Free State Development and Investment Corporation Limited ... · and Mineral Reserves (“the SAMREC Code”), the South African Code for the Reporting of Mineral Asset Valuation

An Independent Mineral Asset Valuation

Report on the Du Preez Leger Project,

Free State Province, South Africa

Effective Date: 19 February 2010

Minxcon Reference: M09-105

Competent Valuator:

NJ Odendaal (Director Minxcon): B.Sc. (Geol.), B.Sc. (Min. Econ.),

M.Sc. (Min. Eng.), Pr. Sci. Nat., FSAIMM, MGSSA, MAusIMM.

Competent Person:

CJ Muller (Director Minxcon): B.Sc. (Hons) (Geol.), Pr. Sci. Nat.

Suite 5, Coldstream Office Park

Cnr Hendrik Potgieter & Van Staden Streets

Little Falls, Roodepoort, South Africa

Tel: +27 11 958 2899 │ Fax: +27 958 2105

www.minxcon.co.za

Directors: NJ Odendaal, D Van Heerden, C Muller

Registration No. 2004/029587/07

Free State Development and

Investment Corporation Limited

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T1.1 i, ii

Mineral Asset Valuation Report on the Du Preez Leger Project

Prepared by Minxcon (Pty) Ltd

i

DISCLAIMER AND RISKS

This Report was prepared by Minxcon (Pty) Ltd (“Minxcon”). In the preparation of the report, Minxcon has

utilised information relating to operational methods and expectations provided to them by various

sources. Where possible, Minxcon has verified this information from independent sources after making due

enquiry of all material issues that are required in order to comply with the requirements of the SAMREC

Code. Minxcon and its directors accept no liability for any losses arising from reliance upon the

information presented in this report.

OPERATIONAL RISKS

The business of mining and mineral exploration, development and production by their nature contain

significant operational risks. The business depends 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 RISK

Factors such as political and industrial disruption, currency fluctuation and interest rates could have an

impact on 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 any operating entity.



ii

Mineral Asset Valuation Report on the Du Preez Leger

Project, Free State Province, South Africa

TABLE OF CONTENTS

1 Executive Summary ...................................................................................................... 6

2 Introduction and Scope .................................................................................................. 9

2.1 Scope of the Report ................................................................................................ 9

2.2 Competent Persons‟ Declaration ................................................................................ 10

3 Identity of Tenure ...................................................................................................... 10

3.1 Project Description and Location ............................................................................... 10

3.1.1 Access and Infrastructure .............................................................................. 12

3.1.2 Topography and Climate ................................................................................ 12

3.1.3 Adjacent Properties ..................................................................................... 12

3.2 Prospecting Rights ................................................................................................. 14

3.3 Surface Rights ...................................................................................................... 14

3.4 Property Boundaries and Survey Certificates ................................................................. 14

3.5 Environmental Aspects ............................................................................................ 15

3.6 Agreements ......................................................................................................... 15

3.7 Summary of Legal Aspects and Tenure ......................................................................... 15

4 History of the Project .................................................................................................. 16

4.1 Historical Exploration and Sampling Methods ................................................................. 16

4.2 Current Exploration ................................................................................................ 16

5 Geological Setting ...................................................................................................... 17

5.1 Regional Geology ................................................................................................... 17

5.2 Local Geology ....................................................................................................... 19

5.3 Project Geology .................................................................................................... 21

5.3.1 Stratigraphy ............................................................................................... 21

5.3.2 Structure .................................................................................................. 22

5.4 Mineralisation at the Project Area .............................................................................. 26

6 Mineral Resources ...................................................................................................... 27

6.1 Density Estimation ................................................................................................. 27

6.2 Grade Estimation ................................................................................................... 27

6.2.1 Domaining ................................................................................................. 27

6.2.2 Compositing ............................................................................................... 28

6.2.3 Geostatistical Evaluation Method ..................................................................... 29

6.2.4 Assumptions and Adjustments ......................................................................... 29

6.2.5 Statistical Analyses ...................................................................................... 32

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iii

6.2.6 Co-Efficient of Variation ................................................................................ 35

6.2.7 Variography ............................................................................................... 35

6.2.8 Resource Classification.................................................................................. 37

6.3 Mineral Resource Classification.................................................................................. 37

6.3.1 Summary of Mineral Resources ........................................................................ 37

6.3.2 Basis of Classification of Mineral Resources ......................................................... 39

6.3.3 Relationship of the QP to the Issuer .................................................................. 39

6.4 Further Work ........................................................................................................ 39

7 Modifying factors........................................................................................................ 39

7.1 Effect of Modifying Factors ....................................................................................... 39

7.2 Technical Parameters affecting the Resource Declaration ................................................. 39

8 Valuation Approaches .................................................................................................. 40

8.1 Market Approach ................................................................................................... 40

8.1.1 Price Adjustment ......................................................................................... 41

8.1.2 Project Specific Valuation Parameters ............................................................... 41

8.2 Cost Approach ...................................................................................................... 42

9 Valuation date ........................................................................................................... 42

10 Valuation Summary and Conclusions ............................................................................... 43

10.1 Principle Project Risk ............................................................................................. 43

10.2 Valuations of farms Du Preez Leger, Vermeulenskraal, Millo/Tweepan and Rebelkop ................ 44

10.2.1 Market Approach ......................................................................................... 44

10.2.2 Cost Approach ............................................................................................ 47

11 Sources of Information ................................................................................................ 49

12 Previous Valuation ...................................................................................................... 50

13 Competent Persons and Other Experts ............................................................................ 51

14 Competent Valuator .................................................................................................... 52

15 Range of Values ......................................................................................................... 54

16 Identifiable Component Asset values .............................................................................. 54

17 Historic Verification .................................................................................................... 55

18 Market Assessment ..................................................................................................... 55

19 Audits and reviews ..................................................................................................... 57

20 Glossary of Terms ....................................................................................................... 59



iv

FIGURES

Figure 1: Corporate Structure of FSD ......................................................................................9

Figure 2: General Location of the Du Preez Leger Project ........................................................... 11

Figure 3: Topo-Cadastral Map of the Du Preez Leger Project Area ................................................. 13

Figure 4: Regional Geology of the Witwatersrand Basin .............................................................. 18

Figure 5: Stratigraphic Column of the Free State Goldfield ......................................................... 19

Figure 6: Basal Reef Underlying Farm Areas ............................................................................ 20

Figure 7: Leader Reef Underlying Farm Areas .......................................................................... 20

Figure 8: Geological Cross Section of the Vermeulenskraal Area ................................................... 22

Figure 9: Structures at the Project Area ................................................................................ 23

Figure 10: Basal Reef Block Model – Du Preez Leger/Jonkersrust ................................................... 24

Figure 11: Basal Reef Block Model – Vermulenskraal .................................................................. 24

Figure 12: Leader Reef Block Model - Du Preez Leger/Jonkersrust ................................................ 25

Figure 13: Leader Reef Block Model – Vermulenskraal ................................................................ 25

Figure 14: Leader Reef Block Model – Millo/Tweepan ................................................................ 26

Figure 15: Basal Reef Domains ............................................................................................ 27

Figure 16: Leader Reef Geozones ......................................................................................... 28

Figure 17: Available Drill Hole Intersections Overlain on the Project Area ....................................... 30

Figure 18: Basal Reef Domains and Drill Holes ......................................................................... 31

Figure 19: Leader Reef Domains and Drill Holes ....................................................................... 31

Figure 20: Comparative Valuation ........................................................................................ 47

Figure 21: Value Range for the Du Preez Leger Project .............................................................. 54

Figure 22: Gold Price (USD/oz) ............................................................................................ 56

Figure 23: Global Gold Supply and Demand Distribution ............................................................. 56

Figure 24: Gold Price and Real Interest Rate Relationship ........................................................... 57

Figure 25: Gold Price in USD and SA Rand ............................................................................... 58

Figure 26: Gold Price and USD-Euro Relationship ...................................................................... 58



v

TABLES

Table 1: Prospecting Rights relating to the Du Preez Leger Project ............................................... 14

Table 2: Correlation of Important Auriferous Reefs in the Odendaalsrus-Virginia Area ............................... 21

Table 3: November 2008 and Adjusted November 2008 Mineral Resource Reconciliation ...................... 23

Table 4: Domaining Parameters ........................................................................................... 28

Table 5: Statistical Analysis – Basal Reef ................................................................................ 32

Table 6: Statistical Analysis – Leader Reef .............................................................................. 33

Table 7: Co-Efficients of Variance for Basal and Leader Reefs ...................................................... 35

Table 8: Variogram Parameters – Basal Reef ........................................................................... 35

Table 9: Variogram Parameters – Leader Reef ......................................................................... 36

Table 10: Capped/Cut Values for Basal and Leader Reef Domains ................................................. 36

Table 11: Mineral Resources of the Du Preez Leger Project as at November 2008 .............................. 38

Table 12: Parameters Used to Derive Cut-Off Grade .................................................................. 38

Table 13: Acceptable Methods of Mineral Project Valuation ........................................................ 40

Table 14: Economic Parameters used in the Comparative Analysis ................................................ 41

Table 15: Valuation Risk Associated Parameter Matrix - Gold Industry Standards ............................... 41

Table 16: PEM Matrix for Gold ............................................................................................. 42

Table 17: Principle Risk – Du Preez Leger Project ..................................................................... 43

Table 18: Project Valuation Modifying Indices (Also refer to Table 15) ........................................... 45

Table 19: Market Related Values Per Ounce of Mineral Resource .................................................. 45

Table 20: Du Preez Leger Mineral Asset Valuation based on Comparative Analysis ............................. 46

Table 21: Rebelkop Mineral Assets Valuation based on Comparative Analysis.................................... 46

Table 22: Reproduction Costs - Du Preez Leger ........................................................................ 47

Table 23: Du Preez Leger Valuation based on Historical Cost Method ............................................. 49

Table 24: November 2008 Valuation Du Preez Leger .................................................................. 50

APPENDICES

Appendix 1: Minxcon JSE Listing Requirements and SAMREC Code Audit Checklists ............................ 68

Appendix 2: Du Preez and Ledger Reproduced Surface Exploration Drilling Programme ....................... 81

Appendix 3: Granting of Prospecting Right ............................................................................. 82

Appendix 4: Copy of EMP Approval ....................................................................................... 83

Appendix 5: Directors Statements ........................................................................................ 84

Appendix 6: Histograms .................................................................................................... 85



6

11 EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

Minxcon (Pty) Ltd (“Minxcon”) was commissioned by Free State Development and Investment Corporation

Limited (“FSD”) to update an Independent Mineral Asset Valuation Report on the mineral assets of the Du

Preez Leger Project, located near the town of Welkom, Free State Province, South Africa. The Report is

fully compliant with the South African Code for the Reporting of Exploration Results, Mineral Resources

and Mineral Reserves (“the SAMREC Code”), the South African Code for the Reporting of Mineral Asset

Valuation (“the SAMVAL Code”) and Section 12 of the JSE listing requirements, with the exception of

sections pertaining to developed operations as this Project is still in the exploration phase. The

Competent Person of the Valuation Report deems this summary document to be a true reflection of the

content of the full Report.

The Du Preez Leger Project comprises four exploration

areas in the Free State Province; namely the Du Preez

Leger/Jonkersrust 72 (“Du Preez Leger”) area, the

Vermeulenskraal area, the Rebelkop area and the

Tweepan area. Due to the limited information

available regarding the Rebelkop area, this area has

not been evaluated for a Mineral Resource.

The areas of interest are located Free State Goldfield

of the Witwatersrand Basin, with adjacent producing

gold mines including the President Steyn Gold Mine,

Bambanani Mine, Harmony Mine, Beatrix Mine and St

Helena Mine. These mines have mainly targeted the

Basal and Leader Reefs. The A-Reef has also been

extensively mined on Brand Mine to the north of the

Project Area. The placers of primary economic

interest at the Project Area are the Basal and Leader

Reefs.

FSD has held the mineral rights pertaining to the Project Area („old order rights‟) since the early part of

the twentieth century circa 1945. These rights were converted to a New Order Prospecting Permit on 7

November 2006, under the Mineral and Petroleum Resources Development Act, 2002. The New Order

prospecting permit expires on 6 November 2011. No invasive physical exploration activities have been

conducted by FSD to date, and accordingly the environment has not been impacted.

Proposed further work on the Project will include an in-depth review of the available data by a competent

geological consulting company with the possible progression, depending upon the results of the aforesaid

review, to drilling of up to four geological boreholes as envisaged in the Prospecting works Programme.

The estimated funding requirements for exploration for the 2009-2010 combined year is ZAR 5.185 million

and for 2011 is ZAR 350,000. The Company has sufficient cash resources to fund future exploration and

environmental work.

No account of any modifying factors such as mining methods, metallurgical treatment processes and

parameters, taxation, socio-economic, marketing or political factors have been taken into account.

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7

RESOURCE EVALUATION

The Resource evaluation was undertaken using Minxcon‟s „Mt-Estimation‟ geostatistical program which

utilizes DatamineTM as the platform software. Full reef composite mining cut values (Au content (cm.g/t))

have been interpolated into a 2D block model. The block model size of 500 X 500 m was determined from

the drill hole spacing, and the continuous nature of the ore body („stationarity‟ principal). Simple kriging

estimation technique was used, based primarily on drill hole spacing. Detailed checks were carried out to

validate kriging outputs, including input data, kriged estimates and kriging efficiency checks.

Four geostatistical domains (geozones) were modelled for the Basal Reef and eleven geozones were

modelled for the Leader Reef, based on the grade relationships and data trends of the boreholes.

The drill holes represent full reef composites, i.e. one intersection value per drill hole. The composite was

then used in the estimation process.

The November 2008 Minxcon estimated block models were depleted based on regional structure data and

the Mineral Resource was subsequently adjusted accordingly.

The table below details the Mineral Resource with regards to reef versus Resource cut (minimum stoping

width of 120cm) both at a zero cut-off and a cut-off of 250cm.g/t:-

Mineral Resource Statement with regards to Reef versus Resource Cut (minimum stoping width of 120 cm)

Mineral

Resource Area

Cut-Off

(cm.g/t)

TONNAGE %

GEO

LOSS

TONNAGE Au

Diluted

Au CW SW Content

REEF SW REEF SW

(Mt) (Mt) (Mt) (Mt) (g/t) (g/t) (cm) (cm) ('000 kg) (Moz)

BASAL REEF

Du Preez Leger

0 1.08 2.28 5 1.03 2.17 18.44 8.75 61 120 18.99 0.61

250 1.06 2.24 5 1.01 2.13 18.82 8.92 60 120 19.01 0.61

Vermeulenskraal

0 8.89 11.47 5 8.45 10.9 8.39 6.50 120 137 70.90 2.28

250 7.12 7.94 5 6.76 7.54 9.98 8.95 135 145 67.46 2.17

LEADER REEF

Du Preez Leger

0 25.16 28.43 5 23.90 27.01 5.99 5.30 86 120 143.16 4.60

250 22.34 25.35 5 21.22 24.08 6.24 5.50 91 120 132.41 4.26

Vermeulenskraal

0 17.45 24.57 5 16.58 23.34 3.10 2.20 124 141 51.4 1.65

250 12.40 18.88 5 11.78 17.94 3.84 2.52 124 144 45.24 1.45

Millo/Tweepan

0 6.21 7.53 5 5.90 7.15 3.74 3.09 110 128 22.07 0.71

250 5.26 5.49 5 5.00 5.22 4.33 4.15 119 130 21.65 0.7

Notes: 1. SW – Minimum Stoping Width of 120cm; 2. CW – Corrected Channel Width; and 3. SG – 2.7

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8

VALUATION OF THE PROJECT

Based on the information available, the standard comparative value method was selected to value the

mineral assets of the Project. The outcomes were also benchmarked against recent market transactions

involving similar assets, as well as current market value of listed entities holding similar assets.

A 2010 forecast rand/dollar exchange rate of ZAR 7.59 to the US$ was used in the conversion of the US$.

Two methods were used to estimate the value of the Project, namely the Comparative and Historical Cost

methods.

Mineral Asset Valuation

Farm Name Total Lower Price

Risk Adjusted

Price

Upper Price

Lower Value

Fair Value

Upper Value

Exploration Areas with Resources

oz US$/oz ZAR'000

Comparative Method Total DP, V, M, T

9,188,507 2.03 3.21 8.39 141,668 223,445 584,891

Historical Cost Method Total DP, V, M, T 234,765 264,832 289,844

Exploration Areas without Resources

ha ZAR/ha ZAR'000

Rebelkop 690 17,867 25,000 37,662 12,320 17,239 25,970 Notes: 1. DP – Du Preez Leger; V – Vermeulenskraal; M – Millo; T – Tweepan

The business of mining and mineral exploration, development and production by their nature contain

significant operational risks. The business depends 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. Factors such as political and industrial

disruption, currency fluctuation and interest rates could have an impact on 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 any operating entity.

CONCLUSIONS

Minxcon have reached the following conclusions regarding the Du Preez Leger Project:-

The mineralised reefs of economic interest at the Project area are the Basal and Leader Reefs;

The geology of the area is structurally complex;

The Mineral Resources estimated at the Project area have been classified as INFERRED Mineral

Resources, based on SAMREC classification standards;

The total diluted Inferred Mineral Resource for the Du Preez Leger Project at a cut off grade of

250 cm.g/t and application of a geological loss factor of 5 % is 56.91 Mt at a grade of 5.02 g/t; and

The valuation range was established at between ZAR 153.988 million and ZAR 252.003 million

respectively; with a “fair” value of ZAR 240.684 million. The above valuation represents a total

value for the Du Preez Leger Project.

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9

22 IINNTTRROODDUUCCTTIIOONN AANNDD SSCCOOPPEE

Minxcon (Pty) Ltd (“Minxcon”) was commissioned by Free State Development and Investment Corporation

Limited (“FSD”) to compile an Independent Mineral Asset Valuation report on the mineral assets of the Du

Preez Leger Project, located near the town of Welkom, Free State Province, South Africa. Minxcon is

independent of the issuer.

2.1 Scope of the Report

The scope of work is to complete a valuation of the Du Preez Leger Project which comprises four

exploration areas (prospects) in the Free State Province; namely the Du Preez Leger/Jonkersrust 72 (“Du

Preez Leger”) area, the Vermeulenskraal area, the Rebelkop area and the Tweepan area. The prospects

are secured by a New Order prospecting permit held by FSD, a subsidiary of Randgold and Exploration

Company Limited (“R&E”). Due to the limited quantitative information available regarding Rebelkop, no

Mineral Resources was estimated for this prospect.

This report as been compiled in accordance with the South African Code for the Reporting of Exploration

Results, Mineral Resources and Mineral Reserves (“the SAMREC Code”) and the South African Code for the

Reporting of Mineral Asset Valuation (“the SAMVAL Code”).

In order to describe the mineral assets in accordance with the JSE Listings Requirements, Section 12.9,

the information recorded on each property was compiled according to a checklist that incorporated the

compliance reporting requirements for the SAMREC Code, prepared under the auspices of the South

African Institute of Mining and Metallurgy (“SAIMM”). The checklist is attached as Appendix 1 to this

report.

The corporate structure of FSD is illustrated in the diagram below:-

Figure 1: Corporate Structure of FSD

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The following persons are listed on the register of Directors of FSD:-

Marais Steyn;

Van Zyl Botha;

Roger Pearcey; and

Leslie Arthur Maxwell.

None of the directors has or had any direct or indirect interest, beneficial or non-beneficial in the Du

Preez Leger Project.

2.2 Competent Persons’ Declaration

In the preparation of the report, Minxcon has utilised resource and technical information as provided by

FSD.

In the execution of our mandate, Minxcon has reviewed information concerning:-

The strategic location of the properties relative to existing operating mines and advanced projects, known mineral occurrences, exploration or project development activities and infrastructure; and

The geological setting and general exploitability of the properties.

Further:-

Minxcon has not sought independent legal opinion on the effective rights and obligations of FSD and have used the shareholding structure provided by FSD;

Minxcon did not perform a full scale due diligence on the available information and Minxcon and its directors accept no liability for any losses arising from reliance upon the information presented in this report.

Minxcon is an independent advisory company. Its consultants have had extensive experience in preparing

technical and economic advisors‟ and valuation reports for mining and exploration companies. Neither

Minxcon nor its staff have any interest capable of affecting its ability to give an unbiased opinion, and will

not receive any pecuniary or other benefits in connection with this assignment, other than normal

consulting fees.

33 IIDDEENNTTIITTYY OOFF TTEENNUURREE

3.1 Project Description and Location

The Du Preez Leger Project encompasses the farms Du Preez Leger 324, Jonkersrust 72, Millo 639,

Rebelkop 456, Tweepan 678 and Vermeulenskraal 223, located in the district of Virginia in the Free State

Province, South Africa.

