Morupule South:

Project Update August 2012

ASX:HDG

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Disclaimer and Important Information

•This presentation has been prepared by, and issued by, Hodges Resources Limited (“Hodges” or the “Company”) to assist it in informing interested “Recipients” about the Company and the progress of certain business activities. It contains forecasts and forward looking statements which are no guarantee of future performance and which involve certain risks. Actual results and future outcomes will in all likelihood differ from those outlined herein. The presentation should not be construed as an offer or invitation to subscribe for or purchase securities in Hodges. Nor is it an inducement to make offer or an invitation with respect to said securities. •Forward-looking statements are statements that are not historical facts. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to statements regarding future production, resources or reserves and exploration results. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to: (i) those relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations, (ii) risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined, (iii) the potential for delays in exploration or development activities or the completion of feasibility studies, (iv) risks related to commodity price and foreign exchange rate fluctuations, (v) risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental approvals or in the completion of development or construction activities, and (vi) other risks and uncertainties related to the Company’s prospects, properties and business strategy. Our audience is cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and we do not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events. •The Company has not completed feasibility studies on its projects. Accordingly, there is no certainty that such projects will be economically successful. Mineral resources that are not ore reserves do not have demonstrated economic viability. The Company is not declaring an ore reserve at this stage with this work yet to be completed. The stated production tonnages and coal quality must be regarded as provisional indication of likely tonnages and qualities only. The production tonnages are based on the inferred resources, additional geological and mining studies and investigations to date. Information in this report relating to production tonnages is based on information compiled by Mr Mark Major (an employee and managing director of Hodges Resources Limited) who is is a Member of The Australasian Institute of Mining and Metallurgy. Mr Major has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Major consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. (1) The Coal Resources was compiled by GEMECS (Pty) Ltd and are detailed in a report dated 25 June 2012. The competent person with overall responsibility for the reporting of the Coal Resources is Nico J Denner, Pr.Sci Nat, B.Sc Hons (Geology) of GEMECS (Pty) Ltd who is a fellow of a Recognised Overseas Professional Organisation, the Geological Society of South Africa. Nico Denner has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Denner consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.

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Executive Summary

Summary Large, multi-option thermal coal project (Morupule South) in Botswana

2.3 Billion tonne deposit

1.2 Billion tonnes amenable to open cast mining

Located next to existing power station (hub) with transmission lines feeding local and potentially regional power markets

Close to South Africa and its long, established coal industry hubs giving access to deliver coal into Asia Pacific markets

Low sovereign and commercial risk

Financial scoping studies on mining and an integrated power station commenced.

Project Development Plan

Visage 3 stage mining development from 1.5-20Mtpa and associated integrated power approach

Identify and secure Strategic Development Partners

Move part of the inferred resource into a measured or minable category

Continue product transportation studies for best possible export solution

Complete Feasibility Studies on coal fired power station and export quality coal, options

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Hodges Overview

Coal development and exploration company.

Portfolio of thermal coal assets in Botswana – over +6 billion tonnes across the four strategically located projects.

Planned 2016 production for integrated mine and power project.

Expanding coal presence in Botswana and Southern Africa.

Tightly held capital structure with over 15% currently held by the Board.

Experienced mining and energy orientated Board and management including:

Peter Mullens (Chairman, VP exploration with Laramide Resources and Lydian International)

Mark Major (Managing Director with strong project development background)

Nathan McMahon (Director of Hodges and MD of Cazaly Resources Ltd)

Bryan Dixon (Director of Hodges and MD of Blackham Resources Ltd)

Matt Morgan (Exploration Manager who has had nearly 20 years mining experience)

Mike Robbins (CFO with 25 years finance and commercial experience in the mining industry in Australia, Africa and Asia)

Jeff Claeys (Country Manager who has resided in Botswana for over 20 years. Over two decades of experience in the mining industry).

Key Stats at 31 July 2012

ASX Code HDG

Shares on Issue 80.254 m

Options on Issue 10.255 m

Top 20 s/holders 54%

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Why Africa and why Botswana?

