Presentation: Acquisition of Wits Gold - The Vault • Wits Gold Loan is to be repaid first from...

“We are One”

11 December 2013

Acquisition of Wits Gold

Securing the long term future of Beatrix

South Rand Goldfields Burnstone Mine

Wits Gold • A South African focussed,

fully empowered, junior gold developer and emerging producer

• World’s fifth largest gold resource attributable to a single company (157 Moz)

• Total Probable Reserves of 8.5 Moz gold (55.1Mt @ 4.8g/t)

• JSE, TSX listed: WGR; ADR: WIWTY

• Shares in issue: 34.5 million

2

The Transaction • Sibanye Gold has offered to acquire Witwatersrand Consolidated Gold

Resources Limited (“Wits Gold”) for R407 million in cash • The transaction

– Is consistent with Sibanye Gold’s stated intent of ensuring a sustainable dividend yield

– Creates value for all stakeholders through logical regional consolidation – Reinforces Sibanye Gold’s dominant position in the Southern Free State – Potentially secures an additional low cost production source in another

Witwatersrand Basin operating region – Shifts Sibanye Gold’s operating profile towards shallower operations

• Wits Gold’s assets consist of: – Various gold and uranium mineral rights, the majority contiguous to Beatrix – An extensive pipeline of projects in the Southern Free State and contiguous

with Beatrix – The right to acquire the Burnstone mine in the South Rand Goldfield

3 Securing the future of Beatrix through value accretive consolidation

Mineral Resources Mt g/t Moz

Joel (HAR) 21.6 6.9 4.8 Beatrix (SGL) 53.5 6.5 11.1 Bloemhoek (WGR) 63.1 6.9 14.0 DBM (WGR) 61.3 5.5 10.8 Robijn (WGR) 22.6 5.8 4.2 As of June 2012, all SAMREC-Compliant

The Southern Free State Goldfields

Mineral Reserves Mt g/t Moz

Joel (HAR) 3.0 5.6 0.5 Beatrix (SGL) 34.0 4.5 4.9 Bloemhoek (WGR) 31.6 5.3 5.4 DBM (WGR) 23.5 4.1 3.1 As of June 2012, all SAMREC & NI43-101 compliant

Sibanye

4 At least 1 Moz directly extractable from Beatrix North Section

Transaction details

Offer

• Sibanye Gold to acquire 100% of Wits Gold by way of scheme of arrangement

– Final decision to invest in the Burnstone Project/Mine subject to finalisation of due diligence

• Wits Gold has secured irrevocables from 5 shareholders, amounting to 57%, to vote in favour of the transaction

Offer consideration

• Payment of R 407 million on completion of the transaction , to be settled in cash

• Offer equates to R11.55 per Wits Gold share, representing a 35% premium to the 30 day VWAP as at 5 November 2013, when non-binding terms were agreed

• Due diligence by the Sibanye Gold team has confirmed that the transaction price represents a significant discount to the inherent value of Wits Gold

Key Conditions Precedent

• Approval from Sibanye Gold’s 3rd party debt providers • Regulatory approvals including Competition Commission, JSE, TSX,

SARB • Approval by at least 75% of Wits Gold shareholders • Wits Gold Board obtains fair and reasonable opinion on transaction 5

Rationale • Secures key resources adjacent to Beatrix, which will enable an

extension of Beatrix’s LOM • Possible utilisation of existing infrastructure at Beatrix will enhance the

value of Wits Gold’s advanced Southern Free State projects • The tax base at Beatrix can be used to enhance the economics of

developing these projects • Prior joint investigations by Sibanye Gold and Wits Gold have identified

higher grade payshoots extending through Bloemhoek which are readily accessible from Beatrix 3 shaft

• Beisa North and South will provide critical mass to the possible development of Beatrix West Section into a uranium mine

• Possibilities of further regional consolidation • Possible acquisition of Burnstone will enhance Sibanye Gold’s

production profile by increasing its reach into the South Rand Goldfield


DBM – an advanced project • De Bron Merriespruit (“DBM”) contains

relatively shallow gold mineralisation in multiple reefs from 480m below surface

• Independent pre-feasibility completed in June 2012

• 3.1 Moz @ 4.1g/t declared as a reserve • Nameplate production planned at 200 000

oz/yr • 4 years to first production from project start • $629/oz total operating cost (average over

