CAPITAL BUDGET 2017

ANNEXURE 2
OPERATION MINE X
DEPARTMENT PROCESSING
INTERNAL ORDER NUMBER X8ENGX17171
ITEM / INTERNAL ORDER DESCRIPTION Rougher Flotation plant upgrade

REQUESTOR MT PROCESSING

RETURN ON INVESTMENT (YES/NO) YES (Please provide ROI details in attached template. If no ROI is applicable, please justify why this is a strategic asset acquisition)

JUSTIFICATION
Flotation gold recovery is currently averaging between 70 to 75% while flotation tails are at 0.90g/t. The prevailing flotation gold recovery is being obtained by excessive dosage of PAX while more cyanide is dosed at the CIL to improve the leach recovery of the high grade flotation tails. We have observed high flotation gold recovery on the
occassion we operate 1 mill resulting in high flotation residence time hence the motivation to install a fourth cell to permanently increase the residence time. Installing an additional cell will enable the reduction of PAX dosage as required mass pull is spread across 4 cells and this will also result in improved quality of the concentrate.
Moreover the decrease in flotation tails grade will allow for reduced cyanide dosage at the CIL as the gold will be concentrated in a smaller concentrate volume.

ITEM DETAILS

Source Currency Source Currency Exchange Ancillary Ancillary Cost USD Type of Backing
Item Number Item Description Category Currency Units Per Unit Total Rate % (USD) Total Documentation
X8ENGX17171-01 Flotation Cell & Automation H - TOOLS AND EQUIPMENT ZAR 1 6,870,611 6,870,611 13.00 35% 184,978 713,487 QUOTE
X8ENGX17171-02 Earthworks and Civil Works A - EARTHWORKS CFA 1 77,152,682 77,152,682 525.00 0% - 146,957 QUOTE
X8ENGX17171-03 Structural Steel, Piping and Plate Works A - EARTHWORKS CFA 1 114,033,134 114,033,134 525.00 35% 76,022 293,228 QUOTE
X8ENGX17171-04 Crane H - TOOLS AND EQUIPMENT CFA 1 45,000,000 45,000,000 525.00 0% - 85,714 QUOTE
X8ENGX17171-05 Installation, Commissioning and ACT integration J - P&G (VISA, FLIGHTS & ACCOMMODATION) USD 1 20,700 20,700 1.00 0% - 20,700 QUOTE
X8ENGX17171-06 Free Standing RMU Extensible F - ELECTRICAL USD 1 10,700 10,700 1.00 30% 3,210 13,910 QUOTE
X8ENGX17171-07 Electrical Panel F - ELECTRICAL USD 1 18,470 18,470 1.00 30% 5,541 24,011 QUOTE
X8ENGX17171-08 Electrical cable (95mm) - 4 drums F - ELECTRICAL USD 1 86,400 86,400 1.00 30% 25,920 112,320 QUOTE
X8ENGX17171-09 Roof, cladding, grating C - STEEL WORKS CFA 2 3,195,000 6,390,000 525.00 0% - 12,171 QUOTE
X8ENGX17171-10 Cellstation Hardware G - INSTRUMENTATION USD 1 19,600 19,600 1.00 30% 5,880 25,480 QUOTE
X8ENGX17171-11 Froth sense imager G - INSTRUMENTATION USD 1 6,800 6,800 1.00 30% 2,040 8,840 QUOTE
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
TOTAL 303,591 1,456,818

TIMING

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOT 2017
BUDGET 2017 - 328,117 91,843 195,600 258,934 - 34,320 42,857 505,148 - - - 1,456,818

2017 2018 2019 2020 2021 Remaining TOT PROJECT

BUDGET LOM 1,456,818 - - - - - 1,456,818

TOTAL PROJECT ACT/FOR SPEND TO 31 DEC 2016 -

CURRENT BUDGET LOM 1,456,818
TOTAL PROJECT ESTIMATE 1,456,818

PREVIOUS TOTAL PROJECT ESTIMATE - (based on 2016 approved/revised budgets for total project)