AFRICA is the second largest continent by size and population has emerging markets that will grow quicker than established ones. It has a younger demographic than other continents and the heavy involvement of China in recent times has been seen as a great sign for Africa and its growth. It is a resource rich with most of its natural resources undiscovered and barely harnessed. South Africa (and Southern Africa in general) is a significant participant in global coal markets. It is a relatively low cost producer (along with Indonesia and Colombia), it has the world’s largest coal export terminal and has easy access to Pacific and Atlantic coal markets. BOTSWANA has the longest, continuous multi-party democracy in Africa. It is one of the most stable and least corrupt countries on the planet (in 2011, it was ranked by Transparency International in the top 20% of the least corrupt nations in the world). It is the largest exporter of gem diamonds, by value, in the world and sits on over 212 billion tonnes of coal. Botswana can become a foreign mineral investment magnet with the following incentives currently in place: No foreign exchange controls ie. profits, dividends, capital etc can easily be

repatriated Mining tax losses can be carried forward indefinitely 22% corporate tax rate No restrictions on foreign ownership of companies or businesses Well developed legal system based on Common Law principles The Government of Botswana can acquire up to a 15% interest in a mine on

mutually agreed commercial terms ie. it is expected to be a capital funding shareholder in a project

5% royalty on coal sales

In 2010, the population was estimated at 2.038 million with an average annual growth rate of around 2%.

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I n f ra s t r u c t u r e i n B o t s w a n a

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Overview Botswana has good infrastructure by African standards. The quality of infrastructure was greatly improved by the development of the mining industry, which required adequate transportation and communication networks. Botswana also benefits from its location next to South Africa. This has allowed Botswana access to South Africa's telecommunications infrastructure. A fibre-optic telecommunications network has been completed in Botswana connecting all major population centres. The Civil Aviation Authority of Botswana (CAAB) has been established as a regulator of the air transport services to further enhance the transport system Roads An "inner circle" highway connecting all major towns and district capitals is completely paved, and the all-weather Trans-Kalahari Highway connects the country (and, through it, South Africa's commercially dominant Gauteng Province) to Walvis Bay in Namibia. Railways Botswana Railways operates under the auspices of the Ministry of Works and Transport as a public commercial enterprises. The route length of the railways is nearly 900 kilometres comprising 650 kilometres of main line between Ramatlabama in the south and Ramokgwabwe in the north, and 250 kilometres of branch lines serving copper and nickel mines in Selebi Phikwe area, coal mines in Morupule and soda plant at Sua. Various feasibility studies have been completed or are underway for possible rail links between Botswana and South Africa, Botswana and Namibia and Botswana and Mozambique. Power Botswana Power Corporation (BPC) is the controlling arm of the government which manages the power supply. It has an extensive 220KV transmission grid throughout Botswana. Recent development of 400KV transmission lines to integrate with the SAPP grid is completed and development of the Isang sub station is close to completion.

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MORUPULE SOUTH T H E S O LU T I O N

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Morupule South Facts

Morupule South Project

2.3BT JORC Inferred Resource (June 2012)

1.2BT amenable to open cut mining

Export quality coal available

The Morupule South Coal Project is located directly to the south of Botswana’s only operating colliery, the Morupule Colliery. The prospecting licence (PL121/2010) covers a total area of 264.4km2 within the central eastern district of Botswana.

Activities completed in last 12 Months

Drilled 52 drill holes including 15 diamond drill holes (2,076 meters) and 37 reverse circulation (RC) open holes (5,070 meters).

All diamond and the majority of RC open holes were geophysically logged and depth corrected.

Coal bore core samples were delivered to M&L Inspectorate Pty Ltd laboratory in Middelburg, for proximate analysis and washability test work.

Ultra-high resolution airborne magnetic survey flown over entire PL and surrounding environs.

Completion of environmental and social baselines.

2.3BT JORC Inferred resource estimate completed by independent consultants at GEMECS (Pty) Ltd.

Mine (underground)

Power station

PL121/2010 Morupule South

Kilometres

0 5 10

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M o r u p u l e S o u t h J O R C Re s o u rc e

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SEAM NAME

GROSS INSITU

TONNES

RAW COAL QUALITIES (AIR DRIED)

Ave Seam

TK

CV (Kcal/kg)

Ash (%)

Inherent Moisture (%)

Volatile Matter

(%)

Fixed Carbon

(%)

Total Sulphur

(%)

SSB 1.0 MT 0.6 4,346 34.2 3.1 29.6 33.8 1.84 SLB 319 MT 2.6 4,442 35.3 3.5 25.1 36.1 2.25 S2B 35 MT 1.9 4,069 38.6 4.1 21.2 36.2 1 SMT 1,010 MT 10.3 4,083 38.2 3.9 20.1 37.8 0.87 SMB 965 MT 7.3 4,967 29.6 3.7 20.2 46.6 1.13 Total 2,330 MT

Resource Model Information Notes: Coal seams thinner than 50cm, as well as coal with a raw ash of >45% were excluded from the resource estimation

reporting.