LOM) • Bankable study on track for completion by

the end of 2013 • Metallurgical plant synergies provided by

Beatrix will enhance the project by approximately R642 million

7

Source: Wits Gold - Turgis PFS

Securing the future of Beatrix through value accretive consolidation

DBM valuation

Source: Wits Gold - Turgis PFS (Note: Pre-tax NPV with 5% state royalty rate)

8

DBM Valuation Sensitivity

Gold Price (R/kg) 350 000 400 000 450 000 500 000

IRR 22.2% 28.0% 33.1% 37.6%

NPV (10%) (R'm) 2 284 3 701 5 120 6 541


Bloemhoek – technical detail summary • Snowden’s completed the PFS in October

2009

• Medium depth: 1 300 – 2 400m,

• 25 year LOM project containing same reefs as adjacent operations (Beatrix & Joel)

• New properties acquired in December 2011 so as to extend southern high grade resource channel

• Potential synergies with DBM Project and Beatrix

• Production planned at 220 000oz/yr

• 7 years to first production from project start

• Operating cost estimated at $406/oz (2009 terms)

• Included within DBM Mining Right application area


DBM and Bloemhoek Mineral Resource

Indicated and Inferred Resource

2012

Gold Uranium Tonnes

(Mt) Grade (g/t)

Content (Moz)

Tonnes (Mt)

Grade (kg/t)

Content (Mlb)

INDICATED Bloemhoek 47.8 6.9 10.6 DBM 41.8 5.5 7.4 21.7 0.17 8.2 Total Indicated 89.6 6.3 18.0 21.7 0.17 8.2

INFERRED Bloemhoek 15.3 6.9 3.4 63.1 0.15 20.7 DBM 19.5 5.4 3.4 12.5 0.17 4.6 Total Inferred 34.8 6.1 6.8 75.6 0.23 25.3 TOTAL RESOURCES 124.4 6.2 24.8 97.3 0.16 33.5

10

Source: Wits Gold - Turnberry PFS 2009 and Turgis PFS 2012


DBM and Bloemhoek Mineral Reserve

11

Proven and Probable Reserve 2012 Tonnes (Mt)

Grade (g/t)

Content (Moz)

Bloemhoek 31.6 5.3 5.4

DBM 23.5 4.1 3.1

TOTAL 55.1 4.8 8.5

Source: Wits Gold - Turnberry PFS 2009 and Turgis PFS 2012


Beisa North uranium • Historically drilled by Anglo

American (13 holes) which intersected the Ada May or Beisa reef at 650 to 1 115m below surface.

• Union Corporation drilled 14 holes in 1977 to 1991 south of the Sand River and intersected reef between 450 and 1 500m

• A Ni 43 -101 compliant report delineating resources was completed in 2009 by ExplorMine Consultants

• Potential extension of Beatrix West Uranium Project

12

Uranium resources – Beisa North

Beisa North Mineral Resource Tabulation - June 2009 (U3O8 cut-off 50 cm.kg/t)

Area Mineral Resource Category

Tonnes (Mt)

Gold Uranium Grade (g/t)

Content (Moz)

Grade (kg/t)

Content (Mlbs)

Palmietkuil Facies - Southern Africa

Inferred 14.0 2.14 0.97 0.87 26.90

Total Measured, Indicated and Inferred 14.0 2.14 0.97 0.87 26.90

Boschluispuit Facies - Southern Africa

Inferred 13.9 1.30 0.58 0.68 20.94 Total Measured, Indicated and Inferred 13.9 1.30 0.58 0.68 20.94

Total Beisa North project

Inferred 27.9 1.72 1.55 0.78 47.84 Total Measured, Indicated and Inferred 27.9 1.72 1.55 0.78 47.84