The Du Preez Leger Project comprises four exploration areas (prospects) in the Free State Province;

namely the Du Preez Leger area, the Vermeulenskraal area, the Rebelkop area and the Tweepan area. Due

to the limited information available regarding the Rebelkop area, no Mineral Resource was estimated for

this prospect. The areas of interest are located on the Witwatersrand Basin, with adjacent producing gold

mines including the President Steyn Gold Mine, Bambanani Mine, Harmony Mine, Beatrix Mine and St

Helena Mine (Figure 2).

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Figure 2: General Location of the Du Preez Leger Project

The Vermeulenskraal prospect area is situated on portions of the farm Vermeulenskraal 223 and has an

aerial extent of 913.5027ha.

The Du Preez Leger prospect area is located on the farms Du Preez Leger 324 and Jonkersrust 72 and

covers an area of 1131.079Ha.

The Rebelkop prospect area is located on the farm Rebelkop 456 and covers an area of 689.5639Ha.

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The Tweepan prospect area is located on the Remaining Extent of Millo 693 and the entire farm Tweepan

678, and covers an area of 355.0105Ha.

3.1.1 Access and Infrastructure

The Project area is located south of the town of Welkom, and is approximately three hours drive from the

city of Johannesburg. Welkom is accessible by road, rail or air. The main road structure to and around the

project are in good condition; the Du Preez Leger and Vermeulenskraal deposits can be accessed via the

R34 main road through the town of Welkom.

The main electric railway line in this area is the Bloemfontein–Virginia-Johannesburg line, and an airport

and 13 airstrips are situated in the area.

Power is supplied by ESKOM, and Sedibeng Water supplies water mainly from the Vaal River. Sedibeng

Water is a state owned company which was opened in 1979. Limited mid-term power availability may

constrain development of new mining projects in the region. The location of the two deposits, as well as

the general infrastructure of the area, is illustrated in Figure 2.

3.1.2 Topography and Climate

The Free State experiences a continental climate, characterized by warm to hot summers and cool to cold

winters. Areas in the east can experience snowfalls in the winter months, whereas the western areas are

prone to extremely hot summers. The area receives summer rainfall. The climatic conditions are not

excessively extreme, and mining operations can continue throughout the year.

The surface topography of the area surrounding Welkom is characterized by gently undulating plains. The

Du Preez Leger Project is situated at an elevation between 1,300m above sea level (“asl”) and 1,340masl

(Figure 3).

3.1.3 Adjacent Properties

The mines adjacent to the Du Preez Leger Project area are predominantly owned by Harmony Gold Mines

Ltd. These include: the Bambanani Mine, the St Helena Mine and the Harmony Gold Mine as well as the

separately owned President Steyn Gold Mine. No information from the adjacent mines was used for the

purpose of estimating Du Preez Leger Project Mineral Resources.

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Figure 3: Topo-Cadastral Map of the Du Preez Leger Project Area

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3.2 Prospecting Rights

The prospecting rights relating to the Du Preez Leger Project are detailed in the table below:-

Table 1: Prospecting Rights relating to the Du Preez Leger Project

Farm Name PR Number Applicable Minerals

Holding Company

Effective Date

Expiry Date

Du Preez Leger 324

FS30/5/1/1/2/252PR Gold ore

and Silver ore.

Free State Development

and Investment Corporation

Limited

7 November 2006

6 November 2011

Jonkersrust 72

Rebelkop 456

Tweepan 678

Millo 693 (Remaining Extent)

Vermeulenskraal 223 (Remaining Extent of Ptn 1)

The approved Prospecting Right dated 7 November 2006 states the area covered by PR252 as 2,775.6300ha

in extent. This area was found to be incorrect after perusal of the relevant surveyor general diagrams

(“SG diagrams”), and was instead found to be 3,089.1167ha. This amendment has been approved by the

DME and the contract amendment is currently awaiting signature.

The area covered by PR252 is illustrated in Figure 3 (Refer to Appendix 3 for proof of granting of PR252).

3.3 Surface Rights

FSD does not hold the surface rights to the Project Area.

3.4 Property Boundaries and Survey Certificates

The farms relating to the Project area can be located on Government 1:50,000 Topo-cadastral sheets

(March 2005):-

Skoonspruit;

Landskroon;

Odendaalsrus; and

Riebeeckstad.

The farms Du Preez Leger 324 and Jonkersrust 72 were originally known as the farm Du Preez Leger 224

which was subdivided in 1922 into two farms of 565.5395ha in extent each. SG diagrams 2214/0, SG3904

and SG2325/0 all dated 1992 apply.

The farm Rebelkop 456 was originally recorded in 1915 as Rebelkop 1246 with an area of 689.5639ha. SG

diagrams 2121 (1915) and 564/1967 apply.

The farm Millo 693 is the remaining extent of the farm Morijah 415, originally registered in the District of

Winburg. The farm Morijah 415 was subdivided in 1930 into the farm Tweepan 2278 (now Tweepan 678)

and a remaining extent which was named Millo 1639 (now Millo 693). Each farm has an area of

177.5055ha. SG diagram 34/30 applies.

Vermeulenskraal 223 was first registered in 1895 in the District of Winburg with an area of 6,671.1109ha

(SG diagram 936/1895). From 1907 to 1924 various subdivisions took place resulting in the farms

Vermeulenskraal Noord 480, Video 835, Jurgens Hof 1658, Tarka 1659 and Hakkies 1953. The remaining

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extent of 913.5028ha became known as Vermeulens Kraal (or Vermeulenskraal) 223 in the District of

Ventersburg at some time between 1924 and 1939.

3.5 Environmental Aspects

No invasive physical exploration activities have been conducted by FSD to date, and accordingly the

environment has not been impacted.

The original Environmental Management Programme (“EMP”) was approved by the Regional Manager, Free

State Region of the DME, Welkom, on 1st September 2005 as indicated in Appendix 4. The environmental

rehabilitation liabilities could include the restoration of the possible borehole sites in an estimated

amount of ZAR40,000 (forty thousand rand). Funding for such environmental rehabilitation has been

proposed in the overall project budget and a Bank Guarantee (as required by the regulations to the

MPRDA) in the amount of ZAR10,000 (ten thousand rand) has been lodged with the DME.

3.6 Agreements

An Offer to Purchase Agreement was signed on 17 February 2010 between FSD and Witwatersrand

Consolidated Gold Resources Limited (“Wits Gold”). Pursuant to this Agreement, Wits Gold holds the

option to purchase rights to the Tweepan 678 -Millo 693 property.

3.7 Summary of Legal Aspects and Tenure

There are no legal proceedings that may influence the rights to explore for minerals (See Appendix 5). The

tenure is considered to be secure. No government requirements are outstanding.

The Competent Person is satisfied with the status of all legal aspects.

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44 HHIISSTTOORRYY OOFF TTHHEE PPRROOJJEECCTT

FSD has held the mineral rights pertaining to the Project area („old order rights‟) since the early part of

the twentieth century circa 1945. These rights were converted to a New Order Prospecting Permit on 7

November 2006, under the Mineral and Petroleum Resources Development Act, 2002. The New Order

prospecting permit expires on 6 November 2011.

FSD has undertaken historical exploration at the project area but no production has taken place and no

infrastructure exists.

4.1 Historical Exploration and Sampling Methods

The four prospects have different exploration histories. On Vermeulenskraal, three exploration phases

took place. During the late 1940‟s, FSD sunk a single borehole (HV1) on the boundary of Vermeulenskraal

223 and Hakkies 735 which intersected Leader Reef as well as faulted successions. Rand Mines completed

a second phase of drilling in March 1975. Six surface holes (VL1 to VL6) as well as three underground holes

were drilled from the boundary of Harmony Gold Mine. The third phase of exploration was a haulage

developed from Merriespruit 1 Shaft which exposed 422m of Leader Reef. This was the only reef exposed.

On the Du Preez Leger prospect, fourteen boreholes within or adjacent to the property have been used for

evaluation purposes of the Leader Reef. The Basal Reef has only been intersected in 3 boreholes. This is

due to most of the area being south of the Basal/Leader Reef subcrop.

There is no record of previous drilling on Tweepan or Rebelkop; thus the grades have been estimated from

mining and drilling values available on adjoining properties.

The original hard copy borehole logs for the Vermeulenskraal holes are available from FSD. The original

data was not supplied to Minxcon. Electronic information is available for the other prospects. This

information was however not validated by Minxcon against the original data as it is beyond the scope of

this resource estimation. The positions of the Leader-Basal Reef subcrop and prospects were also made

available in electronic format. The holes on Vermeulenskraal were drilled by FSD and Rand Mines, whilst

the holes on the Du Preez Leger prospect were drilled by Anglo American.

Details of historic borehole surveys, sampling methods, drilling techniques, sample recovery, logging

techniques and other sources of information were not available. No details regarding the Quality

Assurance and Quality Control (“QA/QC”) for the sampling and assays were available. Minxcon did not

receive any details regarding the assay laboratory and assaying procedure. As such, there can be no

comment on the integrity of sampling results, but this is relied upon as being accurately recorded by

current and previous Project owners for evaluation purposes.

The exploration cost to date for the Du Preez Leger Project is ZAR327,459.

4.2 Current Exploration

There is no invasive physical exploration currently being conducted at the Project area.

T1.3 i

SV T2.4

T1.3 ii

T3.1

T3.2

T3.3

T3.4



17

55 GGEEOOLLOOGGIICCAALL SSEETTTTIINNGG

5.1 Regional Geology

The Witwatersrand Basin is located in the Kaapvaal Craton, South Africa. It represents a remnant of a

large Achaean sedimentary basin that hosts the world‟s largest gold reserves within a series of

conglomerate horizons. The Witwatersrand Basin comprises a 60,000km2 Northeast trending elliptical

structure, extending from the east of Johannesburg to south of the town of Welkom (Figure 4).

The basin is the largest known gold province in the world and the deposits have been exploited for in

excess of on hundred years. Gold is currently produced from seven of eight goldfields within the basin,

mainly from conglomerate horizons of the Witwatersrand, Ventersdorp and Transvaal Supergroups. The Du

Preez Leger Project is situated in the Free State Goldfield and is situated on the southern edge of the

Witwatersrand Basin.

The Witwatersrand Supergroup is underlain by an Archaean (>3.1Ga) granite-greenstone basement and the

3.086–3.074Ma Dominion Group. It is unconformably overlain by rocks of the Ventersdorp (2.7Ga),

Transvaal (2.6Ga) and Karoo (302-180Ma) Supergroups. The Witwatersrand Supergroup is divided into two

groups, the West and Central Rand Groups. The reefs that occur at the Project area are located within the

Central Rand Group (“CRG”).

The CRG unconformably overlies the West Rand Group. Lithologies in this group are characterised by

sandstone and conglomerate which dominate over shale. The CRG comprises the Turfontein and

Johannesburg Subgroups, which both contain conglomerates in their lower and upper portions. At least

ten basin wide unconformities are known, each overlain by conglomerate beds. The conglomerates of the

CRG contain a variety of pebble types. A distinctive feature of the conglomerates is an overall increase in

clast size, recorded from the base to the top of the group.

T4.1 i

T4.1

SV T2.5



18

Figure 4: Regional Geology of the Witwatersrand Basin



19

5.2 Local Geology

The Free State Goldfield lies approximately 270km from Johannesburg on the southwest rim of the

Witwatersrand Basin.

The dominant structural features of the Free State Goldfield are the north-northwest striking Ventersdorp

age normal faults, such as the De Bron fault, and the north-south trending syncline developed along the

western margin of the gold field (The Mineral Resources of South Africa, 1998). This syncline extends

across the entire North-South span of the Free State Goldfield, and is associated with several reverse

faults such as the Rheedersdam fault. Compression associated with this faulting led to the occurrence of

severely deformed, and in some places, overturned Witwatersrand sediments on the western edge of the

Free State Goldfield, and therefore complicates the exploration and/or mining of gold in this area.

The post-Witwatersrand faulting, represented by normal faults such as the De Bron and Homestead faults,

form the De Bron horst. This block of uplifted lower Witwatersrand sediments demarcate the eastern

boundary to mining in the Free State Goldfield.

The ore bodies of the Free State Goldfield occur within the CRG, and the major gold-producing unit is the

Basal (or Steyn) Reef, which together with the Leader Reef, occurs throughout the goldfield. Other

important economic horizons are the A, B and Eldorado Reefs (Figure 5).

Figure 5: Stratigraphic Column of the Free State Goldfield



20

The following figures illustrate the distribution of the Basal and Leader reefs that underlie the Project

Area:-

Figure 6: Basal Reef Underlying Farm Areas

Figure 7: Leader Reef Underlying Farm Areas



21

The important gold-bearing reefs in the Odendaalsrus-Virginia area are tabulated below:-

Table 2: Correlation of Important Auriferous Reefs in the Odendaalsrus-Virginia Area

Name of reef Distance above Basal Reef (m) Stratigraphic zone

Van den Heevers Rust reefs 247 to 520 Elsburg Reefs

A Reef 180 Kimberly Reefs

B Reef 130 Kimberly Reefs

Leader Reef 17 Bird Reef

Basal Reef 0 Bird Reef

5.3 Project Geology

The Project is located in an area which has been extensively mined for gold, and the local geology is

therefore considered to be fairly well understood and interpreted. The placers of primary economic

interest at the Project area are the Basal and Leader Reefs. Other reefs found in this area include the A

and B Reefs, BPM (Sand River Reef), Aandenk and VS5/Beatrix Reefs. The Vermeulenskraal prospect lies

just to the south of the Sand River and is to the west of Harmony Mine. The Du Preez Leger prospect lies

to the south of the Harmony Brand and St Helena mines, and to the west of the Harmony Unisel Mine.

These mines have mainly exploited the Basal and Leader Reefs. The A-Reef has also been extensively

mined on Brand Mine to the north of the Project area.

The other two prospect areas comprise Tweepan (comprising the farms Millo 693 and Tweepan 678) and

Rebelkop. Limited information is available for these two prospects.

Tweepan is located south of the Harmony Merriespruit mine, and Rebelkop is situated to the east of the

Harmony Virginia mine. Leader Reef is developed on both of these areas. The Basal Reef on Tweepan is

developed only on the farm Tweepan 678 and not on farm Millo 693. B Reef is also developed only on

Tweepan.

The sizes of the prospects as listed previously are: Vermeulenskraal: 913 Ha, Du Preez Leger/ Jonkersrust:

1,101 Ha, Millo/Tweepan: 355 Ha and Rebelkop: 689 Ha.

5.3.1 Stratigraphy

The sediments of the Central Rand Group are overlain by the Karoo and Ventersdorp Supergroup rocks in

the Project area. The Karoo sediments at the Project area varies in thickness from 550-700m. These are

underlain by the lavas and sediments of the Ventersdorp Supergroup, which are mainly comprised of

andesitic lavas of the Klipriviersberg Group. In places these have been eroded by Ventersdorp sediments

of the Klippan Formation (thick sequences of poorly sorted debris flows). Towards the south of the

Welkom Goldfield, there has been a thinning of the Central Rand Group stratigraphy and the Basal Reef

subcrops against the Leader Reef, which is developed over the entire Project area. This subcrop results in

Basal Reef only being formed on approximately 45% of Vermeulenskraal and on a little over 10% of the Du

Preez Leger prospect.

There is less information available on the overlying stratigraphy of the Central Rand Group on the

prospects south and east of the Harmony Merriespruit and Virginia mines, but these would also comprise

Karoo and Ventersdorp Supergroup rocks. Tweepan is characterised by Central Rand Group sediments

underlying the entire property and Rebelkop by Central Rand Group underlying approximately 70% of the

area.



22

Figure 8: Geological Cross Section of the Vermeulenskraal Area

5.3.2 Structure

The economic reefs are found at different depths below surface. On Vermeulenskraal, the Basal Reef

varies in depth from 2,100m to 2,350m to the west of the NNE-SSW trending Vermeulenskraal Fault, whilst

to the east the depth varies between 1,400m and 2,000m. The reefs dip on average approximately 15°

towards the east, but local variations have been noted. The Leader reef overlies the Basal Reef at varying

distance intervals, with the Basal Reef eventually subcropping against the Leader Reef to the south of the

property – on a roughly east-west trend. On the Du Preez Leger prospect, the Basal Reef is found at depths

of between 1,000m and 1,200m. The Leader Reef is found at depths between 1,000m and 1,900m. The

dips of the reefs are to the east on St Helena and Unisel mines, which are contiguous to the north and east

of the Du Preez Leger prospect area, and vary between 20 and 45°. On Tweepan, the Leader Reef is found

to be 1,200m to 2,300m below surface. The Basal reef on Tweepan is 1,300m to 2,300m deep, whilst the B

Reef is located at depths between 1,300 and 2,300m. On Rebelkop, the Leader Reef is present at depths

between 1,100m and 2,000m.

The general structure of the Welkom Goldfields comprises north-south normal faults which successively

displace the orebodies downwards to the west. The regional dip is 15° towards the east but variations are

caused due to local structural controls. These dips are found to be almost vertical along the western

margin to very flat-lying in the eastern parts of the goldfield. The largest of these faults is the De Bron

Fault, which transects the Tweepan prospect. The Du Preez Leger and Vermeulenskraal prospects are to

the west of this fault, whilst Rebelkop is to the east. The displacement along this fault is in the order of

1,000m. The local structural environment of the Vermeulenskraal prospect is dominated by the NNE-SSW

trending normal Vermeulenskraal Fault as well as associated sub-parallel faults. They display downward

displacements to the west. The Du Preez Leger prospect is located west of the Stuurmanspan Fault. This is

another large normal fault which displays strong dextral lateral shifts too. On Unisel and St Helena mines

large scale E-W thrusting has been noted, thus causing duplication of the ore body towards the south. The

potential for the occurrence of similar structures on the Du Preez Leger Project is great.



23

The November 2008 Minxcon estimated block models were discounted based on regional structure data

and the Mineral Resource was subsequently adjusted accordingly. The table below depicts the changes

between the November 2008 and adjusted November 2008 Mineral Resource.

Figure 9: Structures at the Project Area

Table 3: November 2008 and Adjusted November 2008 Mineral Resource Reconciliation

Mineral

Resource Area

Cut-Off

(cm.g/t)

Tonnage Au

(g/t)

Diluted

Au

(g/t)

CW

(cm)

SW

(cm) Reef

(t)

SW

(t)

Reef

(%)

SW

(%)

BASAL REEF

Du Preez Leger 0 -736,825 -1,292,100 -41 -36 0.29 -0.40 0 0

Vermeulenskraal 0 -1,825,553 -1,500,356 -17 -12 1.01 -0.22 10 4

Total Basal Reef 0 -2,562,378 -2,792,456 -20 -17 0.55 -0.36 11 4

LEADER REEF

Du Preez Leger 0 1,338,099 -2,610,980 6 -8 -0.11 0.73 -6 0

Vermeulenskraal 0 -4,240,811 -2,325,113 -20 -9 -0.36 -0.35 16 7

Millo/Tweepan 0 -2,584,186 -4,347,079 -29 -37 0.75 -0.35 18 4

Total Leader

Reef 0 -5,486,898 -9,283,172 -10 -13 0.13 0.17 5 3

TOTAL BASAL AND LEADER REEF

Basal + Leader

Reefs 0 -8,049,276 -12,075,628 -12 -14 0.12 0.04 5.0 3.0

Note: Negative values indicate discounting

The following figures illustrate the areas that were discounted from the Mineral Resource block models

based on structural features.

T2.3 i

T4.1 iv

T8 iv



24

Figure 10: Basal Reef Block Model – Du Preez Leger/Jonkersrust

Figure 11: Basal Reef Block Model – Vermulenskraal



25

Figure 12: Leader Reef Block Model - Du Preez Leger/Jonkersrust

Figure 13: Leader Reef Block Model – Vermulenskraal



26

Figure 14: Leader Reef Block Model – Millo/Tweepan

5.4 Mineralisation at the Project Area

The Basal Reef, which is the major ore horizon of the Free State goldfield, varies in character in different

parts of the goldfield. In general, it is thicker and more robust in the south, where it may consist of several

bands of conglomerate with interstitial quartzite layers, the total reef package being up to 1.5m thick in

the south of President Brand and President Steyn leases and up to 3m thick in the Virginia-Merriespruit

area. Gold mineralisation is often associated with fairly coarse buckshot pyrite. The reef thins towards the

north to often not more than a few centimetres and is usually a single band of conglomerate or coarse grit

with associated carbon. Scour channels, both pre- and post-Basal Reef in age, are fairly common,

especially in the eastern sector.

The Leader Reef is a persistent conglomerate, present over the entire Free State Gold Field, which usually

carries low amounts of gold. It has been mined in certain localised areas and is likely to contribute to a

portion of ore reserves in the future as it is in stratigraphic proximity to the Basal Reef and as a result does

not require significant additional underground development to explore and exploit.