Bore hole coal seam data was correlated by geological logging and down hole geophysics, with subsequent geological modelling and coal resources estimated using Gemcom MinexTM software.

Coal qualities were modelled and reported on an air-dried basis as reported from the lab.

Coal qualities were only composited for seams that have a sampling coverage of at least 90%. Compositing of qualities is done on a density weighted basis across the total thickness of the coal seam/selection. Model expansion of the qualities was limited to 500m from the last known data point.

Model grids were created on a 50x50 mesh size.

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Morupule South Resource Zones

1.2Bt Open pit 1.1Bt Underground

Average Strip Ratio Waste m3: Coal tonne

e.g. 1.7 : 1

1.7 : 1

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Schematic Stratigraphy of the Morupule South Coal field

Morupule Shallow

Morupule Deep

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Morupule South Indicative Wash Results

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Target range CV 24Mj (5,731Kcal)

Seam Sample No.

Ave Yield

Min Yield

Max Yield

Ave Ash

Min Ash

Max Ash

Ave VM Ave IM Ave TS Min TS Max

TS

SSB 1 89.5 22.6 34.2 3.5 5.72 SLB 4 75.0 62.2 87.0 20.9 20.0 21.9 30.8 3.7 0.93 0.76 1.22 S2B 3 34.7 21.9 58.5 19.4 13.3 25.8 25.4 5.0 0.59 0.26 1.19 SMB 7 78.3 41.8 94.4 19.8 18.9 20.7 23.9 4.5 0.48 0.34 0.74

Target range CV 25Mj (5,970Kcal)

Seam Sample No.

Ave Yield

Min Yield

Max Yield

Ave Ash

Min Ash

Max Ash

Ave VM Ave IM Ave TS Min TS Max

TS

SSB 1 59.1 20.4 35.4 3.5 6.06 SLB 4 66.9 52.6 81.7 18.2 17.1 19.3 31.8 3.8 0.79 0.46 1.05 S2B 3 24.0 8.8 45.1 16.9 10.8 23.8 26.4 5.1 0.57 0.22 1.16 SMB 7 66.6 29.2 90.9 17.0 15.6 18.0 24.6 4.5 0.46 0.25 0.69

Target range CV 26Mj (6,209Kcal)

Seam Sample No.

Ave Yield

Min Yield

Max Yield

Ave Ash

Min Ash

Max Ash

Ave VM Ave IM Ave TS Min TS Max

TS

SSB 1 45.4 19.7 36.6 3.9 6.05 SLB 4 56.7 15.5 14.4 16.7 32.7 3.9 0.72 0.48 0.90 S2B 3 14.4 0.0 28.5 17.6 13.3 21.8 28.2 4.8 0.74 0.36 1.12 SMB 7 51.3 20.7 79.5 14.5 13.2 15.7 25.5 4.7 0.46 0.23 0.70

Target range CV 27Mj (6,448Kcal)

Seam Sample No.

Ave Yield

Min Yield

Max Yield

Ave Ash

Min Ash

Max Ash

Ave VM Ave IM Ave TS Min TS Max

TS

SSB 1 0.0 SLB 4 44.4 27.0 70.7 13.0 11.5 14.1 33.7 4.0 0.73 0.48 1.01 S2B 3 8.4 0.0 44.4 14.5 10.8 18.1 30.1 4.6 0.71 0.42 1.00 SMB 7 29.6 13.7 52.2 12.3 10.3 13.5 27.1 4.7 0.45 0.24 0.63

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Comparisons with Other Coal Assets in Botswana

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CIC NMR

HDG-MOR AFR

AVA

5 Bt 2 Bt

0%

10%

20%

30%

40%

50%

60%

70%

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Ash

(%)

CV (Kcal/kg)

Botswana Coal - Raw Data

CIC

NMR

HDG-MOR AFR

AVA 5 Bt 2 Bt

0%

10%

20%

30%

40%

50%

60%

70%

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Ash

(%)

CV (Kcal/kg)

Botswana Coal - Washed Data

The Hodges - Morupule South Coal Project ranks very high on raw and washed data. It should be noted that at the time of compiling this presentation, CIC Energy (2.4Bt raw resource) had been purchased by Jindal Steel and Power for $CDN2 per share.

