Resource Capital Research Company Revie• VGO’s total focus is to maximise the potential from VGO’s strategic position in the historically prolific Barberton goldfields in South

Resource Capital Research

Company Review

August 2010 Disclaimer and disclosure attached. Copyright© 2010 by Resource Capital Research Pty Ltd. All rights reserved. 1

South Africa

Gold

Production, Advanced Exploration.

Exchange: ASX:VGO

August 23 2010 Capital Profile

52 week range (A$/share) 0.30 to

Debt (A$m) - Sep '10F Enterprise value (A$m)Major shareholders: AIMS* (29.7%), Platinum Asset Mgt (25.1%),

Avg monthly volume (m)Cash (A$m) - Sep '10FPrice/Cash (x)Price/Book (x) Listed company options: * AIMS is Asian Investment Management Services Limited

Options and warrants (m) 36.1Converting notes (m)

Share price (A$) 0.350.40

Number of shares (m) 199.5

No

6.712.6

Market capitalisation (undiluted) (A$m) 69.8

5.52.5

0.069.8

0.0

Directors (8.8%); of which M McChesney (7.1%).

Fully diluted (m) 235.6

VGO - Vantage Goldfields Limited

0.24

0.28

0.32

0.36

0.40

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0

7-Ju

n-10

17-J

un-1

0

30-J

un-1

0

12-J

ul-1

0

21-J

ul-1

0

6-A

ug-1

0

19-A

ug-1

0

Shar

e Pr

ice

(A$/

Shar

e)

Source: Bloomberg

VGO was listed on 27 May 2010

Directors S Turner (Non Exec Chairman) M McChesney (CEO) W Stear (Exec Dir) T Willsteed (Non Exec Dir) T Muftizade (Non Exec Dir)

Vantage Goldfields Limited Tel: +(27) 13 753 3046

South Africa: Nelspruit, Mpumalanga Province Australia: Sydney, NSW www.vantagegoldfields.com.au

Analyst: Dr Tony Parry [email protected]

VANTAGE GOLDFIELDS LIMITED

Price: A$0.35

Vantage Goldfields Ltd is aiming to expand two mines in South Africa’s rich Barberton goldfields from a ~34kozpa (CY11) to ~50kozpa (CY13) equity production. The stock is trading at a 36% discount to our base case valuation (assuming US$850/oz gold) or 70% discount to the valuation based on current spot gold. VGO’s major project resource base of 3.47moz gold is currently valued at US$15/oz, very low for a potential mid-tier producer. INVESTMENT POINTS • Our valuation is A$1.15/share (f. dil.) using current

spot Au price US$1,225/oz and A$/US$=0.90.

• Conservative RCR long term Au price US$850/oz, A$/US$=0.80 implies NAV of A$0.55/share (f. dil.).

• Low forward P/E ratios (6.2 FY11, 5.0 FY13).

• Equity production forecast 49kozpa FY13, 59kozpa FY14.

• Excellent position in under-explored Barberton goldfield – South Africa’s largest greenstone belt.

• Total gold resources of 4.38moz (VGO equity 3.47moz), likely to grow significantly with further exploration.

• Resource valuation of US$15/ounce is very low relative to peers – we would expect a range of US$30-50/oz.

• Low risk - production is from expansion of two mines with recent operating history, shallow, low cost (~US$500/oz forecast opex) underground mining operations.

• Senior executives have extensive experience in South African gold operations and project development.

KEY FINANCIAL STATISTICS RCR base case forecasts assume a long term gold price US$850/oz nominal

YEAR END: 31 December 2009F 2010F 2011F 2012F 2013F

Gold Price (US$/oz) 981 1,149 1,086 1,024 962Exchange Rate (A$/US$) 0.80 0.86 0.81 0.80 0.80Exchange Rate (US$/ZAR) 8.45 8.00 8.00 8.00 8.00

Total Ore Milled (kt) 131.0 169.0 543.0 543.0 670.0Total Gold Produced (koz) 7.7 10.2 41.3 47.3 65.2Equity Gold Production (koz) 6.3 8.6 33.8 35.7 48.9

Total Revenue (A$m) 9.3 12.2 46.2 47.1 60.2EBIT (A$m) -4.2 -1.3 17.4 18.6 24.1Net Profit (norm) (A$m) -2.9 -1.3 13.2 12.5 16.3EPS (norm) (A¢/share) -2.4 -0.5 5.6 5.3 7.0CFPS (A¢/share) -2.0 -0.4 8.3 9.1 12.2Dividends (A¢/share) 0.0 0.0 0.0 0.0 0.0PER (x) na -65.9 6.2 6.5 5.0P/CF (x) na -90.9 4.2 3.8 2.9Yield (%) 0 0 0 0 0.0EV/EBITDA (x) na -36.7 7.6 3.3 3.2Shares on Issue (31 Dec) (m) 123.0 199.5 199.5 199.5 199.5



.

Contents

VALUE DRIVERS FOR VANTAGE GOLDFIELDS SHAREHOLDERS..............................2 KEY DATA SUMMARY.......................................................................................3 GOLD RESOURCES AND RESERVES ...................................................................4 VGO’S GROWTH STRATEGY..............................................................................4 COMPANY VALUATION.....................................................................................5 VANTAGE GOLDFIELDS LIMITED – SOUTH AFRICAN GOLD PROJECTS ....................6 LOCATION AND REGIONAL OVERVIEW...............................................................6 DIRECTORS & MANAGEMENT............................................................................9 THE LILY PROJECT (85% REDUCING TO 74%) .................................................. 10 THE BARBROOK PROJECT (74%) .................................................................... 13 WORCESTER GOLD MINE (74%) ..................................................................... 15 OTHER BARBERTON GOLDFIELDS EXPLORATION TENEMENTS............................. 17 KEY ASSUMPTIONS USED IN RCR’S FINANCIAL MODELLING OF PROJECTS ........... 19 MINE LIFE SENSITIVITY................................................................................. 21 DETAILED OPERATING AND FINANCIAL DATA – LILY MINE ................................. 22 DETAILED OPERATING AND FINANCIAL DATA – BARBROOK MINE ....................... 23 GROUP CONSOLIDATED OPERATING AND FINANCIAL DATA................................ 24 DISCLOSURE AND DISCLAIMER...................................................................... 25

Value Drivers for Vantage Goldfields Shareholders The primary intrinsic value drivers for Vantage are: • A substantial established gold resource base (3.47moz gold attributable to VGO) which

provides a foundation for Vantage’s strong production focus to become a mid-tier gold producer in the next three years.

• Staged low-risk gold production expansion based on expanding currently operating, or re-opening dormant mines, applying modern Australian underground bulk mining techniques to relatively shallow ore bodies.

• Continued exploration of strategic holdings in an under-explored highly prospective South African gold province, which is likely to add substantially to the already large gold resource inventory and should support longer term growth well beyond 100kozpa.

• An experienced, competent Board and management team who have the capability to achieve growth targets and manage risk.

