 30 June Additions Disposals (69) (69) At 30 June Accumulated depreciation and impairment losses At 30 June Depreciation Disposals (45) (45) At 30 June Carrying value at 30 June Cost At 30 June Additions At 30 June Accumulated depreciation and impairment losses At 30 June Depreciation At 30 June Carrying value at 30 June Cost At 30 June Additions Disposals (496) (67) (563) At 30 June Accumulated depreciation and impairment losses At 30 June Depreciation Disposals (96) (21) (118) Impairment of assets 4 4 At 30 June Carrying value at 30 June None of the items in property, plant and equipment have been pledged as security and there are no contractual commitments to acquire any property, plant and equipment. 128

131 2013 R R R Investments in subsidiaries Bauba A Hlabirwa Mining Investments Proprietary Limited Ndarama Mineral Resources Proprietary Limited Absolute Group Management Proprietary Limited* * Investment of R100 zero due to rounding effect In the legal structure Bauba Platinum holds the following investments: Directly and indirectly: Absolute Group Management Proprietary Limited 2013: 100%; 2012: 100% and 2011: 100% Ndarama Mineral Resources Proprietary Limited 2013: 100%; 2012: 100% and 2011: 100% Bauba A Hlabirwa Mining Investments Proprietary Limited 2013: 60%; 2012: 60% and 2011: 60% The remaining 40% interest in Bauba A Hlabirwa is held in favour of and for the benefit of the Bapedi Royal Family (2,4%) and the Bapedi Nation (37,6%). The investments in the subsidiaries were tested for impairment. The impairment test considered the attributable targeted and inferred PGM resource, historical transactions that were concluded for such resources and taking into consideration the current platinum price Loans to subsidiaries Bauba A Hlabirwa Mining Investments Proprietary Limited Ndarama Mineral Resources Proprietary Limited 11 Fair value loss adjustment cumulative (24 779) (11 006) (4 343) Beginning of period (11 006) Current period (13 773) (11 006) (4 343) Loans to subsidiaries are unsecured with no fixed repayment terms and bear no interest. The loans have been fairly valued using the net present valuation method, as the repayment of these loans is only expected once the Company produces income from its operations. The discount rate applied is the bank overdraft rate of 8.5% as at 30 June Trade and other receivables VAT Prepayments Deposits and other In the opinion of the directors the carrying value of trade and other receivables approximates fair value due to its short-term nature and represents the maximum amount exposed to credit risk. 13. Cash and cash equivalents Bank and cash balances Call deposits

132 14. Disposal group held-for-sale 14.1 Assets and liabilities classified as held-for-sale The following investments held-for-sale were disposed of in the 2012 financial year and were classified as held-for-sale in the 2011 financial year: Directly Dikopane NN Mining Proprietary Limited 2013: 37,5%; 2012: 37,5% and 2011: 37,5% disclosed as investment in associate; Qinisele Resource Proprietary Limited 2013: 25,1%; 2012: 25,1% and 2011: 25,1% disclosed as a financial asset through other comprehensive income as designated at initial recognition; and Lenopodi Proprietary Limited 2013: 100%; 2012: 100% and 2011: 100%. Indirectly held through Lenopodi Proprietary Limited Canyon Springs Investments 116 Proprietary Limited 2013: 100%; 2012: 100% and 2011: 100% Niemoller Marmer Proprietary Limited 2013: 100%; 2012: 100% and 2011: 100% Lubtalk Investments Proprietary Limited 2013:90%; 2012: 90% and 2011: 90% and Diamond Quartzite Processing Proprietary Limited 2013: 90%; 2012: 90% and 2011: 90%. As a result of the disposal of these investments the Group no longer has a need for a provision for rehabilitation costs. (Drill site rehabilitation is done on an ongoing basis.) The proceeds received from the sale of shares were: Qinisele Resources Proprietary Limited R ; and Lenopodi Proprietary Limited and Dikopane NN Mining Proprietary Limited the net asset value of these investments was settled against the net Calulo loan of R on 27 June 2012, the effective date of the transaction. Non-current assets Mineral rights Property, plant and equipment 238 Investments in financial assets Investments in associates 1 Current assets 445 Inventory 38 Trade and other receivables 91 Cash and cash equivalents 316 Total assets classified as held-for-sale Loans classified as held-for-sale Non-current liabilities 433 Rehabilitation liabilities 433 Current liabilities Trade and other payables Bank overdraft Total liabilities classified as held-for-sale Operating results of discontinued operations Revenue Cost of sales (883) Gross income/(loss) 5 (473) Net income 10 Net finance costs (1 681) (1 054) Expenses (532) (1 172) Net loss (2 198) (2 699) Realised/fair value profit/(loss) for the year (16 917) Realised/impairment of financial asset (83) (16 417) Realised/impairment of financial asset held-for-sale (83) (12 417) Reclassification adjustment of financial assets held-for-sale (4 000) Investment income Dividend income from financial asset held-for-sale Profit/(loss) for the year (31 873) 2013 R R 000 All the companies reflected in the discontinued operations have assessed loss positions and therefore there is no tax effect on the operating results R

133 14. Disposal group held-for-sale continued 14.2 Operating results of discontinued operations continued The fair value adjustment results from the assessment of the discontinued operations excluding the value of the financial assets through other comprehensive income. These discontinued operations are ring-fenced with the Calulo loan which forms the core of the liabilities associated with assets classified as heldfor-sale. The financial asset was held as available-for-sale through other comprehensive loss but due to the weakening of the financial markets the marketability of this asset was severely curtailed, resulting in the asset being impaired. IAS 39 Financial instruments requires when a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income and there is objective evidence that the asset is impaired, that the cumulative loss that had been recognised in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment. The result was that the R4 million reflected in other comprehensive loss in the 2010 annual financial statements has been reclassified to profit and loss in the 2011 restated annual financial statements R R R Cash utilised for disposal group held-for-sale Net cash outflow from operating activities (1 962) (2 072) Net cash inflow from investing activities Net cash outflow from financing activities (3 188) Net cash flows (1 100) 15. Share capital and premium Authorised share capital ordinary shares at R1 each Issued share capital Balance at 30 June Shares issued for cash Share-based payments 234 Assets for shares transactions Balance at 30 June Shares issued for cash Share-based payments Balance at 30 June Balance at 30 June Share premium Balance at 30 June Shares issued for cash Share-based payments 417 Assets for shares transactions Costs associated with asset-for-share transaction (6 728) Costs associated with capital raise (2 410) Balance at 30 June Shares issued for cash Share-based payments Costs associated with capital raise (3 086) Balance at 30 June Balance at 30 June During the 2012 financial year the Company settled costs incurred with regard to the shares issued for cash by issuing shares at R2,07 per share. The results of this transaction are reflected in share-based payments and cost associated with capital raising above. 131

134 16. Reverse acquisition reserve During the 2011 financial year Bauba Platinum concluded a reverse asset acquisition transaction. The effect of the accounting treatment, as a result of the reverse asset acquisition, is that even though the consolidated financial statements are issued under the name of Bauba Platinum, it represents a continuation of Ndarama Mineral Resources Proprietary Limited ( Ndarama ) and Bauba A Hlabirwa ( Hlabirwa ), except for its capital structure. The accounting treatment requires that the share capital structure of Ndarama and Hlabirwa is replaced by that of Bauba Platinum as at the transaction date taking into consideration the value of the purchase price and the fair value of the assets bought. The following values were taken into consideration at the transaction date: 2013 R R R 000 Reverse asset acquisition At transaction date the values were: Fair value of Bauba A Hlabirwa and Ndarama shares at R2, Share capital of Bauba Platinum Net deemed value of Bauba Platinum Share capital of Bauba A Hlabirwa and Ndarama (637) (637) (637) Non-controlling interest Purchase price of Bauba Platinum at R2,98 (47 724) (47 715) (47 715) Reverse acquisition reserve Fair value of Bauba Platinum Purchase price of Bauba Platinum shares at R2,98 (47 715) Reverse asset acquisition cost (25 913) 17. Trade and other payables Trade payables VAT 48 Other payables Loans to shareholders During the 2011 financial year the outstanding loan to the shareholders of Hlabirwa of R2 938 as at June 2010 was repaid by the shareholders of Hlabirwa prior to the conclusion of the reverse asset acquisition transaction. No loans were granted to any shareholder of Bauba Platinum during the years under review. 19. Share premium repaid Prior to the conclusion of the reverse asset acquisition transaction, the shareholders of Hlabirwa restructured the equity of Hlabirwa resulting in the repayment of R share premium. 20. Contingent Liabilities During the 2013 and 2012 financial years, the Group was involved in two litigation matters. The details are: A review application was lodged by Rustenburg Platinum with regard to the prospecting rights held over the farms Genokakop 285KT and Groot Vygenboom 284KT; and A previous employee of the Company has lodged a claim for compensation due to his resignation. The Company has taken senior counsel advice on both these matters and was informed that the Company has a strong case in both instances and the judicial system should find in the Company s favour. The potential financial effect of the outcomes is uncertain in light of the outcome being subjected to the judicial process. To the best of our knowledge and belief there are no other contingent liabilities to third parties and/or contingent assets not set out or referred to in this report which may materially affect the financial position of the Group. During the 2011 financial year the Group was involved in litigation matters with regard to a review application brought against mineral rights held by the Group (refer note 8) and a claim for compensation due to a resignation for good cause by one of its previous employees. The directors are of the opinion that the latter matter will be settled without a material effect on the financial position of the Group. To the best of our knowledge and belief there were no other contingent liabilities to third parties and/or contingent assets not set out or referred to in this report which may materially affect the financial position of the Group. 132

135 21. Financial INSTRUMENTS 21.1 Risk management activities In the normal course of its operations, the Group is exposed to credit, interest rate and liquidity risk. This note describes the Group s objectives, policies and processes for managing those risks and methods used to measure them. In order to manage these risks, the Group has developed a comprehensive risk management process to facilitate control and monitoring. The board has overall responsibility for the determination of the Group s risk management objectives and policies and, while retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group s finance function. The Company s treasury function provides services to the subsidiaries, coordinates access to domestic financial markets and monitors and manages the financial risks relating to the operations of the Group. Operational and business risks are reviewed and addressed on a monthly basis. These risks include credit risk, liquidity risk and cash flow interest rate risk. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes Credit risk The Group does not have any credit risk pertaining to the selling of goods and services. The Company fulfils a centralised treasury function for the Group. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: 2013 R R R 000 Financial instruments Credit risk Deposits and other There was no impairment loss recognised in trade and other receivables Foreign exchange risk The Group does not operate internationally at present and is therefore not directly exposed to foreign exchange risk Interest rate risk At reporting date the interest rate profile of the Group s interest-bearing financial instruments was: 2013 R R R 000 Interest rate risk Financial assets Liquidity risk management Liquidity risk arises from the Group s management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The Group manages liquidity by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows. The Group has no overdraft facility and no interest-bearing debt. In the ordinary course of business the Group raises cash through the issuing of shares for cash. Surplus cash is centrally managed to maximise returns while ensuring that the capital is safeguarded by investing only with top financial institutions. The following table details the Group s remaining contractual maturity for its non-derivative financial liabilities. This table was drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay: Weighted average effective interest rate % 2013 R R R 000 Liquidity risk Trade and other payables Due in one to three months It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. The following table details the Group s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group s liquidity risk management as the liquidity is managed on a net asset and liability basis. 133

136 21. Financial instruments continued 21.5 Liquidity risk management continued Weighted average effective interest rate % Less than one month R 000 One to three months R 000 Three months to one year R 000 Total R June 2013 Non-interest-bearing Variable interest rate instruments 4, June Non-interest-bearing Variable interest rate instruments 5, June Non-interest-bearing Variable interest rate instruments 4, Fair value of financial instruments Three different levels for fair valuation have been defined: Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (i.e. derived from prices); and Level 3: inputs for the assets or liabilities that are not based on observable market data. All financial assets and liabilities are measured at amortised cost. The directors are of the opinion that the carrying value of the financial assets and liabilities as reflected on the face of the consolidated statement of financial position is the fair value of these financial assets and liabilities due to their short-term nature Capital management The Group is an exploration concern and raises the necessary cash to support the exploration programme through the issuing of shares. The Group requires an additional R150 million to complete phase I of the current exploration programme and the plan is to raise the cash in tranches according to the cash flow requirements in order to complete phase I by June 2015 which will allow the Group to apply for a mining permit. The cash outflows are managed by adjusting the drilling rates to coincide with the cash raising programme. The capital management objectives and principles applied in the current financial period are consistent with those applied in the previous financial period. The Group s audit and risk committee reviews the liquidity of the Group at every meeting to ensure that the Group will be able to continue as a going concern while maximising the return to shareholders. The Group is not subjected to externally imposed capital requirements. 22. Related PARTIES Transactions and balances Subsidiaries Transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and are not disclosed in this note. The subsidiaries are: Effective holding % Absolute Group Management Proprietary Limited 100 Ndarama Mineral Resources Proprietary Limited 100 Bauba A Hlabirwa Mining Investments Proprietary Limited

137 22. Related parties continued Transactions and balances continued Directors The directors of the Group during the 2013 financial year were: Appointed Resigned Designation Dr NM Phosa 22/03/2011 Non-executive KV Dicks 17/09/2010 Independent non-executive JG Best 17/09/2010 Chairman non-executive SM Dolamo 17/09/2010 Independent non-executive KW Mzondeki 12/09/2011 Independent non-executive and chairperson of the audit committee King Thulare Thulare 01/07/2011 Alternative to Dr NM Phosa DS Smith 17/09/2010 Non-executive SJM Caddy 13/02/2013 CEO GJ Pitt 01/07/ /01/2013 CEO WA Moolman 01/07/2011 CFO The directors of the Group during the 2012 financial year were: Appointed Resigned Designation JG Best 17/09/2010 Chairman non-executive KV Dicks 17/09/2010 Independent non-executive SM Dolamo 17/09/2010 Independent non-executive KW Mzondeki 12/09/2011 Independent non-executive and chairperson of the audit committee Dr NM Phosa 22/03/2011 Non-executive DS Smith 17/09/2010 Non-executive King TV Thulare 01/07/2011 Alternate to Dr NM Phosa GJ Pitt 22/03/2011 CEO WA Moolman 01/07/2011 CFO The directors of the Group during the 2011 financial year were: Appointed Resigned Designation GJ Pitt 18/03/2011 CEO PC Pienaar 07/06/ /02/2011 Executive director GP Sequiera 14/05/ /10/2010 Executive director MW Rosslee 01/09/ /02/2011 Executive director JG Best 17/09/2010 Independent non-executive chairperson KV Dicks 17/09/2010 Independent non-executive SM Dolamo 17/09/2010 Independent non-executive NM Phosa 22/03/2011 Independent non-executive DS Smith 17/09/2010 Independent non-executive MK Diale 20/01/ /10/2010 Independent non-executive AM Sher 17/04/ /10/2010 Independent non-executive JJ Serfontein 29/05/ /10/2010 Independent non-executive 135

138 22. Related parties continued Transactions and balances continued 2013 R R R 000 Related party Prospect Geoservices CC (DS Smith director geological services) Fees Amounts due at 30 June Qinisele Resources Proprietary Limited Fees/Interest Income Amounts owed to Amounts due to Qinisele Resources Proprietary Limited will be due and payable once the R60 million capital had been raised. The concluding tranche of the capital raised, was signed on 29 June 2011 and the cash net of cost was received subsequent to the 2011 financial year-end and the amounts due were settled. 23. Going CONCERN The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. As is common with many junior mining companies, the Group raises capital for exploration and other projects as and when required. The Group is at an advanced stage of negotiating additional short- to medium-term funding with shareholders. However, there can be no assurance that the Group s projects will be fully developed in accordance with current plans or completed on time or to budget. Future work on the development of these projects may be adversely affected by factors outside of the control of the Group. 24. Subsequent EVENTS 2013: The directors are not aware of any subsequent events other than those disclosed above that occurred between the date of authorisation of the annual financial statements and the year-end that require any adjustments or additional disclosure in the annual financial statements. 2012: The Group was awarded the renewal of its new order prospecting rights on 18 July The directors are not aware of any subsequent events other than those disclosed above, that occurred between the date of authorisation of the annual financial statements and the year-end that require any adjustments or additional disclosure to the annual financial statements. 2011: The Company entered into a share subscription agreement to the value of R50 million on 29 June 2011 and the cash net of costs was received subsequent to the year-end. The directors are not aware of any subsequent events other than those disclosed above that occurred between the date of authorisation of the annual financial statements and the year-end that require any adjustments or additional disclosure to the annual financial statements. 136

139 2013 R R R Directors emoluments Executive directors SJM Caddy 740 WA Moolman GJ Pitt PC Pienaar MW Rosslee Non-executive directrs JG Best KV Dicks SM Dolamo NM Phosa KW Mzondeki DS Smith AM Sher 48 JJ Serfontein 32 King TV Thulare Fees Salary The remuneration of the executive directors is determined by the remuneration committee, having regard to the performance of individuals and market trends. None of the executive directors received post-employment benefits, other long-term incentives, termination or share-based benefits during this period. Executive directors do not receive directors fees and all the directors have service contracts with the Company at 30 June Executive directors are subject to the Company s standard conditions of employment. For the year ended 30 June 2013 Number % Shares % Range , , , , , , , , , , , ,00 Major shareholders directly owning 5% or more of shares in issue Highland Trading Investments Limited ,22 PSL Client Safe Custody Asset ,35 Math-Pin Trust ,89 Bauba A Hlabirwa Investments Proprietary Limited ,16 Shareholder spread Public , ,14 Non-public 3 0, ,86 Highland Trading Investments Proprietary Limited 1 0, ,22 Directors 2 0, ,64 137

140 25. Directors emoluments continued For the year ended 30 June 2013 continued Directors shareholding Directly held Indirectly held Total % of shares GJ Pitt ,75 NM Phosa ,89 Total number of shares ,64 For the year ended 30 June 2012 Range Number % Shares % , , , , , , , , , ,67 Major shareholders directly owning 5% or more shares in issue , ,00 Highland Trading Investments Limited ,22 PSL Client Safe Custody Asset ,77 Math-Pin Trust ,89 Hlabirwa Mining Investments Proprietary Limited ,16 Shareholder spread Public , ,14 Non-public 3 0, ,86 Highland Trading Investment Limited 1 0, ,22 Directors 2 0, ,64 Directors shareholding Directly held Indirectly held Total % of shares GJ Pitt ,75 NM Phosa ,89 Total number of shares ,64 138

141 25. Directors emoluments continued For the year ended 30 June 2011 Range Number % Shares % , , , , , , , , , ,23 Major shareholders directly owning 5% or more shares in issue , ,00 Highland Trading Investments Limited ,77 Math-Pin Trust ,55 Hlabirwa Mining Investments Proprietary Limited ,76 Calulo Resources Proprietary Limited ,21 Shareholder spread Public , ,58 Non-public 4 0, ,42 Associates 1 0, ,94 Directors 3 0, ,48 Directors shareholding Directly held Indirectly held Total % of shares PC Pienaar ,94 GJ Pitt ,99 NM Phosa ,55 Total number of shares ,48 139

142 Appendix 3 EXTRACTS FROM BAUBA S MEMORANDUM OF INCORPORATION Extracts from the Memorandum of Incorporation of Bauba are set out below. A copy of the complete Memorandum of Incorporation is available for inspection at Bauba s registered office. For the purpose of this Appendix 3 Act refers to the Companies Act, 2008 (Act 71 of 2008), as amended, consolidated or re-enacted from time to time, and includes all schedules to such Act and the Regulations. A reference to a section by number refers to the corresponding section of the Act, notwithstanding the renumbering of such section after the date on which the Company is incorporated. A reference to a clause by number refers to a corresponding provision of the Memorandum of Incorporation. 25. COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS 25.1 In addition to the minimum number of directors, if any, that the Company must have to satisfy any requirement in terms of the Act to appoint an audit committee and a social and ethics committee, the board must comprise at least 4 (four) directors and the shareholders shall be entitled, by ordinary resolution, to determine such maximum number of directors as they from time to time shall consider appropriate All directors shall be elected by an ordinary resolution of the shareholders at a general or annual general meeting of the Company and no appointment of a director in accordance with a resolution passed in terms of section 60 shall be competent In any election of directors: the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the board have been filled; and in each vote to fill a vacancy: each vote entitled to be exercised may be exercised once; and the vacancy is filled only if a majority of the votes exercised support the candidate The Company may appoint ex offıcio directors as contemplated in section 66(4)(ii) Apart from satisfying the qualification and eligibility requirements set out in section 69, a person need not satisfy any eligibility requirements or qualifications to become or remain a director or a prescribed officer of the Company No director shall be appointed for life or for an indefinite period and the directors shall rotate in accordance with the following provisions of this clause 25.6: at each annual general meeting referred to in clause 20.5, 1/3 (one-third) of the directors for the time being, or if their number is not 3 (three) or a multiple of 3 (three), the number nearest to 1/3 (one-third), but not less than 1/3 (one-third), shall retire from office, provided that if a director is appointed as managing director or as an employee of the Company in any other capacity, he or she shall not, while he or she continues to hold that position or office, be subject to retirement by rotation and he or she shall not, in such case, be taken into account in determining the rotation or retirement of directors; the directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who were elected as directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot; a retiring director shall be eligible for re-election at such annual general meeting contemplated in clause above, provided that such meeting is held in person and not by means of a written resolution as contemplated in section 60; if at any meeting at which an election of directors ought to take place the offices of the retiring directors are not filled, unless it is expressly resolved not to fill such vacancies, the meeting shall stand adjourned and the further provisions of this Memorandum of Incorporation, including clauses to (inclusive) will apply mutatis mutandis to such adjournment, and if at such adjourned meeting the vacancies are not filled, the retiring directors, or such of them as have not had their offices filled, shall be deemed to have been re-elected at such adjourned meeting Subject to the provisions of clause 25.2 above, the board shall provide the shareholders with a recommendation in the notice of the meeting at which the election or the re-election of a retiring director is proposed, as to which retiring directors are eligible for re-election, taking into account that director s past performance and contribution The board has the power to: fill any vacancy on the board on a temporary basis, as set out in section 68(3), provided that such appointment must be confirmed by the shareholders, in accordance with clause 25.2, at the next annual general meeting of the Company, as required in terms of section 70(3)(b)(i); and exercise all of the powers and perform any of the functions of the Company, as set out in section 66(1), and the powers of the board in this regard are only limited and restricted as contemplated in this clause The directors may at any time and from time to time by power of attorney appoint any person or persons to be the attorney or attorneys and agent(s) of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors in terms of this Memorandum of Incorporation) and for such period and subject to such conditions as the directors may from time to time think fit. Any such appointment may, if the directors think fit, be made in favour of any company, the shareholders, directors, nominees or managers of any company or firm, or otherwise in favour of any fluctuating body of persons, whether nominated directly or indirectly by the directors. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorneys and agents as the directors think fit. Any such attorneys or agents as aforesaid may be authorised by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in them. 140

143 25.10 Save as otherwise expressly provided herein, all cheques, promissory notes, bills of exchange and other negotiable or transferable instruments, and all documents to be executed by the Company, shall be signed, drawn, accepted, endorsed or executed, as the case may be, in such manner as the directors shall from time to time determine All acts performed by the directors or by a committee of directors or by any person acting as a director or a member of a committee shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of the directors or persons acting as aforesaid, or that any of them were disqualified from or had vacated office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a director or member of such committee If the number of directors falls below the minimum number fixed in accordance with this Memorandum of Incorporation, the remaining directors must as soon as possible and in any event not later than 3 (three) months from the date that the number falls below such minimum, fill the vacancy/ies in accordance with clause or convene a general meeting for the purpose of filling the vacancies, and the failure by the Company to have the minimum number of directors during the said 3 (three)-month period does not limit or negate the authority of the board of directors or invalidate anything done by the board of directors while their number is below the minimum number fixed in accordance with this Memorandum of Incorporation The directors in office may act notwithstanding any vacancy in their body, but if after the expiry of the 3 (three)-month period contemplated in clause 25.12, their number remains below the minimum number fixed in accordance with this Memorandum of Incorporation, they may, for as long as their number is reduced below such minimum, act only for the purpose of filling vacancies in their body in terms of section 68(3) or of summoning general meetings of the Company, but not for any other purpose A director may hold any other office or place of profit under the Company (except that of auditor) or any subsidiary of the Company in conjunction with the office of director, provided that the appointment and remuneration (in addition to the remuneration to which he may be entitled as a director) in respect of such other office must be determined by a disinterested quorum of the directors A director of the Company may be or become a director or other officer of, or otherwise interested in, any company promoted by the Company or in which the Company may be interested as shareholder or otherwise, provided that the appointment and remuneration (in addition to the remuneration to which he may be entitled as a director) in respect of such other office must be determined by a disinterested quorum of directors Unless otherwise agreed with the JSE, the proposal of any resolution to shareholders in terms of sections 20(2) and 20(6) of the Act shall be prohibited in the event that such a resolution would lead to the ratification of an act that is contrary to the JSE Listings Requirements. 28. DIRECTORS COMPENSATION AND FINANCIAL ASSISTANCE 28.1 The Company may pay remuneration to the directors for their services as directors in accordance with a special resolution approved by the shareholders within the previous 2 (two) years, as set out in section 66(8) and (9), and the power of the Company in this regard is not limited or restricted by this Memorandum of Incorporation Any director who: serves on any executive or other committee; or devotes special attention to the business of the Company; or goes or resides outside South Africa for the purpose of the Company; or otherwise performs or binds himself to perform services which, in the opinion of the directors, are outside the scope of the ordinary duties of a director, may be paid such extra remuneration or allowances in addition to or in substitution of the remuneration to which he may be entitled as a director, as a disinterested quorum of the directors may from time to time determine The directors may also be paid all their travelling and other expenses necessarily incurred by them in connection with: the business of the Company; and attending meetings of the directors or of committees of the directors of the Company The board may, as contemplated in and subject to the requirements of section 45, authorise the Company to provide financial assistance to a director, prescribed officer or other person referred to in section 45(2), and the power of the board in this regard is not limited or restricted by this Memorandum of Incorporation. 30. BORROWING POWERS 30.1 The directors may from time to time exercise all of the powers of the Company to: borrow for the purposes of the Company such sums as they think fit; and secure the payment or repayment of any such sums, or any other sum, as they think fit, whether by the creation and issue of securities, mortgage or charge upon all or any of the property or assets of the Company For the purposes of clause 30.1, the borrowing powers of the Company shall be unlimited. 141

144 Appendix 4 CORPORATE GOVERNANCE STATEMENT The following information on Bauba s approach to corporate governance has been extracted from Bauba s corporate governance report as it appears in the annual financial statements for the year ended 30 June For the complete corporate governance statement, including the 75 principles of the King Code, please visit and view the 2013 Integrated Annual Report. Corporate governance Introduction Good corporate governance is more than merely applying governance rules; it extends to a qualitative consideration of the non-financial aspects of business performance that have the potential to influence sustainable economic growth and relationships with stakeholders. King III facilitates the move towards integrated reporting and places far greater importance on leadership, sustainability and effective stakeholder engagement. The Bauba board is responsible for corporate governance and oversees the Company s ongoing alignment with the governance and reporting principles set out in King III. See page 14 of the Integrated Annual Report for a summary of Bauba s compliance with King III. Board of directors The Bauba board has a unitary structure and has developed a formal framework for delegation of authority to ensure a proper balance of power amongst the directors. The board is responsible for the appointment of the chief executive officer and there is a clear division of roles between the chairman and chief executive officer. The chairman oversees the effective functioning of the board. In his leadership role, he is involved in setting the strategic direction of Bauba and has been tasked with ensuring effective corporate governance practices. The chief executive officer is answerable for the day-to-day affairs of Bauba, which include implementing and monitoring the strategy of Bauba in a responsible manner. Executive directors are appointed by the board to oversee the daily functioning of Bauba and are held accountable through regular reporting to the board. The non-executive directors, the majority of whom are independent, provide the board with advice and experience that is independent of the executive. They play a critical role as board representatives on the various sub-committees. The board operates in accordance with a board charter and is accountable for ensuring financial and legislative compliance. It is required to make decisions on matters of a material nature, including Bauba s financial and operating results, major acquisitions and disposals, and large capital expenditure. It is also incumbent upon the directors to ensure that sustainable development is an integral part of the business strategy. The appropriate risk management and governance systems are in place and Bauba operates as a responsible corporate citizen and in an ethical manner. The board meets at least four times a year, with additional meetings if required. The meetings follow a formal agenda to ensure that all substantive matters are addressed and information relevant to the meetings is supplied to board members in advance so that they can make informed and reasoned decisions. The directors have unrestricted access to information about Bauba and may seek independent professional advice on matters concerning the affairs of Bauba if required. The executive directors have contracts of employment with Bauba which can be terminated with a notice period of not more than two months. Board composition The board consists of two executive directors and six non-executive directors, four (67%) of whom are independent. The Chairman of the board, Mr Jonathan Best, is independent. As part of Bauba s long-term strategy to actively involve the Bapedi Nation at a strategic, decision-making level, King Thulare V Thulare serves as an alternate to Dr Mathews Phosa. Independent non-executive directors are directors who have not been employed by Bauba for the preceding three years, and are in no way related to Bauba or to any shareholder, supplier, customer or other director of Bauba in a way that would lead to their integrity, impartiality or objectivity being compromised. They have and will continue to exert significant influence at meetings. As a junior exploration company, the directors are of the opinion that the current composition and structure of the Bauba board is appropriate. There is a policy and formal transparent procedures in place to appoint directors to the board to ensure that the appropriate mix of skills and experience is maintained. The non-executive directors do not have fixed terms of appointment. One-third of the non-executive directors are subject, by rotation, to retirement and re-election by shareholders, in accordance with Bauba s Memorandum of Incorporation and there are no age limits. Board committees Certain functions of the board have been delegated to various committees, which operate according to charters approved by the board. These committees in no way diminish the accountability of the board and their effectiveness remains a board responsibility. Members of the audit and risk committee are elected each year by shareholders at the annual general meeting while members of the remuneration and nomination committee, the social and ethics committee and the technical committee, are elected by the board. Audit and risk committee In line with the requirements of King III, the function of the audit and risk committee extends beyond financial reporting to include the overseeing of the preparation of Bauba s integrated report. It is the responsibility of the board to ensure that the audit and risk committee has the necessary skills to perform its broader governance duties. The audit and risk committee is made up of three suitably skilled and experienced independent non-executive directors. The current members of the audit and risk committee are Ms Kholeka Mzondeki (chairperson), Mr Kenneth Dicks and Mr Sholto Dolamo. 142

