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NAME OF APPLICANT: AFFORDABLE OUTCOMES CC

REFERENCE NUMBER: FS 30/5/1/1/2/10261 PR

PROSPECTING WORK PROGRAMME

SUBMITTED FOR A PROSPECTING RIGHT

APPLICATION WITH BULK SAMPLING

AS REQUIRED IN TERMS OF SECTION 16 READ TOGETHER WITH

REGULATION 7(1) OF THE MINERAL AND PETROLEUM RESOURCES

DEVELOPMENT ACT (ACT 28 of 2002)

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STANDARD DIRECTIVE

All applicants for mining rights are herewith, in terms of the provisions of Section 16 and in

terms of Regulation 7(1) of the Mineral and Petroleum Resources Development Act, directed

to submit a Prospecting Work Programme, strictly under the following headings and in the

following format together with the application for a prospecting right.

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1. REGULATION 7.1.(a): FULL PARTICULARS OF THE APPLIC ANT Table 1: Applicant’s Contact Details

ITEM COMPANY CONTACT DETAILS

Name AFFORDABLE OUTCOMES CC Tel no 053 831 8752 Fax no: 053 831 8737 Cellular no 082 496 1452 E-mail address sakkiegerber@vodamail.co.za Postal address

P.O Box 110447 Hadison Park, 8306

Table 2: Consultant’s Details

ITEM CONSULTANT CONTACT DETAILS (If applicable)

Name ROCK RUNNER CONSULTATNS Tel no 053 831 7634 Fax no: 086 248 5383 Cellular no 076 186 2984 / 072 141 4164 E-mail address admin@rockrunner.co.za Postal address

P.O Box 3226 Kimberley, 8300

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2. REGULATION 7(1)(b): PLAN CONTEMPLATED IN REGULA TION 2(2)

SHOWING THE LAND TO WHICH THE APPLICATION RELATES • Survey

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• Topographic The application area is a flat open landscape with vegetation characteristically belonging to the Kimberley Thorn Bushveld Biome.

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• Locality The farm Speculatie is situated approximately 17.9 km outside Kimberley and can be reached via the N8 National Road to Bloemfontein.

3. REGULATION 7(1)(c): THE REGISTERED DESCRIPTION O F THE LAND TO WHICH THE APPLICATION RELATES Farm Number: 217 Farm Name: Speculatie Portion Number: Remainder Magisterial District: Boshof Province: Free State Now a certain piece of land on the farm Rooifontein 1722, situated in the magisterial district of Boshof, Free State Province.

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4. REGULATION 7(1)(d) and (e): THE MINERAL OR MINER ALS TO BE PROSPECTED FOR Table 4.1: Minerals to be prospected for

ITEM DETAIL

Type of mineral(s) Diamonds in General (Code: D) Type of minerals continued Alluvial Diamonds (Code:DA) Type of minerals continued Kimberlite Diamonds (Code: DK) Locality (Direction and distance from nearest town)

The farm Speculatie is situated approximately 17.9 km outside Kimberley and can be reached via the N8 National Road to Bloemfontein

Extent of the area required for prospecting 327.4069 ha (Three hundred and twenty seven comma four zero six nine hectares)

Geological formati on Olifantsfontein Kimberlite Pipe

4.2 Description why the Geological formation substa ntiates the minerals to be prospected for (provide a justification as to why the geological formation supports the

possibility that the minerals applied for could be found therein)

The Olifantsfontein Kimberlite Pipe occurs on the Remaining Extend of the farm Speculatie 217, situated on the outskirts of Kimberley in the privately owned Rooifontein nature reserve. The kimberlite was discovered in the 1880’s. A large excavation with accompanying dumps is evidence of past prospecting and mining activities. Archived documents revealed that diamonds was recovered from the kimberlite in the early 1880’s.

The stratigraphy of the Kimberley area and immediate surrounding area is relatively simple. The bedrock consists of +2 700 million year old Ventersdorp lavas. Prior to the Karoo period the Vaal River cut a network of channels closely approximating the present floodplain. These channels were then utilized by the subsequent glaciers and were finally filled with Dwyka tillites and shales. Magmatic intrusions are in the form of Karoo-aged dolerite sills and dykes and Cretaceous-aged kimberlites.

Alluvium and surficial deposits that are generally made up of red Hutton sand and clayey silt and sand cover a large portion of the project area. The Olifantsfontein Kimbrlite is a Bilobate Group 1 Kimberlite,, which has intruded at the contact of Ecca Shales of the Karoo Sequence and the Karoo-aged dolerite sill.

