Mali: A sure value in the extractive industry By H.E. Dr Boubou Cisse PDAC 2014 MINISTRY OF INDUSTRY AND MINES 1

Overview I.Mali at large II.Legal Framework III.Potential IV.Opportunities 2 MINISTRY OF INDUSTRY AND MINES

3 Geography: A vast country spreading over 1,241,000 km Located in the heart of West Africa; Mali is bordering 7 countries The capital city is Bamako Population: 15,968,882 inhabitants comprised of a young population. In fact, almost 70% of the population is under the age of 25 years old with a growth rate of 3.01% per annum. Political system: Mali is a country with well defined democratic and legal institutions such as the National Assembly, the Supreme Court, the Constitutional Court, the High Council of Land Administration, the Economic and Social Council and the Government. Economy 80% of the labour force is engaged in the agriculture sector, while 80% of the exports are gold related. Mali is a member of West African Monetary Union (WAMU), the Economic Community of the West African States (ECOWAS) as well as the Extractive Industry Transparency Initiative (EITI) and the Kimberley Process. Regulation: Mali has an attractive investment promotion system through the availability of a ‘One-Stop-Shop’ and a competitive Investment Code promoting FDIs via taxes holidays, custom duties exemptions, reimbursement of VAT, non restriction on capital transfer (incoming and outgoing).

4 MINISTRY OF INDUSTRY AND MINES The Malian extractive industry is regulated by two codes: The mining act (2012) The petroleum code (2004) LegislationAgencyMinistry Mining Code deals with the definition of mineral assets, permits, rights and obligations, tax and royalties and compliance with environment National Directorate of Geology and Mines (DNGM) Ministry of Industry and Mines Petroleum Code deals with definition of petroleum assets, exploration and exploitation permits, rights and obligations, tax and royalties and compliance with environment Authority for Petroleum Exploration Promotion in Mali (AUREP) Ministry of Industry and Mines

5 MINISTRY OF INDUSTRY AND MINES The mining code Exploration phaseCommissioningExploitation phaseConvention Name: Exploration Permit Area: Not specified Validity: 2 years Fees: USD 20,000 Renewability: The first renewal is valid for 2 years and the second renewal for a period of 3 years. Fees: USD 1,000 (1st renewal) USD 1,000 (2nd renewal) Acreage tax: USD 2/km2 (1st period) USD 3/km2 (2nd period) USD 4/km2 (3rd period) Period: 3 years. In the case of unfavourable market condition the operator must inform the DNGM and submit a new schedule of commissioning and DFS. Exploitation permit Validity: 30 years Renewability: 10 years until exhaustion Non participative shares: 10% non dilutive granted to the State and 10% in cash participation. Fees: USD 3,000 (Initial period) USD 4,000 (Renewal) Acreage Tax: USD 200/km2 per year Validity: 30 years The convention is an agreement between the operator and the State.

6 MINISTRY OF INDUSTRY AND MINES Petroleum code ExplorationExploitationTaxes and royalties Total Exemption during the exploration period Initial exploration period: four (4) year renewable twice for three (3) years each; with the possibility to extend for two years under condition. Types of contracts: Production Sharing Agreement (PSA), profit oil is negotiable; Concession Agreement (CA), where royalties vary from 0 to 15% based on daily production. Exploitation Authorization period : 25 years renewable twice for 10 years each Commercial and Industrial Benefit Tax 35%, Delivery Tax is USD 2000, No signature Bonus, Acreage Tax is USD 1.00 per km²,

7 MINISTRY OF INDUSTRY AND MINES Mali is ranked third gold producer in Africa and 11 th producer of gold worldwide. with an estimated annual production of 50 tons per annum. Indices of bauxite, iron, and other base metals are known across the country; Sahara Mining is exploiting iron ore in the East of Bamako Strategic metals (lithium, uranium ) occurrences are known; Rockgate Capital is at an advanced stage in the exploration for uranium in the south west of the country in Falea Kidal in Adrar, away from the mining areas A BRIGHT FUTURE FOR THE MINING INDUSTRY FALEA ; Sahara Mining is exploiting iron ore

MINISTRY OF INDUSTRY AND MINES8 MORILA – THE GORILLA A COMPANY-MAKER Paid back all capital in three years Open on February 2001 and still working with the possibility to mine deeper ore. KALANA GOLD MINE In production since 1984 in a shallow pit (-150m) Produced around 10,000 ounce in 2013 Komana East and Komana West deposits Preliminary studies set resources to 1.4 million ounces – based on 17.4 million tons of ore at a grade of 2.6 g/t. SYAMA GOLD MINES During the 2013 financial year Resolute Produced 196,182 ounces at a cash cost of $796 per ounce Syama may get with Tabakoroni (the Mali South goldfields) Tabakoroni deposit NAMPALA, a new mine to extract gold from a surface material oxidized cover MALI SOUTH; HOSTS THE FIRST MINES OF THE COUNTRY HOWEVER, IT REMAINS UNDER EXPLORED HISTORY OF MALI AND GOLD

MINISTRY OF INDUSTRY AND MINES9 Kedougou Kenieba Inlier …the gold province Andesite Basalt Clastic Metasediments Granitoids Limestone Metasediments QT Volcaniclastics Metasediments/volcanics Dalema - Kofi Diale - Keniebandi Mako - Saboussire Randgold Resources ermits SMSZ MTSZ SENEGAL MALI Yatela Sadiola Gara Yalea Sabodala 100 km Massawa Segala Tabakoto Gounkoto Millenium highway HISTORY OF MALI AND GOLD

10 MINISTRY OF INDUSTRY AND MINES GOUNKOTO GOLD MINE THE NEW PEARL … First gold poured 8 June the mine payback all the capital after one year production First dividend of US$69m paid to the Shareholders in July and second dividend of US$63m declared in November 2012

11 MINISTRY OF INDUSTRY AND MINES Bauxite deposits are indicated in the west and south part of Mali. A private company has already targeted and revealed a zone lodging a reserve of more than 150 Million tons. There are indication of diamonds in the West, South and North Mali. Iron ore deposits have been estimated to be over 2 billion tons in the Faleme region. FALEME Area

12 MINISTRY OF INDUSTRY AND MINES Phosphate deposits are located in the north of Mali in the Tilemsi zone. Manganese deposits are located in the Gourma region and are estimated to be around 20 million tons. There is an estimated 4 million tons of lithium deposits located in Western and Southern Mali.

13 MINISTRY OF INDUSTRY AND MINES Mali is divided in blocs for petroleum exploration and exploitation. There are no blocks in production at the moment, however, the preliminary studies are encouraging and a drilling program is set to start in the near future. Opportunities in petroleum exploration

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15 MINISTRY OF INDUSTRY AND MINES Opportunities in Mining Grassroots' projectsJoint Venture opportunities Equity participation Various sites in the western and southern parts of Mali in Gold exploration with indicated potential through State’s studies. Exploration projects with estimated reserves needing technical and financial contribution. Exploitation projects with large reserves needing financial support against a participation in the capital and a percentage of the Net Smelting Return (NSR)>

16 MINISTRY OF INDUSTRY AND MINES Thank you for your attention