145 The audit and risk committee is required to meet at least twice a year in accordance with King III. The Chairman of the board, the Chief Executive Officer, the Financial Director, the external auditors and the internal audit function attend the audit and risk committee meetings by invitation. The committee has adopted formal terms of reference set out in a charter and approved by the board, which include all its statutory responsibilities to shareholders in terms of the Companies Act, 2008 (Act 71 of 2008) and the provisions of King III. The committee assists the board by advising on financial and sustainability reporting and maintaining oversight of the risk management process, internal financial controls, external audit matters and the regulatory compliance of Bauba. The committee applies a combined assurance process and receives assurance from management, the external auditors, the internal auditors and independent technical service providers. It is the responsibility of the audit and risk committee, amongst other things, to: nominate a suitable firm for appointment as external auditors having determined that they have the necessary expertise and are independent of Bauba; determine the terms of engagement of the external auditors and the fee to be paid; review the audit plan of the external auditors and monitor progress against the plan; pre-approve all non-audit services provided by the external auditors; review the accounting policies of Bauba as well as any proposed changes; review the annual and interim financial reports and the annual financial statements as well as the sustainability performance of Bauba in line with acceptable practice for a company the size of Bauba; and review the integrity of the integrated annual report by ensuring its content is reliable and recommending it to the board for approval. The committee ensures that the requisite risk management culture, policies, practices and systems are in place relevant to Bauba s level of exposure. The dayto-day risk management is the responsibility of the management team. Bauba has in place a risk register which lists the material issues to which the business is exposed, as well as strategies to mitigate their impact. The risk register is discussed and updated at every audit and risk committee meeting, and then presented to all directors at the board meetings. Due to the size of Bauba, it is not feasible to employ a full-time internal auditor at this stage. However, Bauba has appointed an outsourced service provider and developed an internal audit charter to guide the provision of an internal audit function, which is overseen by the audit committee. The external auditor has carried most of the responsibility for risk assessments on Bauba s financial statements in the reporting period. The Chairman and the audit and risk committee maintain a level of oversight by reviewing Bauba s financial statements on an ad hoc basis. The audit and risk committee is required by King III to provide assurance to the board on information technology (IT) governance. The current IT systems are in line with the performance objectives of Bauba which operates standard office, accounting and geological packages. The IT support is outsourced to an independent service provider. However, Bauba does carry out an IT risk assessment from time to time, which identifies any potential threats to the IT system. An ongoing review process ensures that Bauba maintains an adequate and effective IT system and that its information assets are properly safeguarded. The board is responsible for IT governance and the approval of any significant IT expenditure. The management team is responsible for the implementation of IT governance within Bauba. The audit and risk committee monitors the available cash resources of Bauba having regard for the capital commitments of its exploration programme and its other cash requirements. Having reviewed liquidity and solvency, the committee has concluded that the going-concern basis of reporting is appropriate for Bauba. As required by JSE Listings Requirement 3.84(h), the audit and risk committee has satisfied itself that the Financial Director has the appropriate experience and expertise to fill that position. The audit committee considered and discussed this integrated report with both the management of Bauba and the external auditors. During this process the committee: evaluated significant judgements and reporting decisions; evaluated the completeness of the financial statements and sustainability discussions; and discussed the treatment of significant and unusual transactions. Remuneration and nomination committee The remuneration and nomination committee consists of three suitably skilled and experienced independent non-executive directors, Mr Kenneth Dicks (Chairman), Mr Jonathan Best and Mr Sholto Dolamo. The nomination section of these meetings are chaired by Mr Jonathan Best (Chairman of the board). The committee establishes the overall principles of remuneration and considers, reviews and approves Bauba s remuneration strategy. It is important to ensure that the levels of reward are competitive and support the performance which is required to achieve Bauba s business objectives. The remuneration of the non-executive directors for the following 12 months is presented to shareholders for approval at the annual general meeting. The nonexecutive remuneration is made up of an annual retainer as well as a fee for attending meetings, in line with the King III recommendations. Furthermore, the remuneration and nomination committee is responsible for developing policy around the appointment of directors, investigates potential board members for necessary skills and competence and makes appropriate recommendations to the board. This part of the meeting is chaired by Jonathan Best. Remuneration policy Bauba has developed a remuneration policy in line with King III. All components of the reward strategy, including the basic salary and the short-term and long-term performance-based incentive payments, are aligned to the strategic direction and business-specific value drivers of Bauba. The key principles of the remuneration policy are to: attract and retain competent employees that enhance business performance; reward, recognise and give appreciation for superior performance; direct employees energies and activities towards the key business goals; link Bauba and individual performance to reward; and 143

146 apply an integrated and holistic approach to the reward strategy, encompassing a balanced mix of: basic salary; short-term incentive bonus rewarding both Company and individual performance; and long-term share-based incentive scheme, based on performance measures. The reward strategy and each of its components are dynamic and are therefore reviewed regularly to ensure that Bauba s remuneration policy keeps pace with market practices, and Bauba s evolving organisational context and objectives. Remuneration mix: The executives total remuneration consists of a basic salary, defined as the employment cost to Bauba, an annual performance-linked bonus and a long-term share-based incentive scheme. This remuneration mix ensures that there is the necessary balance between fixed and performance-related remuneration as well as elements linked to short-term performance and those related to longer-term growth in shareholder value. Guaranteed package: This is the total guaranteed annual employment cost to Bauba associated with the employment of an individual. It is structured on the basis of an all-inclusive salary package; no separate medical aid and pension fund contributions are paid. A cost of living increase in the basic salary is considered by the remuneration committee on an annual basis and implemented from 1 July in the applicable year. No ad hoc adjustments of an executive director or senior manager may be made without prior approval from the remuneration committee. Factors that are taken into consideration in determining the recommended annual increase include: the consumer price index (CPI), mining inflation, retention strategies, industry performance, projected growth, contractual arrangements and affordability. Short-term incentive: This is a short-term incentive plan for which rewards are determined against the achievement of a set of annual Company and individual performance targets determined by the remuneration committee and approved by the board. These incentives are offered at the appropriate level within Bauba and are paid in cash. The maximum payable under this scheme is 25% of annual salary. The agreed performance parameters for the Chief Executive Officer are capital raising, exploration drilling, resource definition and budget management and corporate duties. The Financial Director s performance parameters are based on the financial director s duties and operational parameters. The choice of performance measures attempts to limit the impact of factors outside the control of executives. Where necessary the short-term incentives are benchmarked against competitors in terms of amounts actually earned as well as amounts that could potentially be earned by meeting various target thresholds. The incentive architecture provides for: Company and individual performance related to a specific time period; meaningful performance measures; annual revision by the remuneration committee to ensure the continuing appropriateness of performance measures, the weighting of measures and the split between individual and Company performance; where appropriate, the inclusion of non-financial measures; and the weighting of performance measures to vary depending on seniority, relevance, and ability to influence the outcome. Long-term share-based incentive (LTIP): A long-term share-based scheme based on performance was finalised and will be presented at the annual general meeting on 7 November 2013 for approval by the shareholder. The intention is to implement the scheme during the 2014 financial year, which will incentivise executives and selected employees of Bauba. The award under the scheme will be governed by the board of directors and the remuneration committee and is subject to JSE and shareholders approval. The remuneration levels are benchmarked against a comparator group of South African small and mid-cap JSE-listed entities, as well as junior mining and exploration companies. Bauba makes use of the services of an independent consultant to assist with the benchmarking exercise. In terms of the LTIP, executives and selected employees of the Company may be offered annually a weighted combination of: allocation of share appreciation rights (akin to net settled share options); award of performance shares; and granting of restricted shares. Offers of these shares will be governed by and reflect Bauba s reward strategy pay mix, in which the expected value of incentive reward is set for defined categories of executives and senior management. The LTIP will provide for the inclusion of a number of performance conditions, designed to align the interests of participants with those of Bauba s shareholders, and to reward Company and individual performance, more so than merely the performance of the economy or the platinum mining sector in which Bauba operates. The performance share element makes provision for annual conditional awards of performance shares to be made to executives and selected employees. The performance shares will vest on the third anniversary of their award, to the extent that Bauba has met specified performance criteria, as determined by the remuneration committee, over the intervening period. The share appreciation right element is similar in architecture to a share option plan, but with a number of variations to bring it in line with best practice in the mining industry, and with the remuneration guidelines of King III. Annual allocations of share appreciation rights will be made to executives and selected employees. They will be available to be settled in equal thirds on the third, fourth and fifth anniversaries but need not be exercised until the seventh anniversary, at which time they will need to be exercised failing which they will lapse. On settlement, the value accruing to participants will be the appreciation of Bauba s share price. Social and ethics committee In line with the requirements of King III, the board has appointed a social and ethics committee to ensure the highest standards of business integrity in accordance with the relevant legislation and global best practice. The committee consists of three non-executive directors, Mr Sholto Dolamo (chairman), King Thulare V Thulare and Ms Kholeka Mzondeki and one executive director, Mr Syd Caddy. The role of the social and ethics committee is to: ensure that Bauba s code of ethics is upheld at all levels of the organisation; assist the board of directors in ensuring that the Company is and remains a committed, socially responsible corporate citizen; 144

147 monitor supplement, support, advise and provide guidance on the effectiveness of management s efforts in respect of sustainable development and social and ethics related matters; to the best of its ability, ensure that contractors and suppliers have policies and practices congruent with the Bauba s own social and ethics policies; review content in the integrated report that is relevant to the social and ethics committee, prior to review by the audit committee; and identify the social and ethics risk and opportunities and provide assurance to the board that the necessary mitigation measures are in place. Technical committee The technical committee consists of three non-executive directors, Mr Kenneth Dicks (chairman), Mr Jonathan Best and Mr Damian Smith, and two executive directors, Mr Syd Caddy and Mr Willem Moolman. The primary responsibility of the technical committee is to unlock shareholder value through the delivery of Bauba s exploration objectives in a way that is safe and responsible towards the environment and local communities. The following duties fall to the technical committee: Guide the development of the technical and exploration strategies for the effective exploration, evaluation and development of its resources and oversee the implementation thereof; Ensure that Bauba has the requisite technical skills and that training programmes are aligned with the growth and development of the Company; Assist the board in discharging its responsibility in the management of technical risk; Ensure the adoption of sound principles in managing safety, health and environmental risk; and Brief the board on developments in the fields of geology, engineering, mining, metallurgy and environmental, health and safety management in so far as they impact on the Company s ability to execute its business strategy efficiently and effectively. Board expertise and training The collective experience of the directors of Bauba reflects a wide and balanced range of financial, technical and commercial skills that enable the board to effectively fulfil its mandate in terms of ensuring the economic sustainability of the Company and giving due consideration to the social and environmental impacts of its activities. Newly appointed directors are provided with a basic introduction to various aspects of the Company, including an overview of current strategies, business challenges and important issues, and are required to attend a formal directors training programme with a professional organisation if they have not previously served as a director of a listed company. The board members attend training on an ongoing basis during the year. As part of this training, the audit and risk committee attended an IFRS update course and will do this on a regular basis. Mechanisms for shareholder communication with the board There are a number of formal mechanisms in place to ensure that shareholders have appropriate access to those responsible for safeguarding their investment in the Company. These include one-on-one meetings with major investors, presentations, road shows, announcements on the JSE Limited s electronic news service (SENS), publication in the media of interim and year-end results, the Company s website, the integrated annual report to shareholders and the annual general meetings where shareholders can use proxy forms to exercise their votes should they not be able to attend in person. Company secretary The board is responsible for the appointment of the company secretary. Bauba uses an external registered service provider and the audit and risk committee has validated the competence, qualifications and experience of the company secretary. The company secretary plays a pivotal role in guiding and assisting the board on the delivery of its mandate and is expected to be available to the Chairman and individual board members at all times. The company secretary is responsible for ensuring compliance with all statutory requirements, including the JSE Listings Requirements, and is required to bring to the immediate attention of the board any changes to legislation which may impact on Bauba, its directors, management and employees. The Company Secretary administers and records the business of the directorate and ensures that the board charter and the charters of the individual board committees are kept up to date. The Company Secretary maintains an arm s length relationship with the board of directors and is not a director. In reaching these conclusions the board of directors has, in its assessment, considered the individuals that perform the company secretary role as well as the directors of the juristic person. Share dealing The JSE Listings Requirements specifically prohibit directors and senior employees from dealing in Bauba s shares during a prohibited period. A prohibited period means a closed period; or any period when there exists any matter, which constitutes unpublished price-sensitive information in relation to the issuer s securities. A closed period is the period following a financial reporting date (quarterly, half yearly or annually) and the publication of the results or during a period when an issuer is trading under a cautionary announcement. As a proactive measure, the Company Secretary will advise the Chairman when Bauba has entered a closed period and this will be communicated to all the board members. Directors have to obtain prior approval from the Chairman of the board to trade and are required to report such dealings to the Company Secretary. In terms of the JSE Listings Requirements, any share transactions involving directors are to be published on the Securities Exchange News Service ( SENS ) within 48 hours. A register of share dealings by directors is maintained by the Company Secretary and reviewed by the board. Conflict of interest All directors, executives and defined employees are required to declare all conflicts of interest that may exist as a result of their association with any other company at every board meeting. Furthermore, the Company Secretary maintains a register of all directors and their involvement with other companies which is checked regularly against the Company and Intellectual Property Commission s database. If a director becomes aware of any conflict of interest, he or she is required to immediately disclose such conflict, will not have any voting rights on the conflicted matter and will be required to leave the meeting for the duration of the discussion of this matter. 145

148 Internal control and risk management The board is responsible for ensuring that a comprehensive system of control exists and is effectively managed so that the risks affecting the business are identified and appropriate action is taken by management to minimise the impact on the ability of Bauba to achieve its strategic business goals. It is the board s responsibility, with the considered guidance of the audit and risk committee, to review the effectiveness of these systems on a regular basis and to ensure their maturity as the business grows. In order to assist the board an outsourced internal audit function which will be accountable to the chairman of the audit and risk committee has been put in place and will report on internal controls of Bauba s activities directly to the Chief Executive of Bauba. Besides ensuring legal and regulatory compliance, the internal audit function will assess internal controls and risk profiles, ensuring that the risks are relevant and mitigation strategies are appropriate. The function will also monitor the delegation of authority and segregation of duties to ensure that governance and risk management processes are not compromised. It is also important for the board to understand the consequences of non-compliance in any particular area. External audit The audit and risk committee is responsible for the oversight of the external auditors. The external auditor will provide assurance to shareholders that the information provided to them fairly presents Bauba s financial performance. The appointment of the external auditors is approved by shareholders at the annual general meeting. In its assessment, the audit and risk committee will ensure that the external auditor s independence is not impaired in any way and that the highest level of professional ethics is observed by the external auditor. The audit and risk committee is satisfied that BDO South Africa Inc, Bauba s appointed external auditor, is independent. Code of ethics The Bauba board has adopted a code of ethics based on the fundamental principles of integrity, transparency and accountability. The code of ethics describes the behaviour required of all Company representatives when engaging with stakeholders. Directors, executive management and all employees are required to sign the code of ethics and the board accepts full responsibility for ensuring, as far as reasonably possible, that the code is enforced. Human rights Basic human rights, as enshrined in the country s Constitution and Bill of Rights, are a key consideration in the way Bauba conducts its business activities and engages its stakeholders. Company policies and procedures ensure that employees and stakeholders are treated with dignity and respect, irrespective of gender, background or race. Approach to stakeholder engagement While Bauba s primary responsibility is to its investors and the enhancement of shareholder value over time, this is only possible with fair and reasonable regard for other stakeholders who have an interest in or are affected by Bauba s activities. Open and equitable engagement with these stakeholders provides an opportunity to identify risks, challenges and opportunities which are considered material for Bauba and the communities in which it operates. Community relations are an important part of Bauba s stakeholder engagement plans, and Bauba has a number of processes in place to engage meaningfully with the community, its representatives and members. These include, amongst others, the use of community liaison officers who are based in the community and are able to provide information on Bauba and its activities on a regular basis. A stakeholder engagement matrix is available on Bauba s website. King III corporate governance compliance Bauba conducts a self-assessment of compliance to the recommendations of King III and has followed the apply or explain principle. Where Bauba has not fully applied the recommendation, including where the recommendation is only partially applied or is under review, an explanation of the reason for partial or noncompliance is provided in the King III governance guidance reported on in Bauba s integrated annual report. Corporate citizenship Bauba has a social and ethics committee, a key role of which is to assist the board in ensuring that Bauba is and remains a socially responsible corporate citizen. There is a growing call around the world to ensure that local communities benefit from the activities of the mining companies they host. It is incumbent upon the board of directors and the management of Bauba to ensure that, from the outset, the Company has a full appreciation of the potential impact its activities could have on employees, local communities and the environment within which it operates and that it understands the needs and concerns of its many stakeholders, particularly to inform decisions around socio-economic development opportunities. Transformation The Bapedi Nation is a 40% shareholder at asset level. This means that Bauba meets the BBBEE requirements of the Minerals and Petroleum Resources Development Act ( MPRDA ). Much is being done to build the business skills of those representing the Bapedi Nation at different levels within the organisation to enable them to take an active role in the business and to ensure real transformation, as envisioned in the MPRDA. Workplace Bauba is committed to employment practices that are founded on the fundamental principles of fairness and equity. This means that all existing and potential employees are provided with equal opportunities in terms of recruitment, promotion, transfer, employee benefits and conditions of service, training and skills development. Management requires companies undertaking work on behalf of Bauba to strictly adhere to health, safety and environmental regulations. It is the responsibility of Bauba to ensure a safe and healthy working environment. A safety and health policy, which is aligned to occupational health and mining legislation requirements, outlines Bauba s goal of ensuring zero harm to employees, contractors and communities close to the prospecting areas. Community liaison officers have undergone safety training in exploration and drilling as part of Bauba s broader skills development programme. Although most of the exploration activities on the Bauba Project are undertaken by contractors, as far as possible Bauba encourages the use of local employees in positions which do not require specialist skills. Where possible, Bauba has used local labour in the construction of the core yard. 146

149 Environment All exploration sites are rehabilitated immediately after completion of the drilling of the particular hole. The drilling contractor is responsible for rehabilitating the site to standards agreed with Bauba. Management ensures that these standards have been met by way of an inspection before a drill site is vacated. Responsible land stewardship is critical and is carefully monitored by Bauba. Bauba s main environmental impacts are: the use of diesel to power the drill rig and generate electricity on site; the management of waste; and the disturbance of land by drilling activities. Social development Bauba invests in projects that will benefit the whole community as opposed to individuals and believes that it is important to provide the platform for open dialogue with host communities. A proper grasp of the community s needs and concerns will enable Bauba to respond appropriately. Bauba continuously engages through King Thulare Thulare, as well as other representatives and leaders of the local communities, to understand how best it can invest in social development projects relative to its exploration activities. 147

150 Appendix 5 share capital of bauba 1. SHARE CAPITAL CHANGES There have been no consolidations or sub-division of shares over the past three years. 2. ISSUES OF SHARES 2.1 The following shares were issued by Bauba over the past three years: Description Subscriber Terms of issue Date issued Issue price Premium/ discount # Number of shares issued Specific issue for cash General issue in lieu of capital raising fees General issue for cash Trinity Asset Management Proprietary Limited Qinisele Resources Proprietary Limited Lavender Sky Investments 40 Proprietary Limited Provide for operational cash Payment of capital raising fees Provide for operational cash 26 July ,80 VWAP less 10% 22 August ,07 VWAP less 10% 31 December ,66 VWAP less 10% # The maximum discount allowed on issue was provided for in order to attract the investment of the subscribers Pursuant to the acquisition, shareholders will be requested to approve: Amendment of the Memorandum of Incorporation The conversion of the authorised ordinary shares in the share capital of the Company with a par value of R1 into authorised ordinary shares of no par value Increase the authorised share capital The increase in the authorised share capital of the Company from ordinary shares of no par value to ordinary shares of no par value Issue of the Share Consideration and Houtbosch Payment Shares: The issue of the Share Consideration, being ordinary shares, in terms of the acquisition, and the issue of the Houtbosch Payment Shares, being ordinary shares, which issues will exceed 30% of the voting power of all the ordinary shares in Bauba immediately prior thereto, as detailed in paragraph 5 of the circular. 2.3 Control of authorised but unissued ordinary shares: In terms of the Ordinary Resolution Number 2 passed at the annual general meeting of shareholders of Bauba held on 9 December 2013, the authorised but unissued ordinary shares in the capital of the Company were placed under the control and authority of the directors, and that the directors were authorised and empowered to allot and issue all or any of such ordinary shares, or to issue any options in respect of all or any of such ordinary shares, to such person/s on such terms and conditions and at such times as the directors may from time to time and in their discretion deem fit, subject to the provisions of sections 38 and 41 of the Companies Act, the Memorandum of Incorporation of the Company and the Listings Requirements. 3. REPURCHASE OF SHARES There have been no repurchases of shares by Bauba over the past three years. 4. PREFERENTIAL CONVERSION AND/OR EXCHANGE RIGHTS OF ANY SECURITIES There are no preferential conversion and/or exchange rights in respect of any Bauba shares. 5. OTHER LISTINGS Bauba does not have any shares listed on any exchange other than the Main Board of the JSE. 6. EXTRACTS FROM BAUBA S MEMORANDUM OF INCORPORATION RELATING TO SHARE CAPITAL Extracts from the Memorandum of Incorporation of Bauba are set out below. A copy of the complete Memorandum of Incorporation is available for inspection at Bauba s registered office. For the purpose of this Appendix 5 Act refers to the Companies Act, 2008 (Act 71 of 2008), as amended, consolidated or re-enacted from time to time, and includes all schedules to such Act and the Regulations. A reference to a section by number refers to the corresponding section of the Act, notwithstanding the renumbering of such section after the date on which the Company is incorporated. A reference to a clause by number refers to a corresponding provision of the Memorandum of Incorporation. 148

151 8. ISSUE OF SHARES AND VARIATION OF RIGHTS 8.1 The Company is authorised to issue (two hundred million) ordinary par value shares of 100 cents each, of the same class, each of which ranks pari passu in respect of all rights and entitles the holder to: vote, whether in person or by proxy, on any matter to be decided by the shareholders of the Company; participate proportionally in any distribution made by the Company; and receive proportionally the net assets of the Company upon its liquidation. 8.2 The board may resolve to issue further shares of the Company at any time, but only within the classes and to the extent that those shares have been authorised by or in terms of this Memorandum of Incorporation. 8.3 The number of authorised shares as set out in clause 8.1 may only be increased, as contemplated in clause below, following the conversion of such ordinary par value shares to ordinary no par value shares by way of special resolution of the shareholders. 8.4 The board shall not have the power to: increase or decrease the number of authorised shares of any class of the Company s shares; or consolidate and reduce the number of the Company s issued and authorised shares of any class; or subdivide its shares of any class by increasing the number of its issued and authorised shares of that class without an increase of its capital; or reclassify any classified shares that have been authorised but not issued; or classify any unclassified shares that have been authorised but not issued; or determine the preferences, rights, limitations or other terms of any shares, or convert one class of shares into one or more other classes of shares; or create any class of shares, and such powers shall only be capable of being exercised by the shareholders by way of a special resolution of the shareholders. 8.5 Each Share issued by the Company has associated with it an irrevocable right of the shareholder to vote on any proposal to amend the preferences, rights, limitations and other terms associated with that Share as contemplated in clause The authorisation and classification of shares, the numbers of authorised shares of each class, and the preferences, rights, limitations and other terms associated with each class of shares as set out in this Memorandum of Incorporation may be changed only by an amendment of this Memorandum of Incorporation by special resolution of the shareholders and in accordance with the JSE Listings Requirements, and such amendments shall not be implemented without a special resolution adopted by the holders of shares of that class at a separate meeting. 8.7 No shares may be authorised in respect of which the preferences, rights, limitations or any other terms of any class of shares may be varied in response to any objectively ascertainable external fact or facts as provided for in sections 37(6) and 37(7). 8.8 No further securities ranking in priority to, or pari passu with an existing class of shares, shall be created without a special resolution being passed at a separate general meeting of shareholders. 8.9 The Company may only issue shares which are fully paid up and freely transferable and only within the classes and to the extent that those shares have been authorised by or in terms of this Memorandum of Incorporation All issues of shares for cash and all issues of options and convertible securities granted or issued for cash must, in addition, be in accordance with the JSE Listings Requirements All Securities of the Company for which a listing is sought on the JSE and all Securities of the same class as Securities of the Company which are listed on the JSE must, notwithstanding the provisions of section 40(5), but unless otherwise required by the Act, only be issued after the Company has received the consideration approved by the board for the issuance of such Securities Subject to what may be authorised by the Act, the JSE Listings Requirements and at meetings of shareholders in accordance with clause 8.14, and subject to clause 8.13, the board may only issue unissued shares if such shares have first been offered to existing ordinary shareholders in proportion to their shareholding on such terms and in accordance with such procedures as the board may determine, unless such shares are issued for the acquisition of assets by the Company Notwithstanding the provisions of clauses 8.3, 8.4, 8.12 and 8.14, any issue of shares, Securities convertible into shares, or rights exercisable for shares in a transaction, or a series of integrated transactions shall, in accordance with the provisions of section 41(3), require the approval of the shareholders by special resolution if the voting power of the class of shares that are issued or are issuable as a result of the transaction or series of integrated transactions will be equal to or exceed 30% (thirty percent) of the voting power of all the shares of that class held by shareholders immediately before that transaction or series of integrated transactions Notwithstanding the provisions of clause 8.12, the shareholders may at a general meeting authorise the directors to issue shares of the Company at any time and/or grant options to subscribe for shares as the directors in their discretion think fit, provided that such transaction(s) comply with the JSE Listings Requirements Except to the extent that any such right is specifically included as one of the rights, preferences or other terms upon which any class of shares is issued or as may otherwise be provided in this Memorandum of Incorporation, no shareholder shall have any pre-emptive or other similar preferential right to be offered or to subscribe for any additional shares issued by the Company. 22. VOTES OF SHAREHOLDERS 22.1 Subject to any special rights or restrictions as to voting attached to any shares by or in accordance with this Memorandum of Incorporation, at a meeting of the Company: every person present and entitled to exercise voting rights shall be entitled to 1 (one) vote on a show of hands, irrespective of the number of voting rights that person would otherwise be entitled to exercise; 149

152 on a poll any person who is present at the meeting, whether as a shareholder or as proxy for a shareholder, has the number of votes determined in accordance with the voting rights associated with the securities held by that shareholder; and the holders of securities other than ordinary shares shall not be entitled to vote on any resolution at a meeting of shareholders, except as provided in clause If any resolution is proposed as contemplated in clause 8.5, the holders of such shares ( affected shareholders ) shall be entitled to vote at the meeting of ordinary shareholders as contemplated in clause 22.1, provided that: the votes of the shares of that class held by the affected shareholders ( affected shares ) shall not carry any special rights or privileges and the affected shareholder shall be entitled to 1 (one) vote for every affected share held; and the total voting rights of the affected shareholders in respect of the affected shares shall not be more than 24,99% (twenty-four point ninety nine percent) of the total votes (including the votes of the ordinary shareholders) exercisable at that meeting (with any cumulative fraction of a vote in respect of any affected shares held by an affected shareholder rounded down to the nearest whole number) Voting shall be conducted by means of a polled vote in respect of any matter to be voted on at a meeting of shareholders if a demand is made for such a vote by: at least 5 (five) persons having the right to vote on that matter, either as shareholders or as proxies representing shareholders; or a shareholder who is, or shareholders who together are, entitled, as shareholders or proxies representing shareholders, to exercise at least 10% (ten percent) of the voting rights entitled to be voted on that matter; or the chairperson of the meeting At any meeting of the Company a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded in accordance with the provisions of clause 22.3, and unless a poll is so demanded, a declaration by the chairperson that a resolution has, on a show of hands, been carried or carried unanimously or by a particular majority or defeated, and an entry to that effect in the book containing the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. The demand for a poll may be withdrawn If a poll is duly demanded, it shall be taken in such manner as the chairperson directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded In the case of an equality of votes, whether on a show of hands or on a poll, the chairperson of the meeting at which the show of hands takes place, or at which the poll is demanded, shall not be entitled to a second or casting vote A poll demanded on the election of a chairperson (as contemplated in clause 20.20) or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairperson of the meeting directs. The demand for a poll shall not prevent the continuation of a meeting for the transaction of any business other than the question upon which the poll has been demanded Where there are joint registered holders of any share, any 1 (one) of such persons may exercise all of the voting rights attached to that share at any meeting, either personally or by proxy, as if he or she were solely entitled thereto. If more than 1 (one) of such joint holders is present at any meeting, personally or by proxy, the person so present whose name stands first in the securities register in respect of such share shall alone be entitled to vote in respect thereof. 34. DISTRIBUTIONS 34.1 Subject to the provisions of the Act, and particularly section 46, the Company may make a proposed distribution if such distribution: is pursuant to an existing legal obligation of the Company, or a court order; or is authorised by resolution of the board and in compliance with the JSE Listings Requirements, provided that such resolution does not provide for capital to be repaid upon the basis that it may be called up again Dividends are declared by the directors in accordance with the Act No distribution shall bear interest against the Company, except as otherwise provided under the conditions of issue of the shares in respect of which such distribution is payable Distributions may be declared either free of or subject to the deduction of income tax and any other tax or duty in respect of which the Company may be chargeable The directors may from time to time declare and pay to the shareholders such interim distributions as the directors consider to be appropriate All unclaimed dividends shall be held by the Company in trust until claimed, provided that dividends unclaimed for a period of 3 (three) years from the date on which they were declared may be declared forfeited by the directors for the benefit of the Company. All unclaimed monies, other than dividends, that are due to a shareholder/s shall be held by the Company in trust for an indefinite period until lawfully claimed by such shareholder/s, subject to the laws of prescription Any distribution, interest or other sum payable in cash to the holder of a share may be paid by cheque or warrant sent by post and addressed to: the holder at his registered address; or in the case of joint holders, the holder whose name appears first in the securities register in respect of the share, at his registered address; or such person and at such address as the holder or joint holders may in writing direct Every such cheque or warrant shall: be made payable to the order of the person to whom it is addressed; and be sent at the risk of the holder or joint holders. 150

153 34.9 The Company shall not be responsible for the loss in transmission of any cheque or warrant or of any document (whether similar to a cheque or warrant or not) sent by post as aforesaid A holder or any one of two or more joint holders, or his or their agent duly appointed in writing, may give valid receipts for any distributions or other moneys paid in respect of a share held by such holder or joint holders When such cheque or warrant is paid, it shall discharge the Company of any further liability in respect of the amount concerned A distribution may also be paid in any other way determined by the directors, and if the directives of the directors in that regard are complied with, the Company shall not be liable for any loss or damage which a shareholder may suffer as a result thereof Without detracting from the ability of the Company to issue capitalisation shares, any distribution may be paid wholly or in part: by the distribution of specific assets; or by the issue of shares, debentures or securities of the Company or of any other company; or in cash; or in any other way which the directors or the Company in general meeting may at the time of declaring the distribution determine Where any difficulty arises in regard to such distribution, the directors may settle that difficulty as they think expedient, and in particular may fix the value which shall be placed on such specific assets on distribution The directors may: determine that cash payments shall be made to any shareholder on the basis of the value so fixed in order to secure equality of distribution; and vest any such assets in trustees upon such trusts for the benefit of the persons entitled to the distribution as the directors deem expedient Any distribution must be made payable to shareholders registered as at a date subsequent to the date of declaration thereof or the date of confirmation thereof, whichever is the later date. 40. SHARE-BASED PAYMENTS The Bauba Share Incentive Plan was approved at the annual general meeting held on 9 December To date no allocations have been made under the plan. 151

154 Appendix 6 SHARE PRICE HISTORY OF BAUBA ON THE JSE The highest, lowest and closing price of shares of Bauba on the JSE for each quarter commencing from 1 August 2011 to 31 July 2013 and the quarterly volume is as follows: Quarter ended High (cents) Low (cents) Close (cents) Volume 31 October January April July October January April July The highest, lowest and closing price of shares of Bauba on the JSE for each month commencing from 1 August 2013 to 31 July 2014 and aggregated monthly volume is as follows: Month ended High (cents) Low (cents) Close (cents) Volume 31 August September October November December January February March April May June July

155 The highest, lowest and closing price of shares of Bauba on the JSE, for the last 30 trading days, for each day commencing from 30 June 2014 to 8 August 2014 (being the Last Practicable Date prior to the finalisation of this Circular) and the daily volume are as follows: Day ended High (cents) Low (cents) Close (cents) Volume 30 June July July July July July July July July July July July July July July July July July July July July July July July August August August August August August Source: JSE Limited. 153