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The approximate 1.5 ha Olifantsfontein Kimberlite is covered by up to 1 m of reddish brown soil. Below the soil is a 1 to 3 m thick layer of calcrete which graded into clacretised kimberlite and then into highly weathered yellowish kimberlite.

4.3 Attach a geological map that justifies the desc ription why there is a

possibility that the minerals applied for could occ ur on the land concerned.

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5. REGULATION 7(1)(f): A DESCRIPTION OF HOW THE MIN ERAL RESOURCE AND MINERAL DISTRIBUTION OF THE PROSPECTIN G AREA WILL BE DETERMINED AND REGULATION 7(1)(h): ALL PLANNED PROSPECTING ACTIVIT IES MUST BE CONDUCTED IN PHASES AND WITHIN SPECIFIC TIMEFRAM ES AND REGULATION 7(1)(i):TECHNICAL DATA DETAILING THE PRO SPECTING METHOD OR METHODS TO BE IMPLEMENTED AND THE TIME RE QUIRED FOR EACH PHASE OF THE PROPOSED PROSPECTING OPERATIO N

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PHASE ACTIVITY

(what are the activities that are planned to achieve optimal prospecting)

SKILL(S) REQUIRED

(refers to the competent personnel that wil l be employed to achieve the required results)

PLANNED TIMEFRAME (in months ) for the activ ity

OUTCOME

(what is the expected deliverable)

OUTCOME TIMEFRAME (deadline for the expected outcome to be delivered)

QAUALIFIED SIGNATORY

What technical expert wil l sign off on the outcome?(eg. geologis ts, mining engineers , surveyors,

etc )

e.g.1 Non -Invasive Prospecting

Geophysical Survey

Geologist / Mineral economist

Month 1 – 6 Flight Plans, Flight Line and Traverse Lines

Digital Data gathered

Month 6 Geophysicist

Non -Invasive Prospecting

Literature Survey

Geologist Month 1 – 6 Maps or Plans and detailed report on results

Month 6 Geologist

Invasive prospecting

Boreholes,

Geologist Month 6-24 Borehole core data Month 24 Geologist

e.g.2 Trenches and/ Geologist Month 7- 24 Detailed report on sidewall profiles, volumes, average grades, locality

Month 24 Geologist

e.g.3 Excavations Works foreman / labourers / drilling con.

Month 7- 24 sidewall mapping, lithological profiles

Month 24 Geologist

e.g.4 Non -Invasive prospecting

Analytical Desktop Studies

Mine Economist / Geologist Month 24-36 Geological or pre-feas ibility Reports

Resource Statements , Geological Maps/Plans

Month 36

Geologist / Mineral Economist (professionally Qualified Persons)

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The table below incorporates the information requir ed in respect of Regulations 7(1)(f), 7(1)(h) and 7 (1)(i): Table 5.1

Phase Activity (what are the activities that are planned to achieve optimal prospecting)

Skill(s) required (refers to the competent personnel that will be employed to achieve the required results)

Timeframe (in months) for the

activity)

Outcome (What is the expected deliverable, e.g. Geological report, analytical results, feasibility study, etc.)

Timeframe for outcome

(deadline for the expected outcome to be delivered)

What technical expert will sign off on the outcome?

(e.g. geologist, mining engineer, surveyor, economist, etc)

Phase 1 Geological Desktop Study Geologist Months 1 to 3 • External diamond occurrence apart from the pipe

• Geological maps

3rd month Project Geologist

Phase 2 Drilling Project Geologist Months 4 to 8 Location of diamond bearing bodies/gravel

8th month Chief Geologist

Phase 3 Bulk Sampling Project Geologist Months 9 to 18 Grade per hundred ton Mine feasibility

18th month Chief Geologist

Phase 4 Report writing Project Geologist Months 19 to 24 Geological Report 24th month Chief Geologist

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6. REGULATION 7(1)(g): A DESCRIPTION OF THE PROSPEC TING METHOD OR METHODS TO BE IMPLEMENTED

(i) DESCRIPTION OF PLANNED NON-INVASIVE ACTIVITIES:

(These activities do not disturb the land where prospecting will take place e.g. aerial photography, desktop studies, aeromagnetic surveys, etc) Phase 1 – Geological Desktop studies (months 1 to 3) Geological desktop studies will be conducted over the application area to establish whether or not other kimberlite bodies and/or alluvial gravel beds are present on the application area. The methodology to be used for this purpose is current and updated geological information regarding the Speculatie farm, satellite imagery and field visits. The information obtained are then mapped to obtain a graphical model of the area to be used in the report to be drafted explaining all results obtained during this phase with recommendations and locality of bore holes to be drilled during phase 2. Phase 4 – Geological Reporting (months 19 to 24) Detailed geological models will be drafted using all prospecting results and information obtained. These models will be used as graphical illustrations within the report written. The Geological Report to be written will contain all relevant information in regard to the prospecting results obtained with geological interpretations and recommendations for future reference.