The A Reef and the B Reef, both in the Kimberley Stage, are widespread but have not been extensively

mined although rich patches of B Reef have historically been exploited in the northern part of the goldfield.

The Elsburg Reefs consist of lenses of auriferous conglomerate occurring in a thick quartzite succession. The

Elsburg Reefs (or Rainbow Reefs) differ from the normal, essentially barren, Elsburg conglomerate beds

(locally referred to as zones VS 1 to VS 4) with which they are correlated; whereas the pebbly constituents

of the latter consist of a variety of rock types, those of the former are composed of quartz and chert

pebbles, or may pass into grit essentially composed of quartz and chert fragments. It is believed that older



27

Witwatersrand reefs, which were truncated and eroded along the western side of this goldfield,

contributed the gold in these reefs.

66 MMIINNEERRAALL RREESSOOUURRCCEESS

6.1 Density Estimation

A density of 2.7t/m3 was applied to the Mineral Resource estimates. This value is based on an average

known density for Witwatersrand ore bodies.

6.2 Grade Estimation

6.2.1 Domaining

In order to understand geostatistical estimation, the data should represent homogeneous population

distributions, which are dependent on the geological understanding of the ore body/bodies. Typically the

zones utilised in estimation (geozones) are derived from geological domains and are dependent on the

scale being estimated to, and may or may not redefine the geological domains. The domains are used to

constrain the statistical and geostatistical analysis that form the basis of the estimation process.

The Basal and the Leader reefs were reviewed with the aim of delineating broad scale gold geozones. The

gold domains were thoroughly investigated and modelled by the CPs. Each of the reefs was delineated

according to the variability of the channel width (CW), gold content and gold grade.

Four geostatistical domains (geozones) were modelled for the Basal Reef and eleven geozones were

modelled for the Leader Reef, based on the grade relationships and data trends of the boreholes (Figure

15 and Figure 16).

Figure 15: Basal Reef Domains

T2.1 i

T2.2 i

T2.3 i

T4.1

T4.2

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28

Figure 16: Leader Reef Geozones

Table 4: Domaining Parameters

Basal Domain CW (m)

Au (g/t)

Au (cm.g/t)

Cov

Domain 1 thin high high low

Domain 2 med low low low

Domain 3 thin med low low

Domain 4 thick high high low

Leader Domain CW (m)

Au (g/t)

Au (cm.g/t)

Cov



Domain 3 thick low low low


Domain 5 thin med med low

Domain 6 thick low med low

Domain 7 thin low low low

Domain 8 med high med low

Domain 9 thin high high low

Domain 10 thin low low low


6.2.2 Compositing

The drillholes represent full reef composites, i.e. one intersection value per drill hole. The composite was

then used in the estimation process.



29

6.2.3 Geostatistical Evaluation Method

The following applies to the Resource area and was undertaken using Minxcon‟s ‘Mt-Estimation’

geostatistical program which utilizes DatamineTM as the platform software. Full reef composite mining cut

values (Au content (cm.g/t)) have been interpolated into a 2D block model. The block model size of

500X500m was determined from the drill hole spacing, and the continuous nature of the ore body

(„stationarity‟ principal). Simple kriging estimation technique was used, based primarily on drill hole

spacing. Detailed checks were carried out to validate kriging outputs, including input data, kriged

estimates and kriging efficiency checks.

The following parameters were used in the kriging process for both reef horizons:

Point data – metal content (Au (cm.g/t)) and thickness (cm);

500m x 500m x 1m block size (X,Y,Z);

Subcells employed;

Parent cell estimation;

Discretisation 5 x 5 x 1 for each 500m x 500m x 1m block;

First search volume – approximately 1.5 times the variogram range (m);

o Minimum number of samples 4 in search volume one (SVOL1);

o Maximum number of samples 40 in search volume one (SVOL1);

Second search volume 1.5 times first search volume;

o Minimum number of samples: 2;

o Maximum number of samples: 40;

Third search volume was not employed due to drill hole spacing being adequate for search

volumes 1 & 2;

Interpolation method – Simple kriging; and

Metal Grade (Au g/t) was calculated from metal content and mining width.

6.2.4 Assumptions and Adjustments

The Basal Reef and Leader Reef at the Project Area are defined as consistent tabular ore bodies across the

Project Area, which allowed a 2 dimensional (“2D”) approach to the Mineral Resource estimation. Simple

kriging estimation was employed. The estimation process utilised the gold metal content (cm.g/t) and

thickness (cm). Figure 17, Figure 18 and Figure 19 illustrate drill hole positions over the Project Area.

T2.2 ii



30

Figure 17: Available Drill Hole Intersections Overlain on the Project Area



31

Figure 18: Basal Reef Domains and Drill Holes

Figure 19: Leader Reef Domains and Drill Holes



32

A total of 110 accepted Basal Reef and 135 Leader Reef intersections were available for the Mineral

Resource estimation, of which 15 Basal Reef intersections fell within the Resource area, and 124 Leader

Reef intersections fell within the Resource area. The average distance between drill holes varied between

600m and over one kilometre. The gold metal grade was estimated from metal content and mining width.

No audits or reviews have been conducted on the data used in the Mineral Resource estimation. True

widths of reef intersections were used for the Mineral Resource estimation.

6.2.5 Statistical Analyses

Statistical analyses were performed on the gold content (Au cm.g/t) and mining width (cm) of each

domain within the Project Area, to develop an understanding of the statistical characteristics and sample

population distribution relationships. Descriptive statistics in the form of histograms (frequency

distributions) and probability plots (used to evaluate the normality of the distribution of a variable) were

used to develop an understanding of such statistical relationships (refer to Appendix 6). Negative values in

the tables below represent log space values.

Table 5: Statistical Analysis – Basal Reef

Descriptive Statisti cs (Spreadsheet1)

VariableValid N Mean Minimum Maximum Variance Std.Dev. Skewness Kurtosis

DOM1_ALL_B_CW

DOM1_ALL_B_AU

DOM1_ALL_B_CMGT

Ln_DOM1_ALL_B_CW

Ln_DOM1_ALL_B_AU

Ln_DOM1_ALL_B_CMGT

13 62.846 15.9000 145.900 1192 34.532 1.020097 1.63421

13 28.968 6.0800 137.550 1420 37.689 2.382841 5.84803

13 1639.385 280.0000 9697.000 6351810 2520.280 3.159497 10.53046

13 3.991 2.7663 4.983 0 0.599 -0.558642 0.38240

13 2.849 1.8050 4.924 1 0.962 1.070678 0.35443

13 6.840 5.6348 9.180 1 0.974 1.099577 1.60296



DOM2_ALL_B_CW

DOM2_ALL_B_AU

DOM2_ALL_B_CMGT

Ln_DOM2_ALL_B_CW

Ln_DOM2_ALL_B_AU

Ln_DOM2_ALL_B_CMGT

10 107.4500 21.60000 191.0000 5480.89 74.0331 -0.185274 -2.04423

10 4.4010 0.40000 12.2300 17.44 4.1765 1.277427 0.46396

10 297.4000 60.00000 789.0000 54965.82 234.4479 0.858596 0.69594

10 4.3352 3.07269 5.2523 0.94 0.9672 -0.429806 -2.16355

10 1.0026 -0.91629 2.5039 1.31 1.1435 -0.543768 -0.17609

10 5.3382 4.09434 6.6708 0.92 0.9592 -0.252402 -1.78599



DOM3_ALL_B_CW

DOM3_ALL_B_AU

DOM3_ALL_B_CMGT

Ln_DOM3_ALL_B_CW

Ln_DOM3_ALL_B_AU

Ln_DOM3_ALL_B_CMGT

6 67.2833 19.20000 149.0000 3378.54 58.1252 0.793665 -1.76091

6 5.2150 0.20000 24.7900 92.40 9.6125 2.423088 5.90213

6 181.5000 5.00000 476.0000 33520.30 183.0855 0.780113 -0.46934

6 3.8682 2.95491 5.0039 0.83 0.9129 0.398619 -2.34362

6 0.5399 -1.60944 3.2104 2.45 1.5637 0.690733 2.22918

6 4.4144 1.60944 6.1654 2.86 1.6925 -0.879895 0.15544



DOM4_ALL_B_CW

DOM4_ALL_B_AU

DOM4_ALL_B_CMGT

Ln_DOM4_ALL_B_CW

Ln_DOM4_ALL_B_AU

Ln_DOM4_ALL_B_CMGT

4 125.725 53.5000 296.300 13050.1 114.2372 1.94443 3.83151

4 14.875 3.6200 21.160 63.5 7.9714 -1.39056 1.52888

4 1251.500 797.0000 1600.000 146941.7 383.3297 -0.40501 -3.46714

4 4.587 3.9797 5.691 0.6 0.7556 1.68943 3.19382

4 2.507 1.2865 3.052 0.7 0.8276 -1.80704 3.26808

4 7.093 6.6809 7.378 0.1 0.3284 -0.64618 -2.27090 B – Basal Reef

CW – mining cut width

CMGT – value content



33

Table 6: Statistical Analysis – Leader Reef

Descriptive Statistics (Spreadsheet9)


DOM1_ALL_LD_CW

DOM1_ALL_LD_AU

DOM1_ALL_LD_CMGT

Ln_DOM1_ALL_LD_CW

Ln_DOM1_ALL_LD_AU

Ln_DOM1_ALL_LD_CMGT

11 113.6364 43.0000 265.000 5378.0 73.3347 1.355763 1.039607

11 7.8964 2.4000 19.880 30.4 5.5120 1.281139 0.869895

11 693.6364 344.0000 1996.000 199647.3 446.8190 2.904128 9.199702

11 4.5644 3.7612 5.580 0.4 0.6008 0.314147 -0.382569

11 1.8630 0.8755 2.990 0.4 0.6645 0.248715 -0.550244

11 6.4261 5.8406 7.599 0.2 0.4549 1.611285 4.832942



DOM2_ALL_LD_CW

DOM2_ALL_LD_AU

DOM2_ALL_LD_CMGT

Ln_DOM2_ALL_LD_CW

Ln_DOM2_ALL_LD_AU

Ln_DOM2_ALL_LD_CMGT

8 94.1125 18.20000 256.2000 6627.14 81.4072 1.432940 1.291055

8 3.5100 1.45000 10.4400 8.85 2.9750 2.272171 5.359725

8 233.5000 98.00000 541.0000 24458.00 156.3905 1.311867 0.961472

8 4.2328 2.90142 5.5460 0.73 0.8545 0.088394 -0.213806

8 1.0433 0.37156 2.3456 0.40 0.6337 1.415082 1.916592

8 5.2788 4.58497 6.2934 0.38 0.6148 0.595244 -0.891812



DOM3_ALL_LD_CW

DOM3_ALL_LD_AU

DOM3_ALL_LD_CMGT

Ln_DOM3_ALL_LD_CW

Ln_DOM3_ALL_LD_AU

Ln_DOM3_ALL_LD_CMGT

11 142.2727 42.00000 279.0000 5314.02 72.8973 0.477611 -0.13641

11 1.2409 0.25000 2.8800 1.01 1.0051 0.696544 -1.27426

11 165.5455 13.00000 404.0000 18470.87 135.9076 0.661725 -1.21003

11 4.8168 3.73767 5.6312 0.35 0.5918 -0.668284 -0.12410

11 -0.1238 -1.38629 1.0578 0.79 0.8914 0.098074 -1.65424

11 4.6949 2.56495 6.0014 1.15 1.0722 -0.677843 0.03382



DOM4_ALL_LD_CW

DOM4_ALL_LD_AU

DOM4_ALL_LD_CMGT

Ln_DOM4_ALL_LD_CW

Ln_DOM4_ALL_LD_AU

Ln_DOM4_ALL_LD_CMGT

2 222.000 86.000 358.000 36992.00 192.3330

2 8.460 3.150 13.770 56.39 7.5095

2 1153.500 1127.000 1180.000 1404.50 37.4767

2 5.167 4.454 5.881 1.02 1.0085

2 1.885 1.147 2.622 1.09 1.0430

2 7.050 7.027 7.073 0.00 0.0325



DOM5_ALL_LD_CW

DOM5_ALL_LD_AU

DOM5_ALL_LD_CMGT

Ln_DOM5_ALL_LD_CW

Ln_DOM5_ALL_LD_AU

Ln_DOM5_ALL_LD_CMGT

13 73.6231 13.00000 122.0000 802.85 28.3346 -0.37519 0.664211

13 4.7185 2.09000 8.3400 3.34 1.8285 0.60926 -0.206484

13 365.7692 48.00000 745.0000 46495.53 215.6282 0.24971 -0.893236

13 4.1915 2.56495 4.8040 0.32 0.5623 -2.16441 6.068188

13 1.4807 0.73716 2.1211 0.16 0.3975 -0.19953 -0.284091

13 5.6728 3.87120 6.6134 0.63 0.7968 -1.06712 0.769297



DOM6_ALL_LD_CW

DOM6_ALL_LD_AU

DOM6_ALL_LD_CMGT

Ln_DOM6_ALL_LD_CW

Ln_DOM6_ALL_LD_AU

Ln_DOM6_ALL_LD_CMGT

19 150.2421 61.0000 321.000 5447.36 73.8063 0.836357 -0.027592

19 3.4416 0.7300 8.750 4.48 2.1175 0.909140 0.760893

19 432.6316 149.0000 1163.000 62818.80 250.6368 1.739959 3.490589

19 4.9003 4.1109 5.771 0.24 0.4875 0.096936 -0.998434

19 1.0365 -0.3147 2.169 0.47 0.6845 -0.418691 -0.540967

19 5.9372 5.0039 7.059 0.27 0.5185 0.311108 0.138374



34



DOM7_ALL_LD_CW

DOM7_ALL_LD_AU

DOM7_ALL_LD_CMGT

Ln_DOM7_ALL_LD_CW

Ln_DOM7_ALL_LD_AU

Ln_DOM7_ALL_LD_CMGT

2 56.00000 35.00000 77.00000 882.0000 29.69848

2 0.31000 0.20000 0.42000 0.0242 0.15556

3 26.00000 7.00000 39.00000 283.0000 16.82260 -1.40082

2 3.94958 3.55535 4.34381 0.3108 0.55752

2 -1.23847 -1.60944 -0.86750 0.2752 0.52463

3 3.02507 1.94591 3.66356 0.8832 0.93980 -1.64611



DOM8_ALL_LD_CW

DOM8_ALL_LD_AU

DOM8_ALL_LD_CMGT

Ln_DOM8_ALL_LD_CW

Ln_DOM8_ALL_LD_AU

Ln_DOM8_ALL_LD_CMGT

30 104.5433 31.0000 256.000 2729.9 52.2481 1.343788 2.29891

30 6.6847 2.7300 20.930 16.8 4.1011 1.780627 3.83516

30 647.6333 267.0000 3252.000 307963.8 554.9449 3.784888 17.34025

30 4.5329 3.4340 5.545 0.3 0.5048 -0.395009 0.64806

30 1.7551 1.0043 3.041 0.3 0.5242 0.658240 -0.44683

30 6.2880 5.5872 8.087 0.3 0.5513 1.289878 2.22760



DOM9_ALL_LD_CW

DOM9_ALL_LD_AU

DOM9_ALL_LD_CMGT

Ln_DOM9_ALL_LD_CW

Ln_DOM9_ALL_LD_AU

Ln_DOM9_ALL_LD_CMGT

11 73.3636 28.0000 175.000 1639.9 40.4951 1.663123 3.61901

11 12.6482 4.2600 42.550 128.1 11.3178 2.178276 5.07096

11 762.1818 236.0000 1689.000 223079.0 472.3124 0.744103 -0.26337

11 4.1757 3.3322 5.165 0.3 0.5055 0.270370 0.38553

11 2.2747 1.4493 3.751 0.5 0.7149 0.820380 0.32718

11 6.4486 5.4638 7.432 0.4 0.6595 -0.070239 -1.37589



DOM10_ALL_LD_CW

DOM10_ALL_LD_AU

DOM10_ALL_LD_CMGT

Ln_DOM10_ALL_LD_CW

Ln_DOM10_ALL_LD_AU

Ln_DOM10_ALL_LD_CMGT

8 58.2500 16.00000 91.0000 812.214 28.49937 -0.53472 -1.25998

8 1.9925 0.00000 4.9100 3.129 1.76893 0.92463 -0.46508

8 114.0000 0.00000 262.0000 8364.571 91.45803 0.54352 -0.82942

8 3.9094 2.77259 4.5109 0.435 0.65990 -1.06716 -0.38264

7 0.5789 -0.51083 1.5913 0.581 0.76255 0.16199 -0.97392

7 4.6525 3.49651 5.5683 0.564 0.75084 -0.37346 -0.92776



DOM11_ALL_LD_CW

DOM11_ALL_LD_AU

DOM11_ALL_LD_CMGT

Ln_DOM11_ALL_LD_CW

Ln_DOM11_ALL_LD_AU

Ln_DOM11_ALL_LD_CMGT

8 98.6250 48.20000 160.0000 1401.979 37.44301 0.17562 -0.22939

8 1.9087 1.02000 2.8200 0.451 0.67183 0.24017 -1.17052

8 176.0000 70.00000 271.0000 3377.714 58.11811 -0.34625 1.45640

8 4.5207 3.87536 5.0752 0.173 0.41622 -0.57619 -0.46483

8 0.5891 0.01980 1.0367 0.136 0.36826 -0.24494 -1.10241

8 5.1099 4.24850 5.6021 0.161 0.40082 -1.50367 3.26359

L - Leader Reef

CW – mining cut width

CMGT – value content



35

6.2.6 Co-Efficient of Variation

The Co-efficient of Variation (“CoV”) is the ratio between the standard deviation and the mean and is a

relative measure of dispersion in a data set. Typically a CoV <1 indicates low variance within the data set.

A low variance data set demonstrates that the population distribution reflects a relatively homogenous

data set which is necessary for estimation purposes.

Table 7: Co-Efficients of Variance for Basal and Leader Reefs

BASAL Mean Std Dev COV

Domain 1 62.84 34.530 0.549

Domain 2 107.45 74.033 0.689

Domain 3 67.283 58.125 0.864

Domain 4 125.725 114.237 0.909

LEADER Mean Std Dev COV

Domain 1 113.636 73.334 0.645

Domain 2 94.1125 81.407 0.865

Domain 3 142.272 72.897 0.512

Domain 4 222 192.330 0.866

Domain 5 73.623 28.330 0.385

Domain 6 150.242 73.806 0.491

Domain 7 56 29.698 0.530

Domain 8 104.54 52.248 0.500

Domain 9 73.363 40.495 0.552

Domain 10 58.25 28.499 0.489

Domain 11 98.625 37.440 0.380

6.2.7 Variography

Variograms are an essential tool for investigating the spatial relationships of samples. Variograms for

metal content (Au cm.g/t) and mining width (“CW”) were modelled. Anisotropy was investigated,

although all variograms are deemed best represented by omni-directional models. The tables below

summarise the variogram model parameters for the Resource area.

Table 8: Variogram Parameters – Basal Reef

Range quoted in metres

CW –width

cm.g/t – value content

Nugget:Sill Ratio – expressed as %



36

Table 9: Variogram Parameters – Leader Reef

Range quoted in metres

CW –width

cm.g/t – value content

Nugget:Sill Ratio – expressed as %

Cutting/Capping

Cutting/capping of outlier data is undertaken in the variography process in order to model the population

variance which is not unduly influenced by outlier values. No Capping or cutting is undertaken during the

kriging exercise. Use of the log normal and normal probability plots aids in determining the outliers that

would be capped/cut in the variography stage. The following domains were capped/cut in the variography

process:-

Table 10: Capped/Cut Values for Basal and Leader Reef Domains

Reef Domain Capped/Cut Value

Basal Reef 1 3,000

2 500

3 280

Leader Reef 4 300

5 500

6 600

8 1,200



37

6.2.8 Resource Classification

The accuracy of the Mineral Resource classification is a function of the confidence levels inherent in the

entire process comprising drilling, sampling, geological understanding and geostatistical relationships. The

following aspects or parameters were considered for Mineral Resource classification:

1. Sampling – quality assurance & quality control (QA/QC):

a. Measured: high confidence, no problem areas;

b. Indicated: high confidence, some problem areas with low risk;

c. Inferred: some aspects might be of medium to high risk.

2. Geological confidence:

a. Measured: high confidence in the understanding of geological relationships,

continuity of geological trends and sufficient data;

b. Indicated: Good understanding of geological relationships;

c. Inferred: geological continuity not established.

3. Number of samples used to estimate a specific block:

a. Measured: at least 4 boreholes within variogram range and minimum of twenty

one-metre composited samples;

b. Indicated: at least 3 boreholes within variogram range and a minimum of twelve

one-metre composite samples;

c. Inferred: less than 3 boreholes within the variogram range.