Note: all information has been taken from public available documentation (in July 2012) from the companies websites and all seams are weighted averaged for the purpose of this comparison.

AVA Aviva Corporation Limited Open cut mine potential

AFR African Energy Resources Limited Open cut mine potential

CIC CIC Energy Limited ~30% can be extracted via open cut mining methods and the remaining 70% will require underground mining.

HDG-MOR Hodges Resources Limited – Morupule South Project

50% Open cut mine potential with 50% Underground

NMR Nimrodel Resources Limited Possible Open cut potential but considered to be underground due to main seams being greater than 80m below surface.

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M i n e D e v e l o p m e nt P l a n

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Mine Concept Plan

The Morupule South resource currently indicates it has over 50% of its resource accessible to open pit mining methods. On that basis, Hodges believes a three stage project, along the following lines, is ideal:

Stage 1 – 1.5 to 2Mtpa coal mine. An operation of this size could be up and running by 2016. Coal would be supplied to current power stations or could be used as feed by an independent power station owner (300MW modular style). Stage 2 – 5Mtpa coal mine (around 2019). Coal would supply modular style power station owner PLUS initial export of high quality coal to international markets. Stage 3 – up to 20Mtpa coal mine (around 2022). This size operation could supply different power stations and power suppliers as well as large scale exports to international sea borne markets.

Current Activities

Currently defining measured resource – a waiting on laboratory results.

Mining and integrated power concept studies, currently being undertaken. Additional infill and bulk sampling to increase resources knowledge will be undertaken before the end of 2012. F

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T h e S ta g e d C o a l H a n d l i n g C o n c e p t

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ROM

Power Projects

Export Coal

Export Power

Domestic Power

Mine

Wash Plant

1.5Mtpa 5Mtpa 20Mtpa

2Mtpa

2Mtpa

8-10Mtpa

5-7Mtpa

300MW 600MW - 1,800MW

1Mtpa

4,700 Kcal Middlings product

5,800 – 6,200 Kcal Export Product

4,300 – 5,000 Kcal Raw product 2.3Bt Inferred Resource

Stage 1 = 1.5Mtpa Stage 2 = 5Mtpa Stage 3 = 20Mtpa

Rejects to holding facility

Rail load out to port loading

facilities.

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POWER PROJECT T h e N e e d

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Overview

Hodges sees a unique opportunity to take advantage of the strategic location of the Morupule South project (located beneath Botswana’s transmission network) and the power shortage in Africa. The Morupule South has over 50% of its resource accessible via open pit mining methods. On this basis, Hodges believes a three stage development approach from 1.5Mtpa by mid 2016 to 20Mtpa by 2022 is ideal. Hodges has been investigating various corporate entities and structures to implement the above. This has involved looking at tax jurisdictions (including nations with double tax treaties with Botswana) and possible ‘ring fencing’ of the various components of the plan ie. separate power, mining and management entities.

Power Project Concept

The initial proposed project shall be a green field mine-mouth power plant comprising one or two 300MW coal fired power plant units with associated auxiliaries and systems. The steam cycle would be based on the sub-critical technology using coal-fired boiler and tandem compound steam turbine with natural draft cooling tower system. The operating life of the proposed plant is 25 years+ with estimated annual coal consumption of around 1.5Mtpa (3Mtpa for 600MW). The project development would be carried out over four (4) stages, namely site investigation and design, site preparation, construction and installation and the operational and maintenance stage. Environmental and social baseline studies have been completed. Hodges envisages the commencement of the EIA in 2013. Hodges has engaged the same consultants (Ecosurv) as those used by the Botswana Power Corporation for their recent expansion of the Morupule power station. Hodges intends to participate in the Botswana tender process for IPP’s – a brownfields project in 2016 and a greenfields project in 2018.