156 Appendix 7 DETAILS OF DIRECTORS DIRECTORSHIP Previous directorships and partnerships The names of all companies and partnerships of which the directors of Bauba have been a director or partner in the previous five years are listed below: Director Directorships Registration SJM Caddy Absolute Group Management Proprietary Limited 2008/022099/07 Acs Projects And Wholesaling Proprietary Limited 2002/016588/07 Barnato Exploration Proprietary Limited* 1988/003756/06 Bauba A Hlabirwa Mining Investments Proprietary Limited 2006/039054/07 Bauba Platinum Limited 1986/004649/06 Cadasset Trading Proprietary Limited 1999/015018/23 Cairngorm Properties CC 2000/012512/07 Cape Verde Proprietary Limited* 1961/000010/0 Castillo Investments Proprietary Limited 1998/013740/07 Ezulwini Mining Company Proprietary Limited* 2004/028640/07 Gold Fields Operations Proprietary Limited* 1959/003209/06 Lac Marketing Proprietary Limited 1999/027073/07 Mine Restoration Investments Limited 1987/004821/06 Mines Rescue Services Proprietary Limited* 1996/010374/07 Mining Reclamation And Supports Proprietary Limited 2004/030117/07 Ndarama Mineral Resources Proprietary Limited 2006/035052/07 New Shelf 1114 Proprietary Limited* 2010/018841/07 Palmietfontein Mining Ventures Proprietary Limited* 1985/004895/07 Rand Uranium Proprietary Limited* 2007/007531/07 Randfontein Estates Proprietary Limited* 1889/000251/06 Sabie Mines Proprietary Limited* 1937/009104/07 Terrabelm Proprietary Limited 2001/025991/07 Veskol Investments CC 1991/021395/23 Veskol Investments Proprietary Limited 2002/020498/07 WA Moolman Absolute Group Management Proprietary Limited 2008/022099/07 Bauba A Hlabirwa Mining Investments Proprietary Limited 2006/039054/07 Bauba Platinum Limited 1986/004649/06 Canyon Springs Investments Proprietary Limited* 2007/028950/07 Diamond Quartzite Processing Proprietary Limited* 2007/026130/07 Elaria Holdings Proprietary Limited* 2002/004142/07 Lubtalk Investments Proprietary Limited* 2003/024338/07 Ndarama Mineral Resources Proprietary Limited 2006/035052/07 J Best Anglogold Ashanti Holdings Plc Isle of Man Bauba Platinum Limited 1986/004649/06 Goldstone Resources Limited FTSE AIM Gulf Industrial Limited* Australian Stock Exchange Polymetal International Plc* London Stock Exchange Metair Investments Limited 1948/031013/06 Metair Management Services Proprietary Limited* 1984/001856/05 Polymetal International Plc* London Stock Exchange Sentula Mining Limited 1992/001973/06 K Dicks Bauba Platinum Limited 1986/004649/06 Harmony Gold Mining Company Limited 1950/038232/06 Witwatersrand Consolidated Gold Resources Limited 2002/031365/06 154

157 Director Directorships Registration S Dolamo Bauba Platinum Limited 1986/004649/06 Mmaditsela Road Logistics Proprietary Limited 2008/146829/23 Webster United Investment One Proprietary Limited 2012/005296/07 Katlego-Khumo Farms Proprietary Limited 2014/014862/07 KW Mzondeki 3m Africolor South Africa Proprietary Limited* 1969/002743/07 Bauba Platinum Limited 1986/004649/06 Energy And Combustion Services Proprietary Limited* 1996/010292/07 Inova Pharmaceuticals Proprietary Limited* 1952/001640/07 Manikholwe CC 1998/024958/23 Red Urban Properties Proprietary Limited 2005/006903/07 Reunert Limited* 1913/004355/06 Sentula Mining Limited 1992/001973/06 Southern African Aids Trust* 2005/001486/08 Supasnaps Properties Proprietary Limited* 1955/003728/07 Telkom SA Limited 1991/005476/06 Tutukani Entertainment Proprietary Limited 1999/017033/07 Masana Petroleum Solutions Proprietary Limited* 2000/002087/07 Aveng Limited 1944/018119/06 Dr NM Phosa 10 Miles Mining Proprietary Limited 2009/013909/07 11 Miles Investment Proprietary Limited 2009/014176/07 12 Miles Investment Proprietary Limited 2009/014244/07 14 Miles Investment Proprietary Limited 2009/013904/07 15 Miles Investment Proprietary Limited 2009/014634/07 20 Miles Investment Proprietary Limited 2009/014023/07 21 Miles Investment Proprietary Limited 2010/008240/07 22 Miles Investment Proprietary Limited 2010/011367/07 23 Miles Investment Proprietary Limited 2010/006799/07 24 Miles Investment Proprietary Limited 2010/006833/07 25 Miles Investment Proprietary Limited 2010/008413/07 2nd Chance Investments Proprietary Limited 2009/009152/07 7 Star Steel Proprietary Limited 2006/032790/07 9 Miles Investment Proprietary Limited 2009/014129/07 Add X Trading 823 CC 2002/069206/23 Aeterno Investments 132 Proprietary Limited 2005/007447/07 African Legal Networks Proprietary Limited 1999/022386/07 African Waterways Proprietary Limited 2009/011771/07 Afric-Asia Steel Pipe Proprietary Limited 2004/036017/07 Akula Trading 4 Proprietary Limited 2007/001136/07 Alliance Mining Corporation Limited 1997/013402/06 Altivex 354 Proprietary Limited 2006/015011/07 Arp Refrigeration Manufacturers Proprietary Limited* 2000/030963/07 Arrow Creek Investments 221 Proprietary Limited 2011/00641/07 Asambeni Holdings Proprietary Limited* 2001/023592/07 Asprop Rentals Proprietary Limited 2009/012074/07 Asytec Africa Proprietary Limited 2003/031716/07 Asytec South Africa Proprietary Limited 2003/031402/07 Bacarac Trading 91 Proprietary Limited 2007/016652/07 Baphiriing Energy Proprietary Limited 2007/008798/07 Batho Bonke Capital (Rf) Proprietary Limited 2003/016319/07 Bauba Platinum Limited 1986/004649/06 Bay Drive Trading 15 Proprietary Limited 2007/001134/07 Bayley Proprietary Limited 1995/001799/21 Bazirox Proprietary Limited 2000/022632/07 155

158 Director Directorships Registration Dr NM Phosa (continued) Beta Gold Proprietary Limited 2008/024438/07 Bitline Sa 105 Proprietary Limited* 2000/044100/23 Blue Summit Properties Proprietary Limited 2006/004297/07 Botlalo Mining And Energy Resources Proprietary Limited 2010/001719/07 Braemore Resources Plc 2008/013973/10 Branders Traat Ontwikkeling (Edms) Bpk 2005/042797/07 Brent Oil Proprietary Limited 2003/022402/07 Brickmakers Proprietary Limited* 1980/011032/07 Brickmakers Holdings Proprietary Limited 2005/033653/07 Burmed Hospital Proprietary Limited 2002/012102/07 Business Venture Investments No 93 Proprietary Limited 2004/030641/07 Camden Bay Investments 19 Proprietary Limited 2007/003269/07 Canyon Springs Investments 18 Proprietary Limited* 2006/029722/07 Cape Promotional Marketing Proprietary Limited* 2007/006290/07 Cedar Point Trading 5 Proprietary Limited* 2006/016024/07 Celssaf Proprietary Limited* 1999/004289/07 Cengence South Africa Proprietary Limited* 2002/027021/07 Circle Group Holdings Proprietary Limited 2005/015630/07 Colliers Siza Proprietary Limited* 1999/026498/07 Comati Logging Proprietary Limited* 1998/025578/07 Command Africa Security CC 2002/042042/23 Command Holdings Limited* 1999/014759/06 Concrete And Cash Properties Syndication Limited 1998/015783/06 Continuum Investment Holdings Proprietary Limited 2009/017757/07 Continuum Principal Investments Proprietary Limited 2009/011697/07 Copper Moon Trading 195 Proprietary Limited* 2005/011407/07 Cs Hentiq 1176 Proprietary Limited 2012/001367/07 Cyrus Facilities Management Proprietary Limited 1998/021979/07 D1 Oils South Africa Proprietary Limited* 2002/017705/07 Dakawa Properties Proprietary Limited 1990/007198/07 Dartingo Trading 178 Proprietary Limited 2008/024482/07 Deftotrix Proprietary Limited 2013/083189/07 Disazest Proprietary Limited 2013/047255/07 Dna Skonkwane Supply Chains Proprietary Limited* 2002/003614/07 Doornlaagte Farming Co Farm Products Proprietary Limited* 2002/016690/07 Du Toit-Smuts And Mathews Phosa Proprietary Limited 2001/004391/21 Earthwize Environmental Products Proprietary Limited 1999/014466/07 Earthwize Investments 1 Proprietary Limited* 2006/018088/07 Earthwize Investments 2 Proprietary Limited 2006/018088/07 Eberspacher Exhaust Systems Proprietary Limited 1998/023414/07 Eberspacher Rosslyn Proprietary Limited 1999/020727/07 Eberspacher South Africa Proprietary Limited 1995/010025/07 Echo Canyon Trading 126 Proprietary Limited 2011/006952/07 Echo Structured Investments Proprietary Limited 2007/017886/07 Edge Bay Investments 14 Proprietary Limited 2006/031741/07 Edge To Edge 31 Proprietary Limited* 2001/005172/07 Ekuphakameni Investments Proprietary Limited 2008/004923/07 Empowergro Investments Proprietary Limited 2003/031644/07 Empowergro Investments 1 Proprietary Limited 2004/002887/07 Enercorp Africa Proprietary Limited* 2007/018391/07 EOH Holdings Proprietary Limited* 1998/014669/06 Erf 1277 White River Proprietary Limited 2001/007479/07 Eveni Communications Proprietary Limited 2009/004131/07 Eveni Development And Construction Proprietary Limited 2009/003938/07 Eveni Investments And Consulting Proprietary Limited 2008/005133/07 Eveni Medical Investments Proprietary Limited 2009/010242/07 Eveni Mining And Exploration Proprietary Limited 2009/003966/07 156

159 Director Directorships Registration Dr NM Phosa (continued) Eveni Projects And Management Proprietary Limited 2009/004134/07 Eveni Properties Proprietary Limited 2009/004135/07 Eveni Waste Management Proprietary Limited* 2009/003938/07 E-Vuka Interactive Proprietary Limited* 2000/001516/07 Expectra 913 Proprietary Limited 2003/008196/07 Exper Medical Systems Proprietary Limited* 2000/001702/07 Eyoqobo Investments Proprietary Limited* 2004/035852/07 Fishof 1186 CC 2003/035253/23 Forum Millennium Trust Proprietary Limited 2000/011568/07 Gesi Alliance Africa Holdings Proprietary Limited* 2007/022567/07 Gesi Gas Africa Proprietary Limited* 2008/011803/07 Gravelotte Mines Proprietary Limited 1957/002662/06 Green Environmental Solutions Proprietary Limited* 2003/028157/07 Green Solar Geyser Proprietary Limited 2011/108311/07 Hans Merensky Holdings Proprietary Limited 1949/033497/07 Hexing Mzanzi Trading Proprietary Limited 2010/021030/07 Hux It Consortium Proprietary Limited* 2005/015111/07 HWJ Timbers Proprietary Limited 1999/028592/07 Inani Investments Proprietary Limited 2002/021717/07 Indiza Terra Holdings Solutions Proprietary Limited 2011/106731/08 Indiza Terra Housing Projects Proprietary Limited 2005/022368/07 Ingenuity Consulting Services Proprietary Limited* 2000/000285/07 Insizi Coal And Carbon Proprietary Limited* 2008/008427/07 Insizi Reclamation Proprietary Limited* 2006/011317/07 Intelento Trade 116 Proprietary Limited* 2006/033975/07 Interlento Trade 96 Proprietary Limited 2005/007283/07 Inzizi Holdings Proprietary Limited* 2006/006963/07 Inzizi Minerals Proprietary Limited* 2006/008569/07 Ipsoflo Proprietary Limited 2011/132025/07 Kalpanet Proprietary Limited 2010/007520/07 Karimu 2005 Investments Proprietary Limited 2004/012331/07 Kgato Investment Proprietary Limited 2003/031562/07 Khulani Timber Industries Proprietary Limited* 1998/004702/07 Kone Elevators South Africa Proprietary Limited* 1994/003712/07 Kruger Lowveld Chamber Of Business And Tourism Proprietary Limited* 1998/025398/08 Kuvuka 2006 Properties Proprietary Limited 1996/005776/07 Kwanda Employee Benefits Proprietary Limited* 2002/004362/07 Laeveld Nasionale Kunstefees Proprietary Limited 2003/029944/08 Lagoonbay Lifestyle Estate Proprietary Limited* 2001/022460/07 Lanenex Proprietary Limited 2013/119471/07 Laritza Investments No 192 Proprietary Limited 2007/032966/07 Laritza Investments No 192 Proprietary Limited 2007/032966/07 Lead-X NPC Proprietary Limited 2011/148093/08 Libradox Proprietary Limited 2009/018407/07 Lows Creek Treated Timber Proprietary Limited* 1998/005400/07 Lowveld Chamber Of Business And Tourism NPC Proprietary Limited 1998/025398/08 Lutvonga Investments Proprietary Limited 2008/005028/07 Luvatsi Investments Proprietary Limited 2008/005058/07 Madiba Timbers Proprietary Limited* 1962/001033/07 Mafika Diamond Mines Proprietary Limited* 2003/016016/07 Mafika Engineering Proprietary Limited* 2003/016159/07 Mafika Group Holdings Proprietary Limited* 2004/009919/07 Mafika Property Proprietary Limited* 2003/016008/07 Mafika Resources Proprietary Limited* 2003/016011/07 Mafika Shipbuilding Proprietary Limited* 2003/031648/07 Mafika Synergistix Proprietary Limited* 1999/015973/07 Mafika Technologies Proprietary Limited* 2004/010699/07 157

160 Director Directorships Registration Dr NM Phosa (continued) Mafika Venture Holdings Proprietary Limited* 2001/012062/07 Magnavolt Trading 782 CC 2002/073630/23 Makgaba Technologies Proprietary Limited 2001/021429/07 Malongoana Investments Proprietary Limited 2013/030598/07 Manhattan Operations Africa Proprietary Limited 2001/012932/07 Manhattan Process Engineering Proprietary Limited 2006/038427/07 Masakhe Isizwe Consulting Proprietary Limited* 1997/009652/07 Mashishing New Development Company Number One Proprietary Limited 2005/030472/07 Matla Wire Systems Proprietary Limited* 2005/014552/07 Mathews Phosa And Associates Proprietary Limited 1999/004733/07 Mbombela Developments Proprietary Limited 2000/020171/07 Mbombela Investments Proprietary Limited 2000/020108/07 Mbombela New Development Company Number One Proprietary Limited* 2005/031626/07 Mbombela Stadium Corporation CC 2003/025652/23 Meb Petroleum Services Proprietary Limited* 2010/020794/07 Micromath Trading 715 CC 2002/062144/23 Middleground Trading CC 2002/057931/23 Midnight Feast Properties 123 Proprietary Limited 2010/019050/07 Mineral Co Proprietary Limited* 1998/021279/07 Mobile Agri Skills Development And Training Proprietary Limited 2005/021019/08 Moja Life Proprietary Limited* 2001/011738/07 Moja Loyalty Proprietary Limited* 2000/021992/07 Motor Industry Ombudsman Of South Africa NPC 2001/004871/08 Mp1 Investment Holdings Proprietary Limited 1952/000984/07 Mpilo Investment Holdings Proprietary Limited 2005/015015/07 Multi Projects Property Development South Africa Proprietary Limited 2009/003539/07 Multisource Telecoms Proprietary Limited* 1947/024435/07 N M Phosa Foundation NPC 2009/011821/08 National Pride Trading 456 Proprietary Limited 2007/019697/07 National Solar Proprietary Limited* 2009/006196/07 Ndev Capital Proprietary Limited 2009/010027/07 Ndonsa Investments Proprietary Limited 2004/030015/07 Nelspruit Projects Management And Service Development Services Proprietary Limited 1996/010876/07 New Heights 341 Proprietary Limited* 2000/023078/07 Nexor 570 CC 2002/060925/23 Nexxt Infrastructure And Capital Raising Proprietary Limited* 2000/001444/07 Nhr Mining Timber Proprietary Limited 2007/020885/07 Nomabheka Phosa Resources Proprietary Limited 2008/004853/07 Opsiweb Investments Proprietary Limited 2010/002506/07 Paxobloc Proprietary Limited 2011/107961/07 Phosa Investments Limited 1999/015354/06 Phutfumani Investments Proprietary Limited 2008/001617/07 Pinnacle Point Group Limited* 2000/000059/06 Power Matla Proprietary Limited 1999/004214/07 Power Matla Renewables Proprietary Limited* 2010/017845/07 Proactive Realtime Innovative Strategic Marketing Proprietary Limited* 2006/001668/07 Proxibo Proprietary Limited 2008/020523/07 Proxiscape Proprietary Limited 2008/020556/07 Quality Safety 2002 CC 2002/017516/23 Rexitrix Proprietary Limited 2010/009434/06 Richtrau No 291 Proprietary Limited 2009/020612/07 Rights Africa NPC 2001/008559/08 Ritzshelf 199 Proprietary Limited 2000/000706/07 Ruby Mountain Trading 29 Proprietary Limited* 2006/024910/07 Rudamans (Nelspruit) Proprietary Limited* 1985/003433/07 Rusl Coal And Carbgon Products Proprietary Limited* 2004/007623/07 Ruslyn Holdings Proprietary Limited* 2004/007630/07 158

161 Director Directorships Registration Dr NM Phosa (continued) Ruslyn Minerals Proprietary Limited* 2001/001118/07 SA Golden Leaf Limited* 1998/012986/06 Sanaha Development Projects NPC 2012/070821/08 Sasfin Private Equity Fund Managers Proprietary Limited* 1997/013153/07 Sebenza Kahle Trade CC 2000/046953/23 Shesha Communications Proprietary Limited* 1999/026036/07 Siamark Proprietary Limited 2012/223226/07 Simama Mining Proprietary Limited 2003/025049/07 Sivesinhle Investments Proprietary Limited 2008/005127/07 SJW Motors Proprietary Limited* 2001/007600/07 Skonkwane (Mpumalanga) Proprietary Limited* 2000/002081/07 Skonkwane Corporate Proprietary Limited* 2000/001055/07 Small Beginnings Early Years Proprietary Limited 1991/002952/08 SMEC South Africa Proprietary Limited 1989/007013/07 Smokey Mountain Trading 649 Proprietary Limited 2006/023481/07 Sofala Energy Systems Proprietary Limited 2000/024699/07 South African Mushroom Industries Proprietary Limited* 1974/004050/07 Southern Chartering Proprietary Limited 2005/000719/07 Southern Star Group Proprietary Limited 2004/003748/07 Special Olympics South Africa NPC 2005/017529/08 Squirewood Investments 55 Proprietary Limited 2006/012535/07 Stylution Investments Proprietary Limited 2010/006593/07 Subirox Proprietary Limited 2010/019520/07 Sustainable Forestry Management South Africa Proprietary Limited* 2001/009609/07 Taxi-Fone Proprietary Limited* 2000/021814/07 TBZ Management And Investment Co Proprietary Limited 2008/006194/07 Temakhosi Investments Proprietary Limited 2008/005050/07 Thelo Infrastructure Investments Proprietary Limited* 2009/015444/07 Tornado Transport Proprietary Limited 2002/013158/07 Town Propco Proprietary Limited 2007/008645/07 Trafalgar Africa Property Management Proprietary Limited 2006/002582/07 Tripple Option Trading 323 Proprietary Limited 2002/073462/23 TSB Sugar Holdings Proprietary Limited 1994/002412/07 Two Ships Trading 137 Proprietary Limited CC 2004/023249/07 U F And Z Projects Proprietary Limited 2000/022376/07 Ukanye Urban And Development Specialists Proprietary Limited* 2000/029996/07 Uplands College Proprietary Limited* 1997/018524/08 Uplands College Properties Proprietary Limited* 1996/001931/07 Value Group Limited 1997/002203/06 Value Inani Proprietary Limited 2002/021757/07 Velavke Consulting Engineers Proprietary Limited 1989/007013/07 Vermeester Beleggings Proprietary Limited 2009/008280/07 Vesta Properties Proprietary Limited 2010/021031/07 VFS Financial Services Proprietary Limited* 2000/001996/07 Vuka Alliance Proprietary Limited 1999/017877/07 Vuka Alliance Motor Holdings Proprietary Limited 2001/024843/07 Vuka Commondale Treated Timber Proprietary Limited 2004/033876/07 Vuka Fleet Management Services Proprietary Limited* 1999/009690/07 Vuka Forestry Holdings Proprietary Limited 2003/016658/07 Vuka Management And Investment Corporation Proprietary Limited 2000/007864/07 Vuka Municipal Services Proprietary Limited* 2000/012142/07 Vuka Timber Resources Proprietary Limited 2005/017984/07 Vuka Value Adding Forestry Products Proprietary Limited 2003/017252/07 Vuka Water Projects Proprietary Limited 1996/016976/07 Vuka-Lounics Timber World Proprietary Limited 2005/033373/07 Vuka-Ttp Treated Timber Company Proprietary Limited 2005/010130/07 Western Crown Properties 134 Proprietary Limited 2010/003725/07 159

162 Director Directorships Registration Dr NM Phosa (continued) Wild Break 100 Proprietary Limited 2002/009627/07 Ya Ya Investments Proprietary Limited* 2009/024779/07 Zero Pollution Motors South Africa Proprietary Limited 1999/009841/07 Zohar Management Services Proprietary Limited* Beadica Investments 42 Proprietary Limited* Earthwize Environmental Services Proprietary Limited 2006/018088/07 Enercorp Skills Development Trust 2008/012378/08 Brent Oil Holdings 2010/019050/07 Empowergro Investments 2 (deregistered) 2004/002891/07 Eveni Waste Investments 2009/011383/07 Mathews Phosa and Khumalo-Matse Consultants CC (deregistered) 2006/203177/23 Rencap Securities Proprietary Limited 1987/000175/07 9 Miles Investment Proprietary Limited 2009/014129/07 DS Smith Afmin Private Limited 29532/2008 (Zimbabwe) Afrex Mining Corp Private Limited 3068/2008 (Zimbabwe) Bauba A Hlabirwa Mining Investments Proprietary Limited 2006/039054/07 Bauba Platinum Limited 1986/004649/06 Dreamteam Trading 575 CC 2002/024235/23 Far North Platinum Proprietary Limited 2008/013674/07 Far North Platinum Limited (Guernsey) Fast Pace Trade And Invest 58 Proprietary Limited 2011/005655/07 Mazfact Mining Corp Pvt Limited 29956/2008 (Zimbabwe) Prospect Geoservices CC 2009/032959/23 Quadrant East Platinum Proprietary Limited 2008/020137/07 Quadrant Platinum Proprietary Limited 2008/013690/07 Speller Mining Pvt Limited 19077/2008 (Zimbabwe) King T Thulare Bapedi Kingship Holdings Proprietary Limited 2012/085861/07 Bauba A Hlabirwa Mining Investments Proprietary Limited 2006/039054/07 Bauba Platinum Limited 1986/004649/06 Hlabirwa Mining Investments Proprietary Limited 2000/017808/07 Bana Ba Thulare Social Development Agency 2012/161495/08 Bapedi Kingship Administration 2012/158880/08 Dendotex Proprietary Limited 2010/023281/07 KT 3 Project Consulting Services Proprietary Limited 2011/107241/07 KT 3 Holdings Proprietary Limited 2011/107304/07 Mokororwane Holding Proprietary Limited 2013/045746/07 Nuntius Networking Proprietary Limited* 2010/018817/07 PLP Africa Proprietary Limited* 2011/007473/07 Signature Ware Proprietary Limited 2004/011924/07 Thulare Graphics Designing CC (deregistered) 2004/003789/23 Baswa Advertising and Design CC (deregistered) 2006/156658/23 * Resigned 160

163 Directors of major subsidiaries The full names, ages, qualifications, business addresses and designations of the directors of Bauba A Hlabirwa, the major subsidiary of Bauba, are as follows: Director Business address Designation Sydney John Maurice Caddy (65) PR Eng, National Higher Diploma in Metalliferous Mining First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Ntoampe Isaac Mampuru (59) First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Willem Adriaan Moolman (51) Fellow of the Institute of Professional Accountants (Australia). BCompt (Hons), MBL Unisa First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Moruthane Ben Sekhukhune (48) First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Damian Smith (46) BSc (Hons) Geology from the University of Liverpool, MSc Exploration Geology from the Camborne School of Mines, PRSc.1 Nat Professional Natural Scientist Northam, 1A Albury Office Park, Cnr Albury Road and Jan Smuts, Dunkeld King Thulare Victor Thulare (33) First Floor, Building 816/5, Hammets Crossing Office Park, 2 Selbourne Road, Fourways, Johannesburg, 2055 Chief Executive Officer Director Financial Director Director Director Director All directors of the main operating subsidiary are South African citizens. 161

164 Appendix 8 INDEPENDENT COMPETENT PERSONS REPORT ON THE PLATINUM GROUP METALS ASSETS OF BAUBA PLATINUM LIMITED (BAUBA) SR1.1A(I) AN CLAY MSc (Geol), MSc (MinEng), DipBusMan, PrSciNat, MSAIMM, FAusIMM, FGSSA, MAIMA, MSPE, IoD Managing Director TC ORFORD BSc Hons (Geol), GDE (MinEng), MGSSA, MGASA, MMINSA Mineral Project Analyst JA MYBURGH BSc (Mathematics), MIASSA, MGASA Mineral Project Analyst K MPHAHLELE BSc Hons (Geol), PrSciNat, MGSSA Mineral Industry Adviser S DYKE MSc (EnvSci), CandSciNat, MIAIASA, MGSSA, MIAIASA Environmental Industry Adviser Reference No.: VMD1585R V6 Effective date: 1 March 2014 SR1.1A(ii); JSE12.9(a) Final report date: 12 August 2014 INTRODUCTION Bauba Platinum Limited (Bauba) is a platinum group metals (PGMs) exploration and evaluation company with PGM assets located in the Bushveld Complex (BC) of South Africa. These assets are situated in Eastern Limb of the BC, as illustrated in the locality plan that follows. Bauba s PGM assets include prospecting licences for three early exploration projects, namely the Northern Cluster, Central Cluster and Southern Cluster. Bauba A Hlabirwa Mining Investments Proprietary Limited holds 100% of the PGM Prospecting Right. The directors of Bauba requested that Venmyn Deloitte Proprietary Limited (Venmyn Deloitte) prepare a Competent Person s Report (CPR) on their material PGM assets in South Africa. Bauba A Hlabirwa Mining Investments Proprietary Limited (Hlabirwa) holds 100% of the PGM Prospecting Right. Bauba s combined shareholding in Hlabirwa is 60%. Bauba is listed on the main board of the Johannesburg Stock Exchange (JSE). Venmyn Deloitte has undertaken an independent technical review of the material mineral assets of Bauba, in order to identify all the factors of a technical nature that would influence the future viability of the projects. Venmyn Deloitte considered the strategic merits of each asset on an open and transparent basis. This CPR has been compiled in order to incorporate all currently available and material information that will enable potential investors to make a reasoned and balanced judgement regarding the economic merits of the platinum group metal assets reviewed. Venmyn Deloitte has based its review of Bauba s material platinum group metal assets on information provided by Bauba together with technical reports and other relevant published data. This CPR has been prepared in compliance with the 2009 South African Code for Reporting of Mineral Resources and Mineral Reserves Code (SAMREC Code) and the 2008 South African Code for Reporting of Mineral Asset Valuation (SAMVAL) published under the joint auspices of the Southern African Institute of Mining and Metallurgy and the Geological Society of South Africa. Venmyn Deloitte s professional advisors are Competent Persons as defined by the SAMREC Codes and the SAMVAL Codes, respectively and the Competent Persons involved in the preparation of this CPR are members in good standing with their respective professional institutions. The CPR and valuation was prepared and authored by Mr A Clay who has the relevant and appropriate experience and independence to appraise the assets. Mr A Clay is considered a Competent Person (CP), having more than five years relevant experience in the assessment and evaluation of the types of exploration and mining properties discussed in this report and Competent Persons Certificates are presented in Appendix 5. The following table summarises the mineral assets held by Bauba and the effective shareholdings of Bauba in the various assets. The corporate structure illustrates the companies in which each of the mineral assets is currently held. 162

165 Summary of mineral assets discussed in CPR Project Farm name and number Total licence area (ha) Company holding rights Development status Prospecting right number Mineral Expiry date Bauba s share holding Samrec exploration results Samrec mineral resource Northern Cluster Central Cluster Schoonoord 462KS ,49 Bauba A Hlabirwa Mining Investments Proprietary Limited* Advanced exploration LP30/5/1/1/2/330PR 17 July Indie 474KS , Unspecified minerals with emphasis on PGM, Vanadium ore, Exploration LP30/5/1/1/2/390PRR Titanium ore, 17 July % 4 Chrome ore, Iron ore, and associated LP30/5/1/1/2/330PR minerals and 17 July metals Zwitzerland 473KS , Fisant Laagte 506KS , Total ,35 Magneetsvlaakte 541KS 1 128,90 Bauba A Hlabirwa Mining Investments Proprietary Limited Dingaanskop 435KS ,28 Bauba A Hlabirwa Mining Investments Proprietary Limited* Total ,18 Southern Cluster Grootvygenboom 204KT ,35 Bauba A Hlabirwa Mining Investments Proprietary Limited* Advanced exploration LP30/5/1/1/2/330PR 17 July Genokakop 285KT , Houtbosch 323KT** N/A 256/2006PR ** Total ,48 * Originally awarded to Bapedi Nation. Renewed in 2012 by Bauba A Hlabirwa Mining Investments Proprietary Limited. ** The Houtbosch farm was granted as part of the original prospecting right application 256/2006PR on the 3 July This farm was not granted upon application for renewal and was excluded from LP30/5/1/1/2/330PR. The Houtbosch farm has been reapplied for and granted but not notarially executed as at the effective date of this report. 163

166 Locality map showing the location of Bauba s projects Bauba s corporate structure Bauba Platinum Limited (JSE: BAU) Bauba Platinum Limited (JSE: BAU) Ndarama Mineral Resources Proprietary Limited Bapedi Nation Hlabirwa Mining Investments Proprietary Limited 34,4% 37,5% 2,5% 25,6% Bauba A Hlabirwa Mining Investments Proprietary Limited Northern Cluster Central Cluster Southern Cluster Note: Combined shareholding of Bauba Platinum Limited in Bauba A Hlabirwa Mining Investments Proprietary Limited = 60% 164