Source - ExplorMine: Technical report June 2009 Ni 43 – 101 compliant


Burnstone

Targeting shallower mining horizons

Background • In September 2012, Great Basin Gold Limited (“Great Basin”)

commenced liquidation proceedings

• Southgold Exploration (Pty) Limited (“Southgold”), which owns the Burnstone Mine (“Burnstone”) on the South Rand Goldfield, entered into business rescue

• Burnstone was placed on care and maintenance under the control of a small management team employed under short-term contracts

• On 4 July 2013 Wits Gold submitted a binding offer for the acquisition of Southgold which was accepted and formed part of the business rescue plan approved on 11 July 2013 by the creditors

• Wits Gold has since progressed a suite of agreements, including transaction and refinancing agreements, which are expected to be executed shortly

15 Targeting shallower mining horizons

Key terms • Purchase price of Southgold is R100 • Bank debt reduced to $177.3 million and to be repaid from future free cash flow

over LOM (free cash flow is defined as profit after deducting state royalty tax, gold mining tax and capital expenditure)

• Commitment by Wits Gold to provide a loan of up to R950 million for working capital and CAPEX (“Wits Gold loan”)

• Wits Gold Loan is to be repaid first from future cash flows (90% to Wits Gold loan / 10% to bank debt)

• On settlement of the Wits Gold loan future cash flow is allocated 70% to Wits Gold/30% to bank debt

• $7.25 million of Wits Gold loan is injected on the closing of the Proposed Transaction to settle creditors and business rescue fees

• 36 months interest and payment holiday on bank debt • Option to settle outstanding balances at any time without penalty


Burnstone Mine

• A shallow, semi-mechanised mine (360m below surface) • January 2011 a 6.4 Moz Reserve and 21.7 Moz Resource was declared

(Minxcon and Deswik) • Mine construction started in 2006 • Mine infrastructure 90% complete • Approximately US$800 million spent on establishing the mine • Produced approximately 38 000 oz • Currently under care and maintenance • All mining and prospecting licences in place


Burnstone opportunity

• Recent geological work confirms the existence of a substantial shallow Kimberley Reef resource and viable mine plan

• Initial investigations have indicated a value accretive investment opportunity

• Final decision to invest in Burnstone will be made on completion of the due diligence

• Burnstone establishes Sibanye Gold’s presence in the South Rand Goldfield and East Rand Basin

• Shifts centre of gravity of Sibanye Gold’s production towards shallower mining, reducing risk and cost profile


-4 000

-3 500

-3 000

-2 500

-2 000

-1 500

-1 000

-500

0

Mod

der E

ast

Bur

nsto

ne

DB

M

Coo

ke 1

-3

Joel

Coo

ke 4

Uni

sel

Doo

rnko

p

Bea

trix

Tshe

pong

Rob

jin

Kop

anan

g

Phak

isa

Mas

imon

g

Targ

et 1

&3

Blo

emho

ek

Gre

at N

olig

wa

Sout

h D

eep

Moa

b K

hots

ong

Kus

asal

ethu

Drie

font

ein

Klo

of

Mpo

neng

Bam

bana

ni

Savu

ka/T

auTo

na

Dep

th b

elow

sur

face

(m

)

Gradual shift to shallower mining

19

Sibanye Gold leading the drive into shallower areas

Source: QR Research

Targeting shallower mining horizons

Conclusion • Supports Sibanye Gold’s commitment to strengthening and securing the

long term future of its business in order to sustain its industry leading dividend yield

– Secures key resources adjacent to Beatrix, which will enable an extension of Beatrix’s LOM

– Leveraging existing Beatrix infrastructure increases returns and enhances the economics of the Wits Gold Projects

• The acquisition of Wits Gold is value accretive, strategic and provides growth opportunities

• Shifts centre of gravity of Sibanye Gold’s production towards shallower side of the depth curve reducing risk and cost profile

• Burnstone establishes Sibanye Gold in the South Rand Goldfield and East Rand Basin

20 Securing the future of Beatrix and targeting shallower mining horizons

Questions

Presentation: Acquisition of Wits Gold - The Vault • Wits Gold Loan is to be repaid first from...

Documents

Transcript of Presentation: Acquisition of Wits Gold - The Vault • Wits Gold Loan is to be repaid first from...