Mineral Asset Valuation of Vantage Goldfields Limited ... · “the Company”) to compile an independent Mineral Asset Valuation Report on the Company’s mineral assets, located

Mineral Asset Valuation of

Vantage Goldfields Limited,

Mpumalanga Province,

South Africa

Effective Date: 08 May 2012

Issue Date: 11 July 2012

Minxcon Reference: M12-018

Authors:

D van Heerden (Director, Minxcon):

B.Eng. (Min. Eng.), M.Comm. (Bus. Admin.),

ECSA, FSAIMM, AMMSA

D Clemente (Chief Metallurgist, Minxcon &

Agere Project Management):

NHD (Ext. Met.), GCC, MMMMA, FSAIMM

NJ Odendaal (Director, Minxcon):

B.Sc. (Geol.), B.Sc. (Min. Econ.), M.Sc. (Min. Eng.),

Pr. Sci. Nat., FSAIMM, MGSSA, MAusIMM

Suite 5, Coldstream Office Park

Cnr. Hendrik Potgieter & van Staden Streets

Little Falls, Roodepoort, South Africa

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

www.minxcon.co.za

Directors: NJ Odendaal, D Van Heerden, C Muller

Registration No. 2004/029587/07

Mineral Asset Valuation of Vantage Goldfields Limited, Mpumalanga Province, South Africa

Prepared by Minxcon (Pty) Ltd

i

DISCLAIMER AND RISKS

TABLE OF CONTENTS



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1 EXECUTIVE SUMMARY

Minxcon (Pty) Ltd (“Minxcon”) was commissioned by Vantage Goldfields (Proprietary) Limited (“VGL” or

“the Company”) to compile an independent Mineral Asset Valuation Report on the Company’s mineral

assets, located in the Barberton Goldfield near the town of Nelspruit, Mpumalanga Province, South Africa

(“the Project”).

Although VGL has a vast portfolio of gold mineral assets, including two producing gold mines, both in a

production build-up phase, various dormant gold mines and old workings and other prospects located in

areas of known gold mineralization, Minxcon’s valuation only considered those mineral assets which

contain defined Ore Reserves and Mineral Resources. VGL has conducted, and is continuing to conduct,

intensive exploration operations on its Prospecting Rights, where numerous targets have been identified.

Minxcon’s valuation was, therefore, based on VGL’s life-of-mine plan (“LoM”) for the Lily Mine (“Lily”) and

Taylors Mine (“Taylors”) and also took into consideration the additional, defined Mineral Resources within

the Company’s other mineral asset developments within the Project Area, including the greater Barbrook

Mines Complex (“Barbrook”) and the Worcester Mine project (“Worcester”).

In conducting our valuation, Minxcon reviewed the estimates, forecasts and assumptions made by the

Company in its LoM plan and supportive documentation in order to determine whether these are fair and

reasonable. As the Company (and its predecessors) has been mining and prospecting in the Barberton

Goldfield for two decades, Minxcon was able to gain an insight into the capability of its management team

by reviewing past production and exploration discovery performances as a measure of the level of

confidence which can be placed on management’s forward-looking statements and plans.

Project Location



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VGL’s mineral assets are all accessible through well-developed infrastructure that comprises a

combination of tar and gravel roads, power supplies and easy access to goods and services throughout the

Project Area and its environs.

1.1 GENERAL GEOLOGY

The Barberton Greenstone Belt (“BGB”) hosts the gold mineralised ore bodies of Barbrook, Lily and

Worcester, amongst many other gold mines and prospects which include Pan African Resources plc’s

Sheba, Fairview and New Consort mines. Gold mining in the Barberton Goldfield has been continuous for

more than a century.

The gold mineralisation is typical of Archaean lode gold mineralisation located elsewhere in the world, for

example in the Western Australian and the Canadian Archaean terrains. In the Barberton Goldfield, most

of the economic ore bodies and other sites of significant gold occurrence have a strong spatial relationship

with regional faults and shear structures. VGL’s principal mineral assets are all located along prominent,

regional structural trends where these interact with second-order structures

Gold in the BGB is typically associated with chemical precipitates (chert and banded iron formations – BIF)

and local zones of second-order structural deformation. Ore bodies comprise quartz-carbonate veins as

well as auriferous shears contain varying amounts of sulphide mineralization. The major ore minerals are

pyrite, pyrrhotite and arsenopyrite. Depending upon the mineral assemblages, gold in the ore occurs

either as refractory or free-milling material.