167 The historic and recent exploration data available for each asset is detailed in the CPR and provides a basis for evaluating the technical and economic merits of the projects. The relative development stage of the assets is graphically portrayed in a mineral asset portfolio triangle. Northern Cluster The Northern Cluster is an advanced exploration project situated in the North-Eastern Limb of the BC in South Africa, approximately 40km northwest of the town of Steelpoort in the Limpopo province. Location The Norther Cluster is situated on the farms Schoonoord 462KS, Indie 474KS, Zwitzerland 473KS and Fisant Laagte 506KS and covers an area of 7 693ha, over which a Prospecting Right has been granted. The Northern Cluster is bordered to the north by platinum producing mines of Lesego Platinum and Bokoni Mine. To the east of the cluster are Eastern Chrome Mines Chrometco and Mecklenburg operations. Ownership The Northern Cluster is 100% held by Hlabirwa in which Bauba has a 60% attributable share. Geology The Bauba Clusters are located on the eastern limb of the BC. The limb forms a single unit of three layered mafic-ultramafic bodies, defined as the northern, western and eastern limbs, which together form an ellipse in plan, some 200km by 370km in extent with granites and felsic volcanic rocks in the central and southern regions. The target horizon on the Northern Cluster is the PGM bearing Merensky Reef and Upper Group 2 (UG2) Reefs, which are intersected at greater than 2 000m depth from surface. Exploration Three new drillholes, with up to eight deflections in each drillhole, were completed in the Northern Cluster in The drilling programme was completed in order to upgrade a portion of the Exploration Results declared in 2012 to Inferred Mineral Resources for the UG2 and Merensky Reef Mining Due to the stage of development of the Northern Cluster, no studies relating to mine planning or mine design have been carried out. However, in considering the depth from surface of the economic targets, any future mining is expected to utilise underground mining methods. Processing No details are currently available on the envisaged processing route for this project due to its early stage of exploration. Resources The classification of Inferred Mineral Resources for the recently drilled Northern Cluster Project is considered appropriate for the level of investigation and for lowconfidence resources. Environmental and social Bauba has an approved Environmental Management Programme, closure plan and financial provision, with associated compliance reporting conditions contained within the Prospecting Licence. Bauba is currently in the process of submitting an amended EMP, with an updated closure provision and associated rehabilitation plan. Surface water from a non-perennial stream is utilised by the diamond core drilling programme. Venmyn Deloitte is not aware of any directives issued by any competent authorities regarding environmental and social compliance. However, Venmyn Deloitte recommends that an assessment be conducted to ascertain whether an Integrated Water Use Licence (IWULA) is required in terms of Section 21 of the National Water Act (NWA). Conclusions The Merensky Reef and Upper Group 2 (UG2) Reefs are intersected at greater than 2 000m depth from surface which is considered deep for mines in the region. No neighbouring underground mines exploit the reefs at such a depth and the the Northern Cluster project will be focused on long-term deep mine development planning. Central Cluster The Central Cluster is an early stage exploration project, situated in the North-Eastern Limb of the BC in South Africa, located between the Northern and Southern Clusters. Location The Central Cluster is situated approximately 4,5km southeast of the Northern Cluster, directly west of Anglo Platinum s Twickenham Mine and the Jubilee Platinum Project. The project is located 43km northwest of Burgersfort and 79km northwest of Lydenburg. The cluster is situated on the Magneetsvlaakte 541KS and Dingaanskop 543KS farms, which cover an area of 2 165ha, over which a Prospecting Right has been granted. Ownership The Central Cluster is 100% held by Hlabirwa, which is 60% held by Bauba. Geology The geology of the Central Cluster is similar to that in the Northern Cluster. The first intersections of the Merensky are expected to be between 1 400m and 2 400m below surface under the Central Cluster and the parting between the Merensky Reef and UG2 is expected to be 400m. 165

168 Exploration Three exploration drillholes were drilled within the Central Cluster which have provided information for the definition of Exploration Targets for the UG2 and the Merensky Reef. Mining No mine design, mine plan or costing have been undertaken considering the stage of development of the project. Nonetheless, on consideration of the depth from surface of the economic targets, any future mining is expected to be underground mining methods. Processing The project is in the exploration phase and a processing route has not been developed to date. Resources No Mineral Resources have been declared for the Central Cluster, which remains an Exploration Result. Environmental and social Bauba has an approved EMP, closure plan and financial provision, with associated compliance reporting conditions contained within the Prospecting Licence. Bauba is currently in the process of submitting an amended EMP, with an updated closure provision and associated rehabilitation plan. Surface water from a nonperennial stream is utilised by the diamond core drilling programme. Venmyn Deloitte is not aware of any directives issued by any competent authorities regarding environmental and social compliance. However, Venmyn Deloitte recommends that an assessment be conducted to ascertain whether an IWULA is required in terms of Section 21 of the NWA. Conclusions The Central Cluster is an exploration project with deep mineralised target horizons, similar to that of the Northern Cluster. The Central Cluster is currently undergoing early stage investigation and will focus on a long-term development in terms of a deep mining strategy. Southern Cluster The Southern Cluster is an early stage exploration project, situated in the BC in South Africa. The Southern Cluster is located in the North-Eastern limb of the BC, south of the Northern and Central Clusters. Location The project is situated 9km southeast of the Central Cluster project in the Limpopo province, approximately 23km northwest of Steelpoort and 245km southeast of Johannesburg. The Southern Cluster is located on the farms Grootvygenboom 204KT, Genokakop 285KT and Houtbosch 323KT which cover an area of 4 626,55ha, over which a Prospecting Right has been granted. The Cluster is bordered to the east by Nkwe Platinum. Ownership The Southern Cluster is 100% held by Hlabirwa in which Bauba has a 60% attributable share. Geology The geology of the project is similar to the geology of the adjacent Central Cluster Project area. The limited historical drilling undertaken on the Southern Cluster Project area, intersected the Merensky Reef and UG2 chromitite layer in the Critical Zone at approximately 2 000m below surface over the portion of the project area to the west of the BC Eastern Limb. The Main Zone of the BC dominates the surface geology of the Southern Clusters properties and forms a thick overburden in the area. The Merensky layer is expected to be at least 1 050m to 2 150m below surface in the Southern Cluster and the parting between the Merensky and UG2 is expected to be between 350 and 365m. Of the three Clusters, mineralisation should be closest to surface under the Southern Cluster. Exploration The drilling prograame undertaken on the Southern Cluster and the data has resulted in the definition of an Inferred Mineral Resource for Merensky Reef and the UG2. The Southern Cluster can be classified as an advanced exploration project.. Mining Due to the stage of development of the Southern Cluster, no investigations have been carried out on the mining of the deposit. However, considering the depth from surface of the reefs, any future mining is expected to be underground. Processing No details are currently available on the envisaged processing route for this project due to its early stage of exploration. Resources The Southern Cluster has estimated an Exploration Result. 166

169 Environmental and social Bauba has an approved EMP, closure plan and financial provision, with associated compliance reporting conditions contained within the Prospecting Licence. Bauba is currently in the process of submitting an amended EMP, with an updated closure provision and associated rehabilitation plan. Surface water from a nonperennial stream is utilised by the diamond core drilling programme. Venmyn Deloitte is not aware of any directives issued by any competent authorities regarding environmental and social compliance. However, Venmyn Deloitte recommends that an assessment be conducted to ascertain whether an IWULA is required in terms of Section 21 of the NWA. Conclusions Recent drilling undertaken on the property shows a deep prospect with similar strategy to the Northern Cluster. The depth of the intersected reefs indicates a long-term development prospect with deep mining strategy. Overall Exploration Results and Mineral Resource Estimate The total Exploration Results and the total Mineral Resource estimates per project are summarised in the tables which follow. The current Mineral Resources and Mineral Reserves for the Bauba Clusters were independently estimated, classified and signed off by Andrew Clay of Venmyn Deloitte (Pr.Sci Nat /88, FGSSA). The Mineral Resource estimate was estimated with an effective date of 30 August 2013 and there has been no material change since that date and the effective date of this report, 1 March Bauba s PGM Merensky Reef exploration result estimate as at 30 August 2013 Cluster Farm name Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PgE grade g/t 4PgE ounces Moz Schoonoord 462KS ,0 3,3 3,6 0,94 1,04 34,7 42,4 3,9 4,7 4,3 6,4 Indie (portion RE) 474KS ,0 3,3 3,6 0,94 1,04 39,5 48,2 3,9 4,7 4,9 7,3 Northern Indie (portion 1) 474KS ,0 3,3 3,6 0,94 1,04 39,5 48,2 3,9 4,7 4,9 7,3 Zwitzerland 473KS ,0 3,3 3,6 0,94 1,04 50,8 62,1 3,9 4,7 6,3 9,4 Fisant Laagte 506KS ,0 3,3 3,6 0,94 1,04 52,4 64,0 3,9 4,7 6,5 9,7 Northern total ,0 3,3 3,6 0,94 1,04 216,9 265,0 3,9 4,7 26,9 40,2 Northern Bauba attributable** ,0 3,3 3,6 0,94 1,04 130,1 159,0 3,9 4,7 16,2 24,1 Magnets Vlakte 541KS ,0 3,2 3,6 0,96 1,06 27,3 33,4 4,1 5,0 3,6 5,3 Central Dingaanskop 543KS ,0 3,2 3,6 0,96 1,06 25,1 30,7 4,1 5,0 3,3 4,9 Central total ,0 3,2 3,6 0,96 1,06 52,4 64,1 4,1 5,0 6,9 10,2 Central Bauba attributable** ,0 3,2 3,6 0,96 1,06 31,5 38,4 4,1 5,0 4,1 6,1 Groot Vygenboom ,0 3,2 3,5 0,95 1,05 21,3 26,0 4,1 5,0 2,8 4,2 Southern 284KS Genokakop 285KS ,0 3,2 3,5 0,95 1,05 30,3 37,0 4,1 5,0 4,0 6,0 Southern total ,0 3,2 3,5 0,95 1,05 51,5 62,9 4,1 5,0 6,8 10,2 Southern Bauba attributable** ,0 3,2 3,5 0,95 1,05 30,9 37,8 4,1 5,0 4,1 6,1 Total exploration results ,7 3,2 3,6 0,95 1,04 320,9 392,0 3,9 4,8 40,6 60,7 Total Bauba attributable** 192,5 235,2 3,9 4,8 24,4 36,4 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Note that the potential quantity, quality and content as expressed above are conceptual in nature. Please note that the exploration results are quoted in-situ. Exploration targets are quoted exclusive of Inferred Mineral Resources. 167

170 Bauba s PGM UG2 Reef Exploration result estimate as at 30th August 2013 Cluster Farm name Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PgE grade g/t 4PgE ounces Moz Schoonoord 462KS ,0 3,8 4,2 0,78 0,86 26,9 32,9 5,0 6,1 4,3 6,5 Indie (portion RE) 474KS ,0 3,8 4,2 0,78 0,86 36,1 44,1 5,0 6,1 5,8 8,7 Northern Indie (portion 1) 474KS ,0 3,8 4,2 0,78 0,86 36,2 44,2 5,0 6,1 5,8 8,7 Zwitzerland 473KS ,0 3,8 4,2 0,78 0,86 46,5 56,9 5,0 6,1 7,5 11,2 Fisant Laagte 506KS ,0 3,8 4,2 0,78 0,86 48,0 58,6 5,0 6,1 7,7 11,5 Northern total ,0 3,8 4,2 0,78 0,86 193,7 236,7 5,0 6,1 31,1 46,5 Northern Bauba attributable** ,0 3,8 4,2 0,78 0,86 116,2 142,0 5,0 6,1 18,7 27,9 Magnets Vlakte 541KS ,0 3,7 4,0 0,93 1,03 28,1 34,4 5,3 6,5 4,8 7,2 Central Dingaanskop 543KS ,0 3,7 4,0 0,93 1,03 25,8 31,5 5,3 6,5 4,4 6,6 Central total ,0 3,7 4,0 0,93 1,03 53,9 65,9 5,3 6,5 9,2 13,7 Central Bauba attributable** ,0 3,7 4,0 0,93 1,03 32,4 39,5 5,3 6,5 5,5 8,2 Groot Vygenboom 284KS ,0 3,6 3,9 0,85 0,93 20,7 25,3 5,1 6,3 3,4 5,1 Southern Genokakop 285KS ,0 3,6 3,9 0,85 0,93 31,0 37,9 5,1 6,3 5,1 7,7 Southern total ,0 3,6 3,9 0,85 0,93 51,7 63,2 5,1 6,3 8,5 12,8 Southern Bauba attributable** ,0 3,6 3,9 0,85 0,93 31,0 37,9 5,1 6,3 5,1 7,7 Total exploration results ,4 3,7 4,1 0,82 0,90 299,4 365,7 5,1 6,2 48,9 72,9 Total Bauba attributable** 179,6 219,4 5,1 6,2 29,3 43,8 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Note that the potential quantity, quality and content as expressed above are conceptual in nature. Please note that the exploration results are quoted in-situ. Exploration results are quoted exclusive of Inferred Mineral Resources. Bauba s PGM Merensky Reef Mineral Resource estimate as at 30 August 2013 Cluster Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PGE grade g/t 4PgmE ounces Moz Nortthern total ,00 3,24 1,21 29,17 4,17 3,91 Southern total ,00 3,25 1,02 27,38 3,92 3,45 Total Inferred Resources ,96 3,24 1,12 56,55 4,05 7,36 Bauba attributable** 33,93 4,05 4,41 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Bauba s PGM UG2 Reef Mineral Resource estimate as at 30 August 2013 Cluster Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PgE grade g/t 4PgE ounces Moz Northern total ,00 3,46 1,35 40,74 4,47 5,85 Southern total ,00 3,50 1,35 28,08 4,43 4,00 Total Inferred Resources ,41 3,48 1,35 68,82 4,45 9,85 Bauba attributable** ,41 3,48 1,35 41,29 4,45 5,91 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Note that the potential quantity, quality and content as expressed above are conceptual in nature. Please note that the exploration results are quoted in-situ. Exploration targets are quoted exclusive of Inferred Mineral Resources. 168

171 Venmyn Deloitte has conducted a valuation of the mineral assets in compliance with SAMVAL Code, published under the joint auspices of the Southern African Institute of Mining and Metallurgy and the Geological Society of South Africa. The valuation is required in fulfilment of the JSE Limited s listings requirements Section 12(f). The valuation aims to identify the attributible value on an asset-by-asset basis as a means of identifying the value contribution of each individual asset to the total asset value of Bauba as at the effective date of this report. Each asset has been valued according to its respective development stage by applying various valuation methods. The valuation of the Bauba assets was conducted using the historic cost approach and the comparative market approach valuation methodologies. The mineral asset valuations have been based on exploration information available up to and including 31 January 2014 and are based on the declared Inferred Mineral Resources as well as the Exploration Results for each cluster. A summary of the results of these valuations is provided in the table to follow. Project value Bauba attributable value* Valuation method Lower ZARm Upper ZARm Preferred ZARm Lower ZARm Upper ZARm Preferred ZARm Cost approach 61,10 152,75 122,20 36,66 91,65 73,32 Market approach 54,03 184,07 119,05 32,42 110,44 71,43 * Bauba holds 60% Note: This valuation includes exploration results. Venmyn Deloitte prefers the market valuation approach in valuing early exploration assets with a declared mineral resource estimate. Therefore, on an attributible basis, the value of the assets for Bauba s 60% shareholding ranges between ZAR32,42 million and ZAR110,44 million with a fair value of ZAR71,43 million. Mineral asset portfolio triangle indicating the relative status and location of Bauba s assets 169

172 Disclaimer and Risks Venmyn Deloitte has prepared this CPR and, in so doing, has utilised information provided by Bauba and its contractors as to its operational methods and forecasts. Where possible, this information has been verified from independent sources with due enquiry in terms of all material issues that are a prerequisite to comply with the SAMREC and SAMVAL Codes. Venmyn Deloitte and its directors accept no liability for any losses arising from reliance upon the information presented in this report. The authors of this CPR are not qualified to provide extensive commentary on legal issues associated with Bauba s right to the mineral properties. Bauba has provided certain information, reports and data to Venmyn Deloitte in preparing this CPR which, to the best of Bauba s knowledge and understanding, are complete, accurate and true and Bauba acknowledges that Venmyn Deloitte has relied on such information, reports and data in preparing this CPR. No warranty or guarantee, be it express or implied, is made by the authors with respect to the completeness or accuracy of the legal aspects of this document. Operational Risks The businesses of mining and mineral exploration, development and production by their natures contain significant operational risks. The businesses depend upon, amongst other things, successful prospecting programmes and competent management. Profitability and asset values can be affected by unforeseen changes in operating circumstances and technical issues. Political and Economic Risks Factors such as political and industrial disruption, currency fluctuation, increased competition from other prospecting and mining rights holders and interest rates could have an impact on Bauba s future operations, and potential revenue streams can also be affected by these factors. The majority of these factors are, and will be, beyond the control of Bauba or any other operating entity. ForWArd-Looking Statements This report contains forward-looking statements. These forward-looking statements are based on the opinions and estimates of Venmyn Deloitte and Bauba at the date the statements were made. The statements are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those forward-looking statements anticipated by Venmyn Deloitte and Bauba. Factors that could cause such differences include changes in world PGM markets, equity markets, costs and supply of materials, and regulatory changes. Although Venmyn Deloitte believes the expectations reflected in the forward-looking statements to be reasonable, Venmyn Deloitte does not guarantee future results, levels of activity, performance or achievements. 170

173 List of Contents SR1.1A(i) Page 1. Introduction Scope of opinion Personal inspection Statement of independence Reliance on other experts Sources of information Bauba s corporate structure Mineral assets Topography and climate Vegetation History Historical ownership Historical exploration and mining Local resources Regional geological setting The genesis of the PGM sulphide mineralisation South Africa country profile Political and economic climate Minerals industry Legislative framework Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA) Mineral and Petroleum Resources Development Amendment Act 49 of Mineral and Petroleum Resources Development Draft Amendment Bill (2012) Broad-Based Socio-Economic Charter Amendment of the Broad-Based Socio-Economic Empowerment Charter (2010) Promotion of Beneficiation Bill Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA) Institutional and administrative environmental and social regulatory structures Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 Noise Regulations) National Environmental Management Act (Act 107 of 1998) (NEMA) National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA) National Water Act (Act 36 of 1998) (NWA) National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA) National Heritage Resources Act (Act 25 of 1999) (NHRA) National Environmental Management Biodiversity Act (Act 10 of 2004) (NEMBA) Global platinum group metals market review Supply Demand Price Outlook Northern Cluster Location and access Topography Legal aspects and tenure Ownership Mineral tenure Surface rights Royalties Material contracts Other legal issues

174 Page Local geological setting Deposit type and mineralisation Depth of mineralisation Central cluster Location and access Topography Legal aspects and tenure Ownership Mineral tenure Surface rights Royalties Material contracts Other legal issues Local geological setting Deposit type and mineralisation Depth of mineralisation Southern cluster Location and access Topography Legal aspects and tenure Ownership Mineral tenure Surface rights Royalties Material contracts Other legal issues Local geological setting Deposit type and mineralisation Depth of mineralisation Exploration Recent exploration Remote exploration Surveying methods Diamond drilling Core handling Logging Sampling method Percussion or open hole drilling Down the hole geophysics/wireline logging Bulk sampling and specific gravity Laboratory analyses Sample preparation and analysis Security Qa/qc Assay results Data management Data acquisition and validation Database management Mineral resource estimate Previous resource statement Current resource statement Statistical analysis Resource/exploration results classification Differences between resource statements Environmental and social practices

175 Page General disclosure Environmental and social permitting status Operational environmental management Operational social management Mine closure provision, closure planning and rehabilitation Mining Mineral processing Site infrastructure Water Power Roads Railway siding General mineral asset valuation approach Mineral asset valuation methodologies Cost approach Market approach General mineral asset valuation assumptions Mineral asset valuation Cost approach valuation Market approach valuation Valuation summary Valuation assumptions Previous valuations Audits, reviews and historic verification Adjacent properties Bokoni platinum mine Twinkenham platinum project Modikwa platinum mine Effect of mineralisation depth to shaft depths Exploration programme and budget Risk analysis Conclusions Date and signatures

176 List of Figures SR1.1A(i) Page Figure 1: Bauba's corporate structure 179 Figure 2: Locality map showing the location of Bauba s projects 179 Figure 3: Mineral asset portfolio triangle indicating the relative status and location of Bauba's assets 180 Figure 4: Bauba Clusters locality plan in relation to regional infrastructure 183 Figure 5: Regional geology of the BC 184 Figure 6: Local geological map 185 Figure 7 : Platinum price graph 196 Figure 8: Palladium price graph 196 Figure 9: Rhodium price graph 196 Figure 10: East-West section illustrating the effect of the Phoshiri Dome on the stratigraphy 198 Figure 11: East-West sections over the Bauba Project areas 200 Figure 12: Location of boreholes 203 Figure 13: Merensky and UG2 Reef Resource for the Northern Cluster 211 Figure 14: Merensky and UG2 Reef Resource for the Central Cluster 212 Figure 15: Merensky and UG2 Reef Resource for the Southern Cluster 213 Figure 16: Simplified schematic representation of intersections 214 Figure 17: Variance towers for the Northern Cluster 219 Figure 18: Project lifetime value and valuation methodology curve for Mineral Resource projects 224 Figure 19: Market valuation 227 Figure 20: Adjacent mining operations

177 List of Tables SR1.1A(i) Page Table 1: Summary of Bauba s mineral assets and their development stage 181 Table 2: Stratigraphic Zones of the Rustenburg Layered Suite of the BC 182 Table 3: Types of rights applicable in South Africa 187 Table 4: Estimated global PGM Reserves in Table 5: Estimated global PGM Production for 2011 and Table 6: South African PGM production (2012 and H1 2013) 194 Table 7: Supply and demand for PGMs ( ) 195 Table 8: Summary of QA/QC samples used in lead collection fire assay and ICP-OES finish 208 Table 9: Summary of QA/QC samples used in nickel sulphide collection 208 Table 10: Summary of the CRM bias statistics in lead collection fire assay and ICP-OES finish 209 Table 11: Summary of the CRM bias statistics in nickel sulphide collection (Setpoint) 209 Table 12: Previous exploration results for the Merensky Reef (April 2012) (not SAMREC compliant) 215 Table 13: Previous Inferred Mineral Resource for the Merensky Reef (April 2012) 215 Table 14: Previous exploration results Resource for the UG2 (April 2012) (not SAMREC compliant) 216 Table 15: Previous Inferred Mineral Resource for the UG2 (April 2012) 216 Table 16: Exploration results for the Merensky Reef (30 August 2013) 217 Table 17: Inferred Mineral Resource for the Merensky Reef (30 August 2013) 217 Table 18: Exploration Results for the UG2 (30 August 2013) 218 Table 19: Inferred Mineral Resource for the UG2 (30 August 2013) 218 Table 20: Northern, Central and Southern Cluster environmental and social compliance status 220 Table 21: Prospect exploration phase classification and the corresponding PEM 225 Table 22: Bauba Cost approach valuation results 227 Table 23: Bauba Market approach valuation results 228 Table 24: Bauba Summary of valuation results 228 Table 25: Exploration plan and budget

178 List of Appendices SR1.1A(i) Page Appendix 1: References 233 Appendix 2: Glossary and abbreviations 234 Appendix 3 : Summary of the drilling campaign 238 Appendix 4 : Selection of assay results 239 Appendix 5: Certificates of Competent Persons

179 1. Introduction SR1.1A(ii); SR1.1A(iii); SV2.2; JSE12.9(a)(e) Venmyn Deloitte Proprietary Limited (Venmyn Deloitte) prepared this updated Competent Person s Report (CPR) on Bauba Platinum Limited s (Bauba s) material platinum group metal (PGM) assets in the Bushveld Complex (BC) in South Africa. Bauba is a junior PGM exploration company that holds two prospecting rights, namely 248/2006PR and 256/2006PR. The rights cover eight farms encompassing an area of ha, prospective for PGMs in the North Eastern Limb of the BC. The CPR describes each mineral asset in terms of the +historicaltt and recent exploration data which would have a bearing on the recent resource and reserve estimation of the assets. This CPR has been prepared in compliance with, and to the extent required by the SAMREC Code for the reporting of exploration results, Mineral Resource and Mineral Reserves. Venmyn Deloitte has undertaken an independent technical review of the material mineral assets of Bauba, in order to identify all the factors of a technical nature that would influence the future viability of the projects. Venmyn Deloitte considered the strategic merits of each asset on an open and transparent basis. The CPR has been compiled in order to incorporate all currently available and material information that will enable potential investors to make a reasoned and balanced judgement regarding the economic merits of the PGM assets reviewed. The CPR was compiled to illustrate the current development stage of the assets and the additional exploration to be conducted by Bauba is discussed in Section 28. Venmyn Deloitte s professional advisers are Competent Persons as defined by the SAMREC Codes and the SAMVAL Codes, respectively. Venmyn Deloitte s advisers are internationally accredited. The Competent Person (CP) involved in the preparation of this CPR is a member in good standing with the respective professional institutions. 2. Scope of Opinion SR1.1A(ii); SR1.1A(iii); SR1.2A(i) SV2.2 Venmyn Deloitte has prepared an independent CPR of the material mineral assets of Bauba, in order to identify all the factors of a technical nature that would influence the future viability of the projects. Venmyn Deloitte considered the strategic merits of each asset on an open and transparent basis. This SAMREC and SAMVAL compliant CPR has been compiled in order to incorporate all currently available and material information that will enable potential investors to make a reasoned and balanced judgement regarding the economic merits of the PGM assets reviewed. The SAMREC and SAMVAL Codes are considered by Venmyn Deloitte to be a concise recognition of the best-practice due-diligence methods for these types of mineral projects and accord with the principles of open and transparent disclosure that are embodied in internationally accepted Codes for Corporate Governance. This work has been based upon technical information which has been supplied by Bauba and has been independently due diligenced by Venmyn Deloitte, where possible. Venmyn Deloitte reserves the right to, but will not be obliged to, revise this report or sections therein, and conclusions thereto, if additional information becomes known to Venmyn Deloitte subsequent to the date of this report. It must be noted that this CPR does not form an assurance report in accordance with the International Auditing and Assurance Standards Board (IAASB) standards. 3. Personal Inspection SV2.14 Several site visits have been conducted by CP Mr A Clay, Miss T Orford and Bauba s project geologists on 25 February 2010 and 4 November During the site visits, the CP viewed the site, a sample of borehole locations and drill rigs, the core shed and the sampling and QA/QC procedures. All site infrastructure and workings were inspected. These site visits have substantiated the existence of Bauba s PGM resources which are supported by the exploration results detailed in the relevant sections to follow. Nevertheless, Venmyn Deloitte is fully familiar with the general geological and operational setting of these projects, having worked on similar projects, located in the area. 4. Statement of Independence SR11A(ii); SV2.2; SV2.11; SV2.14; JSE12.9(c); JSE12.9(e) This CPR has been prepared by Venmyn Deloitte, which is an independent advisory company. Its consultants have extensive experience in preparing Competent Persons, Technical Advisors and Valuation Reports for mining and exploration companies. Venmyn Deloitte s advisers writing this report have, collectively, more than 70 years of experience in the assessment and evaluation of PGM mining and exploration projects worldwide and are members in good standing of appropriate professional institutions. Neither Venmyn Deloitte nor its staff or subcontractors have, or have had, any interest in these projects capable of affecting their ability to give an unbiased opinion and, have not received, and will not receive, any pecuniary or other benefits in connection with this assignment, other than normal consulting fees. Neither Venmyn Deloitte nor any of its personnel involved in the preparation of this CPR have any material interest in either Bauba or in any of the properties described herein. Venmyn Deloitte was remunerated a fixed fee amount for the preparation of this report, with no part of the fee contingent on the conclusions reached or the content of this report. Except for these fees, Venmyn Deloitte has not received and will not receive any pecuniary or other benefit whether direct or indirect for or in connection with the preparation of this report. This CPR was prepared by Mr A Clay who has the relevant and appropriate experience and independence to appraise the assets. Mr A Clay is considered a CP, having more than five years relevant experience in the assessment and evaluation of the types of exploration and mining properties discussed in this report. Mr A Clay has also contributed to the preparation of valuation included in this report and can be considered a Competent Valuator as defined by the SAMVAL Code, by way of relevant education, qualifications and experience. Competent Persons Certificates are presented in Appendix 5. Venmyn Deloitte reserves the right to, but will not be obliged to, revise this report or sections therein, and conclusions thereto, if additional information becomes known to Venmyn Deloitte subsequent to the date of this report. It must be noted that this review does not form an assurance report in accordance with the International Auditing and Assurance Standards Board (IAASB) standards. 177

180 5. Reliance on Other Experts SV2.13 Venmyn Deloitte has based its review of Bauba s material PGM assets, for the purposes of this CPR, on information provided by Bauba and its subsidiary companies, along with technical reports by its contractors and associates and other relevant published data. Drafts of this CPR have been provided to Bauba, in order to identify and address any factual errors or omissions prior to finalisation. The authors of this report are not qualified to provide extensive commentary on the legal issues associated with Bauba s and/or its subsidiaries right to the mineral properties. Venmyn Deloitte has obtained copies of the relevant mining and prospecting licences/authorisations, and these have been reviewed to the satisfaction of Venmyn Deloitte. No warranty or guarantee, be it express or implied, is made by the authors with respect to the completeness or accuracy of the legal aspects of this document. The authors of this report are all currently in the employ of Venmyn Deloitte. Venmyn Deloitte has not relied on any other experts. 6. Sources of Information SR1.3A(ii); SV2.11 Venmyn Deloitte has based its review of Bauba s material PGM assets on information provided by Bauba and its subsidiary companies, along with technical reports by its contractors and associates, exploration data and other relevant published data. The information and conclusions within this report are based on information made available to Venmyn Deloitte by Bauba and its contractors at the time of the preparation of this report. Bauba will review draft copies of this report for factual errors. Any changes made as a result of these reviews is not expected to involve any alteration to the conclusions made. Venmyn Deloitte has relied upon general information contained within the reports, articles and databases detailed in Appendix Bauba s Corporate Structure SR1.7A(i-iv) in terms of the legal tenure sections of this report, specific reference is made to the associated subsidiary companies holding the various rights, as appropriate, and their relationship to Bauba as set out in the corporate structure. However, for ease of reference, and throughout the remainder of the CPR, references to Bauba should be understood to mean Bauba Platinum Limited and not Bauba A Hlabirwa Mining Investments, which is a subsidiary of Bauba Platinum Limited. Bauba s corporate structure, with respect to the mineral assets to be discussed in this report, is presented in Figure Mineral Assets SR1.2A(i); SR1.7A(i-iv); SV2.3 Bauba holds three PGM assets located within the Eastern Limb of the BC in South Africa (Figure 2). Bauba s assets include two prospecting rights, divided into three projects that are at various stages of exploration. The assets are also graphically portrayed in a mineral-asset portfolio triangle in Figure 3 in order for the reader to obtain an understanding of the relative development of the various projects. The Houtbosch farm was granted as part of the original prospecting right application 256/2006PR on 3 July This farm was not granted upon application for renewal and was excluded from LP30/5/1/1/2/330PR. The Houtbosch farm has been reapplied for and granted but has not notarially executed as at the effective date of this report. Houtbosch is considered a part of the Southern Cluster Project. The PGM assets are located within the Limpopo province of South Africa and are between approximately 95km and 110km southeast of Polokwane. The BC is a stratiform platinum deposit, hosting platinum deposits within the Merensky and Upper Group 2 Reefs (Table 1). 9. Topography and Climate SR1.6A(i), SR1.6A(ii), SR1.6B(i), SR1.6B(ii) The Bauba Projects lie along the Leolo mountain range in the Limpopo province, with elevations varying between 800m and 1 886m above sea level. The elevation differences within the Northern, Central and Southern Clusters are about 470m, 220m and 400m respectively. There are some inter-mountain flat lying valleys and this is where dirt access roads are generally situated. The climate of the area is typical sub-tropical Highveld weather, with warm humid summers and cool dry winters. The rainfall on escarpments is higher at annual averages of 700mm compared to about 500mm in the valleys. Precipitation is usually in the form of thunderstorms during summer. The sudden downpours pose some risk of flooding in low-lying areas. Temperatures recorded at nearby town Steelpoort vary between 30 and 17,6 C in January and 21,6 to 3,8 C in July. Extremes of 40 and -2,3 C have also been recorded. The mostly moderate climate means that exploration and mining operations can be undertaken throughout the year, with no extraordinary measures required. 178

181 Figure 1: Bauba s corporate structure Bauba Platinum Limited (JSE: BAU) Bauba Platinum Limited (JSE: BAU) Ndarama Mineral Resources Proprietary Limited Bapedi Nation Hlabirwa Mining Investments Proprietary Limited 34,4% 37,5% 2,5% 25,6% Bauba A Hlabirwa Mining Investments Proprietary Limited Northern Cluster Central Cluster Southern Cluster Note: Combined shareholding of Bauba Platinum Limited in Bauba A Hlabirwa Mining Investments Proprietary Limited = 60% Figure 2: Locality map showing the location of Bauba s projects 179