The primary extrinsic value driver for Vantage Goldfields is clearly the gold price, which has been in a strong uptrend for the last three years and is likely to remain well supported in the medium term, given the current concerns over massive budget deficits in Europe and the USA, the perceived risk in investing in equities and property, and longer term fears of inflation fuelled by government printing presses running overtime printing money to fund deficits.



Key Data Summary

Gold production growth (VGO equity)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2009a 2010F 2011F 2012F 2013F 2014F

Year end 31 December

VGO

Equ

ity G

old

Prod

uctio

n ('0

00 o

z)

Lily Barbrook

Revenue and profitability

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2009a 2010F 2011F 2012F 2013F

Year end 31 December

A$

mill

ion

Gross Revenue EBIT

RCR valuation – gold price sensitivity

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

800 900 1,000 1,100 1,200 1,300Long Term Gold Price (US$/oz)

Ass

esse

d N

AV

(A$/

shar

e, fu

lly d

il.)

A$/US$ = 0.80 A$/US$ = 0.90

RCR LONG TERM FORECASTUS$850/oz

BASED ON CURRENT SPOT

US$1,225/oz

CURRENT SHARE PRICE A$0.35

Equity in gold production is set to grow strongly firstly from the Lily operation expansion, then the re-start and expansion of Barbrook. Revenue is forecast to grow strongly, with forecast cash costs (from 2012) below US$500 per ounce providing healthy margins. The graph is based on RCR’s gold price forecast trending back to US$850/oz long term (e.g. 2013 forecast ave. US$962/oz). Every ~US$100/oz gold price changes the assessed value by ~A$0.20/share. On anything but the most pessimistic long term gold price forecasts (<US$800 per oz) the stock looks significantly undervalued.



Gold Resources and Reserves The Table below summarises resources and reserves for the Vantage Goldfields project areas. The Lily reserves and Lily/Barbrook resources are as at December 2009. The Barbrook reserves for the Stage 1 expansion were announced on 20 August 2010. Reserves and Resources

*

Resources (includes Reserves)*

Mineralised Material (est., non compliant with JORC)* Lily project equity is currently 85%, will reduce to 74%.

0.00.0

407.4

Code for reporting mineral resources - Australian: JORC

74%

85%

Total Reserves

11.2

Classification

Lily

Gold

74%

2.8274%

Total ResourcesWorcester

Meas+ind+infMeas+ind+inf

Ind+infBarbrookLily

11.262.3

136.4

5.563.863.75

Proved & Probable

22.3

36.4

Reserves

Proved & ProbableBarbrook (Stage 1)

3544,382

2,025

525.0

koz

45.7

Au

0.0

Eqty

441.2

koz

3,465

33.8

Au

0.34

g/tAu

Mt

3.09

tg/tOre

16.3

14.8 479.31.4

62.9

262

1,7221,482

2.92,003

Project

5.1

4.804.15

c/offEquity

85%

3.16

VGO’s Growth Strategy • VGO’s total focus is to maximise the potential from VGO’s

strategic position in the historically prolific Barberton goldfields in South Africa, where it has already established a project resource base of 4.4moz gold.

• The first priority is to expand production in a low-risk staged manner from its two existing operations, firstly Lily (currently operating), and then Barbrook (currently dormant), through a central processing plant, to become a medium scale (~60kozpa equity) profitable gold producer.

• The second priority is to build the regional gold resource base and new project pipeline in the Barberton goldfields, through further exploration of the many advanced exploration prospects in this under-explored region. This is likely to lead to further expansion in equity gold production to well over 100kozpa in the next 5-6 years, if moderately successful.

Total project resources of 4.38moz are contained predominantly in the Lily and Barbrook deposits… …VGO’s current equity in resources is 3.47moz. VGO has developed a well defined and credible growth strategy which should see the company become a mid tier gold producer with a staged, low risk approach.



Company Valuation

VANTAGE GOLDFIELDS LIMITED VALUATION

RCR F'cast Spot Gold RCR F'cast Spot Equity Resource Resource L.T. Gold Gold

Gold Resource Valuation Valuation US$850/oz US$1,225/ozEquity (moz) US$/oz ^ US$/oz * A$m ^ A$m *

Projects+ Lily Gold Mining Operations (NPV nominal @ 5%DR) ^^ 85% 1.72 34 73 66.6 140.5+ Barbrook Mine (NPV nominal @ 5% DR)** 74% 1.48 21 53 35.2 88.6+ Worcester Mine 74% 0.26 20 51 6.0 15.0+ Other Exploration Projects 74% 0.00 7.0 12.0

Sub Total 3.47 114.8 256.1

+ Cash (est Sep '10) 12.6 12.6+ Tax Losses 0.0 0.0- Debt (est. Sep '10) 0.0 0.0- Corporate 13.4 13.4

Sub Total -0.8 -0.8

VGO NET ASSET VALUE (A$m) 114.0 255.3

Capital StructureShares (post IPO) (m) 199.5 199.5Fully Diluted Shares (m) 235.6 235.6

VGO NET ASSET VALUE PER SHARE :A$/share 0.57 1.28 VGO NET ASSET VALUE DILUTED :A$/share fully diluted 0.55 1.15

** Barbrook NPV has been discounted by 30% for current project status - BFS (Stage 1 only) and pre-prodcution.^ Base case valuation assumes RCR long term gold price forecast of US$850/ounce from 1Q13, long term A$/US$ = 0.80; linear change from current.* Spot Valuation based on long term gold price = current spot ~US$1,225/oz, A$/US$ = 0.90^^ Lily equity (currently 85%) will reduce to 74% - but sell down will be at market valuation - therefore nominally neutral to our valuation.

Current Valuation of Gold Resources

VGO ENTERPRISE VALUE : RESOURCE RATIOA$(m) US$(m)

Market capitalisation: 69.8 62.1

Plus debt: 0.0 0.0

Minus cash (est. Sep 2010) -12.6 -11.2

Enterprise Value: 57.2 50.9

Current gold resources (VGO equity) moz: 3.47 3.47

EV/resource Ratio ($/oz): 16.51 14.70

We would expect an EV/resource ratio of at least US$30-US$50/ounce for an existing productioncompany with a clear path to achieving ~60kozpa production.



Vantage Goldfields Limited – South African Gold Projects Company History VGO was founded in 2004 (initially operating under the name “Eastern Goldfields”) by the current CEO Michael McChesney, based on the strategic 16,000 hectare land holding in the Barberton (Eastern) goldfields of South Africa. Since that date, the company has invested approximately US$30m on exploration at Lily, a BFS for the Lily mine, initial production at Lily, the purchase of Barbrook mine and processing plant in 2008, and a BFS for re-starting Barbrook (Stage 1). VGO was listed on the ASX on 27 May 2010. Approximately A$30.4m was raised – A$20.4m from the IPO, and A$10m through a pre-IPO private placement. The 2010 capital raising has allowed VGO to push ahead with its production expansion plans at Lily and to finalise a BFS for re-starting the dormant Barbrook operation. Location and Regional Overview

Vantage’s projects are situated in the Barberton Greenstone Belt in South Africa’s Eastern Goldfields.