With regard to VGL’s mineral assets, gold mineralization at Lily occurs as a free-milling, pyrrhotite hosted

ore whereas, at Taylors and in the remainder of the ore deposits within the Barbrook Mines Complex, gold

is contained in a so-called double refractory, sulphide ore type. The latter complicates metallurgical

recoveries, requiring special processing methods. At Worcester, the ore body is free-milling.

1.2 MINERAL RESOURCE

The table below shows VGL’s latest Mineral Resource Statement.The Mineral Resources are inclusive of

Ore Reserves at appropriate cut-off grades.

Mineral Resource Statement as at December 2011

MINE & CATEGORY

31-Dec-11 31-Dec-10

Tonnes Grade Content Tonnes Grade Content

(000) g/t kg oz (000) g/t kg oz

Lily Mine

Measured 6,070 3.07 18,700 600,000 6,240 3.07 19,160 616,000

Indicated 3,160 2.95 9,300 299,700 3,160 2.95 9,300 299,700

Inferred 12,830 2.67 34,200 1,100,900 12,830 2.67 34,200 1,100,900

Total 22,060 2.82 62,200 2,000,600 22,228 2.82 62,660 2,016,600

Barbrook Mines Complex

Measured 2,769 3.51 9,710 312,100 770 4.03 3,100 99,200

Indicated 1,672 6 10,030 322,500 1,300 5.32 6,900 222,400

Inferred 7,671 5.67 43,480 1,397,800 9,140 5.72 52,300 1,681,400

Total 12,112 5.22 63,220 2,032,400 11,210 5.56 62,300 2,003,000

Worcester Project

Measured 0 0 0 0 0 0 0 0

Indicated 1,870 3.98 7,450 238,700 1,520 4.01 6,100 195,400

Inferred 1,500 3.54 5,300 172,100 1,340 3.69 4,900 158,700



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MINE & CATEGORY

31-Dec-11 31-Dec-10


(000) g/t kg oz (000) g/t kg oz

Total 3,370 3.78 12,750 410,800 2,860 3.86 11,000 354,100

Imperial Project

Measured 0 0 0 0 0 0 0 0

Indicated 150 4.01 1,000 20,000 150 4.01 1,000 20,000

Inferred 0 0 0 0 0 0 0 0

Total 150 4.01 1,000 20,000 150 4.01 1,000 20,000

Makonjwaan Project

Measured 0 0 0 0 0 0 0 0

Indicated 300 3.41 1,000 32,000 300 3.41 1,000 32,000

Inferred 0 0 0 0 0 0 0 0

Total 300 3.41 1,000 32,000 300 3.41 1,000 32,000

Bonanza Project

Measured 50 3.75 180 6,000 50 3.75 180 6,000

Indicated 50 4.47 210 7,000 50 4.47 210 7,000

Inferred 0 0 0 0 0 0 0 0

Total 100 4.11 390 13,000 100 4.11 390 13,000

Centurion Dump*

Measured 560 2.28 1,000 41,000 560 2.28 1,000 41,000

Indicated 0 0 0 0 0 0 0 0

Inferred 0 0 0 0 0 0 0 0

Total 560 2.28 1,000 41,000 560 2.28 1,000 41,000

Total Resources

Total 38,652 3.66 141,560 4,549,800 37,410 3.73 139,350 4,479,700

Notes:

1. Mineral Resources are inclusive of Ore Reserves.



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1.3 LOM PLAN OVERVIEW

VGL’s Ore Reserves were stated for three underground operations, namely Lily Mine, Taylors Mine

(Barbrook Stage 1) and Worcester Mine. However, the latter has not been included in the LoM plan.

