Life at “the top” and thereafter!

Graham Briggs

Preview of “life History”

1. Started as a Learner official in June 1972, Evander was cold and miserable at 4am in the morning.

2. I got an offer as a Geological Assistant, as quick as a flash I was there, doing exploration field work

3. Ended up in gold exploration, deep diamond drilling was happening everywhere in 1975 into early 1980’s to search for the next big extension to the Wits basin.

4. I finally woke up and went to university and graduated with a BSc (Hons) in Geology in 1983.

5. Guess what? I was sent back to gold exploration.6. My transition into operations took place in the mid 80’s, the big

new mine had not been discovered.

Preview of “life History” continued

7. By 1990 gold mines had mined the best grades, gold price was low, mines were starting to restructure.

8. 1994, a New Dawn for South Africa politically, but a political focus on gold mines would be akin to jumping off a cliff.

9. By 1995 restructuring amongst the big players was a theme and ore reserve management processes were well underway in an attempt to get more life out of gold mines.

10. In 1997 Bre-X scandal happened, geologists became well known; firstly for jumping out of helicopters, secondly as taxi drivers in Canada.

11. Corporate governance hit the exploration and mining companies, JORC and SAMREC was the order of the day.

Preview of “life History” continued

13. I had fun in Africa (Harmony acquired many mines in SA), Canada, Australia and PNG. 1997 to 2007.

14. Gold price in Rands was starting to take off.15. Gold production was continuing its downward spiral and in

2008 I got the job of CEO of Harmony, many said I was mad, “the jury is still out”.

16. The gold mines underwent a complete transformation and continually matched the political agenda of SA.

17. Restructuring continued unabated on the gold mines with no lifeline from government and no let up on the political and safety inspectorate pressure, and no acknowledgement of the successes the mining companies had achieved.

18. I “retire” from (the “top”) Harmony in 2016. 19. Gold production in SA down to 140 tons.

What happened to the gold price in my gold mining career

today

What happened to gold production in my gold mining career

My career

The SA cycle of gold mining

No money spent on capital, life of mine shortens.

Government demands more taxing changes.

Lets mine anything, even at

lower grade. DMR issues

section 54’s, less tonnage.

Oh Crap! we do not have enough gold to cover the

costs

No money, let’s restructure.

Unions demand more money,

more production interruptions.

No dividends, share price down, can’t raise money

to develop the orebody

Repeat the cycle until the money runs out.

Blame the capitalists

Blame the capitalists

Blame management

Gold price goes up and we can’t benefit

blame the world economic cycle

What SA gold mining needs (quotes from others)• There is a need for a fresh start in stakeholder relationships

given that it is in the interest of the country to exploit thegold resources optimally.

• Trust needs to be re-established, a shared narrativedeveloped, and a fair deal agreed. New avenues for dialogueneed to be found, and common interests identified.

Neal Froneman, Sibanye

“The journey to our greatness cannot be carried out by oneperson alone, or indeed, by one group alone. It cannot becarried out by government alone, or the unions alone, or theindustry by itself. The road to a better future for all mining’sstakeholders lies in collaboration and partnership.”Mike Teke Chamber President

The government needs to help

Unambiguous, clear policy and a supportive regulatory framework required.Partner with private sector to promote investment and growth.Providing incentives to investment and a fair taxation regime.Administrative processes must be fair and efficient and adhere to legislation.Stamp out Corruption, this is still a massive problem.Reduced gold production is an opportunity for exploration and also for new gold mining companies to acquire closing/defunct mines, there has to be a government incentive.

Taxation (and taxing) in its various forms

But “there’s gold in them thar hills” Mark Twain

Production

Witwatersrand Mines, mostly deep, mostly big capital required 11

In the Witwatersrand

Production

Greenstone mines, relatively shallow, lower capital but metallurgically complex 12

In the Eastern Goldfields

My motto

Don’t think because it has been mined here that this spot is empty, rather think that because gold has been found here there is probably even more to be mined.

If you have gold in your blood, If you want to be a gold miner then go to one of these two places in South Africa; the Wits or the Eastern Goldfield.

You will have to work hard but “So it is!”

My thoughts on retirement

You get born, you grow up through your teenage years, if you are lucky someone pays for your further education, you end up with a working career, you climb the corporate ladder and you get to the “top”.

Then you retire and then you die.

You know so much when you are at the “top” why do you stop using all your knowledge? Work don’t retire!

“Busy people are Happy people”

The Future?

1. The Gold Price is not going to be the saviour of gold miningin South Africa.

2. Radical reshaping to survive beyond the next few decades isrequired.

3. Modern management improvements required (Re-think, Re-structure, maybe Disrupt!!).

4. Compete with yourself (make your own business better orsell to someone that will implement these changes).

5. Geological understanding and modelling is a key to unlockthe gold mines of the future.

6. A Transformation and Modernisation Model needs to bedeveloped (Business, Government, Communities, Unionsand Employees).

7. Breaking hard rock will remain hard work.

The future, be maverick

• Ultimately, without a shift in mining methodology and business thinking the gold industry will fail to mine South Africa’s gold orebodies (profitably?).

• This could result in the sterilisation of resources, accelerated and premature mine closures and job losses.

• Turning to account South Africa’s gold resources in the safest, most efficient, cost-effective and sustainable manner possible is of primary importance.

• Modernisation is not only essential for the gold industry to survive but will help to improve safety and health, it will also contribute to increased skills development, employment, exports and revenue; not to mention the knock-on effect on local communities.

An example on the Witwatersrand

A low-grade (less than 5 g/t) mine, conventionally mined, has life expectancy of some 5 years. Using modern management methods this could extend operations to between 10 and 20 years.A mine bought in 1995 had 5 years life of mine, by applying modern management practices the mine is still operating and it is believed that it still has a 5 year life of mine (22 years later!).Modern management improvements were: decisive management decisions, ore reserve management, disciplined mining and reporting, improved management structure, leadership training on senior and middle management, improved employee and union relationships, skills development, improved safety practices and focus on health of workforce.This Mine managed to reduce the cost base and the improved productivity made it more profitable.

An example in the Greenstone beltKlipwal MineThis is a mine that was unloved and had closed, now reopened and being refurbished and has started producing gold with a target of 15 000 ounces per year at a cost of less than $800/ounce

Klipwal Mine in KwaZulu Natal

1. BMI has reopened this mine and it is being refurbished at a capital cost of R50 million.

2. Qualified and keen mining/engineering staff are available in the labour market thus the infrastructure refurbishment is done in-house.

3. First gold (September 2016) is coming from a clean-up (vamping) in the mine where it is estimated that 70-80 000 tons at a grade of 3 g/t exist.

4. Underground the supervisory, infrastructure and health and safety personnel are mine employees.

5. Production labour is dominantly ex-illegal miners now in co-operatives (contractors) giving the mine great productivity with zero absenteeism.

6. Drilling and blasting operations should commence before the end of the calendar year.

Production beyond 2017

After the “top”

I am the Chairman of Birrell Mining International, a non-executive director of Ubank, a Consultant to 98 Degrees, and a shareholder in 98 Degrees Medical Solutions.

The road to the future may be difficult but WE need to build it

Thanks