VGO is totally focused on the gold potential of one highly prospective and under-explored region. VGO’s projects are all located in the Barberton Greenstone Belt of the Mpumalanga province in the north east of South Africa, close to the border with Swaziland. VGO’s mineral rights in this region cover an area of about 16,000 hectares (160km2). The Barberton Greenstone Belt is the second largest major goldfield in South Africa after the better known Witwatersrand Basin. These historic goldfields have a history of continuous gold production over a period of

VGO has invested over A$30m in the last six years in developing its flagship projects to their current advanced stage. The May 2010 IPO and a private placement raised AS$30.4m to develop the Lily Project and fund the Barbrook BFS. All VGO’s projects are situated in the Barberton Greenstone Belt in the NW of South Africa… …a highly prospective region which is South Africa’s second largest goldfield after the Witwatersrand Basin.



more than 100 years. Gold in the Barberton Goldfield is derived mainly from gold-quartz lode deposits, with most gold mineralisation (such as at Barbrook) associated with sulphides. We understand over ten million ounces of gold have been produced from the greenstone belt since first production in 1884, some 80% from the three currently producing mines. The Barberton Greenstone Belt is geologically similar to the Archean greenstone belt in Western Australia and the Zimbabwean greenstones. According to SRK consulting, the Zimbabwean greenstone belts have collectively produced more gold per square kilometre than any other of their kind in the world. The gold deposits in the Barberton Goldfields are structurally controlled with most deposits located on major faults – similar to gold occurrences in other greenstone belts. However, the region remains relatively un-explored in terms of modern exploration techniques. As far as we are aware, no high resolution aeromag had been flown in this region until recently, which included the survey by VGO. VGO’s tenements surround the three significant mines still in production in the Barberton Goldfields – the New Consort, Fairview and Sheba mines, owned by Pan African Resources PLC (AIM:PAF; JSE:PAN – see map above). Currently, these mines collectively produce about 100,000 ounces of gold per annum from about 320,000 tpa of ore extracted from three underground mining operations. The grades are quite high, with CY2009 reported head grades of around 9.4g/t. The ore is refractory, requiring processing through a centralised BIOX/CIL extraction plant. Pan African has established a total resource of 2moz (Grade 8.1g/t), of which 620koz (grade 8.0 g/t) is in the reserve category. The Pan African operations exhibit solid profitability – the company quotes cash costs of around US$450/ounce for its operations, and in the year to 30 June 2009 the company reported EBITDA of STG 17.8m (approximately A$31m). The redevelopment and proposed expansion of the historic Lily mine, based on the establishment of a major resource (and mineable reserve) in wide shear zones amenable to bulk mining, has established a model to be applied to the many other dormant greenstone belt gold mines in this region. The three key VGO assets earmarked for current or probable future production are the operating Lily mine (currently 85%), the dormant Barbrook mine (74%), and the dormant Worcester mine (74%). Corporate Structure and BEE Partners South African legislation requires that 26% of a mining project has to be in the hands of native-owned entities – the so called Black Economic Empowerment (“BEE”) partners. As can be seen in the corporate structure chart below, this is the case with the Barbrook, Worcester and other prospecting rights where VGO holds an effective 74% interest through its 100%-owned South African subsidiary company Eastern Goldfields SA Pty Ltd (“EGSA”). However,

The Barberton Goldfields have produced >10moz in the last 125 years. The greenstone belt is similar to the Archean greenstone belt in WA. VGO’s projects are in a region being rejuvenated through the application of modern exploration and mining techniques. VGO’s Barberton Goldfields mines (Lily and Barbrook) are in close proximity to Pan African’s (AIM:PAF) three operating mines at Fairview, Sheba and New Consort, which produced ~95koz in CY2009. VGO is applying Australian technology and bulk mining techniques to relatively shallow underground operations. 26% project equity needs to be in ‘local’ hands.



VGO’s effective interest in the Lily mine is still 85% by way of a 42% direct stake and 43% indirect stake that EGSA holds in this project. Corporate structure chart

VGO will be required to sell down a further 11% of the Lily operation to a BEE group. Importantly, any incoming BEE taking up this equity must pay an agreed market value for the stake. (Based on our base case NPV valuation of 100% of the Lily Project (A$78m), the 11% stake would be valued at A$8.6m). In our modelling, we have assumed that the sell down of Lily to 74% equity takes place in January 2012. However, in reality it is unlikely any incoming BEE partner will be in a position to ‘pay upfront’ for such a significant investment. What is more likely is that VGO will fund the incoming BEE partner into the project by effectively providing a loan to the BEE, which will subsequently be repaid to VGO through a disproportionate flow of project cashflow back to VGO until the loan is repaid. Accordingly, in our modelling, we have not booked an immediate capital inflow to VGO at the time of sell-down to the BEE, rather maintained a higher percentage of cashflow flowing to VGO until the assumed A$8.6m funding cost is repaid. The NPV valuation is based on the current 85% equity, reflecting the assumed market value of any sell-down.

VGO will be required to reduce its equity in Lily from 85% to 74%, at an agreed market value. Our current project NPV implies an assessed value of A$8.6m for the 11% to be sold down. It is likely that VGO will fund the increased 11% stake for the incoming BEE partner, and subsequently recover this funding from project cashflow



Directors & Management Stephen Turner – Non Executive Chairman: A Chartered Accountant with extensive experience in delivering resource projects in Australia, South Africa and Pacific Island countries. Has been involved in founding previous companies (was founder and Deputy Chairman of LSE listed International Ferro Metals) and involved in equity capital raisings in major international financial centres. Michael McChesney – Chief Executive Officer: Michael founded the company in 2004 with the Lily Mine and other Barberton region assets as the key focus. He has been behind the development of the company since then and brought it to the point where it is seeking to become a credible mid-tier producer. He has extensive prior South African operational experience – previously he was a director of Metorex and Simmer & Jack Mines. He is a civil and mining engineer with over 30 years’ experience in mining, mineral processing and exploration. Willo Stear – Executive Director: Geologist with over 35 years’ experience in minerals exploration, mining geology, mineral economics, and mining project evaluation and development. He has served on the boards of various other junior resource companies. Terry Willstead – Non Executive Director: 46 years’ experience as a mining engineer, principal of highly regarded consulting mining engineers Terence Willstead and Associates. He serves on the boards of a number of other mining companies as a non executive director. Tamer Muftizade – Non Executive Director: 30 years’ experience in international accounting and auditing – has fulfilled executive roles in various precious metal resource companies. Tony Knight – Chief Operating Officer: Tony is a Mine Manager with 34 years’ experience in Africa and the UK. The bulk of his work has been in gold mining operations in greenstone belts, so his direct operating experience is highly relevant to VGO. He has been with the company since July 2008. His previous role was as Managing Director of Pan African Mining in Zimbabwe.

VGO has assembled a strong team with extensive project development and operational experience. CEO Michael McChesney has been the driving force since 2004. The four directors have a combined career experience totalling over 140 years. COO Tony Knight brings extensive prior experience in southern African greenstone gold mining to the team, which will be important as VGO’s operations are ramped up.