(ii) DESCRIPTION OF PLANNED INVASIVE ACTIVITIES: (These activities result in land disturbances e.g. sampling, drilling, bulk sampling, etc) Phase 2 – Drilling (4 to 8 months) The drill hole locations needs to be determined through the outcome of phase 1 geological study and reporting. Drilling will only be done on determined possible diamond carrying bodies to a recommended depth or till bed rock is reached. Reverse Cycle Percussion drilling be initially used for the drilling of 10 holes (each with an approximate depth of 20 m), but where kimberlite bodies are found the holes will be further drilled with diamond core drilling (core drill holes will have each a maximum depth of 40 m). The core extracted will be sampled and sent for laboratory analysis for the determination of possible diamond content and approximate carats per hundred ton.

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Phase 3 – Bulk Sampling (6 to 10 months) This phase will consist of bulk sampling and diamond recovery test work on the kimberlite bodies to determine the commercially feasibility of the body. The results obtained from phases 1 and 2 will indicate the location of the bulk samples. The bulk sampling / trial mining needs to be done till 2 000 carats has been obtained in order to determine the exact diamond carrying potential of the area (kimberlite and alluvial) for the feasibility of the mine to be concluded and the determination to continue with a Mining Right License.

This will be done through the separate testing of 4 bulk samples with each a dimension of 20 x 10 x 5 m deep by means of machinery and labour. Excavators are used to remove the topsoil (rooikoppie) as well as possible diamondiferous gravel deposits. The gravels go through a scrubber and into a rotating pan, where it is mixed with water to obtain a puddle. As a result of the mixing and rotating in the pan, the heavier minerals are pushed towards and extraction point and tapped, called concentrate. The lighter material remain in suspension and overflows out of the center of the pan. The concentrate undergoes a final recovery by grease table and hand sort.

Commitment to provide addendums in respect of addit ional prospecting activities

I herewith commit to provide the Department of Mineral Resources with an

addendum in respect of both the EM Plan and Prospecting work Programme regarding any future in-fill prospecting required but not described above, prior to undertaking such activities. The addendum will cover all the Regulations as per the Prospecting Work Programme.

I agree that the addendums will provide for similar activities only and if the

scope changes I would be required to apply in terms of Section 102 of the MPRDA for an amendment of the Prospecting Work Programme

Mark with X

ACCEPT X

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(iii) DESCRIPTION OF BULK SAMPLING ACTIVITIES This activity requires that an application IN TERMS OF Section 20 of the Act is specifically included in your application for a prospecting Right and cannot be proceeded with if such permission is not specifically granted. (Bulk sampling is a sampling technique ONLY- it cannot be used to conduct mining operations. The following table must be completed for Bulk Sampling) Table 6.1: Bulk Sampling Activities

ACTIVITY DETAILS

Number of pits/trenches planned 4 Bulk Samples

Dimensions of pits/trenches, per pit/trench

Number of pits/trenches

Length Breadth Depth

4 20 x 10 x 5

Locality To be determined through Phases 1 and 2

Volume Overburden (Waste) ± 360 m³

Volume Ore ± 600 m³

Density Overburden 1.8

Density Ore 1.45

Phase(s) when bulk sampling will be required Phase 3

Timeframe(s) Months 6 to 10

NOTE: Detailed description of the required costs MU ST be indicated in the cost estimate as per Regulation 7(1) (k)

o The topsoil and overburden removed shall be stored separately next to the relevant block for rehabilitation purposes.

o Gravel excavated is screened to remove the rough boulder material from the fined gravels. The latter is then transported to the processing plant while the rough material is used form initial backfilling

o At the processing plant is the gravel washed in a rotating pan to obtain a concentrate of heavy material. The lighter material is discarded with the puddle, which is a by-product of diamond recovery processes and treated with a dewatering screen. The ‘dry mud’ will be used with the boulder material for initial backfilling while the excess water is recycled and stored within the mentioned evaporation dam.

o The concentrate obtained for the washing plant is now being treated at the sorting/recovery plant where all diamond are recovered and the surplus used for further back filling purposes.

