PRESENTATION TO PPC STATUS OF GROOTVLEI MINE 13 APRIL 2011

PRESENTATION OUTLINE Background Liquidation matters Water and Environmental Issues The pumping subsidy Health and Safety Concluding remarks

BACKGROUND The mine situated about 1km west of the town of Nigel and few kilometers from Springs town Operated under a mining licence in terms of the repealed Minerals Act,1991 Wholly owned by Pamodzi Gold Pamodzi currently under provisional liquidation

THE LIQUIDATION In 2009 the company started experiencing serious cash flow challenges Placed under Provisional Liquidation since then Aurora was appointed by the Liquidator on a management contract to operate the mine until cash to take the mine over is secured Final liquidation order by the high court still pending

THE LIQUIDATION CONT… According to the Liquidators, the Court has extended the Liquidation process to August 2011 DMR informed that the liquidators and management contractor cannot meet any of the mine’s financial obligations Recommendation to place mine on care and maintenance submitted to DMR

WATER AND ENVIRONMENTAL ISSUES Historically, pumping capacity at Grootvlei at 110 mega litres p/day Capacity to pump at this rate diminished with time due to poor or non maintenance of the pumping infrastructure Application for pumping subsidy, 2009: October to December No assistance currently due to criteria not met

CRITERIA FOR PUMPING ASSISTANCE Applicable only critically marginal mines Applicable to mines in financial difficulty Mine in a short term crisis but inherently sustainable and not dependent on state aid for its survival Mines to reveal all relevant information to the adjudication authority

CRITERIA FOR PUMPING ASSISTANCE The mine must be faced with imminent closure if not assisted Applicable to operational mines only No other expenses other than pumping costs to be claimed

SIMPLIFIED SECTION OF PUMPING AREA

HEALTH AND SAFETY AT THE MINE Due to financial problems, the mine’s capacity to mine safely compromised. Inspections and audits conducted to ensure compliance with provisions of MHSA. Safety of persons at the mine could not be assured, vital infrastructure such as man hoist could not be maintained. DMR advised the mine to be placed under care and maintenance, until it recovers. Mine currently under care and maintenance

CONCLUDING REMARKS Awaiting the final Liquidation Order Care and maintenance to be lifted Initiative with DWA on the broader solutions within the Wits basin, Grootvlei part of the central basin

THANK YOU