The Lily Project (85% reducing to 74%) The Lily Project is currently VGO’s only producing mine. It is the immediate focus of production expansion to around 35kozpa from the current rate of ~10kozpa, through development of bulk underground mining operations and a refurbished treatment plant. Location The Lily Mine (see location map page 12) is located on the main road between the two towns of Kaapmuiden and Barberton, about 60km from the regional centre of Nelspruit, where VGO has its South African headquarters. Geology, Reserves and Resources The Lily mine is located on a major structural fault (the Lily fault). Gold mineralisation is in steeply dipping (~850) quartz veins. The mineralisation has been defined over a strike length of ~2km and to a depth of ~700m, as indicated in the cross section below. Cross Section of Lily mineralisation

To date VGO has established a resource of just over 2moz at 2.82g/t. of which 480koz at a grade of 3.09g/t is in the Reserve category (mostly Probable). History and Current Operations Lily’s production history goes back to 1891. In the period from 1891 to 2000, the mere 23koz of reported production came mainly from small scale underground workings. The current management commenced operations in 2000, and in the decade since have extracted approximately 100koz of gold from predominantly open pit mining operations. The existing Main Pit, East Pit and Rosie’s Fortune Pits are shown on the graphic above. In 2007, portal construction for underground mining was started, and in 2009 pre-production underground development commenced, as indicated in the decline advance depicted in the graphic above. In 2009, 7,449 ounces of gold were produced – quite low since the mining was oriented towards development rather than production.

Lily is VGO’s only operation currently in production. A total resource of 2.02moz to a depth of ~700m has been established over a strike length of 2km. The Lily mine was first established in 1891. The VGO team took over in 2000 and has extracted ~100koz mainly from open cut mining… …with a switch to underground development in 2009.



The ore is currently hauled 17km by road to the Makonjwaan processing plant. This plant has a 180,000 tpa treatment capacity through a conventional CIP circuit. The Lily ore is free milling, and recoveries in excess of 90% have been regularly achieved. Production Expansion VGO started planning for the expansion of the Lily Project in 2007 with a Bankable Feasibility Study (“BFS”) for the expansion completed by Turgis Consulting Pty Ltd in early 2008. Subsequently the BFS was updated in August 2009 and more recently in February 2010, and now forms the basis for the expansion underway. The production expansion at Lily is based on a mine plan giving a projected 13 year mine life, treating around 400,000 tonnes per annum of ore to yield an average of 35kozpa gold. The mine plan envisages utilising the existing decline from the Main Pit, as shown in the graphic below. The Lily Mine Plan

Bulk mining techniques (long hole open stoping mechanised mining) will be employed over (typically) a width of 7-8 metres, to a total depth of 500m below the current Main Portal entrance. There is excellent potential to extend the mine life beyond the 13 years currently assumed, with mineralisation open at depth as well as with potential along strike in associated geological structure that have not been tested. It is planned to treat ore through the treatment plant at Barbrook (acquired in 2008) which is only 6 kilometres from the Lily mine and will reduce trucking costs. The Barbrook treatment plant has been renamed the Central Metallurgical Complex (“CMC”) as it will also be used to treat the refractory Barbrook ore when that mine resumes production. The CMC has been on care and maintenance since 2006. It is currently being refurbished to allow treatment of Lily ore at an eventual rate of around 400,000 tpa through a CIP circuit. The CMC has dual circuits – the second flotation circuit will initially have a lower capacity (120,000tpa) and will be applied to the treatment of Barbrook ore during Stage 1 (see following Section). The use of the refurbished CMC for Lily ore has avoided the need to construct a new plant for the Lily

The Makonjwaan treatment plant is 17km away and has limited expansion. A BFS for Lily expansion has been completed. The mine plan envisages production based on a decline established in 2009. Bulk mining over 7-8m widths will be employed. Mineralisation is open at depth with further potential along strike. The Barbrook treatment plant (6km away) is being refurbished as the Central Metallurgical Complex (“CMC”) to treat ore from Lily (expanding to 400ktpa) and, later, Barbrook.



expansion, thereby saving capital cost and time. The Makonjwaan plant will be de-commissioned when the CMC comes on stream. Underground mine development has progressed to the stage where production mining is scheduled to commence in the current (September 2010) quarter. Refurbishment of the CMC CIP circuit is underway, which should enable switching of ore processing from the Makonjwaan plant to the CMC in 4Q10. Further Lily mine development during the second half of CY2010 at an estimated capital cost of A$17.5m is expected to enable Lily production to ramp up to the scheduled 400,000tpa3Q11, lifting gold output to ~35kozpa. Location map showing Lily Mine, Barbrook Mines, Central Metallurgical Complex and present Lily ore treatment plant at Makonjwaan

The Central Metallurgical Complex at Barbrook

Lily Operating Assumptions and Financial Projections We have summarised the key assumptions used in our financial modelling of the Lily project on page 19 and a summary of operating and financial projections for Lily is shown on page 22.

Small scale Lily production through the CMC will start in 4Q10… …with ramp up to 400ktpa (35kozpa) expected in mid 2011. The CMC is strategically located adjacent to the Barbrook Mine and only 6km from the Lily Mine.



The Barbrook Project (74%) The Barbrook Project is an underground mining operation on care and maintenance with an ore processing plant that was last operated by its previous owners (Caledonia Mining Corporation; AIM: CMCL, TSX:CAL) in 2006. CMCL had operated Barbrook spasmodically since 1995. VGO purchased its 74% stake in the Barbrook Project through acquisition of Barbrook Mines Pty Ltd in May 2008 for approximately US$10 million. The estimated replacement cost of the Barbrook plant is >US$30m.

VGO purchased Barbrook for two primary reasons:

1. Primarily to acquire the Barbrook processing plant which will form the ore processing hub for Lily, and subsequently Barbrook, as the upgraded Central Metallurgical Complex; and,

2. secondly, to acquire a 74% interest in 2.0 million ounces of gold resources at Barbrook (84% in the Inferred Category) at an average grade of 5.56g/t (purchase price ~US$5/oz resource).

As is the case with Lily, Barbrook has a long production history dating back to 1880. Ore has been extracted from over 60 different lodes. The ore is refractory, and the previous operator installed a flotation circuit in the Barbrook mill to produce a gold containing concentrate. VGO has entered into a gold concentrate Off-Take agreement with an international metals trader. Location The Barbrook Mine (see location map page 12) is located on the main road between the two towns of Kaapmuiden and Barberton, about 60km from the regional centre of Nelspruit, where VGO has its South African headquarters. Geology and Resources The Barbrook mineralisation is associated with two parallel regional fault lines, the Barbrook Line and the Swartkoppie Line. The bulk of the mineralisation identified and extensive mine development undertaken is focused on the Barbrook Line, as indicated in the graphic below. Isometric cross section of Barbrook Mine

Barbrook was last mined in 2006. VGO purchased the Barbrook mine and mill in 2008, acquiring a strategic processing plant at well below replacement cost, and a project with 2moz of gold resources. Barbrook mining history dates back to 1880. Mineralisation at Barbrook has been identified along two parallel fault lines.