4. Kriged variance:

a. This is a relative parameter and is only an indication and used in conjunction with

the other parameters.

5. Distance to sample (variogram range):

a. Measured: at least within 60% of variogram range;

b. Indicated: within variogram range;

c. Inferred: further than variogram range.

6. Lower confidence limit (blocks):

a. Measured: less than 20% from mean (80% confidence);

b. Indicated: 20%–40% from mean (80%–60% confidence);

c. Inferred: more than 40% (less than 60% confidence).

7. Kriging efficiency:

a. Measured: more than 40%;

b. Indicated: 20–40%;

c. Inferred: less than 20%.

8. Deviation from lower 90% confidence limit (data distribution within Resource area

considered for classification):

a. Measured: less than 10% deviation from mean;

b. Indicated: 10–20%;

c. Inferred: more than 20%.

6.3 Mineral Resource Classification

6.3.1 Summary of Mineral Resources

The table below details the Mineral Resource with regards to reef versus Resource cut (minimum stoping

width of 120cm) both at a zero cut-off and a cut-off of 250cm.g/t.

T7 i

T7

T8 ii, iii



38

Table 11: Mineral Resources of the Du Preez Leger Project as at November 2008

Mineral

Resource Area

Cut-Off

(cm.g/t)

TONNAGE %

GEO

LOSS

TONNAGE Au

(g/t)

Diluted

Au

(g/t)

CW

(cm)

SW

(cm)

Content REEF

(Mt)

SW

(Mt)

REEF

(Mt)

SW

(Mt) ('000 kg) (Moz)

BASAL REEF

Du Preez Leger

0 1.08 2.28 5 1.03 2.17 18.44 8.75 61 120 18.99 0.61

250 1.06 2.24 5 1.01 2.13 18.82 8.92 60 120 19.01 0.61

Vermeulenskraal

0 8.89 11.47 5 8.45 10.9 8.39 6.50 120 137 70.90 2.28

250 7.12 7.94 5 6.76 7.54 9.98 8.95 135 145 67.46 2.17

LEADER REEF

Du Preez Leger

0 25.16 28.43 5 23.90 27.01 5.99 5.30 86 120 143.16 4.60

250 22.34 25.35 5 21.22 24.08 6.24 5.50 91 120 132.41 4.26

Vermeulenskraal

0 17.45 24.57 5 16.58 23.34 3.10 2.20 124 141 51.4 1.65

250 12.40 18.88 5 11.78 17.94 3.84 2.52 124 144 45.24 1.45

Millo/Tweepan

0 6.21 7.53 5 5.90 7.15 3.74 3.09 110 128 22.07 0.71

250 5.26 5.49 5 5.00 5.22 4.33 4.15 119 130 21.65 0.7

Notes: 1. SW – Minimum Stoping Width of 120cm; and 2. CW – Corrected Channel Width.

The total diluted Inferred Mineral Resource for the Du Preez Leger Project at a cut off grade of 250cm.g/t

and application of a geological loss factor of 5% is 56.91Mt at a grade of 5.02g/t.

The cut-off grade of 250 cm.g/t is derived from optimistic assumed and justifiable technical and

economical conditions, under which the Resource becomes economically extractable. In Table 12 all

assumed technical and economical parameters used in deriving the 250 cm.g/t cut-off are listed. The

calculated 232 cm.g/t cut-off grade was rounded up to 250 cm.g/t.

Table 12: Parameters Used to Derive Cut-Off Grade

Parameter Factor Unit Paylimit Unit

Conversion oz/kg 32.15076 Oz Exchange Rate 10.6 R/USD Metal price 1 250 USD/oz Metal price 426 R/g Operating cost 500 R/t 1.17 g/t

Minor Geological Losses 5 % 1.23 g/t

Dilution (Stoping and Sundries) 13 % 1.39 g/t

MCF 85 % 1.64 g/t

PRF 92 % 1.78 g/t

Stoping Width 130 cm 232 cm.g/t

The lower grade Leader Reef‟s average stopping width of 130 cm was used in the calculation. The minor

geological losses used in the Resource table as well as in the above calculation, was benchmarked from

the surrounding mines in the Welkom and Virginia areas. The factors used in above calculation are in line

with industry accepted standards for a Resource of this nature.

The Metal price and exchange rate calculation are based on historical trends for both parameters.

Historical gold prices are recalculated in today‟s terms and a 95% percentile is used to derive a USD gold

price. The same statistical applications are used in the calculation of the ZAR/USD exchange rate, but the

ZAR is not inflation adjusted in the case for gold.

Considering the Du Preez Leger‟s Basal Reef as a new standalone shaft and infrastructure complex, it

would be seen as a marginal economically extractable Resource. However, the Du Preez Leger Resource



39

area is surrounded by current mining activities which make it possible to gain access from a variety of

current infrastructure, resulting in a possible economically extractable Resource.

6.3.2 Basis of Classification of Mineral Resources

All the aspects of the Project Mineral Resource estimate are compliant with the specifications embodied

in the SAMREC Code. The Mineral Resource pertains to Au grades (g/t) at a cut-off of 250cm.g/t. All

Mineral Resource estimation carried out by Minxcon adheres to the guidelines stipulated in the SAMREC

Code.

Only Mineral Resources have been estimated for this report. All Mineral Resources have been classified as

Inferred Mineral Resources, according to the specifications of the SAMREC Code, and as such are exclusive

of Mineral Reserves.

Based on the drill hole spacing and kriging efficiencies of the estimates, and a number of other

parameters, the Mineral Resource estimate was deemed to fulfil the requirements of being an Inferred

Mineral Resource.

6.3.3 Relationship of the QP to the Issuer

Apart from having been contracted to compile this report, the QP‟s have no commercial or other

relationship with FSD. The QP who undertook the Mineral Resource estimation and compilation of this

Technical Report was Mr C J Muller (B.Sc. (Geol.) Rand Afrikaanse University, Pr. Sci. Nat. (400201/04)).

6.4 Further Work

Proposed further work on the Project will include an in-depth review of the available data by a competent

geological consulting company with the possible progression, depending upon the results of the aforesaid

review, to drilling of up to four geological boreholes as envisaged in the Prospecting works Programme.

The estimated funding requirements for exploration for 2009 and 2010 is ZAR5.185 million, and the

Company has sufficient cash resources to fund future exploration and environmental work.

77 MMOODDIIFFYYIINNGG FFAACCTTOORRSS

7.1 Effect of Modifying Factors

No account of any modifying factors such as mining methods, metallurgical treatment processes and

parameters, taxation, socio-economic, marketing or political factors have been taken into account.

7.2 Technical Parameters affecting the Resource Declaration

No mining or plant recoveries factors have been built into the Mineral Resource model. However, the

Mineral Resource is calculated based on mining cut widths.

T7 iii

T8 i

T5.4

T5.5

SV T2.7



40

88 VVAALLUUAATTIIOONN AAPPPPRROOAACCHHEESS

The methodologies used in valuing a mineral asset differ depending on the developmental stage of the

project i.e. exploration, development and production properties.

The following three valuation approaches are internationally accepted methods of valuing mineral

projects, as illustrated in Table 13 and summarised below:-

Cost Approach: used to value early stage exploration properties and which relies on the historical and future exploration expenditure;

Market Approach: used to value exploration and development properties and which is based on the relative comparisons of similar properties for which a transaction is available in the public domain. The market 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; and

Cash Flow Approach: used to value development and production properties and relies on the “value in use” principle and requires determination of the present value of future cash flows over the useful life of the mineral asset.

Table 13: Acceptable Methods of Mineral Project Valuation

VALUATION

APPROACH

PROPERTIES

EXPLORATION DEVELOPMENT PRODUCTION ECONOMICALLY

VIABLE NOT VIABLE DEFUNCT

Cash Flow Not generally

used Widely used Widely used Widely used

Not generally

used

Not generally

used

Market Widely used Less widely used Quite widely

used Quite widely used Widely used Widely used

Cost Quite widely

used Not generally used

Not generally

used Not generally used Less widely used

Quite widely

used

The selection of an appropriate valuation approach is dependent on the availability of information on the

property. Minxcon used the two approaches that are applied primarily to exploration properties, namely

the Market and Cost Approach.

8.1 Market Approach

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.

The valuation method requires comparison with relatively recent transactions of assets that have similar

characteristics to those of the asset being valued. It is generally based upon a monetary value per unit of

resource (where available) or per unit of defined mineralisation. The comparable transaction method uses

the transaction price of comparable assets to establish a value for the specific asset to be valued. The

difficulty of this approach in the mining industry is that there are no true comparables, since each asset is

unique with respect to key factors such as geology, mineralisation, costs, stage of exploration and

infrastructure. In addition, there are normally relatively few transactions for mineral assets. The

movements in the mineral price and the USD/ZAR exchange rate are also reflected in the range of values.

When transactions of mineral assets do occur, they rarely involve strictly cash, leaving the valuator the

task of converting blocks of shares, royalties or option terms into present day monetary equivalents.

SV T2.8

T5.7



41

Minxcon has plotted the total values of 27 historical gold transactions of properties of a similar nature,

which took place on an arm‟s length basis, in relation to their specific stage of exploration. This

methodology, when applied to exploration transactions provides guidance in terms of a range of

transaction values. The transactions used to construct the valuation curve occurred at a specific point in

time and therefore at a specific ZAR denominated gold price, which have been adjusted to current gold

prices and exchange rates. This current price adjustment was made using the average gold price and

USD/ZAR exchange rate for the three months preceding the effective date of this report, together with

the twelve month forecast, to calculate an appropriate price level. An alternative market approach is to

determine the monetary value per hectare (MVH) using relatively recent transactions of assets that have

similar characteristics to those assets being valued.

8.1.1 Price Adjustment

In order to report historic transaction in today terms and compare all transaction on the same economic

level, economic parameters (SA Rand and USD Gold Price) were determined for each historic transaction

at the time when the historic transaction took place. Historic transaction prices were then adjusted to

current day terms by determining the difference of parameters at the time of historic transactions to the

current day parameters. Parameters were calculated on a 3 month historic average preceding the

calculation date. The following gold prices and exchange rates were used in the price adjustment:-

Table 14: Economic Parameters used in the Comparative Analysis

R/US$ Au ZAR/kg

Months

Nov-09 7.52 1127 272322

Dec-09 7.49 1135 273313

Jan-10 7.46 1118 268245

3Mnth Historic 7.49 1127 271293

2010 7.68 1137 280746

Average 7.59 1132 276002

This principle is used to reflect the current market expectation that is likely to drive the fair market

value.

8.1.2 Project Specific Valuation Parameters

There are specific project valuation parameters associated with each stage of project development.

Initially, risk associated with the physical characteristics of an ore body is high. As a project moves past

the feasibility stage and into detailed design, construction, start-up, and full operation, the uncertainty

associated with the risk components is reduced. Uncertainty with regard to the Mineral Resources, LoM

and grade continues until well into the operational life. Because of the inherent unknowns in geology,

some uncertainty normally persists until the end of the LoM. The Canadian Institute of Mining have derived

from industry, a valuation parameter matrix, for determining mining project risk, weighting different

criteria such as depth, mining process, geology and legal tenure. Minxcon adopted this matrix and

incorporated a single additional category, namely the Social and Environmental factor, and applied values

applicable to the South African industry as summarised in Table 15. These parameters were used to

determine a risk associated index for a project relative to that of the gold industry:-

Table 15: Valuation Risk Associated Parameter Matrix - Gold Industry Standards

PRINCIPLE PROJECT RISK

DESCRIPTION INDEX DESCRIPTION INDEX DESCRIPTION INDEX

Depth <200m 10 >200m-1500m 6 >1500m 2

T6 i



42

Scale of Project (Resource) >10Moz 10 >5Moz-10Moz 6 <5Moz 2

Mining/ Process Method Open Pit 10 Mechanised 6 Underground 2

Infrastructure Mining and Conc. 10 Mining 6 Nothing. 2

Data Quality Well Understood 6 Neutral 4 Poorly understood 2

Title/Ownership Operating Mine 6 Mining Right 4 Exploration Right 2

Geological Complexity Highly Complex 6 Complex 4 Minor Structures 2

Deposit Type Wits 6 Greenstone 4 Other 2

Stage of Development DFS 3 Pre-feasibility 2 Compliant resource or <

1

Strategic Important - Premium 3 Neutral 2 Discount 1

Ability to Increase Resource High 3 Medium 2 Low 1

Social and Environmental Corporate with BEE 3 BEE 2 No BEE 1

8.2 Cost Approach

The cost approach relies on historical and/or future expenditure on the property and involves estimation

of the depreciated cost of reproducing or replacing the asset and improvements. Reproduction cost refers

to the cost at a given point in time of reproducing a replica asset; whereas replacement cost refers to the

cost of reproducing improvements of equal utility. In the case where insufficient confidence exists in the

technical parameters of the mineral asset, valuation methods rely almost entirely on the principle of

historical cost, implying that an asset‟s value is correlated to the money spent on its acquisition, plus a

multiple of expenditures. A prospectively enhancement multiplier (PEM) is a factor applied to the total

cost of exploration, the magnitude of which is determined by the level of sophistication of the exploration

for which positive exploration results have been obtained, and the prospectivity of the project (see Table

16):-

Table 16: PEM Matrix for Gold

PROSPECTIVITY RATING 5=High; 0=Low

EXPLORATION PHASE 4.65 0 1 2 3 4 5

Unexplored Prospect 0.00 0.00 0.50 1.00 1.50 2.00 3.00

Greenfields entry and desktop historical literature research 1.00 0.50 1.00 1.50 2.00 2.50 3.10

Reconnaissance and follow-up stream sampling 1.20 0.60 1.10 1.60 2.10 2.60 3.25

Follow-up soil sampling 1.50 0.75 1.25 1.75 2.25 2.75 3.75

Geophysical survey 2.50 1.25 1.75 2.25 2.75 3.25 4.00

Core Drilling 3.00 1.50 2.00 2.50 3.00 3.50 4.50

Bulk sampling 4.00 2.00 2.50 3.00 3.50 4.00 5.50

Historical Mining 6.00 3.00 3.50 4.00 4.50 5.00 6.50

Classification of Inferred Resources 8.00 4.00 4.50 5.00 5.50 6.00 6.50

The Martix is calculated by using a formula based on the exploration phase (70% weighting) and

prospectivity rating (30% weighting) a subjective number provided by the exploration geologist to the

project multiplied by a constant which is adjusted by market sentiment. The PEM factor for gold which

currently ranges from 0 to 6.50 is then multiplied by the historical cost.

99 VVAALLUUAATTIIOONN DDAATTEE

The effective date of the valuation is 18 February 2010 while the effective date of the Report stands at 19

February 2010. Thus, no material changes to the valuation have occurred.

SV T2.9

SV T2.10



43

1100 VVAALLUUAATTIIOONN SSUUMMMMAARRYY AANNDD CCOONNCCLLUUSSIIOONNSS

10.1 Principle Project Risk

The following table summarises the projects risks:-

Table 17: Principle Risk – Du Preez Leger Project

PRINCIPLE RISK COMMENT

Depth

On Vermeulenskraal, the Basal Reef varies in depth from 2,100m to 2,350m to the west of the NNE-SSW trending Vermeulenskraal Fault, whilst to the east the depth varies between 1,400m and 2,000m. On the Du Preez Leger prospect, the Basal Reef is found at depths of between 1,000m and 1,200m. The Leader Reef is found at depths between 1,000m and 1,900m. On Tweepan, the Leader Reef is found to be 1,200m to 2,300m below surface. The Basal reef on Tweepan is 1,300m to 2,300m deep, whilst the B Reef is located at depths between 1,300 and 2,300m. On Rebelkop, the Leader Reef is present at depths between 1,100m and 2,000m.

Scale of Project (Resource) Medium Sized Deposit

Mining/ Process Method Underground Conventional

Infrastructure

The main road structure to and around the project are in good condition; the Du Preez Leger and Vermeulenskraal deposits can be accessed via the R34 main road through the town of Welkom. Power is supplied by ESKOM, and Sedibeng Water supplies water mainly from the Vaal River. Limited mid-term power availability may constrain development of new mining projects in the region. No current mining infrastructure exists, and no previous mining activity has taken place

Data Quality

Details of historic borehole surveys, sampling methods, drilling techniques, sample recovery, logging techniques and other sources of information were not available. No details regarding the Quality Assurance and Quality Control (“QA/QC”) for the sampling and assays were available. Minxcon did not receive any details regarding the assay laboratory and assaying procedure. As such, there can be no comment on the integrity of sampling results, but this is relied upon as being accurately recorded by current and previous Project owners for evaluation purposes.

Title/Ownership

Free State Development and Investment Corporation Limited has an approved prospecting right FS30/5/1/1/2/252PR for Gold ore and Silver ore. And will expire on 6 November 2011

Geological Complexity

The general structure of the Welkom Goldfields comprises north-south normal faults which successively displace the orebodies downwards to the west. The regional dip is 15° towards the east but variations are caused due to local structural controls. These dips are found to be almost vertical along the western margin to very flat-lying in the eastern parts of the goldfield. The largest of these faults is the De Bron Fault, which transects the Tweepan prospect. The Du Preez Leger and Vermeulenskraal prospects are to the west of this fault, whilst Rebelkop is to the east. The displacement along this fault is in the order of 1,000m. The local structural environment of the Vermeulenskraal prospect is dominated by the NNE-SSW trending normal Vermeulenskraal Fault as well as associated sub-parallel faults. They display downward displacements to the west. The Du Preez Leger prospect is located west of the Stuurmanspan Fault. This is another large normal fault which displays strong dextral lateral shifts too. On Unisel and St Helena mines large scale E-W thrusting has been noted, thus causing duplication of the ore body towards the south. The potential for the occurrence of similar structures on the Du Preez Leger Project is great.

Deposit type Witwatersrand gold field

Stage of development Early stage exploration

Strategic Neutral

Ability to increase resource Limited



44

10.2 Valuations of farms Du Preez Leger, Vermeulenskraal, Millo/Tweepan and

Rebelkop

10.2.1 Market Approach

The valuation of the project areas were based on the market approach for which Minxcon used their

valuation curve, constructed from historical transactions of properties of a similar nature. The

methodology was as follows:-

The Industry Valuation standards illustrated in Table 15 were used to estimate the project specific

risk of the areas for which resources exists. The Project principle risk criteria (Table 17) were

measured against the Industry Valuation standards in the decision making process to determine a

project valuation index;

a comparison of the project valuation indices which ranged between 28.50 (Millo/Tweepan) and

34.50 (Du Preez Leger and Vermeulenskraal) for the Inferred categories respectively, to that of

the South African gold industry (48), indicates that the project risk profile is higher, than the

South African gold industry average (Table 18);

Considering the deviation of the project valuation indices above, from the industry mean of 48,

the USD/oz industry value of USD19/oz for the Inferred Mineral Resources, was adjusted

downwards to between USD4.67/oz (Millo/Tweepan) to USD5.65/oz (Du Preez Leger and

Vermeulenskraal) which is within the boundaries set by the standard deviation for the population

of transactions analysed;

Measuring the market approach based on historic transactions above, Minxcon found that the unit

value was still above Market Related Values Per Ounce based on EV/oz as illustrated in Table 19.

The value was further adjusted to establish a value of USD2.68/oz to USD3.25/oz;

For the value calculation, the sum of the individual products of the USD/oz x Moz x ZAR7.59/USD

for the Mineral Resource of each of the respective areas were determined (Table 20); and

and compared to the South African Gold industry as shown in Figure 20.



45

Table 18: Project Valuation Modifying Indices (Also refer to Table 15)

Gold

Industry Average

Basal Reef Leader reef

Du Preez Leger

Vermeulens- kraal

Du Preez Leger

Vermeulens-kraal

Millo/Tweepan

Depth 6.00 6.00 6.00 6.00 6.00 6.00

Scale of Project (Resource)

6.00 6.00 6.00 6.00 6.00 1.00

Mining/ Process Method 6.00 2.00 2.00 2.00 2.00 2.00

Infrastructure 6.00 - - - - -

Data Confidence 4.00 4.00 4.00 4.00 4.00 4.00

Title/Ownership 4.00 2.00 2.00 2.00 2.00 2.00

Geological Complexity 4.00 2.00 2.00 2.00 2.00 2.00

Deposit type 4.00 6.00 6.00 6.00 6.00 6.00

Stage of development 2.00 0.50 0.50 0.50 0.50 0.50

Strategic 2.00 2.00 2.00 2.00 2.00 1.00

Ability to increase resource

2.00 1.00 1.00 1.00 1.00 1.00

Social & Environmental 2.00 3.00 3.00 3.00 3.00 3.00

Average 48.00 34.50 34.50 34.50 34.50 28.50

Note As the valuation parameter increases, the project value will increase and the risk profile will decrease

As part of the valuation methodology, similar JSE listed gold companies were assessed and their enterprise

value (“EV”) was calculated. From these, their average market related dollar per ounce of resource value

was calculated:-

Table 19: Market Related Values Per Ounce of Mineral Resource

Company EV/oz

Gold 1 $22.07

Central Rand Gold $1.59

DRD Gold $4.19

Simmer and Jack Mines $3.26

Witsgold $1.22

Note: 1.Includes Measured, Indicated and Inferred

2.As at February 2010

Other factors taken into account include the aquisitions of the Orkney and President Steyn Mine

operations by Pamodzi Gold. Minxcon calculated that the Orkney operation was aquired at $2.78/oz and

the President Steyn Mine was aquired for $2.47/oz. It must be kept in mind that these operations are very

mature, with limited resource and substantial associated environmental liabilities, which impact

dramatically on the price received.