During 2011 and 2012, ore was mined from Lily Mine and Taylors Mine. VGL’s February 2012 LoM plan

comprises Lily Mine, Taylors Mine (Barbrook Stage 1) and Barbrook Stage 2. Barbrook Stage 2 is included in

the LoM plan as its large Mineral Resource inventory is considered by the Company to constitute the next,

major production building block in its strategic growth plan.

The location of the different operations within the Project Area is illustrated in the figure below.

Location of Different Operations

A Pre-Feasibility study was done on Worcester Mine but the Ore Reserves were excluded from the LoM as a

strategic decision was made by the Company to first add critical mass to the Ore Reserves before any

further project development is undertaken in the short term.



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The LoM plan for VGL as indicated in the February 2012 LoM plan is illustrated below:-

VGL LoM Production Profile and Grade

Lily Mine production is planned to double in 2012, from the approximate 16,000 tpm produced in 2011, to

reach a steady state production rate of approximately 33,000 tpm. Lily Mine will maintain steady state

production for 11 years. Taylors Mine is planned to reach steady state production in October 2012 and

maintain steady state production until the end of 2014 at 8,000 tpm.

Barbrook Stage 2 is planned to commence in 2014 and will replace the production from Taylors Mine

(Barbrook Stage 1). It will increase the production from the Barbrook complex to 45,000 tpm. Steady state

production is expected to be achieved over four years at the end of 2016. The required feasibility study

work will be conducted within 2012 on the Barbrook Stage 2 operation.

1.4 OPERATING COSTS

The operating costs for the operation consist of fixed and variable components. The split between fixed

and variable costs are illustrated in the table below.

Fixed Variable Cost Split

Fixed Cost % Variable Cost %

Stoping 12.70% 87.30%

Development 22.30% 77.70%

Plant 19.13% 80.87%

Engineering 100% 0%

Technical Services 100% 0%

Mine Administration 100% 0%

Mine Overheads 100% 0%

Overall 45% 55%



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The total cash cost for the different operations over the LoM plan as stand-alone operations and combined

are illustrated in the table below.

VGL’s Operating Costs

Units Lily Taylors Total Barbrook

Potential Total

Net Turnover ZAR/Milled tonne 937 996 941 1,119 1,045

Mine Cost ZAR/Milled tonne 181 195 182 191 187

Plant Costs ZAR/Milled tonne 137 173 139 269 215

Cash Operating Costs ZAR/Milled tonne 318 368 321 461 403

Royalties ZAR/Milled tonne 5 5 5 10 19

Total Cash Costs ZAR/Milled tonne 323 373 326 471 422

Other Costs ZAR/Milled tonne 240 465 237 212 196

Total Production Costs ZAR/Milled tonne 563 838 563 683 618

The cost is illustrated as ZAR/t milled according to VGL’s February 2012 LoM plan. The operations each

have a higher operating cost as stand-alone operations due to the overhead fixed cost component.

1.5 CAPITAL COSTS

The capital expenditure for all three of the operations in the LoM can be seen in the table below. The

capital expenditure of the plants for the three different projects is also included, which is expected to

continue until 2014.

Total Life of Mine Capital Expenditure Including All Three Operations

ZAR

Mining

Mine Development 589,971,836

Mine Equipment 275,400,000

Infrastructure 49,000,000

Mining Total 914,371,836

Plant

Lily Processing Plant 11,000,000

Taylors Processing Plant 250,000,000

Barbrook Phase 2 Processing Plant 4,700,000

Plant Total 265,700,000

Other Infrastructure 366,000

Total 1,180,437,836

The total capital cost included for all three operations amounts to ZAR1,180.44 million for the LoM.

1.6 MINERAL RESOURCES INCLUDED IN LOM PLAN

Only Measured and Indicated Mineral Resources were included in the LoM plan. The split between

Measured, Indicated and Inferred is illustrated in the table below.

Mineral Resources Included in the Ore Reserve Plan

Mineral Resources in LoM Plan Lily Mine Taylors Mine Worcester Mine

Measured 64% 83% 0%

Indicated 36% 17% 100%

Inferred 0% 0% 0%

All the Inferred Mineral Resources were excluded from the Ore Reserve plan.