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o After all backfilling occurred shall the overburden and topsoil be evenly spread

over the area to finalize the rehabilitation.

o Continuous inspections to the rehabilitated area will be conducted to monitor the re-vegetation rate as well as to remove all invader/pioneer plant species that may also establish themselves in the area

Commitment to provide for an addendum in respect of additional bulk sampling activities

I herewith commit to provide the Department of Mineral Resources with an

addendum to the Prospecting Work Programme, and an Environmental Management programme for approval prior to undertaking any future bulk sampling activities not described above.

Mark with X

Accept X

7. REGULATION 7(1)(j)(i):DETAILS WITH DOCUMENTARY P ROOF OF THE APPLICANT’S TECHNICAL ABILITY OR ACCESS THERETO TO CONDUCT THE PROPOSED PROSPECTING OPERATION 7.1 Competencies to be employed in terms of the Min e Health and Safety Act

COMPETENCIES TO BE EMPLOYED (List the legal appointments that will be made in terms of the Mine Health and Safety Act, appropriate for the type of operation)

Health and Safety representative First Aid officer Electrician Occupational Health Practitioner (Contractual)

I herewith confirm that I, in Table 9.1 have budget ed and financially provided for the required skills listed above. CONFIRMED (Mark with an X) X

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7.2 List of Appropriate equipment at your disposal (If Applicable) Table D: Appropriate Equipment Available Excavators Loaders Bulldozer Dumber Trucks Crusher Vibrating Screen 1 x 16ft pan Dewatering Screen Recovery plant

7.3 Technical skills

The applicant has the technical ability and back-up (please find attached) to undergo such prospecting operations.

8. REGULATION 7(1)(j)(ii):DETAILS WITH DOCUMENTARY PROOF OF A BUDGET AND DOCUMENTARY PROOF OF THE APPLICANT’S FIN ANCIAL ABILITY OR ACCESS THERETO

AND

9. REGULATION 7(1)(k) A COST ESTIMATE OF THE EXPEND ITURE TO BE

INCURRED FOR EACH PHASE OF THE PROPOSED PROSPECTING OPERATION (remember to also include prospecting fees)

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Table 9.1

ACTIVITY

YEAR 1 Expenditure

(R’)

YEAR 2 Expenditure (R’)

YEAR 3 Expenditure (R’)

YEAR 4 Expenditure (R’)

YEAR 5 Expenditure (R’)

PHASE 1 (3 months)

Geological study 50 000 Report Writing 25 000 PHASE 2 (3 months) Drilling 130 000 Sample Analyzes 150 000 Geologist 90 000 PHASE 3 (4 months) Bulk Sampling of phase 280 000 420 000 Deposit Evaluation 64 000 96 000 Logistics 76 000 114 000 Rehabilitation 100 000 150 000 Phase 6 (2 months) Geological Report 60 000

Annual Total 965 000 840 000

Total Budget 1 805 000

NOTE! If any person (including the applicant) prov ides services in any job or skills category at a reduced rate or free of charge , then such person’s Curriculum Vitae (CV) must be attached as documentary proof of the technical ability available to the applicant.

10. FINANCIAL ABILITY TO GIVE EFFECT TO THE WORK PR OGRAMME

10.1 The amount required to finance the Work Progra mme. (State the amount required to complete the work)

The maximum amount necessary to finance the prospecting activities is R1 805 000.00, but should not be required to such a high as selling of the diamonds should cover the prospecting cost and also determine the feasibility of the future mine.

10.2 Detail regarding the financing arrangements (Elaborate on the financing arrangements, in terms of where the finance will be sourced, extent to which the financing has been finalized and on the level of certainty that such financing can be secured.)

The applicant has the financial resources to finance the project.

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10.3 Confirmation of supporting evidence appended (Attach evidence of available funding and or financing arrangements such as balance sheets, agreements with financial institutions, underwriting agreements, etc. and specifically confirm in this regard what documentation has been attached as appendices).

Please find attached the supporting documentation for the applicant’s financial and technical resources.

11 Confirmation of the availability of funds to imp lement the proposed project. The applicant has the financial resources to finance the project.

12 I herewith confirm that I have budgeted and fina ncially provided for the total budget as identified in Regulation 7(1)(k). Confirmed (Mark with an X) X

13 REGULATION 7(1) (m): UNDERTAKING, SIGNED BY THE APPLICANT, TO

ADHERE TO THE PROPOSALS AS SET OUT IN THE PROSPECTI NG WORK PROGRAMME

Table: 13.1 Herewith I, the person whose name and identity numb er is stated below, confirm that I am the Applicant or the person autho rised to act as representative of the Applicant in terms of the res olution submitted with the application, and undertake to implement this prospe cting work programme and adhere to the proposals set out herein.

Full Names and Surname

ESIAS JEREMIA GERBER Identity Number

701118 5189 081