A sample of inferred values of typical Witwatersrand transactions which range from USD1.30/oz to

USD12.60/oz was taken from the bigger population of historical transactions. The lower 25% and upper

25% extreme values were eliminated to establish a value range for the properties within the 25th and 75th

quarter percentiles.



46

Table 20: Du Preez Leger Mineral Asset Valuation based on Comparative Analysis

Approach Total Lower Price:

Risk Adjusted

Price

Upper Price:

Lower Value Fair Value Upper Value

EXPLORATION PROPERTIES WITH RESOURCES

US$/oz ZAR'000

Du Preez Leger 4,868,898 $2.04 $3.25 $8.75 75,293 119,983 323,240

Vermeulenskraal 3,623,127 $2.04 $3.25 $8.75 56,028 89,284 240,535

Millo/Tweepan 696,482 $1.96 $2.68 $4.00 10,347 14,178 21,117

Total 9,188,507 $2.03 $3.21 $8.39 141,668 223,445 584,891

The Rebelkop area does not have any estimated Mineral Resources, and as the Rebelkop area has been

held by FSD since the early twentieth century, no information is available which could be used to apply

the historical cost method of valuation. Hence the Project was valued using a value per hectare.

A sample of Witwatersrand gold transactions that took place in South Africa was taken from the bigger

population of transactions and analysed. The upper value of these transaction included project with

infrastructure. Minxcon derived a R/ha value closer to the lower end of the spectrum as illustrated in

Table 21

Table 21: Rebelkop Mineral Assets Valuation based on Comparative Analysis

Total

Lower Price:

Mean Vaue

Upper Price:

Lower Value Fair Value Upper Value

EXPLORATION PROPERTIES WITHOUT RESOURCES

Ha R/ha ZAR'000

Rebelkop 690 R 17,867 R 25,000 R 37,662 R 12,320 R 17,239 R 25,970

The following diagram illustrates the derived industry valuation curve developed by Minxcon for historic

Gold transactions and plotted onto it, the Du Preez Leger Project, which was valued on a comparative

basis.



47

Figure 20: Comparative Valuation

10.2.2 Cost Approach

Details of historic borehole surveys, sampling methods, drilling techniques, sample recovery, logging

techniques and other sources of information were not available. The exploration cost to date for the Du

Preez Leger Project of ZAR327,459 recorded in FSD‟s book does not truly reflect the reproduction costs.

Minxcon, sourced the reproduction cost of the boreholes drilled from Agere Project Management (Pty) Ltd

(“Agere”), an experienced Wits exploration management company. Table 22 summarises the reproduction

cost for the property as calculated by Agere.

Table 22: Reproduction Costs - Du Preez Leger

ACTIVITY Quantity Unit Rate

(ZAR) COST (ZAR)

1. DATA ACQUISITION Months 0 0

Collation of any existing exploration data including geophysical surveys, drillhole core, borehole logs, sampling and assay data, geological and survey data and maps, geological reports, etc.

2. DETAILED MAPPING Months 0 0

Mapping of the western limb, the gap and

other areas of concern



48


(ZAR) COST (ZAR)

3. EXPLORATION DRILLING

Site establishment 4 per rig 150,000 600,000

Diamond drilling 26883

916 24,623,312

Casing 4800 per meter 300 1,440,000

Wedges 0 per wedge 45,319 0

Beacons 16 per beacon 200 3,200

Borehole Plug 16 per plug 8,792 140,665

Water for drilling 1

200,000 200,000

Core trays 3343 per tray 139 463,052

Down hole survey 400 per survey 6,188 2,475,064

Site de-establishement and rehabilitation 4 per rig 150,000 600,000

Rehabilitation 16 per hole 119,066 1,905,049

Inter site moves 16 per hole 150,000 2,400,000

SUBTOTAL

34,850,343

4. ANALYSES AND TESTWORK

Assays 96 per sample 1,000 96,000

Diamond saw blades 20 per blade 1,500 30,000

SUBTOTAL

126,000

5. LABOUR: CONSULTANTS AND CONTRACTORS

Geological and project management 13 per month 333,000 4,329,000

Mining and rock mechanics 0 per day 9,000 0

Metallurgical 10 per day 9,000 90,000

Financial 0 per day 9,000 0

Surveying 10 per day 9,000 90,000

Geophysical surveys 0 per day 9,000 0

SUBTOTAL

4,509,000

6. TRAVEL AND ACCOMMODATION

Transportation and travel 13 months 15,000 195,000

Food and accommodation and fuel 13 months 15,000 195,000

SUBTOTAL

390,000

7. PROJECT RUNNING COSTS

Vehicle hire 13 months 40,000 520,000

Diesel 13 months 5,000 65,000

Water and Electrical 13 months 2,500 32,500

Toilet hire 13 months 5,000 65,000

Sampling consumables 13 months 10,000 130,000

Maintenance consumables 13 months 1,500 19,500

Field consumables 13 months 1,500 19,500

Equipment hire 13 months 10,000 130,000

Telecommunications 13 months 5,000 65,000

Software 13 months 8,000 104,000

SUBTOTAL 13

1,150,500

8. OTHER CONTRACTORS

Security 13 months 40,000 520,000

Civils 2 months 15,000 30,000

Environmental 0 months 0

Core yard 13 months 15,000 195,000

SUBTOTAL

745,000



49


(ZAR) COST (ZAR)

9. TRENCHING AND BULK SAMPLING

Trenching

Bulk sampling

Mapping of trenches

SUBTOTAL

0

10. CONTINGENCY

10%

4,177,084

TOTAL 45,947,928

As previously described, the expenditure has been multiplied by an upper and lower PEM ranging between

5.12 and 6.33 to generate a range of values for the properties. Based on the prospectivity of the Du Preez

Leger properties, Minxcon determined a “fair” value of ZAR 264.83 million using an average PEM of 5.74,

as shown in Table 23:-

Table 23: Du Preez Leger Valuation based on Historical Cost Method

NAME Phase

Description PEM (Low)

PEM (Fair)

PEM (High)

HISTORICAL COST

(ZAR'000)

LOW VALUE

(ZAR'000)

FAIR VALUE

(ZAR'000)

HIGH VALUE

(ZAR'000)

Du Preez Leger Classification

of Inferred Resources

5.12 5.78 6.33 R 18,505 R 94,654 R 106,867 R 117,045

Vermeulenskraal Classification


5.12 5.78 6.33 R 22,736 R 116,297 R 131,303 R 143,808

Millo/Tweepan Classification


5.06 5.67 6.16 R 4,706 R 23,814 R 26,661 R 28,991

Total/Average

5.10 5.74 6.27 R 45,948 R 234,765 R 264,832 R 289,844

1111 SSOOUURRCCEESS OOFF IINNFFOORRMMAATTIIOONN

The following references were used in the compilation of the Mineral Asset Valuation report on the Du

Preez Leger Project:-

Date Author Title

December 1988 Mathison and Hollidge Inc The OFS Goldfield: The Old-The New-The Future

Johannesburg Consolidated Investment Co Ltd

Confidential Report on the Free State Development Farms, Du Preez Leger 324 and Jonkersrust 72 in the Virginia District, Orange Free State

K&S Mining Mining and Exploration in and around the Orange Free State Goldfield

FSD An Evaluation of Vermeulenskraal 223

SV T2.11



50

1122 PPRREEVVIIOOUUSS VVAALLUUAATTIIOONN

Minxcon completed a report: “Free State Development and Investment Corporation Limited - An

Independent Mineral Asset Valuation Report on the Du Preez Leger Project, Free State Province, South

Africa in November 2008, .Ref: R08-162. The value then calculated was ZAR 188.233 million

The following gold price and exchange rate were used:

Exchange Rate: ZAR8.51/US$

Gold Price: US$825/oz

Gold Price (ZAR) ZAR225,832/kg

Table 24: November 2008 Valuation Du Preez Leger

Resource Area Value (USD million) Value (ZAR million)

Du Preez Leger/Jonkersrust 10.470 85.858

Vermeulenskraal 9.028 74.030

Millo/Tweepan 1.775 14.555

Rebelkop 1.682 13.791

Total 22.96 188.233

SV T2.12



51

1133 CCOOMMPPEETTEENNTT PPEERRSSOONNSS AANNDD OOTTHHEERR EEXXPPEERRTTSS

The authors of this Report are members in good standing of appropriate professional institutions. The

qualifications and professional registrations of the competent persons who have contributed to this

evaluation are provided at the end of this report. The following persons made contributions to this report,

and are qualified persons, as defined in SAMREC, SAMVAL and NI 43-101*:-

Competent Valuator - Johan Odendaal (Director, Minxcon): B.Sc. (Geol.), B.Sc. (Hons) (Min. Econ.), M.Sc.

(Min. Eng.), Pr. Sci. Nat. 400024/04, FSAIMM, MGSSA, MAusIMM.

Johan Odendaal has 22 years experience in the mining and financial industry and 7 years as independent

mining consultant specialising in the valuation of Mining Projects and Companies. He commands a wide

range of knowledge on both the local and international mining companies. As a former employee of Merrill

Lynch, he was actively involved in advising mining companies and investment bankers on corporate

transactions. Johan worked for twelve years as a mining analyst and; rated one of the top platinum mining

analysts; he became a globally recognised industry specialist. Regular contact with the mining, corporate

and investment community allowed him to build an extensive network of contacts around the globe

specialising in valuation of mining companies.

Competent Person - Charles Muller (Director, Minxcon): B.Sc. (Hons) (Geol.), Pr. Sci. Nat. 400201/04

Charles has a wealth of knowledge in the field of geology and mineral resource evaluation. Charles is an

expert in data processing, ore-body modelling and mineral resource evaluation using Datamine™, as well as

the other major computer packages aimed at the minerals industry. During his 24 years in the mining

industry, he has gained extensive experience in the fields of sedimentology, gold exploration and target

generation of gold, platinum, diamonds, coal and base metal Projects. His skills in software development,

customizing data systems and integration of databases are widely recognised in the mining industry. Charles

has been involved with the modelling and geostatistical evaluation of various ore-bodies across the globe.

He has presented papers on ore resource evaluation at international venues and has a number of

publications to his credit.

Key Technical Staff – Quintin Antunes (Resource Geologist, Minxcon): B.Sc. (Hons) (Geol.), Pr. Sci. Nat.

400231/08, MGSSA

Quintin has spent 5 years working in the mining and minerals industry and has gained experience in mining

and exploration on a variety of minerals in South America, South Africa, as well as other African countries.

As a graduate, Quintin spent time working as a geologist on exploration projects on a variety of commodities

including, but not limited to, alluvial diamonds, iron ore, gold and copper in the Thabazimbi (South Africa),

Guyanna (South America) and Tete (Mozambique) areas. At end of 2005, Quintin moved to the platinum

mines in Rustenburg where he worked as a Sectional Geologist and later acted as a Shaft Geologist. In

2007, Quintin moved to the consulting industry where he has been involved with Mineral Resource and

Reserve projects. Quintin forms part of the Resource teams undertaking of Competent Persons Reports as

well as working on Mineral Rights projects and mine valuations. He is currently working on a wide range of

projects, including QA/QC reports and Resource evaluations and reports for platinum, kimberlite diamonds,

alluvial diamonds, gold and coal projects. Periodically he is involved with exploration projects where a first

assessment of the mineral potential and exploration proposal needs to be submitted.

T11

SV T2.13



52

1144 CCOOMMPPEETTEENNTT VVAALLUUAATTOORR

CERTIFICATE of COMPETENT VALUATOR - N J Odendaal

I, Johan Odendaal, do hereby certify that:

1. I am Director of Minxcon (Pty) Ltd Suite 5 Coldstream Office Park,

Cnr Hendrik Potgieter and Van Staden Roads,

Little Falls,

Johannesburg, South Africa

2. I graduated with a B.Sc. (Geology) degree from the Rand Afrikaans University in 1985. In addition, I have obtained a B.Sc. Hons (Mineral Economics) from the Rand Afrikaans University in 1986 and a M.Sc. Min. Eng. from the University of the Witwatersrand in 1992.

3. I am a member/fellow of the following professional associations.

Class Professional Society Year of

Registration

Member Geological Society of South Africa (MGSSA No. 965119) 2003

Fellow South African Institute of Mining and Metallurgy (FSAIMM Reg. No. 702615) 2003

Member Australasian Institute of Mining and Metallurgy (MAusIMM Reg. No. 220813) 2003

Member South African Council for Natural Scientific Professions (Pr. Sci. Nat. Reg. No.

400024/04)

2003

Member Investment Analysts Society of South Africa 1992

4. I have worked as a Geoscientist for a total of 23 years since my graduation from university. As a former employee of Merrill Lynch, I was actively involved in advising mining companies and investment bankers on corporate related issues, analysing platinum and gold companies. I completed a various number of valuations on gold using the valuation approaches described by SAMVAL.

5. To the best of my knowledge, information and belief, the Report contains all scientific and technical information required to be disclosed to make the Report not misleading.

6. The facts presented in the Report are correct to the best of my knowledge.

7. The analyses and conclusions are limited only by the reported forecasts and conditions.

8. I have no present or prospective interest in the subject property or asset.

9. My compensation, employment or contractual relationship with the Commissioning Entity is not contingent on any aspect of the Report.

10. I have no bias with respect to the assets that are the subject of the Report, or to the parties involved with the assignment.

11. I have not made a personal inspection of the property.

Yours faithfully,

N J ODENDAAL B.Sc. (Geol), B.Sc. Hons. (Min. Econ.), M.Sc. (Min. Eng.) Pr. Sci. Nat., FSAIMM, MGSSA, MAusIMM DIRECTOR

Dated this 18th February 2010

T11

SV T2.14



53

CERTIFICATE of COMPETENT PERSON - C J Muller

I, Charles Muller, do hereby certify that:

1. I am Director of Minxcon (Pty) Ltd Suite 5 Coldstream Office Park,

Cnr Hendrik Potgieter and Van Staden Roads,

Little Falls,

Johannesburg, South Africa

2. I graduated with a B.Sc. (Geology) degree from the Rand Afrikaans University in 1988. In addition, I have obtained a B.Sc. Hons (Geology) from the Rand Afrikaans University in 1994 and attended courses in geostatistics and advanced Datamine modelling and geostatistical evaluation through the University of the Witwatersrand.

3. I am a member/fellow of the following professional associations.

Class Professional Society Year of Registration

Member Geostatistical Association of Southern Africa 2008

Member South African Council for Natural Scientific

Professions (Pr. Sci. Nat. Reg. No. 400201/04) 2004

4. I have worked as a Geoscientist for a total of 25 years. As the former Chief Geologist for Goldfields South Africa, my specialisation lies within Mineral Resource modelling and management. I have completed a number of Mineral Resource estimations for gold using approaches described by SAMREC.

5. To the best of my knowledge, information and belief, the Report contains all scientific and technical information required to be disclosed to make the Report not misleading.

6. The facts presented in the Report are correct to the best of my knowledge.

7. The analyses and conclusions are limited only by the reported forecasts and conditions.

8. I have no present or prospective interest in the subject property or asset.

9. My compensation, employment or contractual relationship with the Commissioning Entity is not contingent on any aspect of the Report.

10. I have no bias with respect to the assets that are the subject of the Report, or to the parties involved with the assignment.

11. I have not made a personal inspection of the property.

Yours faithfully,

C J MULLER B.Sc. (Hons) (Geol), Pr. Sci. Nat., MGSSA DIRECTOR

Dated this 18th February 2010



54

1155 RRAANNGGEE OOFF VVAALLUUEESS

Two valuation approaches have been employed in the valuation of the Du pReez Leger Project. Minxcon‟s

extensive database provides a comprehensive and reliable benchmark for the market approach. Minxcon‟s

confidence in the market approach, leads the competent valuator to prefer the results of the market

approach versus the cost approach. However there is a strong correlation between the historical cost spend

and sequential upgrade in resources and hence provide a good range to the valuator.

A range of values was provided together with a fair value.

The upper and lower valuation range was established at between ZAR 153.988 million and ZAR 252.003 million

respectively; with a “fair” value of ZAR 240.684 million.The above valuation represents a total value for the

Du Preez Leger Project.

Figure 21: Value Range for the Du Preez Leger Project

0

1

2

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000

Val

uat

ion

Ap

pro

ach

Value (R'000)

Market Approach

Cost Approach

FSD directly holds the prospecting right which covers the four farms. FSD‟s attributable interest in the Du

Preez Leger Project is 100%. The “fair” value attributable to FSD for the Du Preez Leger Project is therefore

ZAR 240.684 million.

1166 IIDDEENNTTIIFFIIAABBLLEE CCOOMMPPOONNEENNTT AASSSSEETT VVAALLUUEESS

N/A

SV T2.16

SV T2.15



55

1177 HHIISSTTOORRIICC VVEERRIIFFIICCAATTIIOONN

N/A

1188 MMAARRKKEETT AASSSSEESSSSMMEENNTT

Following a period of high demand in 2008, the volume of total identifiable gold demand in the second

quarter of 2009 saw a significant drop with demand subsiding (World Gold Council Website, March 2009).

While the USD gold price in Q2 2009 was only 3% higher than in Q2 2008, consumers in several key markets

experienced significant price gains. Over the same period, the gold price rose 20 % in Indian rupee terms, 28

% in Turkish lira terms, 31 % in pound sterling terms, and 18 % in euro terms.

The decline in tonnage relative to Q2 2008 was attributable to weakness in jewellery and industrial demand,

offset to a considerable extent by a significant increase in investment demand. Identifiable investment

demand in Q2 totalled 222.4 t, up 46 % on year-earlier levels. Net investment demand eased significantly

relative to the highs seen during the previous three quarters when the level of uncertainty surrounding the

economy and financial sector was at extreme levels, but remained very healthy on a historical basis.

Official coin demand was up 62 % on year-earlier levels. ETF demand, at 56.7 t in Q2 2009, was robust on a

historical basis but nevertheless marked a significant reduction on the 465.1 t experienced in Q1 2009.

Jewellery demand in Q2 2009 was 22 % below year-earlier levels. The weakness was widespread, with

western countries experiencing the ongoing effects of economic hardship and non-western countries suffering

primarily from a high gold price. The exception to this trend was mainland China, where jewellery demand

rose 6 % in tonnage terms relative to year-earlier levels.

Industrial demand continued to suffer from the effects of weak economic conditions, falling 21 % relative to

year-earlier levels. The sector experienced an 18 % quarter-on-quarter gain, reflecting a significant

improvement in the other industrial and decorative and electronics components.

The USD gold price has steadily been increasing, reaching a high of USD 1,043/oz in October 2009, which is

the highest gold price ever recorded. For the 2008 year as a whole, the gold price averaged USD871.96, up 25

% from USD695.39 in 2007. The price for 2009 is expected to average USD950/oz, which is 9 % higher than

2008.

The biggest source of growth in demand for gold during the year was investment. Identifiable investment

demand reached 399.0 t in Q4 of 2008, up from 141.4 t in Q4 2007, a rise of 182 %. Demand in 2008 was 64%

higher than in 2007, equivalent to an additional inflow of USD15.2 billion. Taking into account implied

investment, which includes the more speculative side of the gold market, total investment was USD10.1

billion higher than in 2007.

T5.8 i

SV T2.18

SV T2.17



56

Figure 22: Gold Price (USD/oz)

The extreme uncertainty that currently surrounds the global economy is unlikely to abate and should

continue to underpin net investment demand, particularly demand for bars and coins.

Figure 23: Global Gold Supply and Demand Distribution

Total Mine Supply

59%Official Sector Sales

8%

Old Scrap Gold33%

Provisional Gold Supply 2008

Jewellery58%

Industrial and Dental

12%

Bar and Coin Retail

Investment

17%

Other Retail Investment

4%

ETFs and Similar

9%

Provisional Gold Demand 2008

For now, the outlook for gold remains buoyant. Historically drivers for gold creating market uncertainty and

prompting investors to opt for gold as alternative investment were:-

Political uncertainty;

Currency fluctuation;

Stock market uncertainty; and

High inflation and low real interest rates.