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1.7 ORE RESERVES

VGL’s Ore Reserves are illustrated in the table below as stated in the April 2012 Vantage Goldfields

Limited Annual Report. The effective date of the Ore Reserves is December 2011.

Ore Reserve Statement as at December 2011

MINE & CATEGORY

31-Dec-11 31-Dec-10


(000) g/t kg oz (000) g/t kg oz

Lily Mine 1

Proved 370 2.83 1,045 33,600 371 2.73 1,010 32,500

Probable 4,740 3.08 14,615 470,000 4,386 3.22 14,100 453,500

Total 5,110 3.06 15,660 503,600 4,757 3.18 15,110 486,000

Barbrook Mines Complex 2

Proved 260 4.06 1,060 34,100 286 4.09 1,170 37,600

Probable 60 4.44 250 8,100 57 4.44 253 8,100

Total 320 4.13 1,310 42,200 343 4.15 1,423 45,700

Worcester Project 3

Proved 0 0 0 0 0 0 0 0

Probable 1,400 3.01 4,220 135,600 0 0 0 0

Total 1,400 3.01 4,220 135,600 0 0 0 0

Total Reserves

Total 6,830 3.1 21,190 681,400 5,100 3.24 16,533 531,700

Notes:

1. Mineral Resource and Ore Reserve Statement – December 2011.

2. The Ore Reserves at Barbrook include only Barbrook Stage 1 (Taylors Mine).

3. Worcester Mine Pre-Feasibility study September 2011.

1.8 METALLURGY

The ore from both current operations is treated at the former Barbrook plant – now called the Central

Metallurgical Complex (“CMC”). The Dorè is sent to the Rand Refinery. Taylors Mine produces a float

recovery concentrate which is then sold per off-take agreement to Mine 2 Market (M2M) at approximately

63% of the price of the metal content. The Barbrook Stage 2 ore is expected to be treated using a separate

BIOX® plant which is still to be constructed.

Plant Recovery Factors

Commodity Recovery

Lily (Overall Recovery Conventional CIL) 90%

Barbrook (Overall Recovery which includes Float and Biox and CIL) 81%

Taylors (Float Recovery) 79%

The recovery reflected for Barbrook Stage 2 includes Float, BIOX® and leach. By assuming a float recovery

of 88% and combined BIOX® and leach recoveries of 92% to 95%, respectively, an overall recovery of 82%

should be achieved. A detailed review of process alternatives as part of a Bankable Feasibility Study

(“BFS”) is currently underway, which includes pilot plant test work.

VGL purchased Barbrook Mines Limited (“BML”) primarily to use its plant to replace the smaller

Makonjwaan plant. The CMC was successfully converted to treat Lily ore and has been operating since

January 2011. Various alternatives are being pursued by VGL’s technical team to treat the more refractory

Taylors ore and this includes the BIOX® process, which is an established technology for treating refractory

ores in the Barberton area. Minxcon is in agreement with this strategy, providing that the required test

work is done to ensure that the optimum gold recovery and operating cost is well understood. This is part

of the BFS currently being done.



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The Stage 2 BFS will initially concentrate on determining the feasibility of mining and processing the

extensions of the ore bodies currently being extracted. Minxcon recommends that the detailed design be

reviewed and evaluated following the completion of the test work - this will form part of the BFS and

independent consultants have already been appointed by VGL to monitor progress.

There was a significant gold lock-up in the CMC plant during the commissioning period from January to

April 2011. The gold lock-up negatively affected the actual gold recovery but subsequently improved to

around 90% once the plant stabilised.

Operating costs for treating Lily ore were ZAR198/t against a budgeted amount of ZAR258/t for the year.

There are opportunities to further reduce the operating unit costs. Operating costs to produce a flotation

concentrate for export by M2M from the Taylors ore were ZAR233/t between April and December 2011.

The gold recovery is low (±50%) due to the constraints of having to produce a high-grade concentrate of 50

g/t in terms of the off-take agreement with M2M.

1.9 FINANCIAL VALUATION

Minxcon considered the Market Approach (Comparative Valuation) and Cash Flow Approach (“DCF”) as

suitable methods to determine a range of values for VGL.

