Pre-IPO Equity Investment - 45% Discount to DCF Value per Share

Opportunity Snapshot

Investment Opportunity

This is a publicly held, mining and energy company holding a portfolio of anthracite, coking and thermal coal assets in South Africa and Zimbabwe.

Our aims:
1) Raise Pre-Listing Equity Capital (3-6 Months):
• To acquire Coal Export Allocation Capacity of 6-million tons per annum at Richards Bay Port;
• To commission ‘geotechnical and independent experts’ reports for the HKEx Listing Application.

2) Consolidate and Increase (12 Months):
• Coal production from proprietary operations and third party mines in Mpumalanga and KwaZulu-Natal Provinces of South Africa for:-
• Long term supply of 300,000 tons per month of thermal coal to power generation utilities in Asia;
• Long term supply of 200,000 tons per month of thermal South Africa power generation utility;
• Long term supply of 70,000 tons per month to ferro-alloys and cement producers in Asia.

Competitive Advantage

• The company is a publicly held, mining and energy company with over 240 shareholders;
• 90% of current shareholding is held by broad-based black economic empowerment shareholders;
• Portfolio of anthracite, coking and thermal coal assets in South Africa and Zimbabwe with resources and reserves in excess of 7.745 billion tons; Listed in the prestigious “World Finance 100’ for 2010 and 2011.

• We are a customer focused mining and exploration company, offering energy(coal, oil, gas) products for both domestic and export markets.

• To continuously provide premium quality thermal and metallurgical coal to end-users (power plants & steel mills), exceeding their expectations through reliability of supply and efficient output.

We create value for all stakeholders:
• End-users through premium quality coal products
• Employees through job security and motivation
• Shareholders through capital appreciation and dividend payout
• Local communities through the creation of a safe, responsible and innovative socio-economic environment.

Rationale for the deal

Investors have the opportunity to benefit at two levels:
• First; the value generated from the coal business. Operations will be enhanced by the capital injection that comes from this Share Placement Offer. This will be seen directly in the dividend distributions to shareholders.
• Second; the capital gains realized from Company growth can be crystallized on or after the IPO on the HKEx.

Use of financing

The proceeds from this Share Placement Offer will be used to acquire 6-million tons per year Coal Export Allocation capacity at the port of Richards Bay and consolidate coal supplies to the Company’s coal-end-users in China and India.

Opportunity for the investor

NPV of Net Cash flows (ZAR ‘000s) - ZAR3 955 302
Offer Price per Share - ZAR12.00 (US$1.40) (Minimum Subscription - 1000 Shares)
DCF Equity Value per Share post this Offer - ZAR21.61
Enterprise Value per EBIDTA - 4.23x
Projected Average Dividend per Share per year over a 10-year period, assuming 333 million Issued Share Capital on HKEx IPO - ZAR4.83

A detailed company and offer presentation is available upon request. Investors can contacts us on Merar.

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