57

Although the gold market has never again experienced hyperinflation like was seen in the early 1980s, it still

has an impact as illustrated in the figure below, effectively lowering the real interest rate in the US.

The real rate of short term interest is currently following a downward trend and approaching negative

territory, therefore forcing investors to find alternative investments. In addition to this, the continued credit

crisis and depreciation of the USD has led to increased gold purchases as a safe haven asset and dollar hedge.

These factors underpinned the gold price reaching levels above USD1,000/oz in 2008 and 2009 with the rand

gold price trading above ZAR350,000/kg.

Figure 24: Gold Price and Real Interest Rate Relationship

Source: Kitco; Economic Research – Federal Reserve Bank of St Louis

1199 AAUUDDIITTSS AANNDD RREEVVIIEEWWSS

N/A

T9 i, ii

SV T2.19



58

Figure 25: Gold Price in USD and SA Rand

250

350

450

550

650

750

850

950

-

50 000

100 000

150 000

200 000

250 000

300 000

350 000

Jan

-99

Jun

-99

No

v-9

9

Ap

r-0

0

Sep

-00

Feb

-01

Jul-

01

De

c-0

1

May

-02

Oct

-02

Mar

-03

Au

g-0

3

Jan

-04

Jun

-04

No

v-0

4

Ap

r-0

5

Sep

-05

Feb

-06

Jul-

06

De

c-0

6

May

-07

Oct

-07

Mar

-08

Au

g-0

8

Jan

-09

Jun

-09

USD

/oz

ZAR

/kg

Gold Price (ZAR/kg) Gold (US $/oz)

Source: Kitco; Statistics South Africa

Figure 26: Gold Price and USD-Euro Relationship

250

350

450

550

650

750

850

950

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

Jan

-99

Jun

-99

No

v-9

9

Ap

r-0

0

Sep

-00

Feb

-01

Jul-

01

De

c-0

1

May

-02

Oct

-02

Mar

-03

Au

g-0

3

Jan

-04

Jun

-04

No

v-0

4

Ap

r-0

5

Sep

-05

Feb

-06

Jul-

06

De

c-0

6

May

-07

Oct

-07

Mar

-08

Au

g-0

8

Jan

-09

Jun

-09

USD

/oz

EU/U

SD

USD/Euro

U.S. / Euro Foreign Exchange Rate Gold (US $/oz)

Source: Kitco; Economic Research – Federal Reserve Bank of St Louis



59

2200 GGLLOOSSSSAARRYY OOFF TTEERRMMSS

Term Definition

Adit An opening driven horizontally into the side of a mountain or hill for providing access to a

mineral deposit.

Acid Rock Drainage The exposure, usually as a result of mining, of sulphide-bearing minerals to air and water,

forming sulfuric acid. This acid dissolves metals such as lead, zinc, copper, arsenic,

selenium, mercury, and cadmium, into ground and surface water. Acid rock/mine

drainage can poison ground and drinking water and destroy aquatic life and habitat.

Commonly mined ore bodies that pose the risk of acid rock drainage include gold, silver,

copper, iron, zinc, and lead.

Alluvial Deposited by running water.

Amsl Above mean sea level

Achaean A period of time between 4,000Ma and 2,500Ma.

Assay Process to determine the proportions of metal in an ore.

Assay laboratory A facility in which the proportions of metal in ores or concentrates are determined using

analytical techniques.

Auriferous A synonym for gold bearing.

Bearing Strike

Black Economic

Empowerment (“BEE”)

company

The following recommendations have been made to the South African government by the

Black Economic Empowerment Commission regarding the definitions of different levels of

company ownership by Black people that qualify for BEE status:

A „Black company‟ is one that is 50.1% owned and managed by Black people;

A „Black empowerment company‟ is one that is at least 25.1% owned and

managed by Black people; and

A „Black influenced company‟ is one that is 5% -25% owned and managed by

Black people.

Blank Samples that contain no mineral content that are sent to the assay laboratory for quality

control.

Block model Technique of modelling which divides the resources into mineable blocks.

Borehole

A hole drilled usually drilled from surface but also from underground, in which core of the

rock strata is cut by a diamond-impregnated bit or crown as the cutting edge. This core

can be studied and split with one half being sent for the determination of any contained

metals (called assaying).

Bulk sample Large sample which is processed through a small-scale plant and not a laboratory.

Buckshot Pyrite Pyrite that has crystallised in a cubic shape.

Carbon-In-Pulp (CIP) A common process used to extract gold from cyanide leach slurries. The process consists

of carbon granules suspended in the slurry and flowing counter-current to the process

slurry in multiple-staged agitated tanks. The process slurry, which has been leached with

cyanide prior to the CIP process, contains solubilised gold. The solubilised gold is

absorbed onto the carbon granules, which are subsequently separated from the slurry by

screening. The gold is then recovered from the carbon by electrowinning onto steel wool

cathodes or by a similar process.

Chip Sample Sample of ore chipped out of a rock face.

Clastic A sediment or rock composed chiefly of fragments derived from pre-existing rocks or

minerals.



60

Term Definition

Coefficient of Variation A measure of dispersion of a probability distribution (ratio of standard deviation to the

mean).

Competent Person The SAMREC Code defines a Competent Person as a person who is registered with any

one of SACNASP, ECSA, PLATO or any other statutory South African or international

body that is recognized by SAMREC. A Competent Person should have a minimum of

five years‟ experience relevant to the style of mineralisation and type of deposit under

consideration and to the activity, which that person is undertaking.

Composite Sample The combining of individual sample results to determine the average grade of a borehole

intercept.

Conglomerate A sedimentary rock containing rounded fragments (clasts) derived from the erosion and

abrasion of older rocks. Conglomerates are usually formed through the action of water in

rivers and beaches.

Core A cylindrical shaped sample of ore, derived by drilling with a hollow cylinder for the

purpose of obtaining geological information.

Density-apparent porosity

studies

The standard mass and water displacement methodology to calculate the SG of the rock,

which also takes into account the amount of weathering of the material that might have

taken place.

Diamond drilling A drilling method, where the rock is cut with a diamond bit, usually to extract cores.

Dilution Waste which is mixed with ore in the mining process.

Dip The angle that a structural surface, i.e. a bedding or fault plane, makes with the horizontal

measured perpendicular to the strike of the structure.

Dolomite A sedimentary rock formed by the replacement of limestone.

Dyke A tabular body of intrusive igneous rock that cuts across the layering or structural fabric of

the host rock.

Eskom South African electricity supply company

Enterprise Value A measure of a company's value, often used as an alternative to straightforward market

capitalization. EV is calculated as market cap plus debt, minority interest and preferred

shares, minus total cash and cash equivalents.

Exchange Rate The rate at which one currency will be converted to another.

Exploration Prospecting, sampling, mapping, diamond drilling and other work involved in the search

for mineralisation.

Facies The features that characterise a sediment as having been deposited in a particular

depositional environment.

Fault A fracture in earth materials, along which the opposite sides have been relatively

displaced parallel to the plane of movement.

Faulting The process of fracturing that produces a displacement.

Fire Assay Analysis of gold content by cupellation process.

Fluvial Pertaining to rivers.

Footwall The underlying side of a fault, orebody or stope.

Geozone An area defined by geological characteristics.

Grade The quantity of metal per unit mass of ore expressed as a percentage or, for gold, as

grams per tonne of ore.

Granite A common, coarse-grained, light-coloured, hard igneous rock consisting chiefly of quartz,

orthoclase or microcline, and mica, used in monuments and for building.



61

Term Definition

Greenstone Any of various altered basic igneous rocks coloured green by chlorite, hornblende, or

epidote.

Hanging Wall The overlying side of a fault, orebody or stope.

Hedging Hedging is a strategy designed to minimize exposure to an unwanted business risk, while

still allowing the business to profit from an investment activity.

Highwall The unexcavated face of exposed overburden and ore in an opencast mine.

Homogenous Uniform in structure or composition throughout.

Inferred Mineral Resource An „Inferred Mineral Resource‟ is that part of a Mineral Resource for which tonnage,

grade and mineral content can be estimated with a low level of confidence. It is inferred

from geological evidence and assumed but not verified geological and/or grade continuity.

It is based on information gathered through appropriate techniques from locations such as

outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain

quality and reliability. An Inferred Mineral Resource has a lower level of confidence than

that applying to an Indicated Mineral Resource.

In situ In place, i.e. within unbroken rock.

Indicated Mineral Resource That part of a mineral resource for which tonnage, densities, shape, physical

characteristics, grade and mineral content can be estimated with a reasonable level of

confidence. It is based on exploration, sampling and testing information gathered through

appropriate techniques from locations such as outcrops, trenches, pits, workings and drill

holes. The locations are too widely or inappropriately spaced to confirm geological and/or

grade continuity but are spaced closely enough for continuity to be assumed (SAMREC

definition).

Interburden A layer of rock that lies in-between two layers of mineralised rock.

Kriging A weighted-moving-average interpolation method where the set of weights assigned to

samples minimizes the estimation variance, which is computed as a function of the

variogram model and locations of the samples relative to each other, and to the point or

block being estimated.

Kurtosis A measure of the „peakedness‟ of the probability distribution of a real-valued random

variable.

Latitude The angular distance north or south of the earth‟s equator, measured in degrees along a

meridian, as on a map or globe.

Lava Molten rock that reaches the earth‟s surface through a volcano or fissure.

Lenticular Resembling in shape, the cross-section of a lens.

Level The workings or tunnels of an underground mine which are on the same horizontal plane.

Lithology The general compositional characteristics of sedimentary rocks.

Logging Method of obtaining a continuous record of the lithology, stratigraphy and structure of the

core obtained from a diamond-drill hole.

Lognormal Distribution A probability distribution in which the log of the random variable is normally distributed,

meaning it conforms to a bell curve.

Longitude The angular distance north or south of the earth‟s equator, measured in degrees along a

meridian, as on a map or globe.

Mean Average.

Measured Resource That part of a mineral resource for which tonnage, densities, shape, physical

characteristics, grade and mineral content can be estimated with a high level of

confidence. It is based on detailed and reliable exploration, sampling and testing

information gathered through appropriate techniques from locations such as outcrops,



62

Term Definition

trenches, pits, workings and drill holes. The locations are spaced closely enough to

confirm geological and grade continuity (SAMREC definition).

Metamorphic Rock Rocks that result from partial or complete recrystallization in the solid state of pre-existing

rocks under conditions of temperature and pressure.

Metaquartzite A quartzite formed by metamorphic recrystallization.

Mineable That portion of a resource for which extraction is technically and economically feasible.

Mineral Reserve The economically mineable material derived from a Measured and/or Indicated mineral

Resource. It is inclusive of diluting materials and allows for losses that may occur when

the material is mined. Appropriate assessments, which may include feasibility studies,

have been carried out, including consideration of, and modification by, realistically

assumed mining, metallurgical, economic, marketing, legal, environmental, social and

governmental factors. These assessments demonstrate at the time of reporting that

extraction is reasonably justified. Mineral Reserves are sub-divided in order of increasing

confidence into Probable Mineral Reserves and Proved Mineral Reserves (SAMREC

definition).

Mineral Resource A concentration (or occurrence) of material of economic interest in or on the earth‟s crust

in such form, quality and quantity that there are reasonable and realistic prospects for

eventual economic extraction. The location, quantity, grade, continuity and other

geological characteristics of a mineral resource are known, estimated from specific

geological evidence and knowledge, or interpreted from a well-constrained and portrayed

geological model. Mineral Resources are subdivided, in order of increasing confidence in

respect of geoscientific evidence, into Inferred, Indicated and Measured categories

(SAMREC definition).

Mineralisation The presence of a target mineral in a mass of host rock.

Mineralised area Any mass of host rock in which minerals of potential commercial value occur.

National Instrument 43 101 The Canadian Code for reporting of Mineral Resources and Ore Reserves.

Oligomictic Composed almost entirely of a single type of fragment.

Ordinary Kriging A variety of kriging which assumes that local means are not necessarily closely related to

the population mean, and which therefore uses only the samples in the local

neighborhood for the estimate. Ordinary kriging is the most commonly used method for

environmental situations.

Opencast Opencast mining is a type of surface excavation which often takes the shape of an

inverted cone; the shape of the mine opening varies with the shape of the mineral

deposit.

Ore A mixture of valuable and worthless minerals from which at least one of the minerals can

be mined and processed at an economic profit.

Orebody A continuous well defined mass of material of sufficient ore content to make extraction

economically feasible.

Outcrop The area over which a particular rock unit occurs at the Earth‟s surface.

Overburden The alluvium and rock that must be removed in order to expose an ore deposit.

Palaeochannel An ancient trough or channel-like feature that was formed by river or similar stream

current action during deposition of sediment at some period of geological time.

Pay limit The breakeven grade at which the ore-body can be mined without profit or loss and is

calculated using the gold price, the working cost and recovery factors.

Payshoot High trending grade area.

Placer A sedimentary deposit containing economic quantities of valuable minerals mainly formed

in alluvial and eluvial environments.



63

Term Definition

Production The day-to-day activities directed to obtaining saleable product from the mineral resource

on a commercial scale. It includes extraction and other processing prior to sale.

Pyconometer A standard vessel used in measuring the density or specific gravity of materials.

Pyrite A common yellow sulphide mineral (FeS2).

Quartzite A metamorphic rock consisting primarily of quartz grains, formed by the recrystallization

of sandstone by thermal or regional metamorphism.

Reef A gold-bearing placer, normally a conglomerate, which may contain economic

concentrates of gold and uranium.

Refining The final stage of metal production in which final impurities are removed from the molten

metal by introducing air and fluxes. The impurities are removed as gases or slag.

Rehabilitation The process of restoring mined land to a condition approximating to a greater or lesser

degree its original state. Reclamation standards are determined by the South African

Department of Mineral and Energy Affairs and address ground and surface water, topsoil,

final slope gradients, waste handling and re-vegetation issues.

Relative Density Relative density (also known as specific gravity) is a measure of the density of a material.

It is dimensionless, equal to the density of the material divided by some reference density

(most often the density of water, but sometimes the air when comparing to gases)

Reverse Fault A dip-slip fault marked by a hanging wall that has moved upward relative to the footwall.

Riffler Ore splitter.

Royalty A payment made for a concession of commercial value.

Sampling Taking small pieces of rock at intervals along exposed mineralisation for assay (to

determine the mineral content).

SAMREC Code The South African Code for the reporting of Exploration Results, Mineral Resources and

Mineral Reserves.

Sandstone A sedimentary rock formed by the consolidation and compaction of sand and held

together by a natural cement, such as silica.

Sedimentary Formed by the deposition of solid fragmental material that originates from weathering of

rocks and is transported from a source to a site of deposition.

Shaft Vertical or inclined passageway to access the underground mining areas.

Shale A fine grained sedimentary rock formed by the compaction of silt, clay or sand that

accumulates in deltas and on lake and ocean bottoms.

Simple Kriging A variety of kriging, which assumes that local means are relatively constant and equal to

the population mean, which is well known. The population mean is used as a factor in

each local estimate, along with the samples in the local neighborhood. This is not usually

the most appropriate method for environmental situations.

Skewness A measure of the asymmetry of the probability distribution of a real-valued random

variable.

Specific Gravity The ratio of the weight of a given volume of a substance to the weight of an equal volume

of water. (Also referred to as relative density)

Stope Excavation within the orebody where the main production takes place.

Stratigraphic A term describing the chronological sequence in which bedded rocks occur that can

usually be correlated between different localities.

Strike The direction taken by a structural surface such as a fault or bedding plane as it intersects

the horizontal.

Subcrop A sub surface outcrop.



64

Term Definition

Tabular Having two dimensions much greater than the third.

Telkom South African telecommunications company.

Tonnage Quantities where the tonne is an appropriate unit of measure. Typically used to measure

reserves of gold-bearing material in situ or quantities of ore and waste material mined,

transported or milled.

Trench A surface excavation to intersect the orebody, which is generally longer than it is wide.

Unconformity A surface within a package of sedimentary rocks which may be parallel to or at an angle

with overlying or underlying rocks, and which represents a period of erosion or non-

deposition, or both.

Variance A measure of a random variables statistical dispersion indicating how its possible values

are spread around the expected value.

Variogram It describes the spatial or temporal correlation of observations.

Waste rock Rock with an insufficient gold content to justify processing.

Winze A small shaft sunk from one level to another in a mine, as for the purpose of ventilation or

access.

Yield/Recovered grade The actual grade of ore realised after the mining and treatment process.



65

Abbreviation Definition

~ Approximately

2-D Two Dimensional.

3-D Three Dimensional.

AIDS Acquired Immunodeficiency Syndrome

AIM Alternative Investment Market

Al Aluminium

Au Gold

AusImm Australian Institute of Mining and Metallurgy

BEE Black Economic Empowerment

BRQF Black Reef Quartzite Formation

CAPM Capital Asset Pricing Model

CCIC Caracle Creek International Consulting Inc

CEO Chief Executive Officer

CFO Chief Financial Officer

CIP Carbon in Pulp

COG Cut off Grade

COO Chief Operating Officer

CPIX Consumer Price Index excluding the effects of mortgage rate changes

CPR Competent Persons Report

CRG Central Rand Group

CW Channel Width

DCF Discounted Cash Flow

DME Department of Minerals and Energy

DD Diamond Drillhole

DTM Digital Terrain Model

DWAF Department of Water Affairs and Forestry

EAGC EAGC Ventures corp.

ECSA Engineering Council of South Africa

EMP Environmental Management Programme

EMPR Environmental Management Programme Report

ERB East Rand Basin

Fe Iron

FW Footwall

GCS Groundwater Consulting Service (Pty) Ltd

GDP Gross Domestic Product

GFGC Gold Fields Geological Centre

GFM&D Gold Fields Mining and Development (Pty) Ltd

GSSA Geological Society of South Africa

HDS High Density Sludge

HDSA Historically Disadvantaged South Africans

HIV Human immunodeficiency virus

HMI Human Machine Interface

HW Hanging Wall

ICP-OES Inductively Coupled Plasma Atomic Emission Spectroscopy

IRR Internal Rate of Return

ISO International Standards Organisation

JSE JSE Securities Exchange

LOM Life of Mine

M&A Mergers and Acquisitions



66

Abbreviation Definition

Max Maximum

Min Minimum

Mn Manganese

MOU Memorandum of Understanding

MPRDA Mineral and Petroleum Resources Development Act

MVR Middelvlei Reef

MWP Mining works programme

NIR Not in Resource (but included in the LOM plan)

NPV Net Present Value

NYSE New York Stock Exchange

ORM Ore Reserve Manager

PC Percussion (Drillhole)

PLC Programmable logic controllers

PPP Purchasing Power Parity

Pr.Sci.Nat Practicing Natural Scientist

PRF Plant Recovery Factor

Ptn Portion

PV Present Value

RC Reverse Circulation (Drillhole)

Re Remaining Extent

REL Randfontein Estates Limited

RD Relative Density

ROM Run of Mine

S&LP Social and Labour Plan

SAG Semi-autogenous Grind (mill)

SAMREC The South African Code for the Reporting of Mineral Resources and Mineral Reserves

SAMVAL The South African Code for the Valuation of Mineral Assets

SANAS South African National Accreditation System

SAIMM South African Institute of Mining and Metallurgy

SCADA Supervisory Control and Data Acquisition

SCF Shaft Call Factor

SEC Securities and Exchange Commission

SHE Safety, Health and the Environment

SMU Smallest Mining Unit

SPV Special Purpose Vehicle

STC Secondary Tax on Companies

TSX Toronto Stock Exchange

UG Underground

VAT Value Added Tax

VCR Ventersdorp Contact Reef



67

Unit Definition

% Percentage

bcm Bank cubic meter

cm Centimeter

cmg/t Centimeter grams per tonne

cmkg/t Centimeter kilograms per tonne

g Grams

g/t Grams per tonne

Ha Hectare

kg Kilogram

kg/t Kilogram per tonne

kt kiloton

lb Pound

Ma One million years

M Million

m Meter

mbs Meters below surface

Mg/l Milligrams per liter

Ml Megalitres

Mlb Million pounds

mm Millimetre

R South African Rand

R/t Rands per tonne

t Tonne

t/hour Tonnes per hour

t/year Tonnes per year

tpm Tonnes per month

u Micro

US$ United States Dollar

US$/oz United States Dollar per ounce

US$/t United States Dollar per tonne

ZAR South African Rand

ZAR/t Rands per tonne



68

Appendix 1: Minxcon JSE Listing Requirements and SAMREC Code Audit Checklists

JSE LISTING REQUIREMENTS AUDIT CHECKLIST

JSE Section JSE Contents Report Section

12.4 (c) The Competent Person‟s Report must be accompanied by a compliance checklist cross referencing every paragraph in this section together with the applicable sections in the SAMREC and SAMVAL codes to the relevant part of the Competent Person‟s Report.