1.9.1 Comparative Valuation

Applying the comparative valuation, a value of ZAR613.244 million was placed on the Mineral Resources

not included in the LoM plans for Lily and Taylors.

Mineral Asset Valuation for VGL Based on Comparative Analysis

Project Mineral Resource

Category Gold (oz)

Value/oz (USD)

Value (ZAR)

Lily (Residual Resources not in Reserve)

Measured 109,365 91.56 78,388,787

Indicated 75,258 34.31 20,212,722

Inferred 1,101,360 8.16 70,382,123

Total M, Ind and Inf 1,285,982 16.79 168,983,632

Barbrook(Residual Resources not in Reserve)

Measured 312,479 84.06 205,615,844

Indicated 322,536 30.88 77,964,131

Inferred 1,398,383 7.06 77,246,294

Total M, Ind and Inf 1,802,686 22.67 360,826,628

Makonjwaan Indicated 32,890 23.45 6,036,331

Imperial Indicated 19,339 24.59 3,722,354

Worcester

Indicated 239,285 21.16 39,631,450

Inferred 170,721 5.12 6,841,773

Total Ind and Inf 410,006 14.48 46,473,223

Bonanza

Measured 6,028 66.05 3,116,682

Indicated 7,186 25.16 1,415,285

Total M and Ind 13,214 43.81 4,531,966

Centurion Measured 41,050 70.55 22,670,401

Total Resource NIR All M, Ind, Inf 3,835,880 20.42 613,244,175 Note: Converted at ZAR/USD7.83.

1.9.2 DCF

In generating the discounted cash flow model, the following were considered:

This report details the optimised cash flow model with consensus economic input parameters.

A hurdle rate of 13.44% (in nominal terms) was assumed for the discount factor.

The impact of the Mineral Royalties Act using the formula for refined metals.



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Sensitivity analyses were performed to ascertain the impact of discount factors, commodity

prices, grade, total working costs and capital expenditures.

Valuation of the respective tax entities was performed according to the “gold mining tax

formula”.

The full value of the respective operations is reported – no attributable values were calculated.

The study was done on three different gold deposits. Lily and Taylors are currently being mined

and Barbrook Stage 2 is to start up during 2014. Lily is being mined with mechanised long-hole

open stoping and Taylors by means of shrinkage stoping.

The Taylors concentrate after flotation is sold to M2M, while the Lily processed gold is sent to the

Rand Refinery. The respective payout percentages received by VGL have been factored into the

DCF calculations.

The Taylors and Lily Mines are the only two operating mines included in the DCF. The remainder of

the Barbrook Mining Complex (i.e. Barbrook Stage 2) currently has no Ore Reserves and mine plan,

and its value is based on the assumption that the BFS is positive and that the production schedule

reflected in the LoM is achievable. The economic potential of Barbrook’s current Mineral

Resources will only be quantifiable once the BFS is completed.

Minxcon’s opinion on VGL’s Mineral Resources and Ore Reserves is that they are fully compliant

with the SAMREC Code as well as the JORC Code.

The Company’s declared Ore Reserves at the Worcester Project have not been included in the

Cash Flow Approach. A Pre-feasibility Study undertaken by VGL on Worchester showed a potential

real value of between NPV20 ZAR 58.941 million and NPV15 of ZAR112.150 million, but due its

size, Worcester was not included in the LoM, The Worcester Project was, therefore, valued on the

basis of its Mineral Resources.

A long-term rand exchange rate of ZAR/USD8.25 and a gold price of USD1083/oz were used in the cash

flow models.