Integrated Mine and Power Projects F

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Re c e nt A c t i v i t i e s

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Power shortage in SADC to continue NEWSDAY Victoria Mtomba Business Reporter | 2011-09-28 08:51:00

Southern African Power Pool (SAPP) the regional power grouping, yesterday

said the region has a shortfall of power and would not meet the required

demand before 2014 when lined up transmission projects had been completed. He said regional power demand was 50 214 megawatts (MW) and last year power peak demand was 45 566MW. F

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S o u t h e r n A f r i c a n Po w e r Po o l ( S A P P )

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Southern Africa

The countries who formed part of the Southern African Development Community (SADC) in September 1994 also formed a co-operation known as the Southern African Power Pool (SAPP). The SAPP was created with the primary aim to provide reliable and economical electricity to supply to the consumers of each of the SAPP members, consistent with reasonable utilisation of natural resources and the effect on the environment. SAPP currently consists of 12 member countries, 9 operating and 3 non operating. The SAPP is currently dominated by Eskom, a South African government owned electricity utility which supplies over 85% of the region’s power needs. The SAPP faces major challenges such as:

Lack of infrastructure to deliver the electricity

Lack of maintenance on electricity infrastructure

Limited funds to finance new investments

Insufficient generation

High losses

Reference – Southern Africa Power Pool website www.sapp.co.za

“Over US$5.6 billion would be required to develop the identified transmission projects” Estimated deficiency of 6,000MW, by 2015

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B o t s w a n a Po w e r S u p p l y

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The Botswana Power Corporation (BPC) is a state owned generation, transmission and distribution company that was established in 1970. It currently only has 190MW of its own capacity and imports aver 80% of electricity from the SAPP. By 2013, South Africa will stop supplying power to Botswana. This will be partly offset when Morupule B fully comes on line in late 2012 (600MW) but the government still expects a generation shortfall of another 600MW that will need to be addressed by IPP’s (300MW brownfields by 2016 and 300MW greenfields by 2018) as the government does not have the funds to build more capacity. Electricity demand in Botswana is expected to grow at a compound yearly growth rate of 4.6% from now until 2020 (per Frost and Sullivan) with coal remaining the main stock feed for future generation capacity. The BPC has recently entered into its first PPA (in $US) with Karoo Sustainable Energy who aims to bring into production a 180MW power station facility, run on coal bed methane, within the next 2 years. In 2008, KSE was awarded a 270MW tender, issued by the BPC for the development of 270MW emergency power plant. Due to the global economic crisis of 2008-2009, the project was restructured to a 90MW dual fuel (gas and diesel) and 180MW gas power plants. Tariffs in Botswana are heavily subsidised but have risen by 70% since 2010.

Morupule South Project Located in the centre of

the Botswana power infrastructure hub , next

to existing mine and power stations.

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B o t s w a n a F u t u r e D e m a n d

21 Reference – Botswana Power Corporation presentation to Botswana Resources Conference 2011

BPC’s current generation capacity

Source Capacity Remarks

Morupule A 120MW 24 year old plant – running at 40% efficiency, needs refurbishment or decommissioning.

Morupule B 528MW Commissioning delays with first two units. Final two units not expected to come on line until 2013.

Orapa 90MW Duel fuel plant – currently ran on diesel.

Other 70MW Rented diesel plant.

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EXPORT PROJECT T h e Po te nt i a l

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E x p o r t R a i l L i n k s - T h e O p t i o n s

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D C

B

A

A. Existing Rail – Bots-Zim-Moz • Rail distance of ~1350km • MOUs signed between countries • May require minor upgrades

B. Transnet Botswana – SA Link • Existing operational rail constraints • New rail required to link Botswana to existing

rail • Access to operating ports

C. Rail to Ponta Techobanine • Rail distance of over 1200km to Mozambique

through Zimbabwe • Requires all new rail or upgraded lines with

high axle loads and large volumes

D. Trans-Kalahari Railway • Rail distance of over 1600km into Namibia to

the west African coast • Requires all new rail and upgraded port with

high volumes

Near term solution. Two major prospects are the use of Current Rail (option A) and Transnet link (option B) Current Rail – Bot-Zim-Moz currently under utilized due to current freight tariffs. Negotiation on tariffs and some track modification could make this a near term transport option to Maputo port. This option is consider suitable for smaller volumes of higher ranked coal (start-up option). Transnet Link – Transnet have expressed an interest to develop a rail link into Botswana through the developing Waterberg Feeder expansion. This option is consider by the company to be suitable for all stages of the project; due to its ability to transport sufficiently larger volume and current Port options.