182 Figure 3: Mineral asset portfolio triangle indicating the relative status and location of Bauba s assets 180

183 Table 1: Summary of the Bauba s mineral assets and their development stage Project Farm name and number Total licence area ha Company holding rights Development status Licence type Prospecting right number Mineral Date issued Date of last renewal Expiry date Notes Bauba s shareholding Northern Cluster Central Cluster Schoonoord 462KS ,49 Bauba A Hlabirwa Mining Investments Proprietary Limited* Advanced exploration Prospecting LP30/5/1/1/2/330PR Unspecified minerals with emphasis on PGM, vanadium ore, titanium ore, chrome ore, iron ore, and associated minerals and metals. Indie 474KS ,43 7 June 2006 Zwitzerland 473KS ,51 28 April 2010 Fisant Laagte 506KS ,92 7 June 2006 Total ,35 Magneetsvlaakte 541KS 1 128,90 Bauba A Hlabirwa Mining Investments Proprietary Limited Dingaanskop 435KS ,28 Bauba A Hlabirwa Mining Investments Proprietary Limited* 28 April July July 2015 Amendment/ Variation to include farms Zwitzerland, Genokakop, Grootvygenboom and Schoonoord on 28 April 2010 Exploration Prospecting LP30/5/1/1/2/390PRR 7 June July July % LP30/5/1/1/2/330PR 60% Total ,18 Southern Cluster Grootvygenboom 204KT ,35 Bauba A Hlabirwa Mining Investments Proprietary Limited* Advanced exploration Prospecting LP30/5/1/1/2/330PR 28 April July July 2015 Genokakop 285KT ,13 28 April 2010 Houtbosch 323KT** N/A ** 256/2006PR 3 July 2006 Was not renewed 2 July 2011 This right was not renewed. 60% Total ,48 The Houtbosch farm was granted as part of the original prospecting right application 256/2006PR on 3r July This farm was not granted upon application for renewal and was excluded from LP30/5/1/1/2/330PR. The Houtbosch farm has been reapplied for and granted but not notarially executed as at the effective date of this report. Venmyn Deloitte is of the opinion that neither the topography of the project areas nor the climate experienced in the region, offer any risk to the continued exploration and potential development of the projects. 181

184 10. Vegetation 182 Vegetation is typically bushveld grassland with numerous small bushes and thorn trees. The project areas are typically disturbed grazing lands for cattle and goats. Small communities inhabit the mountainous areas. The flat-lying, intermountain areas are used for farming maize and corn. 11. History Bauba A Hlabirwa Mining Investments Proprietary Limited and Highland Trading Investments Proprietary Limited acquired Absolute Holdings Limited on the 21 July Historical ownership SR1.3A(i); SR1.3B(ii); SV2.4 The Northern, Central and Southern Clusters have not been historically targeted as a mineral project and no historical owners are documented. The area is well known for PGM exploration and numerous mining and exploration projects are located adjacent to and in the vicinity of the Bauba operations. A more detailed review of adjacent projects is detailed in Section 0tt Historical exploration and mining SR1.3A(i); SV2.4 Historical exploration and mining refers to all activities undertaken prior to Bauba s involvement and acquisition of the Northern Cluster Project. No historical mining or exploration activities have been documented on Bauba s mineral assets prior to Bauba. 12. Local Resources SR5.6 The BC hosts some of the world s largest reserves of PGMs along with vast quantities of iron, tin, chromium, titanium and vanadium. Numerous mines are currently mining these commodities; therefore, both skilled and unskilled labour is readily available from the surrounding towns of Lydenburg, Steelpoort and Mokopane. The Bauba Project area will be well serviced due to good infrastructure, services and the available labour force in the surrounding mines and towns (Figure 4). 13. Regional Geological Setting SR4.1A(i); SV2.5 The Bauba Clusters are located on the eastern limb of the BC (Figure 5). The BC consists of three layered mafic-ultramafic bodies, named the northern, western and eastern limbs. These form an ellipse in plan, approximated 200km by 370km in extent with granites and felsic volcanic rocks in the central and southern regions. The BC exhibits remarkably consistent layering that can be correlated extensively throughout the geologic expression of the whole complex. The BC comprises the mafic layered suite known as the Rustenburg Layered Suite (RLS). The RLS sequence is divided into five stratigraphic zones that exhibit varying thicknesses. The descriptions of the various zones are summarised in Table 2 below. Economic platinum deposits are found within the Critical Zone of the BC, which is subdivided into the Upper Critical Zone and the Lower Critical Zone. All stratiform platinum deposits (such as the Merensky Reef and the UG2 Reef), discovered up to this juncture, are concentrated within the Upper Critical Zone of the Critical Zone. The chromitite layers of the Lower Critical Zone also contain PGMs but these are found in sub-economic concentrations, commonly associated with chromitite layers (Figure 6). The Merensky Reef and the UG2 dip constantly at angles varying from 6 8ºW The genesis of the PGM sulphide mineralisation The origin of the PGM mineralisation in the BC has been investigated since its discovery and remains a matter of debate. A possibility exists that PGMs are concentrated in primary basaltic to komatiitic composition magma when a high degree of partial melting (30%) of the upper mantle occurs. Within this primary melt, some mechanism to induce sulphide saturation was active to produce a sulphide liquid which segregates from the primary magma. Magma mixing, crustal contamination and fractional crystallisation are the most important processes known to induce sulphide saturation in magma during intrusion. table 2: Stratigraphic zones of the Rustenburg Layered Suite of the BC Unit Group Thickness m Dominant lithology Description Upper Zone Varies Gabbros, gabbro-norite, and anorthosite containing minor magnetite layers No chilled contact with the hanging wall rocks, which consist of rhyolites and granophyres Main Zone Upper Critical Zone Lower Critical Zone Lower Zone Marginal Zone Upper Group Middle Group Lower Group Norite, gabbro-norite, anorthosite and minor pyroxenite Layered pyroxenite, norite, anorthosite and chromitite, including the UG2, UG1 and Merensky Reef, MG4, MG3, MG2 and MG1 Varies, reaches a maximum of Several metres to hundreds of metres Pyroxenite dominant inter-layered with minor harzburgite and chromitite layers Cyclically layered units of orthopyroxenite, dunite and harzburgite Unlayered, heterogeneous ultramafic rocks mostly norites Comprises half of the RLS. Banding and layering not well developed The Upper Critical Zone (UCZ) is marked by the presence of cumulus plagioclase. Norites dominate the UCZ, with subordinate pyroxenite and anorthosite present at intervals through the sequence. The Middle Group (MG) of layers straddle the contact between the Lower and Upper Critical Zone, whereas the upper group (UG) layers occur within the UCZ. Economic PGM mineralisation is hosted in the Merensky Reef and UG2 chromitite layer The Lower Group (LG), consisting of the LG5, LG6 and LG7, occurs exclusively in the lower Critical Zone. The LG5, LG6, and LG7 are laterally persistent and contain base metal sulphide mineralisation Thickness varies and thins over basement highs. The most complete exposure is in the northeastern part of the Eastern Limb of the RLS which occurs as a series of dunite-harzburgite cyclically layered units Contamination of the basic magmas by the enclosing host rocks. Sedimentary rock fragments are contained as xenoliths in the lower portions. Exposures of this zone are poor Once sulphide saturation of magma was reached, a sulphide liquid segregated from the primary magma and strong partitioning of PGMs, Ni and Cu into this segregated liquid took place. It is has been suggested that these sulphide droplets act as a scavenging medium for the PGMs and the droplets collect on the floor of the magma chamber where the ore-bearing layers form (Eales, 2001).

185 Figure 4: Bauba Clusters locality plan in relation to regional infrastructure 183

186 Figure 5: Regional geology of the BC 184

187 Figure 6: Local geological map 185

188 14. South Africa Country Profile SR Political and economic climate South Africa gained independence from Britain on 31 May 1910, and was declared a republic in From 1948 until 1990, the South African political and legal systems were based upon the concept of apartheid, a philosophy of separate racial development, enforced by a white minority government. The first multiracial elections in 1994 brought an end to apartheid and ushered in black majority rule under the African National Congress (ANC), with a number of different political parties participating in the elections. The country continues to hold democratic, peaceful, free and fair elections, the last of which was won by the ANC in 2014, under the leadership of President Jacob Zuma. South Africa is the most advanced economy in Africa and provides the gateway to sub-saharan Africa. It is classified as a middle-income emerging market, with well-developed financial, legal and judicial systems and modern infrastructure. Between 2004 and 2008 South Africa grew economically as a result of macroeconomic stability and a global commodities boom, but growth slowed in the second half of 2008 and 2009 due to poor global economic conditions, which influenced commodity prices and demand. Gross domestic product (GDP) fell almost 2% in 2009, but has recovered since then, albeit slowly with 2014 growth projected at about 2%. Unemployment, poverty and inequality still remain a challenge. However, in 2010, 2011 and 2012, the country again reflected a positive economic growth rate, with 2.8%, 3.4% and 2.6% real GDP growth rates, respectively (CIA, 2013). South African economic policy is fiscally conservative but pragmatic. The country attempts to control inflation by keeping it within an acceptable range (3% 6%), maintains a budget surplus, uses State-owned enterprises to deliver basic services to low-income areas and provides social grants to a quarter of the population. Currency and inflation volatility, poverty, income disparities, and poor availability of public services continue to characterise the country. However, there has been an improvement in many of these areas. The country, for instance, returned to its target inflation range in 2010, 2011 and 2012, since inflation stood at an estimated 4,1%, 5% and 5,2%, respectively, in these years compared to an estimated 7,2% inflation rate in 2009 (CIA, 2013). A dent was also made in the South Africa s high unemployment rate, as unemployment levels also fell from an estimated 24,9% in 2011 to an estimated 24,4% in 2012 (CIA, 2013) Minerals industry The minerals industry contributed 8.8% of South Africa s GDP in 2011, but this contribution is more significant if multiplier and induced effects of mining are taken into account (COM, 2012). South Africa has a mature minerals industry developed from gold and diamond discoveries in the late 1800s. The country is the world s largest producer of platinum, chrome and vanadium and ranks highly in the production of diamonds, coal, iron ore and base metals. South Africa hosts a number of large orebodies such as the Bushveld Complex and the Witwatersrand Basin, as well as rich diamond fields and extensive coalfields. One of the greatest challenges associated with the minerals and mining industry in South Africa is rising costs of labour, electricity, diesel and steel, among other costs. Another challenge, which has gained headline attention in 2012, is that of labour and community unrest caused by low wages particularly among contract workers and under-resourced communities a phenomenon that has been worsened by municipalities inability to provide adequate infrastructure to communities and an apartheid-era homeland system that has workers from labour-sending areas being impoverished by supporting two households. Other important concerns for the mining industry are the effect of HIV/Aids on the workforce, as well as uncertainty related to resource nationalism, including requirements for beneficiation, limitations on the export of strategic minerals, the introduction of a State mining company and calls for the nationalisation of mines Legislative framework The South African Government has an extensive legal framework within which mining, environmental and social aspects are managed. Inclusive within the framework are international treaties and protocols, and national acts, regulations, standards, and guidelines which address international, national, provincial and local management areas. South African statutory legislation and requirements relevant to the projects and considered as part of this assessment included: Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA); Mineral and Petroleum Resources Development Amendment Act 49 of 2008; Mineral and Petroleum Resources Development Draft Amendment Bill (2013); Broad-Based Socio-Economic Charter (and associated amendments, 2010); Promotion of Beneficiation Bill; Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA); National Environmental Management Act (Act 107 of 1998) (NEMA); National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA); National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA); National Environmental Management: Protected Areas Act (Act 57 of 2003) (NEM:PAA); Environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 Noise Regulations); National Heritage Resources Act (Act 25 of 1999) (NHRA); National Forests Act (Act 30 of 1998) (NFA); National Water Act (Act 36 of 1998) (NWA); Hazardous Substances Act (Act 15 of 1973) (HAS); and Mine Health and Safety Act (Act 29 of 1996) and amendments (MHSA). The most important of these are summarised in the subsections to follow. 186

189 Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA) Types of rights and permits applicable to the mining industry in South Africa, as provided for in the MPRDA and amendments, are detailed in Table 3. table 3: Types of Rights applicable in South Africa Licence type Purpose Duration Requirements Conditions Reconnaissance permission Exploration at the reconnaissance stage One year (nonrenewable) Financial ability; technical ability and work programme Holder does not have the exclusive right to apply for a New Order Prospecting Right (NOPR) New Order Prospecting Right (NOPR) Exploration at target definition stage Up to five years initially. renewable once for three years Financial ability; technical ability; economic programme; work programme and environmental plan Payment of prospecting fees. Holder has the exclusive right to apply for NOMR Retention permit Hold onto legal rights between prospecting and mining stages Three years initially. Renewable once for two years Prospecting stage complete; feasibility study complete and Environmental Management Plan (EMP) complete. Project not currently feasible May not result in exclusion of competition, unfair competition or hoarding of rights. May not be transferred, ceded, leased, sold, mortgaged or encumbered in any way New Order Mining Right (NOMR) Development and production stage 30 years initially. Renewable for further periods of 30 years. Effective for life of mine (LOM) Financial ability; technical ability; prospecting complete; economic programme; work programme; social plan; labour plan and completed EMP Payment of royalties (from 2010). Compliance with Mining Charter and Codes of Good Practice on broad based BEE Mining permit Small-scale mining Two years initially. Renewable for three further periods of one year at a time Life of project must be <2 years; areas must be <5ha and completed EMP Payment of royalties (from 2010). May not be leased or sold The South African government enacted the MPRDA on 1 May It defines the State s legislation on mineral rights and mineral transactions in South Africa. The Act emphasises that the government did not accept the existence of the historic dual State and private ownership of mineral rights in South Africa and, as such, the Act legislated that all mineral and petroleum resources in South Africa now vest in the State. Additional objectives of the Act include the promotion of economic growth, the development of resources to expand opportunities for the historically disadvantaged, and the socio-economic development of the areas in which mining and prospecting companies are operating. It also provides for security of tenure relating to prospecting, exploration, mining and production. A further objective of the Act was to advance BEE within South Africa s minerals industry, by encouraging mineral exploration and mining companies to enter into equity partnerships with BEE companies. The Act also makes provision for the implementation of social responsibility procedures and programmes by coal resource companies. The Act incorporated a use-it or lose-it principle, that has been applied to companies or individuals who held mineral rights or the rights to prospect and mine prior to 2004 (Old Order Rights). These Old Order Rights were required to be transferred within specified timeframes, under the provisions of the Act, into New Order Rights to prospect and mine. Once the State has granted the conversion of the Old Order Rights to New Order Rights, or has granted a New Order Right for new applications submitted after the implementation of the MPRDA, a Notarial Agreement between the State and the holder of the New Order Right is entered into. This Agreement sets out all the conditions associated with the New Order Right. New Order Rights can be suspended or cancelled by the Minister if, upon notice of a breach from the Minister of its obligations to comply with the MPRDA, or the conditions prescribed as part of its New Order Right, a breaching entity fails to rectify such a breach. In addition, in terms of the MPRDA, mining and exploration companies have to comply with additional responsibilities relating to environmental management and to environmental damage, degradation or pollution, resulting from their prospecting or exploration activities. Section 37 of the MPRDA establishes the framework for the inclusion of environmental management principles, with Section 39 establishing environmental management programme and EMP requirements. Requirements for the contents of exploration, scoping, Environmental Impact Assessment (EIA), EMPs and EMP reports are provided in Government Notice Regulations (GNRs) 49, 50, 51 and 52. Sections 41 to 47 of the MPRDA address legislative closure requirements. GNR 527 of the MPRDA addresses the financial provision for mine rehabilitation and closure and requires that the quantum of financial provision, to be approved by the Minister, must be based on the requirements of the approved EMP and include a detailed itemisation of all actual costs required for: 187

190 premature closure regarding: the rehabilitation of the surface of the area; the prevention and management of pollution of the atmosphere; the prevention and management of pollution of water and the soil; and the prevention of leakage of water and minerals between subsurface formations and the surface; decommissioning and final closure of the operation; and post closure management of residual and latent environmental impacts. GNR 527 establishes the requirements for the social and labour plan (SLP). Amongst other aims, the MPRDA strives to transform the mining and production industries. The Act requires the submission of the SLP as a prerequisite for the granting of mining or production rights. The SLP requires applicants for mining and production rights to develop and implement comprehensive human resources development programmes including employment equity plans, local economic development programmes and processes to protect jobs and manage downscaling and/or closure (DMR). Monitoring and performance assessments, and waste management principles inclusive of pollution control and waste management, and the management of mine residue stockpiles and deposits are also included within the scope of GNR 527. Blasting permits are required for any blasting activities as defined within the MPRDA Mineral and Petroleum Resources Development Amendment Act 49 of 2008 in 2008, an Amendment Bill proposed to make significant changes to the MPRDA. The Bill was signed by the President in 2009 but did not come into force at that time (Webber Wentzel, 2009). The 31 May 2013 Government Gazette noted the Act would come into force on 7 June 2013, but this announcement was followed by a further announcement in the 6 June 2013 Government Gazette that some of the amendments, including those relating to the transferability of MPRDA rights (which required ministerial approval) and the prohibition of the amendment of rights to include additional areas or minerals, would not come into effect. Van der Want (2013) suggests that the proclamation of this Act was an error. While not an exhaustive list, the Amendment Act is noteworthy because it addresses the following issues: It requires the prior written consent for disposal in various forms of a prospecting or mining right or an interest in such a right; It changes the duration of the reconnaissance permission from two years to one and allows a Regional Manager to reject a defective application with reasons within 14 days of receipt; It requires that the Minister refuse a prospecting right if there is a concentration of rights by the applicant and associated companies; It allows the Minister to impose further conditions on an applicant for mining rights to include participation by the community; It increases the area for which a mining permit can be issued to 5ha, but does not allow an applicant to have more than one mining permit on the same or adjacent land; It allows for the cancellation or suspension of mineral rights if there is non-compliance with the MPRDA; It discusses transitional arrangements for mineral rights, including documentary proof that holders of Old Order Mining Rights are in compliance with the BEE and socio-economic objectives of the MPRDA; It attempts to promote the development of input and downstream industries; It encourages the entry of HDSAs, including women and communities with interests or rights to land, into the industry; and It has various forward-looking environmental provisions that were to come into effect 18 months after the promulgation of the Act. These include: making the Minister of Mineral Resources responsible for environmental matters that relate to mining; requiring the simultaneous application for environmental authorisation with mineral tenure applications; and requiring a report on compliance with environmental authorisation with renewal applications (Legalbrief Today, 2013; Webber Wentzel, 2013). 188

191 Mineral and Petroleum Resources Development Draft Amendment Bill (2012) An explanatory summary of the 2013 Amendment Bill was published in the same Government Gazette that announced that the 2008 Amendment Act was to come into force. The 2013 Amendment Bill proposes amendments to the 2008 Amendment Act and is seen as an important indicator of likely future mineral policy in South Africa (Legalbrief Today, 2013). The Bill has seen a significant amount of comment from industry players who suggest that irregularities and ambiguities are contained within. While not an exhaustive list, some of the key changes that in the Bill are the following: The Minister is given the right to initiate beneficiation, including setting the level required for beneficiation, the price required for beneficiation, and the percentage of raw material inputs that are set aside for local beneficiators; Persons who intend to export designated minerals are required to obtain written approval for this from the Minister. The term is not defined, but is thought to refer to what was known as strategic minerals, or minerals defined periodically by the State to be of strategic importance to the country; Historic tailings, the ownership of which was contested by a high-profile De Beers court case, are now held in custody by the State rather than the historic producer of those tailings; Associated minerals, discovered in mining, can be mined by the primary mineral rights holder. Third parties are also permitted to apply for rights over associated minerals, but will have to notify the primary rights holder of the application; The right to a mineral deposit is sub-divisible, but consent as to the transfer of any interest is required from the Minister; Environmental requirements will be implemented under NEMA, and rights holders will be responsible for environmental liabilities even after a closure certificate has been issued by the Minister; Penalties for non-compliance with various mining-related legislation and requirements are set as a percentage of annual turnover and exports; The Minister is prohibited from granting a right where this would result in anti-competitive conduct and dominance by the applicant in a particular sector of the mining industry; The State has a right to a share in the annual profits derived from exploration or production from all new petroleum exploration and production rights; BEE objectives are required to be complied with in prospecting rights, where they were required to be complied with in only mining rights in the past; In the case of liquidation, mineral rights held fall within the insolvent estate but ministerial approval is required when they are transferred to a new owner; and Historically disadvantaged persons are redefined to exclude white women (Tucker and Sibisi, 2013; Leon, 2013). The MPRDA Amendment Bill was approved by Parliament in Broad-Based Socio-Economic Charter Promulgation of the Broad-based Socio-Economic Charter for the South African Mining Industry (also known as the Mining Charter) marked the end of protracted debates and varying interpretations of the legislation s requirements, paving the way for the full implementation of the MPRDA. All mining and prospecting companies are required to comply with the provisions of the Mining Charter. The objectives of the Mining Charter are to: promote equitable access to the State s resources by all the people of South Africa. It required that every mining company achieved a 15% level of ownership of its mining assets by historically disadvantaged South Africans (HDSAs) by 1 May 2009, and a level of 26% ownership by 1 May 2014; substantially and meaningfully expand opportunities for HDSAs, including women, to enter the mining and minerals industry and to benefit from the exploitation of the nation s resources. In terms of this requirement, 40% of management roles were to be held by HDSAs by 2010; expand the skills base of HDSAs to serve the community; promote employment and advance the social and economic welfare of mining communities, and the major areas from which labour is drawn to carry out exploration or mining; and promote the beneficiation of South Africa s mineral commodities, whereby the companies which have facilitated downstream, value-adding activities for products they mine, could achieve an offset against the HDSA equity participation requirement. Most mining companies are already implementing their own empowerment strategies. These strategies demonstrate their best endeavours to consider the issues and a willingness to accommodate the requirements when they are finally defined. Compliance with the Mining Charter is measured using a designated scorecard, which provides a practical framework against which the Minister can assess whether a company actually measures up to what was intended in the MPRDA and the Mining Charter. 189

192 Amendment of the Broad-Based Socio-Economic Empowerment Charter (2010) The Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (the Charter Amendment) was released in September It was unsurprising that it retained the minimum target of 26% HDSA ownership of mining assets by However, an offsetting of HDSA ownership by as much as 11% is now possible depending on the extent of a company s beneficiation strategies. BEE procurement targets in the Amendment are as follows: A minimum of 40% of capital goods will have to be sourced from BEE entities by 2014; and 70% of services and 50% of consumer goods will have to be purchased from BEE entities by in addition, multinational suppliers of capital goods will have to contribute 0,5% a year of their annual income from South African mining firms towards a socio-economic development fund. HDSA targets for employment equity are also further refined and a minimum of 40% HDSA demographic representation is stipulated for executive management, senior management, core and critical skills, middle management and junior management by Specific annual targets are noted for human resources development, since a percentage of the annual payroll (excluding the mandatory skills levy) will have to be spent on skills development activities and be reflective of South Africa s demographics. Skills expenditure, as a percentage of payroll, increases by 0,5% each year, with an initial target of 3% of payroll in 2010, rising to 5% by The expenditure is intended to support South African-based research and development initiatives focused on solutions in sectors such as exploration, mining, processing, technology efficiency in the use of water and energy in mining, beneficiation and environmental conservation and rehabilitation. The Charter Amendment also supports SLPs by insisting on: an ethnographic community consultative and collaborative process prior to the start of a mining project; and a community development needs analysis, together with mining communities, of projects to be implemented in support of integrated development plans, the spend of which should be proportionate to the size of the mining investment. The Charter Amendment also calls for an upgrade of hostels to family units, a one-person-per-room occupancy rate, and support for home ownership options all of which should be implemented by Environmental management and an improvement in the industry s health and safety performance are also highlighted, and best-practices in these areas are specifically mentioned. The Charter Amendment also calls for annual reporting by mining companies on their levels of compliance with the Mining Charter, and notes that non-compliance with the Charter and the MPRDA will result in mining companies being in breach of the MPRDA Promotion of Beneficiation Bill This is still being prepared, and is expected to provide incentives for upstream companies that facilitate downstream investments, in order to reduce the exporting of unprocessed mineral products and to promote local value addition Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRRA) This piece of legislation incorporates the government s intention to impose royalties on revenues derived from mineral production in South Africa. Enacted in 2008, the MPRRA was initially set to be implemented in May However, in an effort to mitigate job losses in the mining sector during the global financial crisis, the government decided to postpone the implementation of the new mineral and mining royalty regime until 31 March The main purpose of the Act was to provide legislation for the collection of royalties from mines, developed and operated in terms of the New Order Mining Right (NOMR), granted through the MPRDA process. The Act distinguishes between refined and unrefined resources, where refined minerals have been refined beyond a condition specified by the Act, and unrefined minerals have undergone limited beneficiation as specified by the Act. The royalty is determined by multiplying the gross sales value of the extractor, in respect of that mineral resource, in a specified year, by the percentage determined by the royalty formula. Both direct operating expenditure (Opex) and capital expenditure (Capex) incurred is deductible for the determination of earnings before interest and tax (EBIT). The quantum of the revenue royalty on all minerals is dependent on the profitability of the company based on the following formula. For refined mineral resources the formula is:- Royalty rate = 0,5 + EBIT x 100 Gross sales (refined) x 12,5 The maximum percentage for refined mineral resources is 5%. For unrefined mineral resources the formula is: Royalty rate = 0,5 + EBIT x 100 Gross sales (refined) x 9 The maximum percentage for unrefined mineral resources is 7%. 190

193 Institutional and administrative environmental and social regulatory structures The government of South Africa is divided into national, provincial and local spheres which address environmental and social regulatory elements within the country. These spheres are distinct, but are closely interdependent and interrelated. The South African Constitution allocates legislative and administrative functions to all three spheres of government, providing for a broad and diverse platform from which government agencies can responsibility manage environmental and social aspects. The national elections, held in 2009, resulted in the allocation of environmental responsibility at national level to the Department of Water and Environmental Affairs (DWEA). Within this new ministerial function, there are two autonomous departments, namely, the Department of Water Affairs (DWA) and the Department of Environmental Affairs (DEA) (Patel, 2011). The National Environmental Advisory Forum and the Committee for Environmental Coordination are advisory bodies established by NEMA. The former has been established to advise the Minister on any matter concerning environmental management and governance, with the latter mandated to promote the integration and coordination of environmental functions by the relevant organs of state (Patel, 2011). The latter committee has not yet been constituted environment Conservation Act (Act 73 of 1989) (ECA) (Section 25 Noise Regulations) ECA served as the national legislative environmental framework prior to the promulgation of NEMA in The majority of ECA has been repealed by NEMA, its subsidiary legislation and other Acts. Section 25 of ECA, which addresses noise and the associated regulations (GNR 154 of 1992), are still in effect. The Act and associated regulations control noise and regulate procedures relating to noise impact and nuisance. Section 4 of the regulations prohibits the generation of noise, or the allowance of noise produced or caused by any person, machine, device or apparatus or any combination thereof (ECA, 1989). Section 5 of GNR 154 of 1992 regulates the creation of a noise nuisance National Environmental Management Act (Act 107 of 1998) (NEMA) NEMA was promulgated in 1998 to replace ECA as the overarching national environmental legislative framework. NEMA was promulgated to give effect to the Environmental Management Policy (published in 2007), and has been subsequently amended, including the National Environmental Management Amendment Act of 2003, and the National Environmental Management Second Amendment Act, Act 8 of The EIA Regulations made in terms of ECA were replaced in 2006 by new EIA Regulations made in terms of Chapter 5 of NEMA. These Regulations have subsequently been revised and gazetted in GNR 543 on 18 June Regulations 543, 544, 545 and 546 establish the processes to be followed to obtain an environmental authorisation and the listed activities requiring authorisation. it should be noted that previously, mining authorisations, including environmental authorisations for mining, were issued under the MPRDA and the DEA was involved, through cooperative governance mechanisms, as a commenting agency. However, this process is currently undergoing a three-stage process of change in terms of the new provisions in the National Environmental Management Amendment Act (Act 62 of 2008) (Patel, 2011). Phase 1 details that the status quo will remain until the MPRDA amendments come into effect, with Phase 2 then coming into effect for an 18-month period. In this time, all new mining, exploration and production rights applications and renewals thereof will have to comply with the NEMA EIA Regulations, but the competent authority will remain the Minister of Mineral Regulation. However, the Minister for Water and Environmental Affairs would hear any appeals. Thereafter, in Phase 3, it is envisioned that the DEA becomes the competent authority. As such, the future potential exists for the transfer of responsibility for environmental permitting from the DMR to the DWEA. Changes relevant to Bauba s assets at the time of transition will consist of the inclusion of mining as a listed activity and integrated environmental licensing. The principles set out in Section 2 of Chapter 1 of NEMA underpins all other related Acts and policies and form the basis of sustainable development in the country. These principles are also applicable to all organisations wishing to obtain an environmental authorisation and operate within the South African legislative framework. Chapter 5 of NEMA establishes the regulatory framework for integrated environmental management. Section 24 of NEMA establishes the requirements for obtaining environmental authorisations for listed activities, with the inclusion of undertaking impact assessment studies activities listed in terms of R544, R545 and R546. Section 24 also outlines the minimum conditions attached to environmental authorisations, monitoring and performance assessment requirements, and the procedure for mine closure on environmental authorisation. Chapter 7 of NEMA establishes compliance and enforcement, with Part 1, Section 28, detailing the duty of care principle (encompassing the remediation of environmental damage). 191

194 National Environmental Management: Waste Act (Act 59 of 2008) (NEM:WA) Chapter 5 of NEM:WA states that a licence is required to establish and operate a waste disposal site. Chapter 5 establishes the procedures and requirements (in terms of footprint, volume, and waste type) for the licensing of waste management activities, inclusive of the storage, transfer, recycling, treatment and/or disposal of waste. Waste that has been excluded from the Act and its associated regulations includes radioactive waste and mine waste residue. Regulations to manage contaminated land are currently being drafted, which may have future potential implications for Bauba in terms of greater licensing and management requirements. Section 19 of the Act establishes activities which require a waste management licence. The activities listed include the following categories: Storage of waste; Reuse, recycling and recovery; Treatment of waste; Disposal of waste; Storage, treatment and processing of animal waste; and Construction, expansion or decommissioning of facilities and associated structures and infrastructure. Each of the listed activities has a threshold which would trigger the need for a waste management licence (various parameters are defined, inclusive of such thresholds as volumes, time, and throughputs). The Act provides considerations for all holders of any waste type. A holder of waste, must, within the holder s power, take all reasonable measures to: avoid the generation of waste and where such generation cannot be avoided, to minimise the toxicity and amounts of waste that are generated; reduce, reuse, recycle and recover waste; where waste must be disposed of, ensure that the waste is treated and disposed of in an environmentally sound manner; manage the waste in such a manner that it does not endanger health or the environment or cause a nuisance through noise, odour, or visual impacts; prevent any employee or any person under his or her supervision from contravening the Act; and prevent the waste from being used for unauthorised purposes. Regulations to manage contaminated land are currently being drafted, which may have future potential implications for Bauba in terms of greater licensing and management requirements National Water Act (Act 36 of 1998) (NWA) The NWA stipulates that a Water Use Licence (WUL) is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act. Use of water for mining and related activities is also regulated through regulations that were updated after the promulgation of the NWA in 1999 Government Notice (GN) 704. GN 704 addresses the regulations on use of water for mining and related activities aimed at the protection of water resources (DWAF, 2007). Inclusive within GN 704 are the control measures for activities and its regulation of the sizing, control and monitoring of water management measures National Environmental Management: Air Quality Act (Act 39 of 2004) (NEM:AQA) The National Environmental Management: Air Quality Act (NEM:AQA, Act 39 of 2004) results from the promulgation of the NEMA. The Act serves as the dominant legislative tool for the management of air pollution and related activities, and defines listed emission activities which require licensing. The overall objectives of the Act are to protect the environment by providing reasonable measures for: protection and enhancement of the quality of air in the Republic; prevention of air pollution and ecological degradation; securing ecologically sustainable development while promoting justifiable economic and social development; and giving effect to Section 24(b) of the Constitution to enhance the quality of ambient air for the sake of securing an environment that is not harmful to the health and wellbeing of people. The South African government has established National Ambient Air Quality Standards in Government Notice The standard provides for various emission limits, inclusive of particulate matter (PM 10 ), ozone (O 3 ), carbon monoxide (C O ), sulphur dioxide (SO 2 ), and nitrogen dioxide (NO 2 ). 192