Long-term Prices Used in Cash Flow (Constant Money Terms)

2012 2013 2014 2015 2016 Long Term

Years 1 2 3 4 5 6

Exchange Rate ZAR/USD 7.9 8.01 8.09 8.17 8.25 8.25

ZAR Inflation Rate % 5.40% 5.40% 6.00% 6.10% 6.10% 6.00%

US Inflation Rate % 2.00% 2.11% 2.40% 2.40% 2.40% 2.50%

Gold USD/oz. 1,750 1,761 1,516 1,345 1,218 1,083

The following table illustrates the value of the mining projects in the LoM at various discount rates:

NPVs at Various Discount Rates (Nominal Terms)

Change Nominal

Discount Rate Lily NPV

(ZAR’million) Taylors NPV (ZAR’million)

Total Barbrook NPV (ZAR’million)

Potential Total

-14.00% -0.60% 1,711 66.79 1,777 3,089 4,866

-12.00% 1.40% 1,569 67.22 1,636 2,477 4,112

-10.00% 3.40% 1,446 67.27 1,513 1,997 3,510

-8.00% 5.40% 1,340 67.05 1,407 1,619 3,025

-6.00% 7.40% 1,247 66.61 1,313 1,318 2,631

-4.00% 9.40% 1,165 66.02 1,232 1,076 2,308

-2.00% 11.40% 1,094 65.3 1,159 882 2,041

13.40% 1,030 64.51 1,095 723 1,818

2.00% 15.40% 974 63.65 1,037 593 1,631

4.00% 17.40% 923 62.76 986 487 1,473

6.00% 19.40% 878 61.83 940 398 1,338

8.00% 21.40% 837 60.9 898 324 1,222

10.00% 23.40% 801 59.96 861 262 1,123

12.00% 25.40% 767 59.03 826 210 1,036

14.00% 27.40% 737 58.1 795 165 960



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Minxcon performed a single-parameter sensitivity analyses to ascertain the impact of the NPV. The gold

prices, exchange rates, grades and production have the biggest impact.

NPV Sensitivities (Combined)

Profitability of Different Mining Projects

Mine Lily Taylors Total Barbrook Potential Total

Item Profitability

Ratios Profitability




Ratios

Total Oz in Mine Plan 435,422 43,019 478,440 973,252 1,451,692

ZAR/Oz 2,366.23 1,499.53 2,288.30 743.01 1,252.30

US$/Oz 289.22 182.98 279.7 91 152.81

LOM 12 3 12 15 15

PV of Income flow 1,280 1,768 1,396 1,563 3,091

PV of Investment 238 231 283 658 941

Benefit-Cost Ratio 5.39 7.64 4.93 2.38 3.28

Capital Gain 439% 664% 393% 138% 228%

Average Payback 0 0 0 3.65 0

The full values of the different projects were derived after applying the Comparative Valuation method to

the Mineral Resources and the Discounted Cash Flow method to the Ore Reserves (with the exception of

Worcester). Although the Taylors and Lily Mines are the only two mines included in the DCF, the defined

ore bodies in the greater Barbrook Mines Complex have economic potential once the Ore Reserves and

mine plan for these are finalised in the BFS.

Financial Valuation Summary (Full Value - ZARm)

Mine Market Approach Value Cash Flow Approach

(DCF) Value Total Value

Lily 168,984# 1,030.31 1,199.29

Taylors 0 64.51 64.51

Barbrook 360.826# 0 360.826

Barbrook Complex 360.826 64.51 425.336

Worcester 46.473 0 46.47

Makonjwaan 6.036 0 6.04

Imperial 3.722 0 3.72

Bonanza 4.531 0 4.53

Centurion 22.670 0 22.67

Others 83.432 0 83.43



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Mine Market Approach Value Cash Flow Approach

(DCF) Value Total Value

Current Full Value 613,244 1,094.82 1,708.06

Notes:

1. # Comparatives for Lily and Barbrook are based on residual Resources (Resources not included in DCF LOM plan).

2. *Total value excludes the Barbrook DCF value of ZAR723 million. Should this be included, above adjustment to the

Barbrook comparative value needs to be made.

The following graph illustrates the effective value of VGL’s mineral assets. The values exclude balance

sheet items (net debt).

Corporate Structure and Values

1.10 CONCLUSIONS

Minxcon concludes the following for VGL:

Mineral Resources

The data used in the estimation are reliable.

The estimation parameters used to calculate Mineral Resources are very conservative and the

classifications of Measured and Indicated (used to calculate Ore Reserves) are accurate.

The methodology used for the estimation was appropriate according to the size of the deposits

and the continuity of the mineralization.