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C o a l E x p o r t P l a n - R a i l

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Long terms options. The Ponto Techobanine (option C) and Trans-Kalahari (option D) railway options are anticipated to be longer term rail solutions or 10 years away from completion. Both are proposing a minimum of 50-60Mtpa using 30t axle loading. The Ponto Techobanine Inter-Regional Heavy Haul Railway and Deep-Water Port Project is a privately funded integrated transport system. The finance requirements are estimated at US$11.3 billion. The project will originate in Botswana and terminate at a new deep-water port at Ponta Techobanine just south of Maputo using Botswana coal as anchor commodity resource, and collecting additional ore in Zimbabwe, Mozambique and Swaziland for delivery to a Coal Terminal in Ponta Techobanine Port. The Trans-Kalahari line requires all new rail and upgraded port with high volumes, connecting Botswana and Namibia (possibly South Africa). The Botswana and Namibian governments are currently gazetting this freight rail route option. The finance requirements are estimated at US$10-15 billion.

Transnet rail development plan. Image sourced from Transnet website (www.transnet.net)

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PATHWAY FORWARD T h e D i r e c t i o n

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Pa t h to P r o d u c t i o n

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Phased development to minimise capital outlay Three stage development proposed with the initial two stages envisaged to be better served through contract mining. Staged growth of the Power station development in line with mine development to maximise returns on middlings.

Target energy growth markets in Asia and Africa Marketing studies identify coal quality range (5,700–6,200Kcal) are suitable for Asia markets. India and China demand for thermal coal is increasing yearly; with further demand required through new and expanding coal fired power developments in these countries.

Phased expansion to meet infrastructure and power transmission capacity growth Use existing rail and small new link rail systems which requires less capital and time to develop in short term with long term on more efficient larger capacity rail options. Phased power growth in line with domestic needs and those of the neighbouring countries..

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I d e a l i s e d P r o d u c t i o n P r o f i l e

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0

2

4

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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

mill

ion

tonn

es

Years

ROM

Domestic

Export

Stage 1 Stage 2 Stage 3 Owner Operator Contract Mine

The open pit operation is expected to have a mine life of over 40 years. Additional, higher quality raw coal could be sourced from the 1.1Bt underground resource.

Requires seaborne export infrastructure developed.

Options considered are Transnet or Mozambique

Requires major rail infrastructure developed. Options considered are TKR / Transnet / Mozambique.

Integrated 300Mw IPP Power station,

with additional regional supply.

Legend

Additional integrated export (SAPP) power

station up to 1,800MW.

Conceptual production profile based on information compiled from independent resource statements and in house mining and resource studies. Please refer to the disclaimer.

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Mining and integrated power supply Conceptual Studies (Nov 2012) Complete conceptual mine design and coal processing options. Define economic viability and Capital & Operational costs of various phased mining scenarios for domestic coal supply for integrated Power stations and seaborne export market.

Defined 2.3Bt Inferred Resource Commenced social and environmental baseline studies

Established competent in-country team

Measured Resource and Reserves (Oct 2012) Drilling completed over a small area where it is expected to define a measured resource in the order of 100Mt. This is sufficient enough resource for an integrated 300Mw Power stations for over 50 Years.

Commence additional Infill and Bulk Sampling drilling (Oct 2012) Drilling additional (low strip) area to increase measured resources and gather additional geological/geotechnical and bulk sampling work, for Feasibility level assessments for power station design and coal use.

2 0 1 2 - M i l e s to n e A c h i e v e m e nt s a n d T i m e ta b l e

Secure Strategic Partner (now) Secure short term funding for project development at company level. Identified and actively talking to possible Power development partners; Coal offtake and infrastructure development groups.

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Complete Feasibility Studies (4Qtr 2013) Complete Feasibility level mine design and coal processing options,

including detailed Capital & Operational costs of the various phased mining scenarios.

Confirm coal product marketability (5,700 to 6,200 Kcal range). Define the integrated power plant viability and optionality.

Add to the existing Reserves (May 2013) To define a 30 year mine life for the integrated export power project and at

least 10-20 year mine life for a export product. To increase confidence in Feasibility level studies.

2 0 1 3 - M i l e s to n e T i m e ta b l e

Define Transport, power and Water solutions (2H 2013) Complete water supply design and commence licensing of supply. Secure rights over transport options; short and longer term. Secure expression of interest for the integrated Power station option.

Secure cornerstone investor and Strategic Partner (2013) Power development partner. Coal offtake agreements. Infrastructure agreements and partners.

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