195 National Heritage Resources Act (Act 25 of 1999) (NHRA) The South African Heritage Resources Agency (SAHRA) of 1999 (Act 25 of NHRA) provides for the protection of all recognised heritage resources of South Africa that have been identified as culturally significant, or are of other special value. The Act provides an integrated system for the management of national heritage resources. Section 38 of the NHRA states that any person who intends to undertake a development must at the earliest stages of the development, notify the responsible Heritage Resources Authority and furnish it with details regarding the location, nature, and extent of the proposed development. Categories of heritage resources are recognised as part of the National Estate in Section 3 of the NHRA, and include: geological sites of scientific or cultural importance; objects recovered from the soil or waters of South Africa, including archaeological and paleontological objects and material, meteorites and rare geological specimens; and objects with the potential to yield information that will contribute to an understanding of South Africa s natural or cultural heritage National Environmental Management Biodiversity Act (Act 10 of 2004) (NEMBA) The State promulgated NEMBA to provide for: the management and conservation of South Africa s biodiversity within the framework of the NEMA; the protection of species and ecosystems that warrant national protection; the sustainable use of indigenous biological resources; the fair and equitable sharing of benefits arising from bio-prospecting involving indigenous biological resources; the establishment and functions of a South African National Biodiversity Institute; and for matters conducted therewith. Specifically, NEMBA has the following goals: Manage, conserve, and sustain South Africa s biodiversity and its components and genetic resources; and Progressive realisation of the objectives identified through the implementation of the Act. The piece of legislation is underpinned by various objectives described below. NEMBA provides for the management and conservation of biological diversity within the Republic and of the components of such biological diversity, and promotes the use of indigenous biological resources in a sustainable manner, in conjunction with the fair and equitable sharing among stakeholders of benefits arising from bio prospecting involving indigenous biological resources. NEMBA aims to give effect to ratified international agreements relating to biodiversity which are binding in the Republic to provide for co-operative governance in biodiversity management and conservation, and to provide for a South African National Biodiversity Institute (SANBI) to assist in achieving the objectives of this Act. 15. Global Platinum Group Metals Market Review SR5.8A(i); SV Supply South African PGM reserves are the most significant globally, followed by the reserves of the US, Canada and other countries (Table 4). South African production of platinum also dominates global production, followed by the platinum production of Russia, Zimbabwe, Canada and others (Table 5). Russia, meanwhile, dominates in the production of palladium, with South Africa producing the next largest volume of palladium (Table 5). table 4: Estimated global PGM reserves in 2012 Country Pgm reserves (kg) South Africa Russia United States Canada Other countries Total Source: Loferski (2013) 193

196 table 5: Estimated global PGM production for 2011 and 2012 Mine production (kg) Platinum Palladium Country e e South Africa Russia Zimbabwe Canada United States Colombia NA NA Other countries Total Source: Loferski (2013). e = Estimated. NA = Not available. South Africa s production of platinum and palladium fell between 2011 and 2012, and this has been attributed to strikes and safety stoppages (Table 6). Total South African PGM production for the first half of 2013 represented ~46% of the South African PGM production for However, Johnson Matthey suggests that South African platinum production will rise by 1% in table 6: South African PGM production (2012 and H1 2013) Production Local sales Export sales Total sales Element Mass (kg) Mass (kg) Value (zar) Mass (kg) Value (zar) Mass (kg) Value (zar) Iridium * * * * Osmium * * * * * * * Palladium * * Platinum * * Rhodium * * Ruthenium * * * * Total * * Iridium Osmium Palladium Platinum Rhodium Ruthenium Total H Source: DMR(2013). * = classified. Recycling also continues to be an important source of PGM supply. 194

197 15.2. Demand Demand for PGMs comes from various applications, including the autocatalyst and jewellery sectors, which consume the largest volume of PGMs (Table 7). Both of these showed a year-on-year decrease in demand between 2012 and Demand for PGMs as a whole, however, grew from ~8.0Moz to ~8.4Moz between 2012 and table 7: Supply and demand for PGMs ( ) Country Supply ( 000oz) South Africa Russia North America Zimbabwe Others Total supply Gross demand by application 4 ( 000oz) Autocatalyst Chemical Electrical Glass Investment Jewellery Medical and biomedical Petroleum Other Total gross demand Recycling 6 ( 000oz) Autocatalyst Electrical Jewellery Total recycling Total net demand Movements in stocks Source: Cowley (2013), Notes provided by Cowley (2013) 1 Supply figures represent estimates of sales by the mines of primary PGM and are allocated to where the initial mining took place rather than the location of refining. Additionally, Johnson Matthey continues to report sales of metal which the company believes have not previously been priced, principally sales of Russian state stocks, as supplies. 2 Johnson Matthey s Russian supply figures represent the total PGM sold in all regions, including Russia and the ex-cis. Demand in Russia and the ex-cis states is included in the Rest of the World region. Russian supply figures for palladium have been split into sales from primary mining and sales of stocks. 3 Supplies from Zimbabwe have been split from Others supplies. PGM mined in Zimbabwe are currently refined in South Africa, and Johnson Matthey s supply figures represent shipments of PGM in concentrate or matte, adjusted for typical refining recoveries. 4 Gross demand figures for any given application represent the sum of manufacturer demand for metal in that application and any changes in unrefined metal stocks in that sector. Increases in unrefined stocks lead to additional demand, reductions in stock lead to a lower demand figure. 5 Johnson Matthey s Medical and biomedical category represents combined metal demand in the medical, biomedical and dental sectors. 6 Recycling figures represent estimates of the quantity of metal recovered from open loop recycling (i.e. where the original purchaser does not retain control of the metal throughout). For instance, autocatalyst recycling represents the weight of metal recovered from end-of-life vehicles and aftermarket scrap in an individual region, allocated to where the car is scrapped rather than where the metal is finally recovered. These figures do not include warranty or production scrap. Where no recycling figures are given, open loop recycling is negligible. In Johnson Matthey s recycling charts, Johnson Matthey label s recovery of electrical scrap as industrial recycling. 7 Net demand figures are equivalent to the sum of gross demand in an application less any metal recovery from open loop scrap in that application, whether the recycled metal is reused in that industry or sold into another application. Where no recycling figure is given for an application, gross and net demand are identical. 8 Movements in stocks in any given year reflect changes in stocks held by fabricators, dealers, banks and depositories but excluding stocks held by primary refiners and final consumers. A positive figure (sometimes referred to as a surplus ) reflects an increase in market stocks. A negative value (or deficit ) indicates a decrease in market stocks. 9 Average price figures for platinum and palladium are the mean of all daily fixing values in a given year except for 2013 which covers the period January to September inclusive. Average price figures for rhodium, ruthenium and iridium are based on Johnson Matthey European Base Prices. 195

198 15.3. Price PGM prices have historically been affected by workers strike actions in South Africa, since prices have become elevated historically through concerns that supply of PGMs are going to be affected (Loferski, 2013). However, 2013 platinum and palladium markets reacted more to monetary policy, particularly in the US, than to supply-demand fundamentals (Johnson Matthey, 2013). The anticipated price rises, as a result of industrial relations tensions and reduced production, did not occur. The platinum, palladium and rhodium prices over a five year period are shown in Figure 7, Figure 8 and Figure 9. The recent price history for PGMs shows a declining trend over the last 12 months in USD terms, although this is somewhat offset by the weakening ZAR. Figure 7 : Platinum price graph Source: INet Bridge (2012) Figure 8: Palladium price graph Source: INet Bridge (2012) Figure 9: Rhodium price graph Source: INet Bridge (2012) 196

199 15.4. Outlook Johnson Matthey s Platinum Today outlines that primary supplies of platinum and palladium are unlikely to grow significantly in There will continue to be production capacity constraints as there will be a reduction in platinum production capacity at key South African producer Anglo American Platinum Limited as well as a reduction in primary palladium supplies due to the lack of Russian stock sales (Cowley, 2013). As far as autocatalysts go, new European diesel emissions limits will boost platinum sales to Europe. Palladium demand stemming from the automotive sector is expected to remain strong as a result of double digit car sales growth coming from China (Cowley, 2013). There is expected to be lower palladium demand from the jewellery sector meanwhile, but there is believed to be strong potential for platinum jewellery demand growth from China and India (Cowley, 2013). 16. Northern Cluster The Northern Cluster is in an early stage exploration project and is situated in the North-Eastern Limb of the BC in South Africa Location and access SR1.2A(i); SR1.5A(i); SV2.3 The Northern Cluster is located approximately 96km southeast of Polokwane, the capital of the Limpopo province of South Africa. The project is situated approximately 40km southwest of Steelpoort and 91km southeast of Mokopane. The project can be accessed via a sand road off the R37 between Lydenburg and Polokwane (Figure 2 and Figure 4). The Northern Cluster is situated on the farms Schoonoord 462KS, Indie 474KS, Zwitzerland 473KS and Fisant Laagte 506KS over which a PR has been granted to Hlabirwa, extending over an area of 7 693ha Topography SR1.6A(i); SR1.6A(ii), SR1.6B(i) The Northern Cluster has an elevation difference of approximately 470m across the project, varying from 800 mamsl to 1 270mamsl. The area is rugged and mountainous and consists of both peaks and valleys. Venmyn Deloitte is of the opinion that neither the topography of the project area nor the climate experienced in the region, offer any risk to the continued exploration and potential development of the project Legal aspects and tenure SR1.7A(i-iv); SR5.1A(i); SR5.2B(i-ii); SV Ownership The Northern Cluster is 100% held by Hlabirwa through a Prospecting Right, of which Bauba has a 60% shareholding, therefore Bauba has a 60% shareholding in the Northern Cluster Mineral tenure SR1.2A(i); SR1.7A(i) The Prospecting Right was issued in June 2006 to King Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela, as representatives of Sekhukhune Rhyne Thulare for and on behalf of the Bapedi Nation. The Prospecting Right was ceded to Hlabirwa on 9 April This was due to expire on 6 July 2011 but was renewed on 18 July The Prospecting Right expires on 17 July Hlabirwa has now entered into a binding agreement with Bauba where Bauba will hold a 60% direct and indirect share in Hlabirwa (Table 1). Full Prospecting Right details have been summarised in Table Surface rights SR1.7A(i); SR1.7A(ii) Bauba does not hold surface rights to the Northern Cluster. Access to the farm has been negotiated with the farm owners Royalties SR1.7A(ii) There are no private royalties payable for the Northern Cluster. State royalties, as per the MPRDA (Section ), are payable Material contracts SR1.7A(ii) Venmyn Deloitte is not aware of any material contracts pertaining to the Bauba Northern Cluster Other legal issues SR1.7A(iii); SR1.7A(iv) Venmyn Deloitte has not been made aware of any land claims, litigation or competing rights associated with the Bauba project areas. To the best of Venmyn Deloitte s knowledge and understanding, Bauba is in possession of all the permits and state aurthorisations that are required for the the current status of exploration Local geological setting SR2.3A(i); SR2.3A(ii); SR4.1A(i-iv); SV2.5 The geological setting of the Bauba Platinum Project is broadly understood. Reconnaissance mapping carried out by S Gain has confirmed that the farms lie in the Main and Upper Zones of the BC. The Critical Zone, which is known to host both PGM targets, the Merensky Reef and the UG2, lies directly below the Main Zone. This can be seen in Figure 10 and Figure 11. Throughout the BC the PGM and other mineral layers are tabular bodies extending laterally over hundreds of square kilometres, resulting in extensive mineral resources whose continuity has been established over years of exploration and mining. Using exploration information from public domain of companies surrounding the Bauba clusters, a series of reef contours was constructed by S Gain and used to predict the behaviour of the mineralisation on the farms. The two PGM layers are expected to have dips ranging between 18 west in the south-east and 30 south-west in the north-west under the Northern Cluster farms. Two diapiric structures, the Paradys and the Phoshiri domes are thought to have deformed the Critical Zone rocks close to the outer edges of the Northern and Central Clusters, providing an uplift of the host rocks closer to surface than the norm for the area. The effect of the dome is illustrated in Figure

200 The precise extent of the structural complexity of the area will be a focus of the technical assessment of the area by Bauba Deposit type and mineralisation The mineralised Merensky Reef and UG2 are magmatic and layered, segregation deposits containing economic quantities of PGMs and base metals. The PGMs are associated with chromite and base metal sulphides Depth of mineralisation The Merensky layer is expected to be between to 2 500m below surface in the Northern Cluster and the parting between the Merensky Reef and the UG2 is expected to be about 390m. A schematic cross section of the Eastern BC including the Bauba Northern Cluster PGE prospects is shown in Figure 11. The section is important to illustrate the disposition of the chrome, Merensky and UG2 mines in the area and the extent to which Bauba s strategy to explore the deeper extension of the existing operation is technically feasible. The figure also illustrates how the reefs outcrop on surface on the adjacent Ga-Pasha property. 17. CENTRAL CLUSTER The Central Cluster is an early exploration project, situated in the North-Eastern Limb of the BC in South Africa, located between the Northern and Southern Clusters Location and access SR1.2A(i); SR1.5A(i) The Central Cluster is situated approximately 4.5km southeast of the Northern Cluster, 43km northwest of Burgersfort and 79km northwest of Lydenburg. The Southern Cluster is located 9km southeast of the Central Cluster and 23km northwest of Steelpoort (Figure 2 and Figure 4) Topography SR1.6A(i), SR1.6A(ii), SR1.6B(i) The Central Cluster has an elevation difference of approximately 220m across the project, varying from 980 to 1,200mamsl. The area is generally rugged terrain. Venmyn Deloitte is of the opinion that neither the topography of the project area nor the climate experienced in the region, offer any risk to the continued exploration and potential development of the project Legal aspects and tenure SR1.7A(i-iv); SR5.1A(i); SR5.2B(i-ii) SV Ownership The Central Cluster is 100% held by Hlabirwa, which is 60% held by Bauba. Figure 10: East-West section illustrating the effect of the Phoshiri Dome on the stratigraphy 198

201 Mineral tenure SR1.2A(i); SR1.7A(i) The Prospecting Rights, 248/2006PR and 256/2006PR were issued in June 2006 to King Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela, as representatives of Sekhukhune Rhyne Thulare for and on behalf of the Bapedi Nation. The two Prospecting Rights were ceded to Bauba on 9 April These were due to expire on 6 July 2011 but were renewed on 18 July The Prospecting Right expires on 17 July Hlabirwa has now entered into a binding agreement with Bauba where Bauba will hold a 60% direct and indirect share in Hlabirwa (Table 1). Full Prospecting Right details have been summarised in Table Surface rights SR1.7A(i); SR1.7A(ii) Bauba does not hold surface rights to the Central Cluster Royalties SR1.7A(ii) There are no private royalties payable for the Central Cluster. State royalties, as per the MPRRA (section ), are payable Material contracts SR1.7A(ii) Venmyn Deloitte is not aware of any material contracts pertaining to the Bauba Central Cluster Other legal issues SR1.7A(iii); SR1.7A(iv) See section To the best of Venmyn Deloitte s knowledge and understanding, Bauba is in possession of all the permits and state authorisations that are required for the current status of exploration Local geological setting SR4.1A(i-iv); SV2.5 As mentioned earlier, the farms lie in the Main and Upper Zones of the BC and the Merensky Reef and UG2 PGE targets lie directly below the Main Zone (Figure 10 and Figure 11). Using exploration information from public domain of companies surrounding the Bauba properties, a series of reef contours were constructed by S Gain and used to predict the behaviour of the mineralisation on the Central Cluster. These showed that the reefs should have shallowed to dips of about 11 to 12 to the west compared to the Northern Cluster. The Central Cluster area is traversed by faults and dykes and has a known presence of unconformable pegmatoids on adjacent properties. Destructive intrusions in the form of IRUP (iron rich replacement pegmatites) are recorded on the adjacent Marula Platinum property. These together with potholes have been known to disturb the Critical Zone on the Eastern Limb. However, the two diapiric structures, the Paradys and the Phoshiri domes are thought to have deformed the Critical, Main and Upper Zone rocks close to their outer edges, providing an uplift of the host rocks closer to surface than the norm for the area. S Gain predicts that this could influence the continuity of the mineralization through structural influences, especially closer to the western sides of the Central Cluster. Bauba will assess this area through their exploration programme Deposit type and mineralisation See section

202 Figure 11: East-West sections over the Bauba project areas Depth of mineralisation The first intersections of the Merensky are expected to be between 1 400m and 2 400m below surface under the Central Cluster and the parting between the Merensky Reef and UG2 is expected to be 400m. A schematic cross section of the Eastern BC including the Bauba Central Cluster PGE prospects is shown in Figure 11. The section through line C-D is important to illustrate the disposition of the chrome, Merensky and UG2 mines in the area and the extent to which Bauba s strategy to explore the deeper extension of the existing operation is technically feasible. 200

203 18. Southern Cluster The Southern Cluster is an exploration project, situated in the BC in South Africa. The Southern Cluster is located in the North-Eastern Limb of the BC, south of the Northern and Central Clusters Location and access SR1.2A(i); SR1.5A(i) The project is situated 9km southeast of the Central Cluster project, approximately 23km northwest of Steelpoort and 245km northeast of Johannesburg. The Southern Cluster is located on the farms Grootvygenboom 204KT, Genokakop 285KT and Houtbosch 323KT which cover an area of 4 626,55ha. Please note that the Houtbosch Farm is not included in the current Prospecting Right. The Prospecting Right for Houtbosch has been granted but not executed and as such no work has been completed on the farm Houtbosch. The Cluster is bordered to the east by Nkwe Platinum (Figure 2 and Figure 4) Topography SR1.6A(i), SR1.6A(ii), SR1.6B(i) The Southern Cluster has an elevation difference of approximately 400m across the project, varying from 1 487mamsl to 1 886mamsl. The area consists of rugged terrain interspaced with flat lying valleys.venmyn Deloitte is of the opinion that neither the topography of the project area nor the climate experienced in the region, offer any risk to the continued exploration and potential development of the project Legal aspects and tenure SR1.7A(i-iv); SR5.1A(i); SR5.2B(i-ii) SV2.3; JSE12.9(h)(iv) Ownership The Southern Cluster is 100% held by Hlabirwa in which Bauba has a 60% attributable share Mineral tenure SR1.2A(i); SR1.7A(i) The Prospecting Right 256/2006PR was issued in June 2006 to King Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela, as representatives of Sekhukhune Rhyne Thulare for and on behalf of the Bapedi Nation. This was due to expire on 6 July 2011 but was renewed on 18 July The Prospecting Right expires on 17 July Hlabirwa has now entered into a binding agreement with Bauba where Bauba will hold a 60% direct and indirect share in Hlabirwa (Table 1). Full Prospecting Right details have been summarised in Table 1. in 2010 there was a review application in the High Court brought by Rustenburg Platinum Mines Limited (RPM) and ARM Mining Consortium Limited against a decision of the DMR and citing certain other Parties in respect of the refusal of the DMR of an application to grant prospecting rights in respect of certain farms. Some of these farms form part of the Southern Cluster in respect of which the DMR has, since the refusal to grant the applications for prospecting rights by RPM and ARM, granted prospecting rights to Bauba (the Southern Rights). Those prospecting rights have been notarially executed and have been registered in the Mining Title Office in the name of Bauba. Bauba is not a party to, nor has it been cited in the High Court application. Accordingly, the parties have no reason not to proceed with the transaction recorded in the acquisition agreement on the terms and conditions stipulated Surface rights SR1.7A(i); SR1.7A(ii) Bauba does not hold surface rights to the Southern Cluster Royalties SR1.7A(ii) There are no private royalties payable for the Southern Cluster. State royalties, as per the MPRRA (Section ), are payable Material contracts SR1.7A(ii) Venmyn Deloitte is not aware of any material contracts pertaining to the Bauba Southern Cluster Other legal issues SR1.7A(iii); SR1.7A(iv) See Section Local geological setting SR2.3A(i); SR2.3A(ii); SR4.1A(i-iv); SV2.5 Using exploration information from public domain of companies surrounding the Southern Cluster, a series of reef contours was constructed by S Gain and used to predict the behaviour of the mineralisation on the farms. These showed that both the Merensky Reef and the UG2 layer should have shallowed to dips of about 70 to 80 west under the Southern Cluster farms. The southern area of the Eastern BC is traversed by faults and dykes and has a known presence of unconformable pegmatoids on adjacent properties. These together with potholes have been known to disturb the Critical Zone on the Eastern Limb. The precise extent of the structural complexity of the area will be a focus of the technical assessment of the area Deposit type and mineralisation See Section Depth of mineralisation The Merensky layer is expected to be at least 1 050m to 2 150m below surface in the Southern Cluster and the parting between the Merensky and UG2 is expected to be between 350 and 365m. Of the three Clusters, mineralisation should be closest to surface under the Southern Cluster. A schematic cross section of the Eastern BC including the Bauba Southern Cluster PGE prospect is shown in Figure 11. The section is important to illustrate the disposition of the chrome, Merensky and UG2 mines in the area and the extent to which Bauba s strategy to explore the deeper extension of the existing operation is technically feasible. The figure also illustrates how the reefs outcrop on surface on the adjacent Nkwe and Modikwa properties 201

204 19. Exploration Recent exploration SR2.1A(i); SR2.1B(i); SR2.3A(i); 2.3A(ii) SR2.3B(i); SR2.5A(i-ii); SR 2.5B; SR3.2A(i-vi) Recent exploration refers to all exploration carried out since the project was acquired by Bauba in A total of ten boreholes have been completed on the three Clusters. Due to the depth of the deposit at the projects and the lack of outcrop, no significant mapping has been completed. Initial work included the acquisition and interpretation of all available data and the compilation of a Geographic Information Systems (GIS) database. This information comprised: 1: geological mapping by the Council for Geoscience; LandSat images; Government aeromagnetic data and their interpretation; line results from a ground magnetic survey over the farm Genokakop; and 1: aerial photographs and their interpretation. Large-scale structures were delineated through interpretation of LandSat and aeromagnetic imagery. This highlighted a series of dykes and fault structures. The topography in the project areas has proven to be an important factor influencing the location of and access to borehole drilling sites. Preliminary diamond drilling in areas of good access was planned to achieve an inter-hole spacing of approximately 2 000m. Three boreholes (BAU040, BAU041 and BAU042), each with a mother hole and a total of eight deflections, were completed on the Northern Cluster in These results have been used to upgrade a portion of the Exploration Results declared in 2012 to Inferred Mineral Resources. A total of three boreholes (BAU021, BAU022 and BAU026) were completed on the Central Cluster and a total of four boreholes (BAU002, BAU004, BAU006 and BAU012) were completed on the Southern Cluster in The Mineral Resources for the Southern Cluster UG2 have been reduced following the review of the resource extent. The location of the boreholes completed is indicated on Figure 12. The first phase of exploration was carried out by and managed by S Gain, commencing in The aim of the programme was to increase the geological knowledge of the property. Each drilling site was mapped and a magnetometer survey was carried out using a GPS for orientation. Geological data was acquired whilst the diamond drilling was underway. The most recent aerial photography was acquired by S Gain, as stereoscopic pairs, and enlarged to a scale of 1: A digital reconnaissance geological map of the total project area was produced based on mapping, using the aerial photography as a base map. Field traverses using a portable magnetometer were conducted to better define the positions of dykes, faults and ultra-mafic pegmatoids are to be conducted as part of the ongoing exploration. The results obtained were plotted onto 1:10,000 maps Remote exploration A detailed aeromagnetic survey, under the supervision of GAP Geophysics, was conducted on the Garatau farm during Garatau is up-dip of Bauba s Southern Cluster. This detail has been included for completeness, as the dykes and faults may extend down-dip into the project area. Their continuity can be estimated with a low confidence but this assists in determining specific geological features of interest and key features to expect in the region. Line spacing of the aeromagnetic survey was 50m and the ground clearance was 20 to 30m. This work, together with diamond drilling, has allowed for the production of a map in which the general structural setting is defined. This work has determined the following: The dip for both the Merensky Reef and the UG2 increases with depth. The measurements on Maandagshoek showed an average dip of 9 to 10ºW; The airborne magnetic information, combined with SPOT and conventional airborne photography and ground mapping, show the strike of the deposit to be NNW-SSE; Dykes of a Karoo to post-karoo age occur in the region. Two prominent dykes on Garatau trend N-S and show a positive magnetic polarity. The dykes are vertical to sub-vertical. If there is a dip, it is towards the east; The dolerite dykes intrude along fault lines and structural zones of weakness. Displacements (faulting) are generally minimal, although one dyke on Garatau shows a 65m normal throw; and Various ultramafic pipes occur on Maandagshoek and Garatau. There is no information on their composition and whether they have been tested for their PGM content. 202

205 Figure 12: Location of boreholes Surveying methods SR2.2A(i) Drill-hole collar positions were surveyed by a professional surveyor, whilst down-hole surveys of the drill-hole path were performed by BCR Surveys Limited. The accuracy and quality of the drill-hole collar and down-hole surveys was thus considered acceptable. 203

206 Diamond drilling in 2010 a phased diamond drilling programme commenced, with a total of 15 boreholes amounting to m expected to be drilled initially. The borehole plan for the fifteen boreholes is shown in Figure 12. Only 10 of the 15 holes have been completed to date and the end of hole depths and intesectionwidths are shown in tt. Diamond drilling campaign was undertaken by Discovery Drilling Proprietary Limited under the supervision of Hennie Coetzee. The average core recovery ranged between 98,5% and 100% and the campaign has yielded to date: 4 diamond drill-holes drilled within the Southern Cluster project area; 1 diamond drill-hole within the Central Cluster project area, with 2 further boreholes in progress; 2 assayed and validated UG2 boreholes (total intersections including deflections: 6) 4 assayed and validated Merensky boreholes (total intersections including deflections: 10); 14.6km of diamond drill core; and 440 samples collected from the reef intersections. The Southern Cluster drilling programme was managed by Bauba. A secure core handling facility was established on the Central Cluster. The cable diamond drill was equipped with an NQ3 drillcrown that produced a 45mm diameter drillcore. The requirements for the drilling company were as follows: Geologist pegged out the borehole positions in the field using planned positions and GARMIN 60CSxGPS instrument; Pegs were clearly marked with the specific borehole number; Geologist produced borehole startnote from Micromine; Geologist signed startnote and made sure that all responsible persons signed; Geologist supplied the contractor with borehole startnote; On receipt of startnote, the contractor moved the drill into position, rigged the drill and started drilling; Percussion drilling: contractor collected percussion chip samples from every metre and stacked them in rows: from left to right, top to bottom, ten in a row; Geologist logged chip samples in the field; Diamond drilling: contractor marked core boxes on the left end of the box, with the borehole number left and the box number right; Core was stacked in the boxes from left to right and top to bottom, so that the shallower depth was in the top left corner of the box and the deeper depth in the bottom left corner of the box; Core blocks with stickup depths were inserted after every run; Core was transported to designated core yard; Geologist stopped borehole; and Contractor rehabilitated the drill site. On completion of the drill hole and the four deflections for the Merensky Reef and the UG2 chromitite layer the hole was sealed and covered with a substantial cement beacon containing a survey point. To the west of the Northern to Central Clusters, along the Paradys Dome, a vibroseis survey was recommended to determine the influence of the Paradys Dome on the Reefs as they approach the dome. The 1:50,000 topo-cadastral map was used for this work. The survey was carried out along well established roads in Dingaanskop farm to determine the depth of the target layers after the effect of the Paradys diapiric intrusion. The drilling was supervised by project geologist that ensured that all the geological data, especially the core management, was conducted with the utmost professionalism to ensure that the information acquired from the geological mapping, core logging and analysis of samples was true and correct Core handling At the drilling site the geologist checked the core at the drill rig for the following: The core was clean (i.e. grease free). Core trays were marked correctly showing borehole and deflection number, from and to depths, and box number; using a permanent paint marker; The core was fitted properly, a short line in permanent marker was drawn across a natural break and a cross drawn across an unnatural break from one piece of core to the other, indicating a proper fit and to ensure easy refitting at any later stage; The core fitting was checked between adjacent rows; The core rows ran from left to right; There was a core block between drilling runs and that the core blocks were marked correctly, showing the correct; depth, core recovered and core loss/gain. Current depth verification was done by requesting a live stick-up measurement. The geologist performed an overall core recovery assessment. Once the overall core recovery data was understood, i.e. all core loss and gains were justifiable, metre intervals were marked; and The total core drilled per day was calculated and recorded in a daily drilling report. 204

207 Logging The core was logged as follows: The logging was performed on site or at the core yard using a hard copy logging sheet; Descriptive logging was performed using predefined parameters from a series of standardised codes in order to ensure consistent logging codes and correlations that enable stratigraphic correlation; Lithological contacts were marked using one consistent china marker colour; The Main Zone is over 1 500m in this area; hence Main Zone logging was basic, only recording the start of the Giant Mottled Anorthosite and the Main Zone base; and Detailed logging was conducted on the Critical Zone portion. The handwritten log was then captured in Microsoft Excel spreadsheet. The guideline for logging of the section of core through the Main Zone is that it should comprise gabbro, norite, and gabbro-norite with occasional anorthosite layers. The latter layers are reasonably persistent and by careful stratigraphic mapping should allow for long range prediction of the expected depth of mineralisation. Careful logging of the stratigraphic sequence would allow for the placement of the position of faults, if these are present. Details to be recorded include the following, where relevant: All plutonic rock types are classified according to the methodology suggested by Streckeissen (1976) and used by most Bushveld geologists. Anticipated rock types include leucogabbro, gabbro, melagabbro, leuconorite, norite, melanorite, gabbro-norite, feldspathic orthopyroxenite, orthopyroxenite, harzburgite, dunite, websterite, lherzlelite, troctolite, speckled and mottled anorthosite, anorthosite, dolerite, quartz-feldspar veins, granitic veins and chromitite; Each rock is designated a grain size; fine, medium, coarse and pegmatitic. In the case of thin dolerite dykes, very fine grained is applicable. Care is taken to recognise the possibility of cyclic layering; Textural features such as pegmatitic, porphyritic and poikilitic are be described as these have an important stratigraphic significance; All sharp and gradational contacts are recorded or described. Care is taken to record possible cyclicity within the layering. This is especially applicable within the Critical Zone; Care is taken to record the position of each chromitite layer, whether the contacts are sharp or gradational, the distribution and type of sulphides and the presence of olivine. The presence and modal proportion of disseminated chromite and magnetite is be carefully noted in all rocks; Structural features including jointing, alteration, the presence of veins and dykes is recorded, together with attitude of the feature. Possible faulting is carefully recorded; The presence of disconformable ultramafic rocks, their petrology, contact relationships, presence of sulphide is noted; All contacts and their dips are recorded. Note is made of any radical changes in the dip of the layers. All contacts is carefully marked on the core in preparation for possible sampling. This is especially important with regard to the core covering the Merensky Reef Unit and UG2 chromitite layer; and A procedure is employed to measure features applicable to structural engineering such as RBQ etc. This methodology needs to be designed and it is suggested that rock engineers log and appraise this core as soon as possible after the completion of the mother hole Sampling method SR3.1A(i); SR3.1A(ii); SR3.1B, SR3.3A(iii) The following sampling procedure was adhered to: Half cylindrical core samples were taken to preserve core reef intersection; The laboratory minimum mass requirement for the analyses of PGMs (+Au, Cu, Ni) is 150g. To achieve this, allowing for pulp re assay and/or repeats, core length of 15cm was adopted as the standard Bauba sample length; Top and base of samples were marked together with the respective sample ID with a china marker; The top and the bottom contact reef samples were marked such that 5cm of hangingwall and/or 5cm of footwall are included, to ensure that contacts are fully represented in sampling; A straight reference line was drawn parallel to the length of the core; Pre splitting digital photographs of marked core were taken; Photos were labelled by borehole identity, deflection number and reef. Photos were stored electronically in the specific borehole file; A triplicate sample ticket booklet was used to label and identify samples. The sample number is alphanumeric having one letter and four numbers, i.e. A1234; Samples were bagged in clear plastic sample bags; inside each bag is the sample and the first ticket, the second ticket is stapled and secured when the bag is sealed and the third one remains in the booklet; Samples are numbered from top to bottom, the first sample being No.1 of the sequence; Once the sample numbering was established across the sample channel and written on the core using a paint marker, the unique sample number as per the booklet ticket was written on the plastic sample bag and the first corresponding ticket was inserted inside the bag; 205