Ore Reserves

The actual production figures for the different mines indicate a constant increase and in March

2012 the mine achieved the planned production from the Ore Reserves for both underground

operations.

All the required mine design work was done within the Ore Reserves and Measured and Indicated

Mineral Resource categories.

The actual operating costs indicate a constant improvement over the last year for both the

underground operations.

The stated Ore Reserves for Lily Mine were calculated by applying a 2.25 g/t cut-off grade to the

Measured and Indicated Mineral Resource grade tonnage curves. Depletions of tonnages mined

during 2011 were included in the calculations. The modifying factors used for Lily Mine were

obtained from the Lily Mine feasibility study. Annual reconciliations are done to update the

modifying factors.

Current Corporate Structure and Values Date: May 2012

Vantage Goldfields Limited

Vantage Goldfields SA (Pty) Limited ZAR1,395.991 million

Vantage Goldfields (Pty) Limited (Worcester Mine Project) ZAR1,200.258 million

Lomshiyo Investments (Pty) Limited (BEE) ZAR312.067 million

MIMCO (Pty) Limited (Lily Mine) ZAR1,209.048million

Centurion Mining Company (Pty) Limited (Bonanza) ZAR27.201million

Barbrook Mines Limited (Barbrook Mine) ZAR425.336 million

Makonjwaan Properties Value: ZAR6.036 million

Eastern Goldfields Exploration (Pty) Limited (Sheba Hills)

58% 100% 100% 100%

26%

74%

42%

100%- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --

Australia

South Africa

Lily MineValue: ZAR1,199.29million

ImperialValue: ZAR3.722million

Taylors MineValue: ZAR64.51 million

100%

100%100%

Barbrook MineValue: ZAR360.826 million

Worcester MineValue: ZAR46.47 million

100%

100%



13

The stated Ore Reserves for the Taylors Mine were revised from the original Ore Reserves reported

in the Bankable Feasibility Study completed by Turgis. This included depletion during the year and

other modifying factors.

Plant

The decision taken to purchase Barbrook in order to use its plant to replace the Makonjwaan plant

was a strategically and financially sound decision. The CMC plant was successfully converted to

treat Lily ore and has been operating since January 2011.

After conducting a comprehensive Scoping Study during 2011 of various processing routes for

treating refractory ores, VGL determined that BIOX® is the best process to be pursued for

Barbrook. Minxcon is in agreement with this and VGL has already commenced a Stage 2 BFS for the

implementation of BIOX®.

The Stage 2 BFS will initially concentrate on determining the feasibility of mining and processing

the extensions of the ore bodies currently being extracted.

There was a significant gold lockup in the CMC plant during the commissioning from January to

April 2011. The gold lock-up negatively affected the gold recovery, but this improved to around

90% once the plant stabilised.

Operating costs for treating Lily ore were ZAR198/t against a budgeted cost of ZAR258/t for the

year. There are opportunities to reduce the operating unit costs. Since inception of the Taylors

ore circuit, the operating costs were ZAR233/t. Minxcon feels that, once tonnages are increased

and stable operations are reached, the total operating costs will diminish. The gold flotation

recovery at Taylors is low at around 50% due to the constraints of producing a high grade

concentrate of 50 g/t as per the off-take agreement with M2M.

Financial Valuation

Minxcon considered the Market Approach (Comparative Valuation) and Cash Flow Approach

(“DCF”) as suitable methods to determine a range of values for VGL.

Applying the Comparative Valuation method, a value of ZAR613.244 million was placed on the

Company’s total Mineral Resources not included in the LoM plans for Lily and Taylors.

Applying the Cash Flow Approach, a value of ZAR1,094.82 million was placed on the Ore Reserves

included in the LoM plan.

The Barbrook Stage 2 will reflect its full economic potential once the BFS is successfully

completed on the existing Mineral Resources.

The full value of the Project is ZAR1,708.06 million.

Documents

Mineral Asset Valuation of Vantage Goldfields Limited ... · “the Company”) to compile an independent Mineral Asset Valuation Report on the Company’s mineral assets, located