Underground mine development has extended to 10 level on the Barbrook Line and 7 Level on the Swartkoppie Line. A total of ~50km of underground development tunnelling is in place, which provides ready access to targeted ore bodies. The bulk of the 2.0moz gold resource (grading 5.56g/t) that has been established is contained in the major mineralised shoots at Taylors and French Bob, which are scheduled to be the focus of the resumption of mining by VGO. Barbrook Mining Resumption Plans VGO plans to undertake a two-stage ramp up of production at Barbrook in order to mesh in with the expansion at Lily, to reduce development risk and to spread capital funding requirements. • Stage 1: A Bankable Feasibility Study (“BFS”) has just been

completed on small scale mining and 120ktpa ore treatment through the CMC, planned to commence in 1Q11.

• Stage 2: Subject to finalising an expanded BFS and further capital

raising, underground production will increase to ~500ktpa of ore to be treated though the CMC.

Stage 1 Barbrook Production ~12kozpa Gold The Stage 1 BFS is based on a preliminary mine plan that has been developed to extract ore primarily from the Taylors Central, French Bob and Twala ore shoots, as indicated in the diagrammatic representation below. Barbrook – Stage 1 mine plan to access Ore Reserves in the Taylors Central and French Bob ore shoots

The Ore Reserves in the two of the five ore shoots in the diagram above amount to 343kt at an average grade of 4.15g/t, sufficient for three years of production at the Stage 1 extraction rate of 120ktpa, giving gold output of around 12kozpa.

Ready access to mineralisation is afforded by the ~50km of underground development already in place. Barbrook will be re-started at a low rate (Stage1) and then expanded (Stage 2) subject to a BFS. Stage 1 mine plan targets ore reserves in two ore shoots. Stage 1 production will be ~12kozpa.



VGO has installed crushing facilities and has completed refurbishment work on the flotation circuit, laboratory and assay facilities at the CMC in readiness for re-commencement of production at Barbrook. VGO will produce a gold concentrate which will be sold to MML (a London-based metals trading company) under an existing three year Off-Take Agreement. The additional capital expenditure for Stage 1 production at Barbrook is minimal – estimated in the BFS to be A$2.8m (compared to A$5m originally forecast in the VGO Prospectus). Stage 2 Barbrook Production ~65kozpa Gold. A BFS for the Stage 2 expansion is planned. VGO has recently confirmed that it is undertaking a PFS as the first step. The PFS and subsequent BFS will focus on lifting Barbrook mining rates and ore processing though the CMC to around 500 ktpa, and gold output to around 55-60kozpa. This will involve introducing bulk mining by mechanised methods. Based on current projections, Barbrook will eventually become VGO’s major gold production source, with gold output nearly double that of Lily. We estimate that the Stage 2 expansion of Barbrook would require a capital expenditure of the order of A$38m which is unlikely to be fundable from cash flow, and would require the raising of additional debt and/or equity capital in the next 1-2 years. Our modelling assumes that the Stage 2 Barbrook construction takes place in 2013 to achieve 400ktpa throughput in 2014 (44koz gold) ramping to 500ktpa and increased gold output of ~55kozpa by the start of calendar 2015. The Stage 2 BFS will look at treatment options for the refractory Barbrook ore. The ‘base case’ will involve the continued treatment of flotation concentrates and sale of these to MML through the offtake agreement. However, VGO will also be looking at the option to build a modest sized smelter at the CMC plant site to further treat concentrates to produce gold billet. A further option to value-add to the Barbrook production is to utilise BIOX technology to treat the refractory ore prior to CIL treatment, as is done with similar refractory ore at the nearby Pan African Resources Plc Fairview mine, which produces about 100kozpa from similar refractory sulphide ores. Given Pan African’s pioneering work with BIOX, this option could provide a relatively low risk treatment alternative for VGO If a VGO-owned smelter (or the BIOX process) were introduced at Barbrook, then net payment of contained gold would rise from about 65% to closer to ~90%. This would enhance project economics significantly and our modelling indicates a rapid payback of the capital invested. Additional capital costs for a smelter or BIOX plant would probably be of the order of US$15m.

Worcester Gold Mine (74%) This is the next “cab off the rank” in VGO’s assessment of dormant mines, and has had sufficient priority in VGO’s busy exploration schedule to be the subject of recent diamond drilling and mineral resource estimation.

The refractory ore flotation circuit at the CMC has been refurbished for Stage 1. An estimated A$2.8m further capex (versus A$5.0m Prospectus forecast) is required to commence production. The Stage 2 BFS targets 500ktpa mill treatment through the CMC giving ~55-60kozpa… …we have assumed Stage 2 production from early CY14. Capex of ~A$40m will be required. Stage1 Barbrook production will involve sale of gold concentrates to be treated off site. VGO will be investigating the option of further concentrate treatment at Barbrook for Stage 2 either through a smelting plant or BIOX plant (similar to that operated by neighbour Pan African). This option will greatly enhance project economics. The dormant Worcester Mine could provide a third mine production option for VGO.



Worcester is located 19km north of Barberton and about 50km by road from the Lily and Barbrook mines. VGO is planning to undertake a pre-feasibility study with a view to resumption of production. Worcester was historically the fifth largest producer of gold in the Barberton goldfields over a period of two decades at the beginning of the 20th century, producing ~185koz of gold. Historical underground mining took place to a depth of 180m below surface. Diagrammatic cross section of the dormant Worcester Mine

VGO has undertaken >9,000m of diamond drilling at Worcester which has allowed the establishment of a Indicated and Inferred Resource below the old workings of 2.86mt @ 3.86g/t containing 354koz of gold, over an average mining width of 15m. VGO intends to continue exploration of the Worcester shear zone in the immediate future, with a focus on infill drilling to upgrade the resource status, and further drilling along strike to extend the resource. Past production has confirmed it is a free-milling ore body. Worcester offers excellent potential as an additional ore source for VGO, and is typical of the large number of dormant mines, known gold deposits and target anomalies that VGO has in its portfolio. We understand that VGO is likely to undertake a pre feasibility study on bringing Worcester back into production. At this stage we have not assumed any future production from Worcester in our financial modelling.

Worcester has been mined to a depth of 180m below surface, mainly in the early 1900’s. VGO has undertaken drilling and has established an initial 0.35moz resource to date, and is planning a PFS to assess medium term production potential.



Other Barberton Goldfields Exploration Tenements

Source: Vantage Goldfields Ltd.

The graphic above demonstrates the potential for development of additional resources and future gold mining operations from within the VGO project portfolio in the Barberton goldfields. VGO’s strategy will be to reproduce the success of its Lily project development – maintaining an exploration focus on identifying shallow bulk mineable deposits in wide shear zones – using modern exploration techniques not yet applied to this historic gold producing region. We consider that this region offers excellent potential for success. Apart from the two headline mine development projects (Lily and Barbrook), which are expected to elevate VGO to mid-tier producer status, and Worcester which has been the subject of recent drilling and resource estimation, there are four other dormant mines which have been identified for exploration and development, while fourteen prospects with known gold mineralisation have been earmarked for future early stage exploration. It is fair to say that VGO’s entire regional ground holding has not been subjected to modern exploration techniques. To kick this off, VGO recently conducted a helicopter-borne high resolution magnetic and radiometric survey of its entire holding. According to VGO, the aeromag survey highlighted numerous targets for follow up investigation, in the form of potential extensions of known mineralised features, as well as potential new ore bodies.