Appendix 1

Listing Particulars

12.8 (a) The Competent Person‟s Report must comply with: -

(i) the SAMREC and SAMVAL Codes, (which for purposes of this requirement includes the guidelines in italics and Table 1 of the SAMREC and SAMVAL Codes); and 2.1

(ii) paragraph 12.9 of this section. 2.1

12.8 (b) Details of any direct or indirect beneficial interest, which each director (and his/her associates), Competent Person, Competent Valuator and where applicable related party, (as defined in Section 10 of the JSE Listings Requirements), has or, within two years of the date of the pre-listing statement, had:

N/A

(i) in any asset (including any right to explore for minerals): N/A

(1) of the applicant issuer; N/A

(2) which has been acquired or disposed of by, or leased to or by, the applicant issuer, including any interest in the consideration passing to or from the applicant issuer; and

N/A

(ii) in the share capital of the applicant issuer; N/A

12.8 (c) Financial information in terms of Section 8 of the Listing Requirements to the extent that the applicant issuer has financial history; 8-12

12.8 (d) A statement by the directors of any legal proceedings that may have an influence on the rights to explore or mine, or an appropriate negative statement. 3.7

12.8 (e) Confirmation that the applicant issuer, or its group (including companies in which it has investments) is in possession of the necessary legal title or ownership rights to explore, mine or explore and mine the relevant minerals. 3.7

Competent Person's Report

12.9 (a) The Competent Person‟s Report must have an effective date (being the date at which the contents of the Competent Person‟s Report are valid) less than six months prior to the date of publication of the pre-listing statement, listing particulars, prospectus or Category 1 circular. Cover pg

12.9 (b) Be updated prior to publication of the pre-listing statement, listing particulars, prospectus or Category 1 circular if further material data becomes available after the effective date. -

12.9 (c) If the Competent Person is not independent of the issuer, clearly disclose the nature of the relationship or interest. N/A

12.9 (d) Show the particular paragraph of this section, the SAMREC Code (including Table 1) and SAMVAL Code complied with in the margin of Competent Person‟s Report

In document

12.9 (e) The report must contain a paragraph stating that all requirements of this section, the SAMREC Code (including Table 1) and SAMVAL Code have been complied with, or that certain clauses were not applicable and provide a list of such clauses; and 1

12.6

12.9 e



69

JSE Section JSE Contents Report Section

Include a statement detailing: -

(i) exploration expenditure incurred to date by the applicant issuer and by other parties where available; 4.1, 10.2

(ii) planned exploration expenditure that has been committed, but not yet incurred, by the applicant issuer concerned; and 6.4

(iii) planned exploration expenditure that has not been committed to by the applicant issuer but which is expected to be incurred sometime in the future, in sufficient detail to fairly present future expectations. 8.2

12.9 (f) The report must contain a valuation section which must be completed and signed off by a Competent Valuator in terms of and in compliance with the SAMVAL Code. 8, 9, 10, 12

12.9 (g) The report must be published in full, on both the JSE and applicant issuer‟s websites -

12.9 (h) be included in the relevant JSE document either in full or as an executive summary. The executive summary must be approved by the JSE (after approval by the Readers Panel) at the same time as the Competent Person‟s Report is approved by the JSE and the Readers Panel. The executive summary should be a concise summary of the Competent Person‟s Report and must cover, at a minimum, where applicable:

1

(i) purpose; 1

(ii) project Outline; 1

(iii) location map indicating area of interest; 1

(iv) legal aspects and tenure, including any disputes, risks or impediments; 1

(v) geological setting description; 1

(vi) exploration programme and budget; 1

(vii) brief description of individual key modifying factors; 1

(viii) brief description of key environmental issues; 1

(ix) mineral Resource and Mineral Reserve Statement; 1

(x) reference to Risk paragraph in the full Competent Person‟s Report; 1

(xi) statement by the Competent Person that the summary is a true reflection of the full Competent Person‟s Report; 1

(xii) summary valuation table. Where the cash flow approach has been employed, the valuation summary must include the discount rate(s) applied to calculate the NPV(s) per share with reference to the specific paragraph in the Competent Person‟s Report. If inferred resources are used, show the summary valuation with and without inclusion of such inferred resources.

1



70

SAMREC COMPLIANCE CHECKLIST

SAMREC Section

SAMREC Contents Pertains

To Report Section

Purpose of Report

T1.1 (i) Title page, Table of Contents, including figures and tables. E, R, R* Cover pg

T1.1 (ii) State for whom the report was prepared, whether it was intended as a full or partial evaluation or other purpose, what work was conducted.

E, R, R* 2

Effective date of report. E, R, R* Cover pg

What work remains to be done. E, R, R* 6.4

T1.1 (iii) The Competent Person's statement as to whether the document is SAMREC compliant. If a reporting code, other than SAMREC has been used, include an explanation of the differences.

E, R, R* 2.1

Project Outline

T1.2 (i) Brief description of scope of project (i.e. preliminary sampling, advanced exploration, conceptual, pre-feasibility, or feasibility phase, LOM plan for an ongoing mining operation or closure).

E, R, R* 2.1

Describe the geological setting, deposit type, commodity. E, R, R* 1

Describe the area of project. E, R, R* 1

Describe the background of project. E, R, R* 1

Describe the business arrangement. E, R, R* 1

Brief description of key technical factors that have been considered. R 1

Brief description of mining, processing and other key technical factors. R* N/A

History

T1.3 (i) Historical background to the project and/or adjacent areas concerned, including known results of previous exploration and/or mining activities (type, amount, quantity and development work).

E, R, R* 4

Prior ownership and changes thereto. E, R, R* 4

Discuss known/existing historical Mineral Resource estimates and performance statistics to actual production for past and current operations, including the reliability of these and how they relate to the SAMREC Code.

R, R* 4

Discuss known/existing historical Mineral Reserve estimates and performance statistics to actual production for past and current operations, including the reliability of these and how they relate to the SAMREC Code.

R* N/A

T1.3 (ii) Reference all information used from other sources. E, R, R* 11

Previous successes or failures should be referred to transparently with reasons why the project should now be considered potentially economic.

R, R* 4.1

Key Plan, Maps and Diagrams

T1.4 (i) Include and reference a location or index map and more detailed maps showing all important features described in the text, including all relevant cadastral and other infrastructure features.

E, R, R* In document



71

SAMREC Section


To Report Section

If adjacent or nearby properties have an important bearing to the report, then their location and common mineralised structures should be included on the maps.


Reference all information used from other sources E, R, R* In document

All maps, plans and sections noted in this checklist, should be legible, and include a legend, coordinates, system of coordinates, scale bar and north arrow.


T1.4 (ii) Diagrams or illustrations should be legible, annotated and summarised. E, R, R* In document

Project Location and Description

T1.5 (i) Description of location (country, province, and closest town/city, coordinate systems and ranges, etc.). E, R, R* 3.1

T1.5 (ii) Location map of prospecting/mining rights E, R, R* 3.1

Location map of any historical and current workings, E, R, R* 3.1

Location map of any exploration. E, R, R* 3.1

Location map of all principal geological features. E, R, R* 3.1

Topography and Climate

T1.6 (i) All relevant issues relating to the mineral project, such as the topography and climate, noting any conditions that may affect possible mining activities.

E, R, R* 3.1.2

Topo-cadastral map in sufficient detail to support the assessment of eventual economics. Known associated climatic risks. R 3.1

Detailed topo-cadastral map. Where applicable aerial surveys should be checked with ground controls and surveys, particularly in areas of rugged terrain, dense vegetation and/or high altitude.

R* N/A

T1.6 (ii) A general topo-cadastral map should be available to support the above statement. E, R, R* 3.1

Legal Aspects and Tenure

T1.7 The legal tenure should be verified to the satisfaction of the Competent Person. E, R, R* 3.7

T1.7 (i) The nature of the issuer‟s rights (e.g. prospecting and/or mining). E, R, R* 3.2

The right to use the surface of the properties to which these rights relate. E, R, R* 3.3

T1.7 (ii) The principal terms and conditions of all existing agreements, and details of those still to be obtained, (such as, but not limited to, concessions, partnerships, joint ventures, access rights, leases, historical and cultural sites, wilderness or national park and environmental settings, royalties, consents, permission, permits or authorisations).

E, R, R*

3.6

T1.7 (iii) The security of the tenure held at the time of reporting or which is reasonably expected to be granted in the future along with any known impediments to obtaining the right to operate in the area.

E, R, R* 3.7

T1.7 (iv) A statement of any legal proceedings that may have an influence on the rights to prospect or to mine for minerals, or an appropriate negative statement.

E, R, R* 3.7

Data Management and Database



72

SAMREC Section


To Report Section

T2.1 (i) Identify and comment on the primary data elements (observation and measurements) used for the project and describe the management of this data or database. This should describe the following relevant processes; acquisition (capture or transfer), validation, integration, control, storage, retrieval and backup processes. Final verification of data, including QA/QC processes should also be part of the database. It is assumed that data is stored digitally but hand printed tables with well-organised data and information may also constitute a database.

E, R, R*

6.2

Identify and comment on interpreted data elements, derived from primary data (modelled or analysed), used for the project and describe the management of this data or database.

R 6.2

Identify and comment on interpreted and planned data elements, derived from modelled data, used for the project plans and describe the management of this data or database.

R* N/A

Spatial Data

T2.2 (i) Describe the survey methods, techniques and expected accuracies of spatial data. E, R, R* 6.2

T2.2 (ii) Representative models and/or maps and cross sections or other 2D or 3D illustrations of results should exist, showing location of samples, accurate drill hole collar positions, down hole surveys, exploration pits, underground workings, relevant geological data, etc.

E, R, R* 6.2

Geological Data

T2.3 (i) Describe the data acquisition or exploration techniques, the nature, level of detail, and confidence in the geological data used (i.e. stratigraphy, lithology, structure, alteration, mineralisation, hydrology, geophysical, geochemical, petrography, mineralogy, geochronology, etc.

E, R, R*

6.2

Discuss geological data that could materially influence the estimated quantity & quality of the Mineral Resource. R 5.3

Discuss geological data that could materially influence the estimated quantity & quality of the Mineral Reserve. R* N/A

T2.3 (ii) Acknowledge and appraise data from other parties and reference all data / information used from other sources E, R, R* In document

Specific Gravity and Bulk Tonnage Data

T2.4 (i) If target tonnage ranges are reported then the preliminary estimates or basis of assumptions made for bulk density/ specific gravity(s) must be stated.

E, R, R* 6.1

Describe the method of bulk density /specific gravity determination with reference to the frequency of measurements, the size, nature and representativeness of the samples.

R 6.1

Include bulk densities for materials mined additional to the Mineral Resource to the same order of accuracy (such as waste, stripping and/or dilution material).

R* N/A

T2.4 (ii) Specific gravity samples must be representative of the material for which grade range is reported. E, R, R* 6.1

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity etc.) moisture and differences between rock and alteration zones within the deposit.

R 6.1

T2.4 (iii) Discuss assumptions for bulk density estimates used in the evaluation process of the different material. R 6.1

General Data

T2.5 (i) All relevant general data should be discussed with reference to the nature, level of detail and confidence. E, R, R* In document



73

SAMREC Section


To Report Section

Sampling Governance

T3.1 (i) Discuss the governance of the sampling campaign and process, to ensure sample and data quality and representivity, such as sample recovery, high grading, selective losses or contamination, core/hole diameter, internal and external QA/QC, and any other factors that may have resulted in or identified sample bias.

E, R, R*

4.1

T3.1 (ii) State whether sample recoveries have been properly recorded and results assessed. In particular whether a relationship exists between sample recovery and grade, and sample bias (e.g. preferential loss/gain of fine/coarse material).

E, R, R* 4.1

Sampling Method, Collection, Validation, Capture and Storage

T3.2 (i) Appropriately describe each data set (e.g. geology, grade, density, quality, diamond breakage, geo-metallurgical characteristics etc.), sample type, sample size selection and collection methods.

E, R, R* 4.1

Data sets should include all relevant metadata, such as unique sample number, sample mass, collection date, spatial location etc. E, R, R* 4.1

Where mineral processing and/or metallurgical testing analyses have been carried out (bulk-sampling/trial mining), include the results of the testing, details of the testing methods and procedures, and discuss whether the samples are representative.

R, R* 4.1

T3.2 (ii) Demonstrate that adequate field sampling process verification techniques (QA/QC) have been applied, e.g. the level of duplicates, blanks, reference material standards, process audits, analysis, etc.

E, R, R* 4.1

If indirect methods were used (e.g. geophysical methods), these should be described, with attention given to the level of confidence. E, R, R* 4.1

T3.2 (iii) If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down-hole lengths are reported, there should be a clear statement to this effect.

E, R, R* 4.1

T3.2 (iv) Describe the data validation procedures used to ensure the data integrity, e.g. transcription, input or other errors, between its initial collection and its future use for modelling (e.g. geology, grade, density, etc.).

E, R, R* 4.1

T3.2 (v) Describe retention policy and storage of physical samples (e.g. core, sample reject, etc.). E, R, R* 4.1

T3.2 (vi) Describe the audit process and frequency (including dates of these audits). E, R, R* 4.1

T3.2 (vi) Disclose any material risks identified. E, R, R* 4.1

Sample Preparation

T3.3 (i) Describe the laboratory/facility/location and accreditation. E, R, R* 4.1

Summarise the process and method used for sample preparation, sub-sampling and size reduction, and likelihood of inadequate or non-representative samples (i.e. improper size reduction, contamination, screen sizes, granulometry, mass balance, etc.).

E, R, R* 4.1

T3.3 (ii) For all sample types the nature, quality, verification and appropriateness of the sample preparation technique should be discussed. E, R, R* 4.1

T3.3 (iii) If a drill core sample, state whether it was split or sawn and whether quarter, half or full core was submitted for analysis. If a non-core sample, state whether the sample was riffled, tube sampled, rotary split etc. and whether it was sampled wet or dry.

E, R, R* 4.1

T3.3 (iv) Describe the quality control and quality assurance procedures adopted for all processes, including sub-sampling stages to maximise representivity of samples. This should include whether sample sizes are appropriate to the grain size of the material being sampled.

E, R, R*

4.1

T3.3 (v) Describe the audit process and frequency (including dates) and disclose any material risks identified. E, R, R* 4.1



74

SAMREC Section


To Report Section

Sample Analysis

T3.4 (i) Identify the laboratory(s) and analytical method. E, R, R* 4.1

Discuss the nature, quality and appropriateness of the assaying and laboratory processes and procedures used and whether the technique is considered partial or total.

E, R, R* 4.1

T3.4 (ii) State the accreditation status and Registration Number of the laboratory. Laboratories should be appropriately accredited, however, if not, then this should be disclosed.

E, R, R* 4.1

T3.4 (iii) Discuss the nature of quality control procedures adopted and quality assurance thereof (e.g. reference material, standards, blanks, duplicates, external / referee laboratory checks) and state whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

E, R, R*

4.1

T3.4 (iv) Describe the audit process and frequency (including dates of the audits) and disclose any material risks identified. E, R, R* 4.1

Geological Model and Interpretation

T4.1 (i) Briefly describe the regional geology E, R, R* 5.1

Describe the geological model, construction technique and assumptions. Discuss the sufficiency of data density to assure continuity of mineralisation and geology and provide an adequate basis for the estimation and classification procedures applied.

R, R* 5, 6

T4.1 (ii) Describe the geological model, level of investigation (e.g. conceptual, pre-feasibility etc.) and inferences made from this model. E, R, R* 5, 6

Description of the thoroughness (precision and accuracy) with which lithological, structural, mineralogical, alteration or other geological, geotechnical and geo-metallurgical characteristics were recorded.

R, R* 5, 6

T4.1 (iii) Discuss data density, distribution and reliability and whether the quality and quantity of information are sufficient to support statements made or inferred, concerning the exploration target or deposit

E, R, R* 5, 6

Discuss whether consideration was given to alternative interpretations or models and their possible effect (or potential risk) if any, on the Mineral Resource estimate.

R, R* 5, 6

T4.1 (iv) Reliable geological models and/or maps and cross sections that support interpretations should exist. E, R, R* 5

Discuss geological discounts (e.g. magnitude, per reef, domain, etc.), applied in the model, whether applied to mineralised and/or un-mineralised material (e.g. potholes, faults, dykes, etc.).

R, R* 5, 6

Estimation and Modelling Techniques

T4.2 (i) If an exploration target or deposit is reported, then the estimation techniques used to determine the grade and tonnage ranges should be described in detail.

E 6

Describe the determination of, and estimation techniques applied to define volume, density, grade, size distribution, value, geotechnical, geo-hydrological, geo-metallurgical or other appropriate models (e.g. section, polygon, inverse distance, geostatistical or other method) should be stated and justified, together with key assumptions and implications thereof, including any adjustments made to data (i.e. compositing, grade cutting / capping), sample spacing, estimation unit size (block size), selective mining units, reconciliation, domaining and maximum distance of extrapolation from data points.

R, R*

6

T4. 2(ii) Describe assumptions and justification of correlations made between variables. R, R* 6



75

SAMREC Section


To Report Section

T4. 2(iii) Discuss the block or grid cell size in relation to the average sample spacing and any assumptions behind modelling of selective mining units (also non-linear estimation techniques if used)..

R, R* 6

T4. 2(iv) Any relevant specialised computer program (software) used should be named (with the version number) together with a reference to where all the original files are stored for this specific model.

R, R* 6

T4. 2(v) The processes of checking and validation, the comparison of model information to sample data and use of reconciliation data should be stated, and whether the Mineral Resource estimate takes account of such information.

R, R* 6

T4. 2(vi) Describe the assumptions made regarding the estimation of any by-products or deleterious elements. R, R* 6

Governmental

T5.1 (i) A statement should be provided to the effect that such governmental requirements as may be required have been approved. E, R, R* 3.7

Environmental

T5.2 (i) Describe any obvious environmental factors that could have a significant impact on the prospects of any possible exploration target or deposit.

E 3.5

The necessary permits have been obtained, or there is reasonable basis to believe that all permits required for the project can be obtained.

R, R* 3.5

T5.2 (ii) Describe any environmental factors that could have a material impact on the likelihood of eventual economic extraction. Discuss possible means of mitigation.

R, R* 3.5

T5.2 (i) A statement should be provided to the effect that all necessary permits have been approved. R* N/A

T5.2 (ii) Describe future yearly environmental liabilities/compliance methods and costs, including reclamation and closure and their planned funding.

R* N/A

T5.2 (iii) Refer to Environmental Impact Study. R* N/A

Social

T5.3 (i) A statement should be provided to the effect that a social management program as may be required has been approved. R* N/A

Mining

T5.4 (i) Describe any obvious mining factors that could have a significant impact on the prospects of any possible exploration target or deposit. E 7

State the level of the techno / economic study – whether conceptual, pre-feasibility, feasibility or ongoing life-of- mine or strategic business plans.

R, R* 7

State the resource models that have been used in the study. R* N/A

T5.4 (ii) Disclose all assumptions made regarding possible mining methods, minimum mining dimensions (or pit shell) and internal (or, if applicable, external) mining dilution.

R, R* 7

State and justify all modifying factors and assumptions made regarding mining methods, minimum mining dimensions (or pit shell) and internal (or, if applicable, external) mining dilution used for the techno-economic study and signed-off, such as mining method, mine design criteria, infrastructure, capacities, production schedule, mining efficiencies, grade control, geotechnical and hydrological considerations, closure plans, and personnel requirements.

R*

N/A



76

SAMREC Section


To Report Section

T5.4 (iii) It may not always be possible to make assumptions regarding mining methods and parameters when estimating Mineral Resources. Where no mining assumptions have been made, this should be explained.

R 7

Optimisation methods used in planning, list of constraints (practicality, plant, access, exposed reserves, stripped reserves, bottlenecks, draw control).

R* N/A

Treatment/Processing

T5.5 (i) Describe any obvious processing factors that could have a significant impact on the prospects of any possible exploration target or deposit.

E 7

Discuss the level of study, possible processing methods and any processing factors that could have a material impact on the likelihood of eventual economic extraction.

R 7

Describe and justify the processing method(s) to be used, equipment, plant capacity, efficiencies, and personnel requirements. R* N/A

T5.5 (ii) The basis for assumptions or predictions regarding metallurgical amenability and any preliminary mineralogical test work should already be carried out.

R 7

Discuss the nature, amount and representativeness of metallurgical test work undertaken and the recovery factors used. A detailed flow sheet/diagram and a mass balance should exist, specifically for multi-product operations where the saleable materials are priced for different chemical and physical characteristics.

R*

N/A

A detailed flow sheet/diagram and a mass balance should exist, specifically for multi-product operations where the saleable materials are priced for different chemical and physical characteristics.

R* N/A

T5.5 (iii) It may not always be possible to make assumptions regarding metallurgical treatment processes and parameters when reporting Mineral Resources. Where no assumptions have been made, this should be explained.