208 The borehole number, sampling intervals, lithology and total code were then recorded on the respective sample ticket inside the sample booklet; The core to be sampled was placed on a 1.5m wooden core holder; this was done to stabilise/secure the core to be worked on and have most of the core to be sampled laid out in one single line; The core was orientated in the core holder such that the upper reef contact was aligned orthogonal to the line i.e. when viewed from above; the contact forms a straight line across the core perpendicular to the long axis of the core; A straight reference line was drawn parallel to the length of the core; and orthogonal to the alpha angle of the upper contact, using a ruler and a china marker; This reference line was carried over all the pieces of the core in the sample channel, having fitted all the pieces; The marked core was then handed over to technical staff for cutting the core in half along the reference straight line, using a rotary diamond saw under the supervision of the geologist. Core was split/halved along the straight reference line using a core splitter; Only one half of the two halves was sampled, which was then broken into individual samples using a chisel and 4 pound hammer (to avoid sample losses) at individual sample boundary markings; A cable tie was also used to close and secure each sample bag; Sample intervals were marked using a paint marker on the remaining half core s cut surface such that it corresponds with the pre-splitting sample marks on the core s circumference; Post-splitting digital photographs of the marked core were taken using a stepladder; A run of sample bags was boxed for dispatch to the laboratory; The sample boxes were transported to the laboratory by the geologist; Samples were submitted with an assay request form and a receipt of samples was signed off by the laboratory; The sample booklet and sample sheet were retained by the geologist. This bears the following information: Sample number (A1234); Borehole Identity and deflection number (BAU001-D1); Sample interval, from and to depth ( m); and Total code, lithology and Reef (26C, CHR, UG2). Sample details were captured electronically on a sample record sheet; and All data sheets are retained in the specific borehole file. The sampling is conducted at the core shed by MTC and Richmond. The following stepped process is applicable to sample both the Merensky Reef and the UG2, but both will be handled separately for the sake of clarity The Merensky unit: The complete intersection of the Merensky Unit is oriented so that the direction of dip is vertical to the tray. The core is marked along its long axis and then cut in half with a diamond saw at right angles to the dip; The positions of the LRC and BRC (Chromitite stringers) are located on the core and their position marked on the flat face of both halves of the core; Digital photographs of the wet core, representative of the complete Merensky Unit, are made prior to sampling; Using the LRC and the BRC as reference planes, sampling should proceed inwards from 0,02m above and below these contacts at 0,10m intervals. The (floating) sample from the middle of the mineralisation is arranged so that it is not less than 0,10m thick. The overlying mineralised orthopyroxenite is sampled at 0,20m intervals until the overlying leuconorite is reached. The last sample, located against the overlying contact is no less than 0,20m thick. Below the LRC samples should proceed at 0,20m until the base of the Merensky pyroxenite; Non-generic sample numbers are used and the duplicate numbers recorded on both pieces of core. A digital photograph of the sample numbers and position is taken prior to bagging; These photographs are stored on a computer and prints appended to each borehole log for reference; and it is anticipated that 30 to 40 samples will be taken through each intersection of the Merensky Unit. ug2 chromitite layer: The complete intersection of the UG2 chromitite layer is oriented so that the direction of dip is vertical to the tray. The core is marked along its long axis and then cut in half with a diamond saw at right angles to the dip; The important markers to define are the upper and lower contacts of the main chromitite layer (0,45 to 0,70m thick), the position of the overlying chromitite stringers (one to three) and the underlying pegmatoid. All these layers are located on the core and their position marked on the flat face of both halves of the core; Digital photographs of the wet core, representative of the complete UG2 chromitite layer, are made prior to sampling. These photographs are stored on a computer and prints appended to each borehole log for reference; 206

209 Percussion or open hole drilling Using the upper and lower contacts of the main chromitite layer as reference planes, sampling should proceed inwards from 0,02m above and below these contacts at 0,10m intervals. The (floating) sample from the middle of the mineralisation is arranged so that it is not less than 0,10m thick. Sampling, at 0,10m intervals should proceed upwards through the stringers (probably one sample). Samples within the underlying pegmatoid are at 0,10m intervals; Non-generic sample numbers are used and the duplicate numbers recorded on both pieces of core. A digital photograph of the sample numbers and position is taken prior to bagging; and It is anticipated that 8 to 10 samples will be taken through the UG2 chromitite layer. No percussion drilling was completed for the Bauba Clusters Down the hole geophysics/wireline logging No down the hole geophysics or wireline logging was completed on the Bauba Clusters Bulk sampling and specific gravity SR2.4A(i); SR2.4A(ii); SR2.4A(iii)SR2.4B(I-iii); SR2.4C(i) No bulk sampling has been undertaken on the Bauba Clusters. The specific gravity determinations were undertaken in the assay laboratory utilising the gas pycnometer method which is essentially a density determination based on gas displacement volume. Specifc gravity determinations were made on every sample submiited to the laboratory and the results are contained in assay return and channel grade calculation sheets for each borehole (see Appendix 4). A total of 440 determinations were undertaken from the reef intersections Laboratory analyses SR3.3A(i-iv); SR3.4A(i) The analytical work was conducted by accredited ISO laboratories, SetPoint (ISO/IEC 17025:2005) and Genalysis (ISO/IEC 17025:2005), Johannesburg and Perth. The former laboratory is registered with the South African National Accreditation Service (SANAS) and the latter with the National Association of Testing Authorities Australia (NATA). Genalysis laboratory analysis for the Meresky Reef pulp sample utilised the FA25/MS and the NS25/MS methods to analyse for the following elements; Au, Ir, Os, Pd, Pt, Rh, and Ru. The FA25/MS method uses a 25g of lead collection fire assay in new pots and analyses by inductively coupled plasma mass spectometry. The NS25/MS method utilises a fire assay nickel sulphide collection and analyses by inductively coupling plasma mass spectrometry. SetPoint s laboratory analysis for the Merensky Reef pulp sample, analysed for Cu, Ni, Co, Cr, Ni, Au, Pt, Pd, Rh, Ir, Ru, and Os, using various techniques such as the Fire assay and ICP; the NiS collection and ICP; and the XRF pressed disc. The sampling results for drillholes BAU040, BAU041 and BAU042 are summarised as follows: BAU040: the October 2012 SetPoint analysis showed a <5ppm composition of the PGM elements as well as gold, copper, nickel, cobalt and chrome are present in the sample; BAU041: the May 2013 SetPoint sampling results indicate an average PGM content of 0,26ppm, 452ppm for copper, 623ppm for nickel, 90ppm cobalt and ppm chromium; and BAU042: the June 2013 SetPoint sampling results show an overall average of 0,6ppm for PGMs and 171ppm for copper, 1 117ppm for nickel, 123ppm cobalt and ppm chromium Sample preparation and analysis SR2.4B(i-iii); SR3.3A(i-ii); SR3.4A(i,iii) SetPoint Laboratories is ISO accredited and this accreditation specifies the general requirements for the competence to carry out tests and/or calibrations, including sampling. It covers the following aspects: The testing and calibration performed using standard methods, non-standard methods, and laboratory-developed methods; Is applicable to all organisations performing tests and/or calibrations, including, first-, second- and third-party laboratories, and laboratories where testing and/or calibration forms part of inspection and product certification; Is applicable to all laboratories regardless of the number of personnel or the extent of the scope of testing and/or calibration activities. When a laboratory does not undertake one or more of the activities covered by ISO/IEC 17025:2005, such as sampling and the design/development of new methods, the requirements of those clauses do not apply; and is for use by laboratories in developing their management system for quality, administrative and technical operations. Laboratory customers, regulatory authorities and accreditation bodies may also use it in confirming or recognising the competence of laboratories. However, it is important to note that the ISO/IEC 17025:2005 is not intended to be used as the basis for certification of laboratories, and compliance with regulatory and safety requirements on the operation of laboratories is not covered by ISO/IEC 17025:2005. SetPoint offers various techniques depending on the testing requirements. The Classic Fire Assay Lead collection is used to accurately determine platinum, palladium rhodium and determines all PGM elements (6E). Genalysis is aslo ISO/IEC accredited, which includes the management requirements of ISO 9001: The facility is accredited in the field of Chemical Testing for the tests shown in the Scope of Accreditation issued by NATA. 207

210 Security The samples are stored in a secure core handling facility located on the Central Cluster. Core logging, sample marking, sample collection, transport and submission to lab were performed by project geologist. All samples are sealed after bagging at the drill site and delivered to the laboratory as soon as practically possible. Receipt of the samples is signed off by the laboratory where the laboratory accepts responsibility for them. Assays are returned to the project geologist QA/QC SR3.1A(i-ii); SR3.3A(iv-v); SR3.4A(iii,iv), SR3.4B(i-iv); SR9 Laboratories are required to calibrate their analytical equipment daily and are also required to partake in round robin proficiency tests to ensure a high standard of results. All result reports were verified by the laboratory manager and any inconsistancies or variations about the laboratorie s specifications are reanalysed. The following describes the analytical QA/QC followed: The QA/QC procedures were undertaken on an on going basis to certify that assay results from the exploration programme can be confidently relied upon; These procedures included the use of Certified Reference Material (CRM), material containing known quantities of the element being assayed for (Standard) and material that has been prepared and tested for no contained trace material (Blank). Also included in the procedures are the use of sample checks by the same laboratory (Duplicates) and the use of a second laboratory as a referee for samples pulps which have been previously analysed by another laboratory (Repeats); Every 10th sample and the last sample of the batch is either a Standard or a Blank or a Duplicate or a Repeat. This means QA/QC material represents greater than 10% of the total samples assayed; At least three Amis standards per reef type, described in Table 8 and Table 9, representing high, medium and low grade were introduced to test the accuracy and reliability of analyses across the range of possible sample grade. These QA/QC samples were submitted as part of the batch, using sequential sample numbers; A complete register was kept, indicating the sample number and its corresponding reference number; In addition to all Bauba QA/QC procedures, SetPoint and Genalysis also performed their own internal QA/QC. table 8: Summary of QA/QC samples used in lead collection fire assay and ICP-OES finish Bauba Genalysis SetPoint Sample type No ID No ID No ID 6 AMIS013 4 AMIS067 Standard 5 AMIS067 2 AMIS074 1 AMIS056 4 AMIS075 3 AMIS075 2 AMIS107 4 AMIS107 3 AMIS122 Blank 6 AMIS166 1 Blank 5 Blank Duplicate 22 to Genalysis 22 0 table 9: Summary of QA/QC samples used in nickel sulphide collection Bauba Genalysis SetPoint Sample type No ID No ID No ID 2 AMIS008 1 AMIS013 2 AMIS053 Standard 4 AMIS013 2 AMIS064 2 AMIS067 1 AMIS014 4 AMIS067 3 AMIS075 4 AMIS034 1 AMIS074 1 AMIS107 5 AMIS056 2 AMIS075 2 AMIS107 2 AMIS122 Blank 7 AMIS166 7 Blank 6 Blank Duplicate 34 to Genalysis 34 Bauba runs an internal audit of the laboratory results on a regular basis, including a comparison to the referree laboratory, to check for any deficiencies or errors. This is completed on each set of data returned to Bauba. To date, no significant errors or bias have been recorded. A summary of the variance of the CRM including all standards, blanks and duplicates is summarised in Table 10 and Table 11. No independent audits or reviews of the sampling methodologies or QA/QC procedures have been undertaken to the knowledge of Venmyn Deloitte. Venmyn Deloitte considers on the basis of a high level review, that no sampling bias is likely and the sample recoveries and results have been acceptably recorded. 208

211 table 10: Summary of the CRM bias statistics in lead collection fire assay and ICP-OES finish Range AU PT PD Total Number of CRM with variance of 10% to -10% Number of CRM with variance of 10% to 0% Number of CRM with variance of 0% to -10% Number of CRM with variance of 0% Total CRM % CRM within 10% variance 83,87% ,62 Bias 0 (0,59) 0,33 (0,09) table 11: Summary of the CRM bias statistics in nickel sulphide collection (SetPoint) Range AU PT PD RH IR RU Total Number of CRM with variance of 10% to -10% Number of CRM with variance of 10% to 0% Number of CRM with variance of 0% to-10% Number of CRM with variance of 0% Total CRM % CRM within 10% variance 66,67 93, , ,33 84,44 Bias (0,19) (4,17) 2,14 0,07 (0,33) 1,15 (0,22) Assay results A selection of the assay results and weighted averages are presented in Appendix Data Management SR2.1A(i); SR2.1B(i) Data acquisition and validation SR2.3A(i); SR3.2A(i-vi) The hard copy borehole logs and drilling reports are captured digitally into an Excel database by the project geologist. Geological and statistical analyses are then undertaken based on the database. Data is verified by the project geologist to ensure that no capturing errors, overlapping sample intersections or other errors occur Database management An Excel database is used to compile the drilling lithological and sampling results. All entries are audited and verified before entry by the project geologist. Backups are stored at head office in Johannesburg. 21. Mineral Resource Estimate Previous Resource statement SR1.3A(i); SR1.3B(i); SR1.3B(ii) The historical Exploration Results and Mineral Resource Statements as estimated by Bauba and reviewed by Venmyn Deloitte in April 2013 are summarised for the Merensky Reef in Table 12 and Table 13 and for the UG2 Reef in Table 14 and Table 15, respectively. The resource statement was presented in the report titled Mineral Resource Update for Bauba Platinum Limited s Northern, Central and Southern Cluster PGM Projects by Venmyn Deloitte. The Competent Person responsible for signing off the PGM Resource Statement was AN Clay, Managing Director of Venmyn Deloitte. The previous exploration results are quoted without a range and are therefore not SAMREC compliant. it is important to note that during the course of the August 2013 Mineral Resource update, a computational error was identified in the disclosure of the Southern Cluster UG2 Inferred Mineral Resources declared for April This error related to the previously disclosed in-situ tonnage of 47,05Mt for the Inferred Resources. The correct in-situ tonnage for the Southern Cluster UG2 Inferred Resources is 36,95Mt. This change in tonnage constitutes a 12,6% decrease in total in-situ Inferred Resources for the 2012 Resource disclosure and a 6,0% decrease in total for in-situ Inferred Resources for the 2013 disclosure. The change in Mineral Resources as a result of this computational error is considered immaterial to justify a separate Mineral Resource update letter and as such the corrected figures are presented herein without additional commentary. It is important to note that the historical exploration results do not have a range for the grades represented in the tables. 209

212 21.2. Current Resource statement SR1.2B(i); SR2.3B(i); SR2.5; SR4.1B(i-iv); SR4.2A(i); SR4.2B(i-vi); SR7B(i-iv); SR8A(i-iii); SR10A(i); SR8B(i-iv); SV2.6 Three new boreholes (with a mother hole and up to eight deflections from each) have been completed on the Northern Cluster and incorporated into the Mineral Resource Statement. These results have been used to upgrade a portion of the Exploration Resultss declared in 2012 to Inferred Mineral Resources. The Mineral Resources for the Central Cluster remains unchanged from the 2012 Resource update, but is included in this report for holistic reasons, whilst the Mineral Resources for the Southern Cluster UG2 have been reduced following the review of the resource extent. The Exploration Results and Mineral Resources for each Cluster are shown in Figure 13, Figure 14 and Figure 15. Mineral Resources are presented as in-situ tonnes before and after geological losses have been applied. Geological losses were determined using public domain information from adjacent projects. It must be noted that for the Exploration Results, the potential quantity, quality and content as expressed in this letter are conceptual in nature. No cut-off grade has been used during Mineral Resource estimation. The Mineral Resources are constrained by a minimum reef width due to underground mining constraints. A conservative minimum mining width of 0,8m is used. All data used in the resource estimation proces is validated against the original sample data each time the estimation is updated. Any errors are corrected and verfied prior to updating the model. The 2013 Mineral Resources have been based on the results of a drilling programme that is undergoing iterative improvement through the use of statistical analysis using public domain information to determine the drill spacing required to improve confidence in the results. Reef width estimations for the Inferred Resource category in the Northern Cluster are based primarily on the regional geology, neighbouring operations and the recent drilling results. The recently updated Exploration Results and Inferred Mineral Resources for the Merensky Reef at August 2013 are summarised in Table 16 and Table 17, while the August 2013 UG2 Reef results are summarised in Table 18 and Table 19, respectively. A simplified representation of the recently drilled Northern Clusters reef profiles is presented in Figure 16. The Mineral Resources were calculated from first principles using the average width of the reef multiplied by the reef area and relative density. The geological loss is then applied to estimate the tonnages. The reef area is calculated based on the expected dip for each farm. All average values are calculated based on the results of drilling and assaying. The Inferred Resource category is predicated upon geological and statistical confidence. The current Item 26 of the SAMVAL Code specifically excludes Inferred Mineral Resources being used in mine design, planning or economic studies. The reasonable expectation of eventual economic extraction is based upon existing PGM mines in South Africa that mine in excess of 1 000m. The Bushveld Complex s continuous geology is well known and justification for economic extraction in excess of 1 000m is evident from not only surrounding mines but PGM mines in general throughout the Bushveld Complex. As South African experts working on PGM deposits within the Bushveld Complex, we are aware of deeper exploration assets that are currently not tangible in the current market. However, it is expected that there are reasonable prospects for eventual extraction over the next thirty years Statistical analysis Venmyn Deloitte has completed a high-level, preliminary analysis of the Northern Cluster drilling programme using the proprietary Venmyn Deloitte Variance Towers in order to determine if the current drill spacing meets requirements to determine the various confidence levels congruent with Inferred, Indicated and Measured Resources. This analysis is being used by Bauba as a method to continually and iteratively review and improve the drilling plan based on information available from the adjacent properties and from the Northern Cluster Project itself. The process is iterative and is reviewed as drillholes are completed and the information becomes available and in doing so, refines the estimates made. The towers are used to estimate the number of boreholes required to obtain the Inferred, Indicated and/or Measured Resource Categories based on the variance of the parameter considered around the mean within a certain confidence limit. Parameters include grade, accumulation, reef width etc. The number of boreholes required and project size determine what influence the results of each borehole will have on the project, i.e. the Circles of Influence. in determining the Circles of Influence for each borehole in the Northern Cluster Project, Venmyn Deloitte performed the statistical analysis using their Venmyn Variance Tower. The variance analysis was completed on the available public domain borehole information from the adjacent properties, which are also targeting PGMs within the BC. The various resource parameters information was available for both the UG2 and Merensky Reef for 73 boreholes. The Venmyn Variance Tower plots the number of boreholes (or reef intercepts) required to constrain the true mean of a parameter of the deposit within an interval, at the 99% confidence limit. To construct the Venmyn Variance Tower, the distribution of a parameter is estimated from the sample data simulation software. Confidence intervals for each parameter are then constructed for different sample sizes and plotted on the graph. The narrowing of the graph indicates the increase in confidence as the number of boreholes increases. 210

213 Figure 13: Merensky and UG2 Reef Resource for the Northern Cluster 211

214 Figure 14: Merensky and UG2 Reef Resource for the Central Cluster 212

215 Figure 15: Merensky and UG2 Reef Resource for the Southern Cluster 213

216 Figure 16: Simplified schematic representation of intersections 214

217 Table 12: Previous exploration results for the Merensky Reef (April 2012) (not SAMREC compliant) Unit Cluster Farm name Resource category Plan area ha Reef area* ha RD Width m 4Pgm grade g/t) Gross tonnes Mt 4Pgm ounces Moz Geological loss % 4Pgm grade g/t Tonnes Mt 4Pgm ounces Moz Schoonoord 462KS Exploration results ,44 0,99 4,29 78,41 10, ,29 63,51 8,76 Indie (portion RE) 474KS Exploration results ,44 0,99 4,29 53,69 7, ,29 43,49 5,99 Northern Indie (portion 1) 474KS Exploration results ,44 0,99 4,29 53,72 7, ,29 43,52 6,00 Zwitzerland 473KS Exploration results ,44 0,99 4,29 69,20 9, ,29 56,05 7,73 Fisant Laagte 506KS Exploration results ,44 0,99 4,29 71,31 9, ,29 57,76 7,96 Total Northern Cluster ,44 0,99 4,29 326,34 44, ,29 264,34 36,44 Merensky Reef Bauba attributable** ,44 0,99 4,29 195,80 26, ,29 158,6 21,86 Magnets Vlakte 541KS Exploration results ,39 1,01 4,52 40,22 5, ,52 30,16 4,38 Central Dingaanskop 543KS Exploration results ,39 1,01 4,52 36,89 5, ,52 27,67 4,02 Total Central Cluster ,39 1,01 4,52 77,11 11, ,52 57,83 8,40 Bauba attributable** ,39 1,01 4,52 46,27 6, ,52 34,70 5,04 Groot Vygenboom 284KS Exploration results ,35 1,00 4,59 28,38 4, ,59 23,55 3,47 Southern Genokakop 285KS Exploration results ,35 1,00 4,59 40,41 5, ,59 33,54 4,94 Total Southern Cluster ,35 1,00 4,59 68,79 10, ,59 57,09 8,42 Bauba attributable** ,35 1,00 4,59 41,27 6, ,59 34,26 5,05 Total exploration results ,42 0,99 4,37 472,24 66, ,37 379,26 53,26 Bauba attributable** ,42 0,99 4,37 283,34 39,8 20 4,37 227,56 31,96 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Note that the potential quantity, quality and content as expressed above are conceptual in nature. Please note that the exploration results are quoted in-situ. Exploration results are quoted exclusive of Inferred Mineral Resources. Table 13: Previous Inferred Mineral Resource for the Merensky Reef (April 2012) Unit Cluster Plan area ha Resource category Reef area* (Ha) RD Width (m) 4Pgm grade g/t Gross tonnes Mt 4Pgm ounces Moz Geological loss % 4Pgm grade g/t Tonnes Mt 4Pgm ounces Moz Merensky Reef Southern Cluster 951 Inferred 995 3,25 1,02 3,92 33,03 4, ,92 27,41 3,46 Total Southern Cluster ,25 1,02 3,92 33,03 4, ,92 27,41 3,46 Bauba attributable** ,25 1,02 3,92 19,82 2, ,92 16,45 2,07 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Please note that the Inferred Resources are quoted in-situ. 215

218 Table 14: Previous Exploration Results Resource for the UG2 (April 2012) (not SAMREC compliant) Unit Cluster Farm name Resource category Plan area ha Reef area* ha RD Width m 4Pgm grade g/t Gross tonnes Mt 4Pgm ounces Moz Geological loss % 4Pgm grade g/t Tonnes Mt 4Pgm ounces Moz Schoonoord 462KS Exploration results ,00 0,82 5,55 75,90 13, ,55 58,45 10,42 Indie (portion RE) 474KS Exploration results ,00 0,82 5,55 51,97 9, ,55 40,02 7,14 Northern Indie (portion 1) 474KS Exploration results ,00 0,82 5,55 52,01 9, ,55 40,04 7,14 Zwitzerland 473KS Exploration results ,00 0,82 5,55 66,99 11, ,55 51,58 9,20 Fisant Laagte 506KS Exploration results ,00 0,82 5,55 69,03 12, ,55 53,15 9,48 Total Northern Cluster ,00 0,82 5,55 315,9 56, ,55 243,24 43,38 UG2 Bauba attributable** ,00 0,82 5,55 189,54 33, ,55 145,95 26,03 Magnets Vlakte 541KS Exploration results ,85 0,98 5,89 44,54 8, ,89 31,18 5,90 Central Dingaanskop 543KS Exploration results ,85 0,98 5,89 40,86 7, ,89 28,60 5,41 Total Central Cluster ,85 0,98 5,89 85,39 16, ,89 59,78 11,31 Bauba attributable** ,85 0,98 5,89 51,24 9, ,89 35,87 6,79 Groot Vygenboom 284KS Exploration results ,74 0,89 5,71 30,19 5, ,71 22,94 4,21 Southern Genokakop 285KS Exploration results ,74 0,89 5,71 45,23 8, ,71 34,38 6,31 Total Southern Cluster ,74 0,89 5,71 75,42 13, ,71 57,32 10,52 Bauba attributable** ,74 0,89 5,71 45,25 8, ,71 34,39 6,31 Total exploration results ,93 0,86 5,63 476,72 86, ,63 360,34 65,22 Bauba attributable** ,93 0,86 5,63 286,03 51, ,63 216,20 39,13 * A regional dip of 17 west has been use to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Note that the potential quantity, quality and content as expressed above are conceptual in nature. Please note that the exploration results are quoted in-situ. Exploration results are quoted exclusive of Inferred Mineral Resources. Table 15: Previous Inferred Mineral Resource for the UG2 (April 2012) Unit Cluster Plan area ha Resource category Reef area* ha RD Width m) 4Pgm grade g/t) Gross tonnes Mt 4Pgm ounces Moz Geological loss % 4Pgm grade g/t Tonnes Mt 4Pgm ounces Moz Merensky Reef Southern Cluster 748 Inferred 782 3,5 1,35 4,43 36,95 5, ,43 28,08 4,00 Total Southern Cluster ,5 1,35 4,43 36,95 5, ,43 28,08 4,00 Bauba attributable** ,5 1,35 4,43 22,17 3, ,43 16,85 2,40 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Please note that the Inferred Resources are quoted in-situ. 216

219 Table 16: Exploration results for the Merensky Reef (30 August 2013) Cluster Farm name Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PgE grade g/t 4PgE ounces Moz Schoonoord 462KS ,0 3,3 3,6 0,94 1,04 34,7 42,4 3,9 4,7 4,3 6,4 Indie (portion RE) 474KS ,0 3,3 3,6 0,94 1,04 39,5 48,2 3,9 4,7 4,9 7,3 Northern Indie (portion 1) 474KS ,0 3,3 3,6 0,94 1,04 39,5 48,2 3,9 4,7 4,9 7,3 Zwitzerland 473KS ,0 3,3 3,6 0,94 1,04 50,8 62,1 3,9 4,7 6,3 9,4 Fisant Laagte 506KS ,0 3,3 3,6 0,94 1,04 52,4 64,0 3,9 4,7 6,5 9,7 Northern total ,0 3,3 3,6 0,94 1,04 216,9 265,0 3,9 4,7 26,9 40,2 Northern Bauba attributable** ,0 3,3 3,6 0,94 1,04 130,1 159,0 3,9 4,7 16,2 24,1 Central Magnets Vlakte 541KS ,0 3,2 3,6 0,96 1,06 27,3 33,4 4,1 5,0 3,6 5,3 Dingaanskop 543KS ,0 3,2 3,6 0,96 1,06 25,1 30,7 4,1 5,0 3,3 4,9 Central total ,0 3,2 3,6 0,96 1,06 52,4 64,1 4,1 5,0 6,9 10,2 Central Bauba attributable** ,0 3,2 3,6 0,96 1,06 31,5 38,4 4,1 5,0 4,1 6,1 Southern Groot Vygenboom 284KS ,0 3,2 3,5 0,95 1,05 21,3 26,0 4,1 5,0 2,8 4,2 Genokakop 285KS ,0 3,2 3,5 0,95 1,05 30,3 37,0 4,1 5,0 4,0 6,0 Southern total ,0 3,2 3,5 0,95 1,05 51,5 62,9 4,1 5,0 6,8 10,2 Southern Bauba attributable** ,0 3,2 3,5 0,95 1,05 30,9 37,8 4,1 5,0 4,1 6,1 Total exploration results ,7 3,2 3,6 0,95 1,04 320,9 392,0 3,9 4,8 40,6 60,7 Total Bauba attributable** 192,5 235,2 3,9 4,8 24,4 36,4 Table 17: Inferred Mineral Resource for the Merensky Reef (30 August 2013) Cluster Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PGE grade g/t 4PGE ounces Moz Northern total ,00 3,24 1,21 29,17 4,17 3,91 Southern total ,00 3,25 1,02 27,38 3,92 3,45 Total Inferred Resources ,96 3,24 1,12 56,55 4,05 7,36 Bauba attributable** 33,93 4,05 4,41 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. 217

220 Table 18: Exploration results for the UG2 (30 August 2013) Cluster Farm name Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PgE grade g/t 4PgE ounces Moz Schoonoord 462KS ,0 3,8 4,2 0,78 0,86 26,9 32,9 5,0 6,1 4,3 6,5 Indie (portion RE) 474KS ,0 3,8 4,2 0,78 0,86 36,1 44,1 5,0 6,1 5,8 8,7 Northern Indie (portion 1) 474KS ,0 3,8 4,2 0,78 0,86 36,2 44,2 5,0 6,1 5,8 8,7 Zwitzerland 473KS ,0 3,8 4,2 0,78 0,86 46,5 56,9 5,0 6,1 7,5 11,2 Fisant Laagte 506KS ,0 3,8 4,2 0,78 0,86 48,0 58,6 5,0 6,1 7,7 11,5 Northern total ,0 3,8 4,2 0,78 0,86 193,7 236,7 5,0 6,1 31,1 46,5 Northern Bauba attributable** ,0 3,8 4,2 0,78 0,86 116,2 142,0 5,0 6,1 18,7 27,9 Magnets Vlakte 541KS ,0 3,7 4,0 0,93 1,03 28,1 34,4 5,3 6,5 4,8 7,2 Central Dingaanskop 543KS ,0 3,7 4,0 0,93 1,03 25,8 31,5 5,3 6,5 4,4 6,6 Central total ,0 3,7 4,0 0,93 1,03 53,9 65,9 5,3 6,5 9,2 13,7 Central Bauba attributable** ,0 3,7 4,0 0,93 1,03 32,4 39,5 5,3 6,5 5,5 8,2 Groot Vygenboom 284KS ,0 3,6 3,9 0,85 0,93 20,7 25,3 5,1 6,3 3,4 5,1 Southern Genokakop 285KS ,0 3,6 3,9 0,85 0,93 31,0 37,9 5,1 6,3 5,1 7,7 Southern total ,0 3,6 3,9 0,85 0,93 51,7 63,2 5,1 6,3 8,5 12,8 Southern Bauba attributable** ,0 3,6 3,9 0,85 0,93 31,0 37,9 5,1 6,3 5,1 7,7 Total exploration results ,4 3,7 4,1 0,82 0,90 299,4 365,7 5,1 6,2 48,9 72,9 Total Bauba attributable** 179,6 219,4 5,1 6,2 29,3 43,8 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. Note that the potential quantity, quality and content as expressed above are conceptual in nature. Please note that the exploration results are quoted in-situ. Exploration are quoted exclusive of Inferred Mineral Resources. Table 19: Inferred Mineral Resource for the UG2 (30 August 2013) Cluster Plan area ha Reef area* ha Geological loss % RD Width m Gross tonnes Mt 4PgE grade g/t 4PgE ounces Moz Northern total ,00 3,46 1,35 40,74 4,47 5,85 Southern total ,00 3,50 1,35 28,08 4,43 4,00 Total Inferred Resources ,41 3,48 1,35 68,82 4,45 9,85 Bauba attributable** ,41 3,48 1,35 41,29 4,45 5,91 * A regional dip of 17 west has been used to calculate the Reef area. ** Based on Bauba Platinum Limited s 60% attributable share. 218