VGO’s ground in the Barberton Goldfields offers a substantial project pipeline with five other dormant mines providing opportunities to reproduce the success at Lily and numerous other prospects earmarked for exploration. VGO’s recent regional aeromag survey highlighted numerous previously unidentified targets for follow up investigation.



VGO’s main priority will be on targets within the immediate vicinity of existing priority projects at Lily, Barbrook and Worcester. In that regard, the Aeromag survey produced some very encouraging data at Lily and Worcester. At Lily, the survey identified a potential westerly extension along strike of the main shear hosting the gold mineralisation, as well as possible parallel structures to the south of the Lily mine. These anomalies are currently being further investigated by surface trenching as well as drilling from the Lily mine Level 4, which is currently underway. At the Worcester Project, VGO will be following up on new structures identified, based on the already demonstrated relationship between previously mined mineralised bodies and these structures. In the current quarter VGO is planning to undertake underground mapping and sampling, accompanied by surface mapping, geochemical soil sampling and ground magnetic surveys. Comments on Other Dormant Mines The Makonjwaan mine – VGO has previously extracted 600kt of ore from this ore body in 1989-1993 through small scale mining (last systematic mining was in 1958 by others) yielding approximately 18koz. VGO plans to continue exploration of this system, which exhibits shear zones from 1m-10m width. VGO owns the Makonjwaan mill, which has been used to treat Lily ore prior to the refurbishment of the Barbrook mill. The Imperial Mine – Situated only 2km from the CMC, this mine was operated from 1909 to 1921, and yielded ~5g/t ore. In 1987, 350m of new underground development was undertaken. VGO is planning further exploration along strike and down dip of the existing ore body. The Bonanza Mine –Discovered in 1886, was last mined from 1982 to 1990. In that period it yielded 183,600t at 5.4g/t. Gold mineralisation is in two parallel fracture-hosted reefs. Apart from investigating the potential extension of the deeper ore zones, VGO sees potential in investigating the open pit oxide ore potential of this dormant mine.

New targets in the vicinity of Lily and Barbrook have come to light. Three other dormant mines have been identified as exploration targets that have had minimal or no modern exploration.



Key Assumptions used in RCR’s Financial Modelling of Projects Lily Mine – Base Case • Total tonnes treated LOM is 6.0mt giving a mine life of 14 years.

This represents total LOM extraction of 0.59moz from a current resource base of 2.03moz and reserve base of 0.48moz. This would require the conversion of a further ~1.2mt of existing 17.5mt of resources (net of reserves) to mineable reserves.

• Utilisation of extensive underground development in place. • Long hole open stoping mechanised mining to a total depth of

500m below the current Main Portal entrance. • Average head grade of 3.06g/t (current reserve grade is 3.09g/t). • Mill production expanded from current ~120ktpa to nominal

200ktpa in 2010 and 400ktpa by end of CY10, with ore treatment through the refurbished Barbrook CIP plant – now known as the Central Metallurgical Complex (“CMC”).

• Cash operating costs reducing to ~ZAR 360/t after mill expansion (A$56/t at forecast exchange rates).

• Metallurgical recovery 89-90% (actual was ~89% in 1H10). • 1H10 capital expenditure of A$5m on the CMC mill, then A$17.5m

over the second half of 2010 to fund expansion, then sustaining capex of A$6mpa.

Barbrook Mine – Base Case • Total LOM tonnes treated is assumed to be 5.5mt giving a mine

life of 11 years. This represents total LOM extraction of 0.82moz from a current resource base of 2.00moz. This would require the conversion of ~50% of existing 11.2mt of resources to mineable reserves.

• Mining will utilise significant underground development in place to support early access and extraction.

• Average long term head grade of 4.5g/t (lower in 2012 and 2013). Current Stage 1 reserve grade 4.15g.t, resource grade is 5.56g/t.

• Mill production resumed 1H11 at a throughput of ~120ktpa. Expansion to nominal 400ktpa by end of CY14, then 500ktpa , by CY15, with ore treatment through an existing flotation circuit at the Barbrook CIP plant – now known as the Central Metallurgical Complex (“CMC”).

• Cash operating costs of ~ZAR430/t after mill expansion (~A$68/t at forecast exchange rates).

• Metallurgical recovery 85%. • Initial production of a gold-containing concentrate. Concentrate

sold with net payment to VGO of 65% of contained gold. • Capital expenditure of A$3m in 2H10 to re-start small scale

production in early 2011, then A$38m over the next two years to fund expansion to 45-55kozpa. Then sustaining capex of A$6mpa.

• Capex of A$15m in 2014 to build a concentrate smelter which will lift net payment from ~65% to ~90% of contained gold.

Lily should be producing ~35kozpa by mid 2011. We have assumed a mine life of 14 years. Extensive underground mine development has been completed… …and the CMC mill refurbishment has largely been completed for 200ktpa in 2010. A further ~A$17.5m capex will drive the expansion to ~400ktpa in 2011. We are forecasting that Barbrook will be in small scale production (10-15kozpa) in early 2011. An expansion in 2014 will boost forecast output to ~55kozpa contained gold. We have assumed a mine life of 12 years. Barbrook is higher grade than Lily, but the ore is not free milling. Capex of ~A$40m has been assumed to reach ~65kozpa… …with a further A$15m in 2014 to install a concentrate smelter which will improve returns.



Capital Funding Based on the above assumptions, the Lily Project for expansion to 35kozpa will be fully funded from current cash, with no requirement for further debt or equity capital raising. The Stage 1 development capital for Barbrook (~A$3m) may require a small additional capital raising for VGO in 2H10. The proposed Stage 2 Barbrook expansion to 55kozpa will entail a more substantial capital expenditure that we estimate to total around A$40m. Capital expenditure of this level in the next 2-3 years will require further capital to be raised in addition to cashflow generated from the Lily Project. The total amount of capital to be raised, if the expanded Barbrook Project proceeds according to our assumptions, depends significantly on the proceeds of the expected sell-down of the Lily Project equity from current 85% to 74%, which we have assumed takes place around 1Q12. Based on our base case valuation of the Lily Project, the 11% stake to be transferred to a BEE would fetch around A$8.6m at market valuation. An injection of cash in 1Q12 to coincide with the sell-down would be the ‘ideal’ case. With this cash injection, there would probably be no further equity funding required for Barbrook if a modest A$11m debt funding facility was put in place in the first half of 2012 to fund the Barbrook Project expansion and to provide working capital. We emphasise that this BEE sell down is an ‘ideal’ case. It is more likely (and assumed in our cash flow modelling) that the in-coming BEE partner cannot provide up front capital to fund the 11% stake in Lily at market valuation. In this scenario, the project owner will be expected to fund the BEE into the project with subsequent repayment of the funding loan through disproportionate return of project cashflows to VGO. In this case, with no upfront cash is received in the BEE sell down of Lily, we have assumed a total funding requirement for VGO of around A$20m, which is likely to require an equity raising as well as a debt facility in 2012. We have assumed A$11m debt and the balance equity.