R 7

State any assumptions or allowances made for deleterious elements and the existence of any bulk sample or pilot scale test work and the degree to which such samples are representative of the ore body as a whole.

R* N/A

T5.5 (iv) The tonnages and grades reported as Mineral Reserves must be in respect of material delivered to the processing facility. R* N/A

Infrastructure

T5.6 (i) Report in sufficient detail to demonstrate that the necessary facilities have been allowed for (which may include, but not be limited to, processing plant, tailings dam, leaching facilities, waste dumps, road, rail or port facilities, power supply, offices, housing, security, resource sterilisation testing etc.).

R*

N/A

Detailed maps showing location of facilities should exist. Project milestones and completion dates should be stated. R* N/A

T5.6 (ii) State assessment of value, ownership, type, extent and condition of plant and equipment which is significant to the existing operation(s). R* N/A

T5.6 (iii) Statement showing that all necessary logistics have been considered (electricity, reagents, fuels). R* N/A

Economic Criteria

T5.7 (i) Not usually reported for Exploration Results. If mentioned, however, factors significant to project economics should be current and based on generally accepted industry practice and experience. Assumptions should be clearly defined.

E 8

In reporting, a Mineral Resource should meet the minimum requirement of “reasonable prospects for eventual economic extraction”. R 8

For Mineral Reserves, parameters should be detailed with engineering completed to a pre-feasibility study level as defined in the SAMREC Code.

R* N/A



77

SAMREC Section


To Report Section

T5.7 (ii) State and define the reasonable and realistic assumptions/parameters (albeit preliminary, e.g. cut-off grade, cut-off screen size, product price or other criteria) used to assess eventual likelihood of economic extraction.

R 8

State, describe and justify all economic criteria that have been used for the study such as capital and operating costs, exchange rates, revenue / price curves, royalties, cut-off grades, reserve pay limits.

R* N/A

T5.7 (iii) These assumptions and factors should be reasonably developed and based on generally accepted industry practice and experience. If appropriate, state the level of study.

R 8

Summary description of method used to estimate the commodity price profiles used for cut-off grade calculation, economic analysis and project valuation, including applicable taxes, inflation indices and exchange rates.

R* N/A

T5.7 (iv) If applied, the basis of equivalent metal formulae should be reported. R 8

Demonstrate that the product price assumptions are reasonable and supportable. Justify assumptions made concerning production cost and value of product. Consider transportation, treatment, penalties, exchange rates, marketing and other costs.

R* N/A

T5.7 (v) Resource sensitivity – detailed description of method used and results obtained. R 8

Allowances should be made for royalties payable, both to Government and private. R* N/A

T5.7 (vi) Resource/Reserve sensitivity – detailed description of method used and results obtained. R* N/A

Marketing

T5.8 (i) Describe the valuable and potentially valuable product(s) including suitability of products to market. E, R 18

Describe product to be sold. Discuss whether there exists a ready market for the product, whether contracts for the sale of the product are in place or expected to be readily obtained.

R* N/A

Risk Analysis

T6 (i) Generally not applied to Exploration Projects. E 8.1

Report any risk assessment completed to support the reasonable prospect of eventual economic extraction and disclose any material risks identified.

R 8.1

Report detailed assessment of project technical, economic, political and other key risk factors. Description of actions which will be taken to mitigate and/or manage the identified risk(s).

R* N/A

Resource and Reserve Classification Criteria

T7 (i) For exploration targets and/or deposits, specific quantities and grades/qualities should be reported in ranges, the basis of which should be explained.

E 6.3

Describe and justify criteria and method used as the basis for the classification of the Mineral Resources into varying confidence categories.

R 6.2

Describe and justify criteria and method used as the basis for the classification of the Mineral Reserves into varying confidence categories which should be based on the Mineral Resource Category and include consideration of the confidence in all the modifying factors.

R*

N/A

T7 (ii) Exceptions to the above should be discussed if they are material and detailed reports thereof should exist. R 6.3



78

SAMREC Section


To Report Section

Discuss the proportion of Probable Mineral Reserves, which have been derived from Measured Mineral Resources (if any), including the reason(s) therefore.

R* N/A

T7 (iii) Discuss whether appropriate account has been taken of all relevant factors. I.e. relative confidence in tonnage /grade computations, density, quality, value and distribution of primary data and information, confidence in continuity of the geological and mineralisation models.

R

6.3

Only Measured and Indicated Resources can be considered for inclusion in the Mineral Reserve. R* N/A

T7 (iv) State whether the result appropriately reflects the Competent Person‟s view of the deposit. R

Mineral Resources classified as Inferred Resources lack the requisite degree of confidence to be converted to a Reserve. R* N/A

T7 (v) State whether the result appropriately reflects the Competent Person‟s view of the deposit. R* N/A

Balanced Reporting

T8 (i) Where comprehensive reporting of all exploration results is not practicable, representative reporting of low and high-grades and/or widths, should be practiced together with their spatial location to avoid misleading the reporting of Exploration Results.

E -

Mineral Resources should be stated as inclusive or exclusive of Mineral Reserves. R 6.3.2

Describe the Mineral Resource estimate used as a basis for the conversion to a Mineral Reserve. R* N/A

T8 (ii) Announcements by Companies should comply with the SAMREC Code, where applicable, and insofar as they relate or refer to a Competent Person‟s report they should:

E, R, R* -

(a) Be approved in writing in advance of publication by the relevant Competent Person; and 2.1

(b) The Competent Person(s) relationship to the issuer of the report, if any, should be clearly defined 6

Report the Mineral Resource statements with sufficient detail indicating the source and type of mineralisation, such as open pit, underground, mineralisation type, facies or ore body, surface dumps, stockpiles and all other sources.

R 6

Caution should be exercised if Inferred Resources are considered in economic studies, and if included, full disclosure and the effect on the results of the economic studies should be stated.

R* N/A

T8 (iii) If grades are reported then it should be stated clearly whether these are regional averages or if they are selected individual samples taken from the property under discussion.

E 6

The Mineral Resource will include all remnants, stockpiles, tailings, and existing pillars where there may be reasonable and realistic prospects for eventual economic extraction. Inclusion or exclusion of existing pillars into the Mineral Resource will be determined site by site taking into consideration factors such as size, shape, grade, location and other historical and geotechnical considerations. A detailed listing of such exclusions and reasons therefore, signed by a relevant Competent Person(s) should exist.

R

N/A

A comparison between the two scenarios, the one with inclusion and the one without inclusion should be fully explained in the Public Report in such a way so as not to mislead the investors. Inferred Mineral Resources may not be reported as Mineral Reserves.

R* N/A

T8 (iv) Reconciliation - Report the reliability, of the current geological and resource models, and key assumptions, including the reliability of resource classifications. This should include a comparison to the previous Resource quantity and qualities, if available. Where appropriate report and comment on any historic trends (e.g. global bias).

R

5



79

SAMREC Section


To Report Section

The Mineral Reserve Statement should be reported with sufficient detail indicating the source and type of mineralisation, such as open pit, underground, mineralisation type, facies or ore body, surface dumps, stockpiles and all other sources.

R* N/A

T8 (v) State the proportion of the total Reserves that is likely to be mined within the current assured tenure timeframe. R* N/A

T8 (vi) Report historic reliability and reconciliation of the performance parameters, assumptions and modifying factors. This should include a comparison to the previous Reserve quantity and qualities, if available. Where appropriate report and comment on any historic trends (e.g. global bias).

R*

N/A

Audits and Reviews

T9 (i) The overall conclusions of relevant audits or reviews, with specific reference to compliance to relevant Codes, where significant deficiencies and remedial actions should be disclosed.

E, R, R* 19

Material results of any audits or reviews of Mineral Resource estimates. Specific reference regarding all material deficiencies and remedial actions should be disclosed.

R 19

The material results of any audits or reviews of Mineral Reserve estimates. Specific reference regarding all material deficiencies and remedial actions should be disclosed.

R* N/A

T9 (ii) State type of review (e.g. independent, external) and name of the reviewer(s) together with their recognised professional. E, R, R* 19

Other Considerations

T10 (i) Description of any other material information that is likely to prevent or facilitate the economic potential of the project. E, R, R* In document

Discuss possible opportunities that may affect the Mineral Resource. R N/A

While any other material information or opportunities affecting the project should be discussed, no material impediments to the profitable exploration of the property should remain.

R* N/A

T10 (ii) A glossary of terms used in the report E, R, R* 20

Qualification of Competent Person(s) and Other Key Technical Staff; Date and Signature Page

T11 (i) State the accountable Competent Persons full name, address, registration number and name of the professional body or ROPO recognized by SAMREC, of which he/she is a member, and relevant experience, together with other key technical staff who prepared and are responsible for the Public Report.

E, R, R*

13, 14

T11 (ii) The Competent Person(s) relationship to the issuer of the report, if any, should be clearly defined. E, R, R* 13, 14

T11 (iii) The Public Report should include a signature page for the Competent Person(s) to attest to its release. E, R, R* 14

Such page should include the date of sign-off and the effective date of the report. E, R, R* 14

NOTES:

1. E = Exploration Results

2. R = Mineral Resources

3. R* = Mineral Reserves



80

SAMVAL COMPLIANCE CHECKLIST

SAMVAL Section

SAMVAL Criterion Report Section

SV T2.1 Executive Summary 1

SV T2.2 Introduction and Scope 2

SV T2.3 Identity and Tenure 3

SV T2.4 History 4

SV T2.5 Geological Setting 5

SV T2.6 Mineral Resources and Mineral Reserves 6

SV T2.7 Modifying Factors 7

SV T2.8 Valuation Approaches and Methods 8

SV T2.9 Valuation Date 9

SV T2.10 Valuation Summary and Conclusions 10

SV T2.11 Sources of Information 11

SV T2.12 Previous Valuations 12

SV T2.13 Competent Persons and Other Experts 13

SV T2.14 Competent Valuator 14

SV T2.15 Range of Values 15

SV T2.16 Identifiable Component Asset (ICA) Values 16

SV T2.17 Historic Verification 17

SV T2.18 Market Assessment 18

SV T2.19 Audits or Reviews 19



81

Appendix 2: Du Preez and Ledger Reproduced Surface Exploration Drilling Programme

Depth Reef Bot Add Bot Defl Total Meters Drilling Drilling Drilling Drilling Drilling Drilling Casing Concrete Borehole Cost Contin- Survey Core Assay Total

to width Reef FW of meters in Percussion CUD (96) CUD (96) CUD (76) CUD (76) CUD (76) BW Block Plug gency Trays Cost/ Cost

top hole 0 drilled weath. 0-300m 0-500m 501-1000m 501-1000m 1001-1500m 1501-3000m NW multi 8 sample

reef 0 zone per meter per meter per meter per meter per meter per meter per bh per bh 10.0% shot R 137 width R

Bh No 0 R 300 R 895 R 989 R 974 R 1,094 R 1,231 R 274 R 200 R 8,792 R 6,188 R 140 R 1,000

300 820 820 300 1 1 25 6 0.25

Site establishment = 4 rigs/yr for 1 yr 4 1 R 150,000 R 600,000 R 60,000 R 660,000

Site de-establishment = 4 rigs/yr for 1 yr 4 1 R 150,000 R 600,000 R 60,000 R 660,000

Site rehabilitation 16 R 119,066 R 1,905,049 R 190,505 R 2,095,554

Interhole move 16 R 150,000 R 2,400,000 R 240,000 R 2,640,000

JR4 1354 1.5 1356 10 1366 0 1366 20 R 90,000 R 178,932 R 316,541 R 175,306 R 399,678 R 0 R 82,233 R 200 R 8,792 R 1,251,681 R 125,168 R 154,692 R 21,622 R 6,000 R 1,559,162


DPL3 1349 1.5 1351 10 1361 0 1361 20 R 90,000 R 178,932 R 316,541 R 175,306 R 394,210 R 0 R 82,233 R 200 R 8,792 R 1,246,213 R 124,621 R 154,692 R 21,505 R 6,000 R 1,553,032





JR9 1746 1.5 1748 10 1758 0 1758 20 R 90,000 R 178,932 R 316,541 R 175,306 R 546,755 R 316,993 R 82,233 R 200 R 8,792 R 1,715,751 R 171,575 R 154,692 R 30,739 R 6,000 R 2,078,756

VL1 1530 1.5 1532 10 1542 0 1542 20 R 90,000 R 178,932 R 316,541 R 175,306 R 546,755 R 51,088 R 82,233 R 200 R 8,792 R 1,449,846 R 144,985 R 154,692 R 25,715 R 6,000 R 1,781,237

VL1a 1514 1.5 1516 10 1526 0 1526 20 R 90,000 R 178,932 R 316,541 R 175,306 R 546,755 R 31,392 R 82,233 R 200 R 8,792 R 1,430,149 R 143,015 R 154,692 R 25,343 R 6,000 R 1,759,199


HAK15 1859 1.5 1861 10 1871 0 1871 20 R 90,000 R 178,932 R 316,541 R 175,306 R 546,755 R 456,100 R 82,233 R 200 R 8,792 R 1,854,858 R 185,486 R 154,692 R 33,367 R 6,000 R 2,234,403




DBH17 2596 1.5 2598 10 2608 0 2608 20 R 90,000 R 178,932 R 316,541 R 175,306 R 546,755 R 1,363,377 R 82,233 R 200 R 8,792 R 2,762,135 R 276,213 R 154,692 R 50,509 R 6,000 R 3,249,548

26699 24 26723 160 26883 0 26883 320 R 1,440,000 R 2,862,912 R 5,064,653 R 2,804,890 R 7,526,083 R 4,924,776 R 1,315,728 R 3,200 R 140,665 R 31,587,955 R 3,158,796 R 2,475,064 R 463,052 R 96,000 R 37,780,867



82

Appendix 3: Granting of Prospecting Right



83

Appendix 4: Copy of EMP Approval



84

Appendix 5: Directors Statements



85

Appendix 6: Histograms

Histogram: DOM1_ALL_B_CW

Expected Normal

0.0 32.5 65.0 97.5 130.0 162.5

X <= Category Boundary

0

1

2

3

4

5

6

7

No.

of

obs.

Normal P-Plot: DOM1_ALL_B_CW

0 20 40 60 80 100 120 140 160

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue

Normal P-Plot: Ln_DOM1_ALL_B_CW

Ln_DOM1_ALL_B_CW: =Log(DOM1_ALL_B_CW)

2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2

Value

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue

Histogram: DOM1_ALL_B_AU

Expected Normal

0.0000 32.8675 65.7350 98.6025 131.4700 164.3375


0

1

2

3

4

5

6

7

8

9

10

11

No.

of

obs.

Normal P-Plot: DOM1_ALL_B_AU

0 20 40 60 80 100 120 140 160

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue

Normal P-Plot: Ln_DOM1_ALL_B_AU

Ln_DOM1_ALL_B_AU: =Log(DOM1_ALL_B_AU)

1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue



86

Histogram: DOM1_ALL_B_CMGT

Expected Normal

0.00 2354.25 4708.50 7062.75 9417.00 11771.25


0

1

2

3

4

5

6

7

8

9

10

11

No.

of

obs.

Normal P-Plot: DOM1_ALL_B_CMGT

-2000 0 2000 4000 6000 8000 10000 12000

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue

Normal P-Plot: Ln_DOM1_ALL_B_CMGT

Ln_DOM1_ALL_B_CMGT: =Log(DOM1_ALL_B_CMGT)

5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue

Histogram: DOM1_ALL_LD_CW

Expected Normal

0.0 55.5 111.0 166.5 222.0 277.5


0

1

2

3

4

5

No.

of

obs.

Normal P-Plot: DOM1_ALL_LD_CW

20 40 60 80 100 120 140 160 180 200 220 240 260 280

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue

Normal P-Plot: Ln_DOM1_ALL_LD_CW

Ln_DOM1_ALL_LD_CW: =Log(DOM1_ALL_LD_CW)

3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue

Histogram: DOM1_ALL_LD_AU

Expected Normal

0.00 4.37 8.74 13.11 17.48 21.85


0

1

2

3

4

5

No.

of

obs.

Normal P-Plot: DOM1_ALL_LD_AU

0 2 4 6 8 10 12 14 16 18 20 22

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue

Normal P-Plot: Ln_DOM1_ALL_LD_AU

Ln_DOM1_ALL_LD_AU: =Log(DOM1_ALL_LD_AU)

0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



87

Histogram: DOM1_ALL_LD_CMGT

Expected Normal

0 413 826 1239 1652 2065


0

1

2

3

4

5

6

7

No.

of

obs.

Normal P-Plot: DOM1_ALL_LD_CMGT

200 400 600 800 1000 1200 1400 1600 1800 2000 2200

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue

Normal P-Plot: Ln_DOM1_ALL_LD_CMGT

Ln_DOM1_ALL_LD_CMGT: =Log(DOM1_ALL_LD_CMGT)

5.6 5.8 6.0 6.2 6.4 6.6 6.8 7.0 7.2 7.4 7.6 7.8

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.00 59.25 118.50 177.75 237.00 296.25


0

1

2

3

4

No.

of

obs.


20 40 60 80 100 120 140 160 180 200 220 240 260 280 300

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.0000 0.6575 1.3150 1.9725 2.6300 3.2875


0

1

2

3

4

5

No.

of

obs.


0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



88


Expected Normal

0.00 97.75 195.50 293.25 391.00 488.75


0

1

2

3

4

5

No.

of

obs.


-50 0 50 100 150 200 250 300 350 400 450

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.00 27.25 54.50 81.75 109.00 136.25


0

1

2

3

4

5

No.

of

obs.


0 20 40 60 80 100 120 140

Value

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0

Value

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue


Expected Normal

1.5625 3.1250 4.6875 6.2500 7.8125 9.3750


0

1

2

3

4

5

No.

of

obs.


1 2 3 4 5 6 7 8 9

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



89


Expected Normal

0.00 174.25 348.50 522.75 697.00 871.25


0

1

2

3

4

5

No.

of

obs.


0 100 200 300 400 500 600 700 800

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0

Value

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue


Expected Normal

0 65 130 195 260 325


0

1

2

3

4

5

6

7

8

No.

of

obs.


40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue



4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 6.0

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.000 2.005 4.010 6.015 8.020 10.025


0

1

2

3

4

5

6

7

8

No.

of

obs.


0 1 2 3 4 5 6 7 8 9 10

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue



-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4

Value

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



90


Expected Normal

0.0 253.5 507.0 760.5 1014.0 1267.5


0

1

2

3

4

5

6

7

8

9

10

No.

of

obs.


0 200 400 600 800 1000 1200 1400

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Exp

ecte

d N

orm

al V

alue



4.8 5.0 5.2 5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 7.0 7.2

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue


Expected Normal

0 45 90 135 180 225 270


0

2

4

6

8

10

12

14

No.

of

obs.


20 40 60 80 100 120 140 160 180 200 220 240 260 280

Value

-3

-2

-1

0

1

2

3

Exp

ecte

d N

orm

al V

alue



3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8

Value

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.00 3.64 7.28 10.92 14.56 18.20 21.84


0

2

4

6

8

10

12

14

16

No.

of

obs.


2 4 6 8 10 12 14 16 18 20 22

Value

-3

-2

-1

0

1

2

3

4

Exp

ecte

d N

orm

al V

alue



0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2

Value

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue



91


Expected Normal

0 597 1194 1791 2388 2985 3582


0

2

4

6

8

10

12

14

16

18

20

No.

of

obs.


0 500 1000 1500 2000 2500 3000 3500

Value

-3

-2

-1

0

1

2

3

4

Exp

ecte

d N

orm

al V

alue



5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 7.0 7.2 7.4 7.6 7.8 8.0 8.2

Value

-3

-2

-1

0

1

2

3

4

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.00 36.75 73.50 110.25 147.00 183.75


0

1

2

3

4

5

No.

of

obs.


20 40 60 80 100 120 140 160 180 200

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Expecte

d N

orm

al V

alu

e



3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue



92


Expected Normal

0.0000 9.5725 19.1450 28.7175 38.2900 47.8625


0

1

2

3

4

5

No.

of

obs.


0 5 10 15 20 25 30 35 40 45

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Exp

ecte

d N

orm

al V

alue



1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Exp

ecte

d N

orm

al V

alue


Expected Normal

0.00 363.25 726.50 1089.75 1453.00 1816.25


0

1

2

3

4

No.

of

obs.


0 200 400 600 800 1000 1200 1400 1600 1800

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Expecte

d N

orm

al V

alu

e



5.2 5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 7.0 7.2 7.4 7.6

Value

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Expecte

d N

orm

al V

alu

e


93

Documents

Free State Development and Investment Corporation Limited ... · and Mineral Reserves (“the SAMREC Code”), the South African Code for the Reporting of Mineral Asset Valuation