221 To illustrate how this is done, the Variance Tower graphs for the cmg/t parameter in the Merensky Reef and for the UG2 are shown in Figure 17. For the cmg/t parameter, the number of boreholes required to constrain the confidence intervals to less than 50% variability about the mean within the 99% confidence limits was calculated. For this parameter, the analysis shows that to reduce the variability to less than 50% at the 99% confidence limit, one requires twenty-four boreholes on the Merensky Reef and six boreholes on the UG2. Figure 17: Variance Towers for the Northern Cluster Variance Tower: Merensky Reef Variance Tower: UG2 Reef Venmyn Deloitte sets the variability threshold to achieve specific levels of confidence which are defendable for the different levels of Resource classification. To achieve an Inferred Mineral Resource, less than 50% variability about the mean is required, an Indicated Mineral Resource requires between 10% and 50% variability, while a Measured Mineral Resource requires less than 10% variability about the mean. The results are shown in Figure 17 for the cmg/t parameter. The analysis was conducted for all resource parameters with the final result being that one requires a minimum of nine boreholes on the Merensky Reef and six boreholes on the UG2 to constrain variability to an Inferred Mineral Resource Category. The reader is reminded that these deep boreholes are often drilled with deflection holes which are also taken into consideration in this analysis. Based on this statistical analyis and the plan area of each cluster, the area of influence of each borehole has been calculated and the logic applied to determine the borehole spacing required to declare an Inferred Mineral Resource Resource/exploration results classification Venmyn Deloitte uses a logic table to classify a mineral deposit into one or more of the resource categories. The logic table presents each of the SAMREC requirements in relation to the available information on the mineral deposit in order to identify the relative confidence in each of these parameters. Upon consideration of this logic table, the Competent Person is then able to determine its classification. The classification of the Northern and Southern Clusters as an Inferred Resource is due to the additional drilling conducted in the clusters. The Central Cluster is classified as an exploration result due to the lack of accurate survey data available with which to estimate the surface extent of the pegmatite shapes delineated from historical mapping, and a project digital terrain model (DTM) Differences between resource statements The previous resource statement (2012) indicates a smaller Inferred Resource category to that of 2013, this is due to an increase in the Northern Clusters category level in the 2013 resource statement, which increased the Inferred Resources tonnes and grade from 16,65Mt and 3,92g/t in 2012 to 33,95Mt and 4,05g/t. This PGM resource statement is presented in Table 12, Table 13, Table 14 and Table ENVIRONMENTAL AND SOCIAL PRACTICES SR5.2; SR General disclosure The following activities were undertaken in the commissioning of this CPR: A discussion with Bauba as to an overview of the current environmental and social compliance status (including management practices) for the Bauba Platinum assets; and A review of all relevant documentation, inclusive of licences, internal and external audits, where available Environmental and social permitting status SR5.1A(i); SR5.1B(i); SR5.2A(i); SR5.2B(i-ii); SR5.2C(iiI) SR5.3 The environmental and social compliance status in relation to the South African legislative requirements for the Northern, Central and Southern Cluster are summarised in Table

222 Table 20: Northern, Central and Southern Cluster Environmental and social compliance status Act, regulation or by-law Requirements Sectional requirements Permitting requirements Current compliance status An EMP must be approved in terms of section 39(4) of the MPRDA as a prerequisite to the commencement of the mining/exploration permit. Sections 39(1) and (2) of the MPRDA require that all applicants for a reconnaissance permissions, prospecting rights or mining permits must conduct an EIA and submit an EMP. Prescriptive details are provided in Section 39(3) a-d. Regulations 49, 50, 51 and 52 detail the requirements for the contents and processes for scoping, EIA, EMP and EMPRs Approval of submissions subject to the conditions stipulated in section 39(4) of the MPRD. Bauba has an approved EMP for the farms Schoonoord 462KS, Zwitzerland 473KS, Indie 474KS, Fisantlaagte 506KS, Dingaanskop 543KS, Waterkop 113KT, Groovygenboom 284KT and Genokakop 285KT Bauba submits annual compliance audit findings in the prospecting report to the DMR Financial provision must be made to allow for closure and rehabilitation must be annually adjusted. Sections 41 to 47 of the MPRDA address legislative closure requirements. GNR 527 of the MPRDA addresses the financial provision for mine rehabilitation and closure and requires that the quantum of financial provision, to be approved by the Minister, must be based on the requirements of the approved EMP and shall include a detailed itemisation of all actual costs required for: Premature closure regarding: the rehabilitation of the surface of the area; the prevention and management of pollution of the atmosphere.; Annual closure and rehabilitation estimation and associated financial provision Bauba has made financial provision for both scheduled and unscheduled closure of the prospecting operations at the Northern, Central, and Southern clusters. This provision is adjusted annually and submitted to the DMR MPRDA, 2002 (Act 28 of 2002) the prevention and management of pollution of water and the soil; the prevention of leakage of water and minerals between subsurface formations and the surface; decommissioning and final closure of the operation; and post-closure management of residual and latent environmental impacts. Regulation 54(2) requires annual financial closure estimation and associated financial adjustment An approved SLP is required for permitting approval, with annual compliance reporting submission Sections of GNR 527 of 2004 and 39(1) and (2) of the MPRDA dictate the requirements of submission, approval and reporting of the SLP Approval and annual reporting to the regional DMR office on compliance in compliance with S of GNR 527 Current operations which are being undertaken in accordance with prospecting activities do not, as of yet, require an SLP. This will be a future requirement should the Prospecting Right be converted to a Mining Right NEMA, 1998 (Act 107 of 1998) EIAs and EMPs are required as defined by listed activities set out under Section 24 of NEMA, 1998 Section 14 details the contents of an EMP, with Regulations 543, 544, 545 and 546 establishing the processes to be followed to obtain an environmental authorisation and the listed activities requiring authorisation Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require an Environmental Authorisation from the DEA. This will be a future requirement should the Prospecting Right be converted to a Mining Right 220

223 Act, regulation or by-law Requirements Sectional requirements Permitting requirements Current compliance status NEMA, 1998 (Act 107 of 1998) Section 28 addresses the duty of care and remediation of environmental damage. Section 28 details that all persons who cause, have caused or may cause significant pollution or degradation of the environment must take reasonable measures to prevent such pollution or degradation from occurring, continuing or recurring, or, in so far as such harm to the environment is authorised by law or cannot reasonably be avoided or stopped, to minimise and rectify such pollution or degradation of the environment Bauba Platinum currently undertakes concurrent rehabilitation, and is compliant with Section 28 of the NEMA The site manager undertakes bimonthly performance compliance assessments NEM:AQA, 2004 (Act 39 of 2004) No listed activity in terms of the Act can take place without a licence GN 1210 establishes national Ambient Air Quality Standards, and provides limits for SO 2, NO 2, PM 10, ozone, benzene, lead and CO Atmospheric Emission Licence Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require an AEL. This may be a future requirement should the Prospecting Right be converted to a Mining Righ. NEM:WA Act, 2008 (Act 59 of 2008) A licence is required to establish and operate a waste disposal site, as defined by the listed activities within the Act Chapter 5 of the Act provides for the licensing of waste management activities, which include storage, transfer, recycling, treatment and/or disposal of waste. Radioactive waste and mine residues have been excluded from the Act Waste Management Licence Current operations which are being undertaken in accordance with prospecting activities do not, as yet, require an WML. This may be a future requirement should the Prospecting Right be converted to a Mining Right NWA, 1998 (Act 36 of 1998) as amended A licence is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent The NWA stipulates that a WUL is required for the abstraction, storage, use, diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act Water Use Licence TTo Venmyn Deloitte s knowledge, the water licence has not been identified as a necessity, and therefore no application has been made However, recent letters to the DMR do detail that surfacewater from a non-perennial stream is utilised by the diamond core drilling programme. Venmyn Deloitte recommend that an assessment be conducted to assess whether an IWULA is required in terms of Section 21 of the NWA Bauba has applied to the Department of Waters Affairs to participate in the Olifants River Water Resource Development Project (ORWRDP) Operational environmental management SR5.2A(i); SR5.2B(ii); SR5.3 Exploration activities currently include mapping, sampling and reverse circulation core drilling. Bauba undertakes concurrent rehabilitation management practices for all exploration and drill holes. Bauba has submitted an amended EMP to the DMR in April 2014 for the following farms: Houtbosch 323KT; Genokakop 285KT; Grootvygenboom 284KT; Dingaanskop 543KS; Fisantlaagte 506KS; Zwitzerland 473KS; Schoonoord 462KS; and Indie 474KS. Within its recent EMP submission, Bauba has made various EMP commitments to ensure complaince with Section 28 of the NEMA, including dust and noise management, waste management, soil pollution and erosion control, and water pollution management. No significant impacts have ben identified for the operations associated with prospecting activities. 221

224 Bauba has made the following commitments in its environmental policy: Comply with relevant state and national legislation as a minimum; Ensure that management and reduction of environmental risks is an integral part of operations planning and long-term strategy; Develop, implement and monitor environmental management plans to achieve environmental targets; Set and meet environmental objectives and targets based on the prevention of pollution; Recognise and protect areas of special heritage and cultural value; Support and participate in community based environmental projects; Maintain a close working relationship with government and other related industries to continually improve environmental management and performance; and Regularly review and report on the environmental performance of the Company and ensure that this policy remains relevant to achieving its target of minimal impact to the environment. Surface water from a non-perennial stream is utilised by the diamond core drilling programme. Venmyn Deloitte recommends that an assessment be conducted to assess whether an IWULA is required in terms of Section 21 of the NWA Operational social management SR5.3C(i) Bauba does not have a Social Labour Plan for the Central Complex prospecting operations. This is not a requirement for prospecting operations Mine closure provision, closure planning and rehabilitation SR5.2C(iv) Financial provision and closure planning, informed by both an approved EMP and GNR 527 of the MPRDA, is a statutory legislative requirement when holding a prospecting licence. Sections 41 to 47 of the MPRDA address current legislative closure requirements. Section 41(1) requires that an applicant for a prospecting right, mining right or mining permit must, before the Minister approves the environmental management plan or environmental management programme (EMP) in terms of Section 39(4), make the prescribed financial provision for the rehabilitation or management of negative environmental impacts. Bauba has made provision for both scheduled and unscheduled closure of the prospecting operations. Closure and rehabilitation operations allow for the two borehole drill sites. The provision also accounts for closure and rehabilitation operations being performed according to the requirements of the EMP. Unscheduled closure provision makes allowance for the four borehole drill sites, with scheduled closure accounting for the rehabilitation of eight borehole sites and 400m of access road. The environment affected by the mining or prospecting operations will be rehabilitated by Bauba, as far as is practicable, to its natural state or to a pre-determined and agreed standard or land us grazing ground for the resident community grazing cattle and goat herds. The affected environment will be maintained in a stable condition that will not be detrimental to the health and safety of humans and animals and that will not pollute the environment. The 2013 provision submission to the DMR included a financial guarantee of ZAR ,00. This provision has ot included the financial estimate provided in the amended EMP. Venmyn Deloitte has recommended that an assessment of the scheduled and unscheduled closure liability be undertaken, with the inclusion of the amended EMP considerations, in accordance with the MPRDA and associated Regulations. 23. Mining SR5.4 Bauba plans to mine the three clusters using underground mining methods. No mining parameter assumptions have been made at this conceptual level of study. The details of the mine plan and further mining assumptions will be finalised as part of the Mining Right application, which will follow successful completion of the planned exploration programme to determine the grade and volume of the deposit. 24. Mineral Processing SR5.6 No mineral processing activities are being carried out at Bauba due to the exploration phase nature of the projects. Metallurgical testwork will form part of the advanced exploration programme. The results of the testwork programme will inform the selection of the preferred process route and plant description. No assumptions based on metallurgical processes and parameters have been made at this conceptual level of study. 25. Site Infrastructure SR5.5 The Bauba Projects are exploration projects and therefore there is no permanent infrastructure associated with PGM mining present on the property. Temporary field camps are set up for the drilling crew and geologists as and when required. No servitudes run through any of the properties under consideration in this report Water Power Water for drilling has to be transported to site, when required. Power is supplied on site using generators, when required. 222

225 25.3. Roads The Southern and Central Clusters can be accessed by car using dirt roads. Well maintained gravel farm roads pass through the Northern Cluster, as well as to the north and east of the Central and Southern Cluster. The R37 runs from the east to the north of the Bauba Project areas (Figure 2) Railway siding No railway access is required at this early stage of the project. 26. General Mineral Asset Valuation Approach SR5.7; SV2.2; SV2.8; SV2.9; JSE12.9(f) This section describes the general mineral asset valuation approach which has been used by Venmyn Deloitte in this CPR to value the mineral assets of Bauba. At the early exploration phase, mineral projects are valued dependent upon prospects for eventual economic extraction. A seller s view may not necessarily match a potential buyer s view and as such the eventual transaction price is usually a compromise. International mineral asset valuation codes set out clear methodologies for the valuation of mineral assets, with confidence in the mineral resource estimates being the primary value driver. The SAMREC Code guide mineral resource and mineral reserve classifications based upon geological confidence in the estimates through the exploration process. With respect to the contributing properties of Bauba, the PGM resources have been classified by Venmyn Deloitte in compliance with the SAMREC Codes. Consistent with this approach, Venmyn Deloitte has valued the contributing properties of Bauba in compliance with the reporting and assessment criteria stipulated for mineral asset valuations in the SAMVAL codes. The selection of an appropriate valuation method depends on such factors as, inter alia: the nature of the valuation; the development status of the mineral asset; and the extent and reliability of available information. A mineral asset is defined, according to the International Financial Reporting Standards (IFRS) as a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise. The selection of an appropriate valuation method depends on such factors as the nature of the valuation, the development status of the mineral asset, and the extent and reliability of available information. in conducting mineral asset valuations, Venmyn Deloitte considers the following categories of mineral assets: Exploration property A Mineral Asset that is being actively explored for mineral deposits but for which economic viability has not been demonstrated. Exploration properties have asset values derived from their potential for the discovery of economically viable mineral deposits. Exploration property interests are bought and sold in the market. Many of these transactions involve partial-interest arrangements, such as farm-in, option or joint-venture arrangements; development projects A Mineral Asset that is being prepared for mineral production and for which economic viability has been demonstrated by a feasibility study or pre-feasibility study and includes a mineral asset which may not be financed or under construction; Production property A Mineral Asset that is in production; Defunct property A Mineral Asset on which the Mineral Resources and Mineral Reserves have been exhausted and exploitation has ceased, and that may or may not have residual assets and liabilities; and Dormant property A Mineral Asset that is not being actively explored or exploited, in which the Mineral Resources and Mineral Reserves have not been exhausted, and that may or may not be economically viable. Any decision to apply a valuation technique depends principally on the stage at which the project has been developed, the geological confidence and the potential of the asset to demonstrate reasonable and realistic prospects for eventual economic extraction. Changes in the value of a mineral asset are associated with increasing confidence through increased knowledge, as well as the greater degree of probability of it being brought to account. An appropriate valuation recognises these possibilities. As the confidence in a mineral resource estimate is increased, i.e. from an exploration result to an Inferred Mineral Resource through Indicated Mineral Resource to a Measured Mineral Resource, so the veracity of the valuation increases. Figure 18 illustrates the link between a mineral asset project s development status and the most appropriate valuation methodology that should be utilised Mineral asset valuation methodologies SV2.8; SV2.9 Where insufficient confidence exists in the technical parameters of a mineral deposit, or mineral asset, to classify resources, valuation methods mainly rely on the principle of historical cost. This implies that a mineral asset s value is related to the money spent on its acquisition, plus a multiple of the exploration expenditure, depending upon the degree to which its prospectivity has been enhanced by exploration. Once resources have been classified, then market comparisons can be made on a monetary value per unit of mineralisation (eg. USD/oz). After technical studies establishing the basis for future economic exploitation have been carried out, discounted cash flow (DCF, or cash flow) methods are applicable and all the methods used to identify a reasonable transaction value. The Bauba mineral assets are at early levels of project development with SAMREC Code compliant resources. In performing the valuation of the Bauba mineral assets, Venmyn Deloitte has relied on the cost, and market approaches. Below, we briefly describe each of the appropriate methodologies employed. The effective date of this valuation is 31 January

226 Cost approach The Cost Approach relies on historical amounts spent on the Mineral Asset. Reference to historical costs, implies that a mineral asset s value is related to the money spent on its acquisition, plus a multiple of the exploration expenditure, depending upon the degree to which its prospectivity has been enhanced by exploration. Through the introduction of a prospectivity enhancement multiplier (PEM), a premium (or discount) multiplier can be applied to the total cost of exploration to date, depending on whether the exploration expense being considered has relatively enhanced the prospectivity of the target or not. The subjectivity of the method is reduced by addressing specific expenditures with reference to the relevance of the type of mineralisation being considered and the effectiveness of the exploration. A measure of the effectiveness of a historical exploration programme is the confidence that can be ascribed to the resultant mineral resource estimate. Figure 18: Project lifetime value and valuation methodology curve for Mineral Resource projects In conducting the mineral asset valuation, using this method, Venmyn Deloitte considered the prospectivity of PGM properties taking cognisance of the classification of exploration phases illustrated in Table 21. Figure 18 shows the project lifetime value and valuation methodology. This table represents Venmyn Deloitte s standard PEM schedule for PGM deposits. The magnitude of the PEM is determined by the level of sophistication of the exploration for which positive exploration results, applying the concept of successful efforts, have been obtained. 224

227 table 21: Prospect exploration phase classification and the corresponding PEM Phase completed Exploration phase Pem Fair Upper Lower Exploration activity 0 Exploration concept 0,0 0,2 0,0 Project about which nothing is known, but which has potential on a conceptual basis 1 Desktop study 0,0 0,5 0,2 Historical and literature study, records or evidence of PGM findings in the area. Historical artisanal mining data 2 Reconnaissance 0,8 1,0 0,5 Geological mapping if terrain suitable. Palaeo topographical mapping. Historical drilling with intercept data, no laboratory assay 3 Ground follow-up 4 Ground follow-up 1,0 1,0 0,8 Detailed outcrop mapping, identification of PGM hosting strata, PGM seam outcrop mapping. Sampling of exposed PGM seams where available. Historical drilling data with intercept and analyses, but of questionable authenticity 2,0 2,0 1,0 Ground geophysics, remote sensing techniques (e.g. seismics). Reliable historical drilling, but correlations difficult due to density of drilling 5 First-phase drilling 4,0 5,0 2,0 Large diameter core drilling, widely spaced grid with preliminary PGM analysis. Firstpass tonnage estimate. Inferred Mineral Resource 6 Resource drilling and laboratory testwork 8,0 11,0 5,0 In-fill drilling, detailed PGM analyses and metallurgical testwork. Establish market potential, detailed resource tonnage estimation. Advanced Inferred and Indicated Mineral Resource classification 7 Historic mining 16,0 20,0 11,0 Previous commercial production, establishing reliable and well documented quality, tonnage, metallurgy etc. Measured Mineral Resource 8 Reserve classification 20,0 >20 20,0 Complete feasibility assessment, establish economics, and design a mine of an appropriate nature. Classification of Mineral Reserves in Venmyn Deloitte s opinion, these PEM values reflect fair and reasonable multipliers based upon the amount of work associated with and/or development status of any particular project. in order to establish an appropriate PEM, a property valued using this method was classified taking cognisance of Table 21, with appropriate adjustments, knowing that each new exploration phase was carried out contingent upon the successful outcome of the preceding phase. In addition, the PEM selected, was reviewed taking into consideration proximity to well understood resource areas, drillhole density and a qualitative assessment of the prospects for eventual extraction. Venmyn Deloitte hyas analysed and rated the contributing properties according to the results achieved from historical and recent exploration activities as well as the success these activities have had in the classification of PGM resources over the various properties, and the prospects for development 225

228 Market approach The market spproach (or sales comparative approach) 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 is based upon other, preferably recent, arm s length transactions of a similar nature that determines a monetary value per unit of resource (USD/oz). To this end, Venmyn Deloitte has compiled an extensive PGM transaction and valuation database in order to undertake the necessary comparisons. For projects for which PGM resources have been classified, Venmyn Deloitte was able to carry out a comparable transaction (market approach) valuation on the basis that recent market valuations of a similar nature provide the proxy for value. in order to arrive at a reasonable market value with which to compare the respective projects, appropriate recent and historical transactions must form the basis. The comparable transaction value range selected for the valuation of the contributing projects has considered the nature of this valuation and the associated risk factors. Venmyn Deloitte s database of recent unit market valuations within the context of the South African PGM market with reference to the respective PGM resource classifications is summarised in Figure 19. The comparable transaction value range selected for the valuation of the contributing projects has considered the nature of this valuation and the associated risk factors General mineral asset valuation assumptions SV2.10; SV2.14 The mineral assets of the contributing projects have been valued using appropriate methodologies as described in the relevant project sections to follow. These valuations have been based on a number of specific assumptions as discussed in the relevant project sections, including the following general assumptions, as relevant: That all information provided to Venmyn Deloitte, by Bauba and its contractors can be relied upon; That the valuations are with respect to the face value of the mineral assets only; That the legal status of the mineral rights and statutory obligations were fairly stated; That the mineral licences will be kept valid and that they can be converted to Mining Rights in the future; That expired Prospecting Rights will be successfully renewed; That the Mining Rights will be kept valid; That all other regulatory approvals for exploration and mining will be timeously obtained; That the corporate structures and ongoing activities are fairly presented; That reliance can be placed on the exploration expenditures provided by Bauba; That reliance can be placed on the financial statements and management accounts provided by Bauba; That reliance can be placed on the current Mineral Resource statements; That Bauba and its subsidiaries would continue as going concerns and would continue to be fully funded; and That Bauba would be able to secure markets and offtake for any future operations. Venmyn Deloitte made due enquiry into these issues to be satisfied of the potential impact on the mineral asset valuation. We have relied upon and assumed the accuracy of the information provided to us in deriving our opinion. Where practical, we have corroborated the reasonableness of the information provided to us for the purpose of our valuation, whether in writing or obtained in discussion with management of Bauba, by reference to publicly available or independently obtained information. Our valuations are based on current economic, regulatory, market as well as other conditions. Subsequent developments may affect these valuations, and we are under no obligation to update, review or re-affirm our valuation based on such developments Mineral asset valuation SV2.8; SV2.9; SV2.15; JSE12.9(f) The contributing PGM assets of Bauba can be defined as an early stage exploration project with Inferred resources. Consequently, the contributing properties were valued using the cost approach and market approach Cost approach valuation Bauba have provided Venmyn Deloitte with all available acquisition and exploration cost data for the project, and Venmyn Deloitte has assessed its relevance and effectiveness. Venmyn Deloitte has considered the prospectivity of the respective PGM properties taking cognisance of the classification of exploration phases illustrated in Table 21. To date, Bauba has incurred exploration costs on this project totalling ZAR30.55m as capitalised in the latest financial statements. Bauba has completed first phase drilling on the project, and based on Table 21, a Prospectively Enhancement Multiplier (PEM) of between 2 and 5 can be applied to the exploration costs. A summary of the results are presented in Table

229 Table 22: Bauba Cost approach valuation results Prospectivity enhancement multiplier Project value Bauba attributable value* Exploration expenditure ZARm Lower PEM Upper PEM Preferred PEM Lower ZARm Upper ZARm Preferred ZARm Lower ZARm Upper ZARm Preferred ZARm 30,55 2,00 5,00 4,00 61,10 152,75 122,20 36,66 91,65 73,32 *Bauba owns 60% of the licences Figure 19: Market valuation The value range derived from the historic cost approach is between ZAR61,10 million (low valuation) and ZAR152,75 million (high valuation) on a 100% basis. This valuation range was calculated from the historic exploration expenditure on the project and the range of PEM values defined in Table 21. The value range reflects the level of value uplift based on the sophistication of the exploration for which positive exploration results, applying the concept of successful efforts, have been obtained. Venmyn Deloitte s preferred value is ZAR122,2 million. On an attributable basis, the value of the assets for Bauba s 60% shareholding ranges between ZAR36,66 million and ZAR91,65 million with a fair value of ZAR73,32 million Market approach valuation Since PGM resources have been classified for Bauba, Venmyn Deloitte was able to carry out a comparable transaction (market approach) valuation on the basis that recent market valuations of a similar nature provide the proxy for value. In order to arrive at a reasonable market value with which to compare the respective projects, appropriate recent and historical transactions must form the basis. Figure 19 summarises Venmyn Deloitte s database of recent unit market valuations within the context of the PGM market with reference to the respective PGM resource classifications. The comparable transaction value range selected for the valuation of Bauba has considered the nature of this valuation and the associated risk factors. Venmyn Deloitte is of the opinion that the ranges defined are reasonable in light of valuations/transactions of a similar nature and consideration of the following: The current pre-production status; The depth of the resources; The environmental sensitivities; The magnitude of the classified PGM resources; and Availability of infrastructure and logistics. 227

230 Table 23: Bauba market approach valuation results The range of values generated, based upon all Mineral Resources and exploration results quantified for Bauba, is summarised in Table 23 and illustrated in Figure 19. Venmyn Deloitte used the mid-point of the range of the exploration results PGM ounces to generate the value range. The value range derived from the market approach is between ZAR54,03m (low valuation) and ZAR184,07m (high valuation) on a 100% basis. This valuation range was calculated from the range of unit values as defined by the market approach. The value range reflects the level of confidence attached to the respective PGM resources, as well as the depth of the PGM reefs and the environmental sensitivities. The population of historic market transactions and valuations provides an indication of reasonability. Cluster 4PgE ounces Moz Lower USD/oz In-situ PGE value Cluster value* Bauba attributable value** Upper USD/oz Mean USD/oz Lower ZARm Upper ZARm Mean ZARm Lower ZARm Upper ZARm Mean ZARm Exploration results Northern Cluster 71,24 0,01 0,05 0,03 7,12 35,62 21,37 4,27 21,37 12,82 Central Cluster 19,71 0,01 0,05 0,03 1,97 9,86 5,91 1,18 5,91 3,55 Southern Cluster 18,93 0,01 0,05 0,03 1,89 9,47 5,68 1,14 5,68 3,41 Sub total 109,88 0,01 0,05 0,03 10,99 54,94 32,96 6,59 32,96 19,78 Inferred Mineral Resources Northern Cluster 9,76 0,25 0,75 0,50 24,40 73,19 48,79 14,64 43,91 29,27 Southern Cluster 7,46 0,25 0,75 0,50 18,65 55,95 37,30 11,19 33,57 22,38 Sub total 17,22 0,25 0,75 0,50 43,04 129,13 86,09 25,83 77,48 51,65 Total 127,09 0,04 0,14 0,09 54,03 184,07 119,05 32,42 110,44 71,43 * At an exchange rate of ZAR10,00/USD ** Bauba owns 60% of the licences. Venmyn Deloitte s preferred value is the mean value derived from the unit value ranges per category. This results in a preferred value, using the market approach, of ZAR119,05 million. On an attributable basis, the value of the assets for Bauba s 60% shareholding ranges between ZAR32,42 million and ZAR110,44 million with a fair value of ZAR71,43 million Valuation summary The results of the Bauba valuations carried out by Venmyn Deloitte are presented in Table 24. table 24: Bauba Summary of valuation results Project value Bauba attributable value* Valuation method Lower ZARm Upper ZARm Preferred ZARm Lower ZARm Upper ZARm Preferred ZARm Cost approach 61,10 152,75 122,20 36,66 91,65 73,32 Market approach 54,03 184,07 119,05 32,42 110,44 71,43 *Bauba holds 60% interest in the licences. The table above demonstrates that the results of the two valuation methodologies yield similar results. Venmyn Deloitte prefers the market valuation approach in valuing early exploration assets with a declared mineral resource estimate. Therefore, on an attributable basis, the value of the assets for Bauba s 60% shareholding ranges between ZAR32,42 million and ZAR110,44 million with a fair value of ZAR71,43 million Valuation assumptions SV2.10 The valuation opinion has been informed on the assumption that the specific technical and financial information specific to the project, detailed in the preceding section; is materially correct and can be relied upon Previous valuations SV2.11, SV2.12 Venmyn Deloitte is not aware of any other recent public valuations that have been done on Bauba within the past two years Audits, reviews and historic verification SV2.19; SV2.17 No audits or reviews of the mineral asset valuation have been conducted and no historic verification of the performance parameters on which the mineral asset valuation is based can be conducted 228

231 27. Adjacent Properties The Bauba Clusters are situated down-dip of a number of established mining operations. The geology of the Clusters is understood as they lie over the down-dip extension of the known and exploited deposit. The greater depth means that similar down-dip operations are not yet exploited. The neighbouring up-dip properties are discussed below. These adjacent mining operations are illustrated in Figure Bokoni Platinum Mine The Northern Cluster is down-dip of the Bokoni Platinum Mine and the Ga-Pasha PGM Project. Bokoni Platinum Mine has been in operation for over 30 years, lies due east and up dip of the Northern Cluster. Both the UG2 and Merensky Reefs are being mined from underground. The local geology is typical of that described for the Eastern Limb. The geologic losses at Bokoni are estimated to be approximately 20% for the Merensky Reef and 15% for the UG2 chromitite layer. The losses are attributable to potholes (UG2-9% and Merensky-16%) and pegmatites, which replace the reef (<3% for both reefs), dykes (4% in both reefs), and structural and alteration features such as faults, shears, joints, veins and alteration zones, which cause minor complications in mining. On a macro-scale dyke swarms cut the farms Zeekoegat, Middelpunt and Umkoanestad with a northeast predominant direction. They can vary in width up to 10m wide. The dykes do not present serious problems during mining and previous and current mining operations report insignificant displacements. Bokoni Mine s equivalent refined platinum production is stated as 55,1koz as at December Bokoni s life-of-mine plan consists of a Mineral Resource (exclusive of Mineral Reserves) of 99 million 4E ounces and a Mineral Reserve of 10,1 million 4E ounces Twinkenham Platinum Project The 100% Anglo Platinum underground mine lies due west of the Central Cluster. The mine is classified as a project in execution, producing only about t a month. The local geology is very typical as that described for the Eastern Limb. The average recorded true dip of the deposit is about 16 SW and stoping widths of about 0,90m Modikwa Platinum Mine Modikwa s life-of-mine plan consists of a Mineral Resource (exclusive of Mineral Reserves) of 60.2Moz 4E ounces and a Mineral Reserve of 8.7 million 4E ounces. Two expansion projects, the Middelpunt Hill UG2 expansion and the Brakfontein Merensky expansion are well advanced and will progressively increase the platinum production of Bokoni Mine. Stoping widths appear to be standardised to 0,95m for both reefs Effect of mineralisation depth to shaft depths A study was carried out by Snowden to illustrate the depths of existing mine shafts and the expected shaft depths of future mines. The Northern Cluster could reach depths of 1 700m, while the Central Cluster shaft could go down to 1 400m, with the Southern Cluster reaching 1 100m. The various shaft depths are illustrated in Figure Exploration Programme and Budget SR10A; SR10B(i); JSE12.9e(iii); JSE 12.10h(vi) The Prospecting Right for the Bauba Clusters was extended for three years from 2012 to The planned exploration for this three year period included the following activities: Diamond drilling of 13 NQ diameter boreholes (seven on the Northern Cluster and six on the Southern Cluster). Of the planned boreholes, six were completed during this period due to drilling difficulties; Lithological logging of all boreholes; Sampling of the mother hole and two deflections for each reef per borehole; Assaying all samples taken for the 4PGM and related elements; Modelling of four 2D seismic geophysical lines; A data analysis and manipulation, ore body modelling, QA/QC; Work on an ongoing conceptual feasibility study; and Ongoing Mineral Resource estimations for all areas as work progresses. The exploration plan and budget for 2014 to 2016 is presented in Table 25. These costs are anticipated to be incurred from 2014 extending over a period of three years. No portion of these estimated costs had been incurred at the effective date of this report. This cost estimate is part of an application to extend the Prospecting Right and approximately ZAR1,05m is expected to be incurred prior to lapse of the Prospecting Right. The exploration plan includes the following: Diamond drilling of a limited number of NQ diameter boreholes; Lithological logging of all boreholes; Sampling of the mother hole and two deflections for each reef per borehole; assaying all samples taken for the 4PGM and related elements; 229

232 Figure 20: Adjacent mining operations Mobilisation and acquisition of aeromagnetic data; Mobilisation and acquisition of seismic data; A data analysis and manipulation, ore body modelling, QA/QC; Work on an ongoing conceptual feasibility study; and Ongoing Mineral Resource estimations for all areas as work progresses. 230