Lily expansion will be funded from current cash and cash flow. Barbrook Project ramp up to ~55kozpa will require further project finance. Total capital to be raised is subject to any inflows from the Lily BEE sell-down to 74% - our base case assumption assumes the BEE sell-down does not generate immediate cash and a total ~A$20m debt/equity financing is required in 2012.



Mine Life Sensitivity We have modelled the project NPV’s on a range of mine life assumptions – shown in the graphs below as total gold extracted over the projected mine life. Lily Mine (current 85%) – effect of mine life on project NPV

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.4 0.5 0.6 0.7 0.8

Total gold mined (moz)

Proj

ect N

PV (A

$/sh

are

- un

dil.) BASE CASE

Barbrook Mine (76%) – effect of mine life on project NPV

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.52 0.67 0.82 0.97 1.12

Total gold mined (moz)

Proj

ect N

PV (A

$/sh

are

- un

dil.)

BASE CASE

Our base case for Lily is a 14 year mine life - assumes a total of 0.6moz is mined from an existing Lily resource of 2.0moz and currently established reserves of 0.48moz. NPV increases significantly if additional resources can be mined. Our base case for Barbrook is a 12 year mine life – assuming a total of 0.82moz is mined from a total current resource of 2.0moz. Project NPV has been discounted by 30% due to pre-production status and BFS completed only for Stage 1.



Detailed Operating and Financial Data – Lily Mine Lily Mine (100%)

Year End 31 December: 2009a 2010F 2011F 2012F 2013F 2014F 2015F 2016F 2017F 2018F

Assumptions

Average Gold Price :US$/oz 964 1149 1086 1024 962 926 936 945 955 964

Exchange Rate AUD/USD 0.80 0.86 0.81 0.80 0.80 0.80 0.80 0.80 0.80 0.80Exchange Rate USD/ZAR 8.40 7.75 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00

Mill ProductionOre Treated :'000t 130.7 169.0 327.0 420.0 400.0 400.0 400.0 400.0 400.0 400.0Head Grade :g/t 2.33 2.10 3.08 2.93 3.08 3.17 3.10 3.10 3.10 3.10Recovery :% 76 89 90 90 90 90 90 90 90 90Recovered grade :g/t 1.77 1.87 2.77 2.64 2.77 2.85 2.79 2.79 2.79 2.79Gold Produced :koz 7.4 10.2 29.1 35.6 35.7 36.7 35.9 35.9 35.9 35.9

Profit & Loss

Revenue :A$m 9.0 13.7 39.6 46.5 43.6 42.6 41.9 42.3 42.7 43.2Total Operating Cost :A$m 9.8 12.8 22.0 22.3 22.4 22.6 22.8 23.1 23.3 23.5Royalty :A$m 0.0 0.4 1.2 1.4 1.3 1.3 1.3 1.3 1.3 1.3Depreciation :A$m 0.4 0.5 2.2 3.1 3.5 4.2 4.7 5.3 6.0 6.8PBIT :A$m -1.2 0.0 14.2 19.8 16.3 14.5 13.1 12.7 12.2 11.6

Tax :A$m 0.0 0.1 4.3 5.9 4.9 4.4 3.9 3.8 3.7 3.5Net Profit :A$m -1.2 -0.2 9.9 13.8 11.4 10.2 9.2 8.9 8.5 8.1

Cash FlowAdd Back - Depreciation :A$m 0.4 0.5 2.2 3.1 3.5 4.2 4.7 5.3 6.0 6.8Less - Capex :A$m 2.0 17.0 10.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0Free Cash Flow :A$m -2.8 -16.7 2.1 10.9 9.0 8.3 7.8 8.2 8.5 8.9

Unit Operating Costs/oz

Cash Operating Cost (C1) :US$/oz 1138.55 1082.28 612.59 497.72 502.38 493.02 508.94 514.05 519.21 524.42

Royalty :US$/oz 0.00 35.0 33.1 31.2 29.3 27.9 28.0 28.3 28.6 28.9Total Cash Cost (C2) :US$/oz 1138.55 1117.27 645.64 528.91 531.70 520.87 536.94 542.33 547.78 553.28

Depreciation/Amort :US$/oz 46.0 41.6 60.1 68.7 79.6 91.1 103.6 117.5 133.0 150.5Total Production Cost (C3) :US$/oz 1184.52 1158.89 705.76 597.61 611.31 611.95 640.58 659.83 680.75 703.74

Unit Operating Costs/t

Total Cash Operating Costs :ZAR/t 536.0 508.8 437.0 337.6 358.2 361.8 365.5 369.1 372.8 376.6Total Cash Operating Costs :A$/t 75.0 75.9 67.3 53.0 56.0 56.5 57.1 57.7 58.3 58.8



Detailed Operating and Financial Data – Barbrook Mine Barbrook Mine (100%)

Year End 31 December: 2009a 2010F 2011F 2012F 2013F 2014F 2015F 2016F 2017F 2018F

Assumptions

Average Gold Price :US$/oz 964 1149 1086 1024 962 926 936 945 955 964

Exchange Rate AUD/USD 0.80 0.86 0.81 0.80 0.80 0.80 0.80 0.80 0.80 0.80Exchange Rate USD/ZAR 8.40 7.75 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00

Mill Production

Ore Treated :'000t 0.0 0.0 102.0 123.0 270.0 400.0 500.0 500.0 500.0 500.0Head Grade :g/t 0.00 0.00 4.64 3.69 4.00 4.00 4.50 4.50 4.50 4.50Recovery :% 0 0 80 80 85 85 85 85 85 85Recovered grade :g/t 0.00 0.00 3.71 2.95 3.40 3.40 3.83 3.83 3.83 3.83Gold Produced :koz 0.0 0.0 12.2 11.7 29.5 43.7 61.5 61.5 61.5 61.5

Concentrate Payment Factor :% na na 63.0 63.0 65.0 90.00 90.00 90.00 90.00 90.00

Profit & Loss

Revenue :A$m 0.0 0.0 10.3 9.5 22.9 45.6 64.7 65.4 66.0 66.7Total Operating Cost :A$m 0.0 0.0 6.2 7.1 14.1 26.0 33.9 34.2 34.6 34.9Royalty :A$m 0.0 0.0 0.3 0.3 0.7 1.4 1.9 2.0 2.0 2.0Depreciation :A$m 0.0 0.0 0.3 0.8 2.7 4.6 7.1 7.8 8.6 9.5PBIT :A$m 0.0 0.0 3.5 1.3 5.4 13.5 21.8 21.4 20.9 20.3

Tax :A$m 0.0 0.0 1.0 0.4 1.6 4.1 6.5 6.4 6.3 6.1Net Profit :A$m 0.0 0.0 2.4 0.9 3.8 9.5 15.2 15.0 14.6 14.2

Cash Flow

Add Back - Depreciation :A$m 0.0 0.0 0.3 0.8 2.7 4.6 7.1 7.8 8.6 9.5Less - Capex :A$m 0.0 3.0 10.0 30.0 18.0 6.0 6.0 6.0 6.0 6.0Free Cash Flow :A$m 0.0 -3.0 -7.3 -28.3 -11.5 8.1 16.4 16.8 17.2 17.7