(OVER)/UNDER ON PREVIOUS PROJECT ESTIMATE -1,456,818

1
 CAPITAL BUDGET 2017 - TIMING
ANNEXURE 2
OPERATION MINE X
DEPARTMENT PROCESSING
BUDGET LINE NUMBER X8ENGX17171
BUDGET LINE DESCRIPTION Rougher Flotation plant upgrade

ORDER / SERVICE DELIVERY TIMING

TIMING FRONT SHEET
ITEM DESCRIPTION 2017 2018 2019 2020 2021 Remaining TOT PROJECT TOT PROJECT
Flotation Cell & Automation 713,487 713,487 713,487
Earthworks and Civil Works 146,957 146,957 146,957
Structural Steel, Piping and Plate Works 293,228 293,228 293,228
Crane 85,714 85,714 85,714
Installation, Commissioning and ACT integration 20,700 20,700 20,700
Free Standing RMU Extensible 13,910 13,910 13,910
Electrical Panel 24,011 24,011 24,011
Electrical cable (95mm) - 4 drums 112,320 112,320 112,320
Roof, cladding, grating 12,171 12,171 12,171
Cellstation Hardware 25,480 25,480 25,480
Froth sense imager 8,840 8,840 8,840
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
TOTAL 1,456,818 - - - - - 1,456,818 1,456,818

2017
ITEM DESCRIPTION Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Flotation Cell & Automation 208,339 505,148
Earthworks and Civil Works 48,986 48,986 48,986
Structural Steel, Piping and Plate Works 146,614 146,614
Crane 42,857 42,857
Installation, Commissioning and ACT integration 20,700
Free Standing RMU Extensible 13,910
Electrical Panel 24,011
Electrical cable (95mm) - 4 drums 112,320
Roof, cladding, grating 12,171
Cellstation Hardware 25,480
Froth sense imager 8,840

TOTAL - 328,117 91,843 195,600 258,934 - 34,320 42,857 505,148 - - -

 RETURN ON INVESTMENT
ANNEXURE 2
OPERATION MINE X
DEPARTMENT PROCESSING
INTERNAL ORDER NUMBER X8ENGX17171
ITEM / INTERNAL ORDER DESCRIPTION Rougher Flotation plant upgrade

IRR @ $1000 GOLD PRICE 36%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2019 2020 2021

TOTAL BENEFITS US$ - - - - - - - - - 121,578 121,578 121,578 364,734 1,458,937 1,458,937 1,482,192 522,918
Production Benefits -
Recovery oz Benefits @ $1000 gold price US$ -
Throughput oz Benefits @ $1000 gold price US$ -
Cost and Other Benefits
Efficiency Benefits US$ -
Cost Benefits US$ 121,578 121,578 121,578 364,734 1,458,937 1,458,937 1,482,192 522,918
Other Benefits US$ -

COST US$ - 328,117 91,843 195,600 258,934 - 34,320 42,857 505,148 18,823 18,823 18,823 1,513,288 225,878 225,878 225,878 79,690
Investment Cost US$ - 328,117 91,843 195,600 258,934 - 34,320 42,857 505,148 - - - 1,456,818 - - - -
Additional Operating Costs US$ 18,823 18,823 18,823 56,470 225,878 225,878 225,878 79,690.05

Net Benefit before tax and royalties US$ - -328,117 -91,843 -195,600 -258,934 - -34,320 -42,857 -505,148 102,755 102,755 102,755 -1,148,553 1,233,059 1,233,059 1,256,314 443,228

Royalties US$ - - - - - - - - - - - - - - - - -
Corporate Tax/(Tax Shield) US$ - - - - - - - - - 22,654 22,654 22,654 67,961 271,844 271,844 277,658 74,387

Total Net Benefit US$ - -328,117 -91,843 -195,600 -258,934 - -34,320 -42,857 -505,148 80,101 80,101 80,101 -1,216,514 961,214 961,214 978,656 368,842

PROJ INV NET BENEFIT EXCL INV

YR0 YR1 YR2 YR3 YR4 YR5
IRR CALC -1,456,818 240,304 961,214 961,214 978,656 368,842

Royalty % 3%
Tax % 25%
Useful Asset Life (Years) 10

Total Project Estimate 1,456,818

Annual Depreciation 145,682