Unit Operating Costs/oz

Cash Operating Cost (C1) :US$/oz na na 412.89 483.73 382.10 476.31 440.86 445.29 449.76 454.27

Royalty :US$/oz na na 20.5 19.4 18.6 25.0 25.3 25.5 25.8 26.0Total Cash Cost (C2) :US$/oz na na 433.42 503.08 400.71 501.32 466.13 470.81 475.53 480.31

Depreciation/Amort :US$/oz na na 18.4 52.3 71.9 84.9 92.8 101.7 111.8 123.3Total Production Cost (C3) :US$/oz na na 451.82 555.39 472.63 586.20 558.95 572.52 587.30 603.61

Unit Operating Costs/t

Total Cash Operating Costs :ZAR/t na 0.0 396.1 367.5 334.2 416.6 433.8 438.1 442.5 447.0Total Cash Operating Costs :A$/t na 0.0 61.0 57.7 52.2 65.1 67.8 68.5 69.1 69.8



Group Consolidated Operating and Financial Data

Vantage Goldfields Limited

ASSUMPTIONS 2009 2010F 2011F 2012F 2013F FINANCIAL RATIOS 2009a 2010F 2011F 2012F 2013FA$/US$ 0.80 0.86 0.81 0.80 0.80US$/Rand (SA) 8.40 7.75 8.00 8.00 8.00 Net debt/equity (%) 9% -9% -9% 3% -9%Gold Price (US$/oz) 981 1,149 1,086 1,024 962 Net debt/ net debt + equity (%) 8% -10% -10% 3% -10%

Current ratio (x) -10.6 5.0 2.3 3.1 6.0EBIT/interest (x) -26.9 na na 27.2 30.5

EQUITY PRODUCTION & COSTS Debt/operating cashflow (%) na na 0% 64% 44%Lily Gold Production (koz) 6.3 8.6 24.8 27.1 27.1 Exploration/total overhead (%) 0% 0% 0% 0% 0%Barbrook Gold Production (koz) 0.0 0.0 9.0 8.6 21.8 EV/EBITDA (x) -4.7 -14.9 0.7 0.6 0.5VGO Total Gold Production (koz) 6.4 8.6 33.8 35.7 48.9 Market cap/net cash (x) -11.0 11.2 10.6 -31.5 11.0

Market cap/book (x) 6.8 1.7 1.2 1.1 0.8Ave C1 Cash Cost (US$/oz) 1173 1092 565 499 457Ave C3 Total Cost (US$/oz) 1196 1169 644 592 558

PROFIT AND LOSS (A$m) FINANCIAL SENSITIVITIESRevenues 7 12 46 47 60Operating costs -9 -11 -24 -22 -28 % Change in EPS for a 10% increase in:Depreciation/amortization 0 0 -2 -3 -5Exploration Expensed 0 0 0 0 0 AUD/USD -16% -25% -25%Corporate -1 -2 -2 -2 -2 Gold Price 17% 28% 27%Other (incl. Royalties) 0 0 -1 -1 -2EBIT -3 -1 17 19 24Interest 0 0 0 1 1 % Change in NPV for a 10% increase in forecast mine lifeOperating profit/loss -3 -1 17 18 23 commodity assumptions for:Tax 0 0 -4 -5 -7 Base + 10%Minorities 0 0 0 0 0 A$/sh. A$/sh. %Net profit/loss -3 -1 13 13 16 Gold Price 0.55 0.69 25%Net abnormals/extaordinaries 0 0 0 0 0Net profit/loss (reported) -3 -1 13 13 16

BALANCE SHEET (A$m) Cash and deposits 2 6 7 9 17Total current assets -4 6 7 9 17 PP&E 4 21 35 59 72Total non-current assets 19 37 52 78 93Total assets 15 43 59 87 111Total current liabilities 0 1 3 3 4 Reclamation reserves 0 0 0 0 0 Long term debt 2 0 0 11 11Total non-current liabilities 5 0 0 22 22Total liabilities 5 1 3 25 26Equity 10 42 56 62 85

Total debt 2 0 0 11 11Net debt 6 -6 -7 2 -6Average shares (fully diluted) (m) 133 236 236 236 236

FLOW OF FUNDS (A$m)EBITDA -3 -1 19 21 29Cash flow from operating activities Operating surplus -2 1 22 24 32 Corporate -1 -2 -2 -2 -2 Net borrowing cost 0 -1 0 -1 -1 Net tax paid 0 0 -4 -5 -6 Net exploration paid -1 0 -2 -2 -2 Other non cash items 1 2 2 3 5Net cash from operating activities -3 0 17 17 25Cash flow from investing activities Capital expenditure -3 -18 -16 -27 -18 Asset Sales & Other -1 0 -2 1 1Net cash from investing activities -4 -18 -17 -26 -17Cash flow from financing activities Net proceeds from issue of shares 0 30 0 0 0 Dividends paid 0 0 0 0 0 Net proceeds from borrowings 0 -4 0 11 0Net cash from financing activities 0 26 0 11 0Net change in cash -7 8 0 2 8

Year YearYEAR END: 31 December



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RCR received referral fees in relation to recent capital raisings for Adamus Resources Limited, Globe Uranium Limited, Uranex NL, PepinNini Minerals Limited and Toro Energy Limited. At the date of this report, neither RCR, nor any of its associates, hold any interests or entitlements in shares mentioned in this report with the exception that either or both of John Wilson (either directly or through Resource Capital Investments Pty Limited (RCI)), or RCI, as trustee of the Resource Capital Investments Fund owns shares in BHP Billiton Ltd and Rio Tinto Plc. Analyst Certification: All observations, conclusions and opinions expressed in this report reflect the personal views of RCR analysts and no part of the analyst’s or RCR’s compensation was, is, or will be, directly or indirectly related to specific recommendations or views expressed in the report. Officers, directors, consultants, employees and independent contractors of RCR are prohibited from trading in the securities of U.S. companies that are, or are expected to be, the subject of research reports or other investment advice transmitted to RCR clients for a blackout window of 14 days extending before and after the date such report is transmitted to clients or released to the market. Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated and Inferred Resources: RCR publishes mineral resources based on standards recognized and required under securities legislation where listed mining and exploration companies make their exchange filings and uses the terms “measured", "indicated" and "inferred" mineral resources. U.S. investors are advised that while such terms are recognized and required under foreign securities legislation, the SEC allows disclosure only of mineral deposits that can be economically and legally extracted. United States investors are cautioned not to assume that all or any part of measured, indicated or inferred resources can be converted into reserves or economically or legally mined. We recommend that US investors consult Securities and Exchange Commission Industry Guide 7 – “Description of Property by Issuers Engaged or to Be Engaged in Significant Mining Operations” for further information about the use of defined terms and the presentation of information included in this report.

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Resource Capital Research Company Revie• VGO’s total focus is to maximise the potential from VGO’s strategic position in the historically prolific Barberton goldfields in South