ASX: SWJ Transforming Gold Mining in South Africa Investor - - PowerPoint PPT Presentation

ASX: SWJ

Transforming Gold Mining in South Africa

Investor Presentation – July 2016

Transforming Gold Mining in South Africa | 2016 1

• This Presentation has been prepared by and issued by Stonewall Mining Limited (ASX.SWJ) (Stonewall or Company) is to assist in informing interested

parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into

• n the basis of this Presentation. This Presentation is limited to persons who are sophisticated investors for the purposes of s708(8) or professional

investors for the purposes of s708(11) of the Corporations Act 2001 or persons who hold Australian financial services licences and any of their

• representatives. By attending and/or receiving this presentation you warrant to Stonewall that you are such a person. This Presentation may contain

forward looking statements. Whilst Stonewall has no reason to believe that any such statements, forward looking statements and projections are either false, misleading or incorrect, it cannot and does not warrant or guarantee that through either the passage of time or actions beyond the control

• f Stonewall they will not become so. You should not act and you must refrain from acting in reliance on any of this Presentation material. Nothing

contained in this presentation constitutes investment, legal, tax or other advice. This overview of Stonewall does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. Before making an investment decision, you should conduct, with the assistance of your broker or other financial or professional adviser, your own investigation in light of your particular investment needs, objectives and financial circumstances and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation prior to making any investment decision. You must make yourself fully aware and all risks associated with this offering and that you do not rely upon warranties or representations by Stonewall and/or its

• fficers. Neither the Company nor its advisers has verified the accuracy or completeness of the information, statements and opinions contained in this
• presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no assurance, guarantee or

warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this presentation. The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to,

• r discuss it with, any other person without the prior written permission of the Company. This Presentation contains information, ideas and analysis

which are proprietary to Stonewall. By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you agree not to reproduce in any manner or distribute any part of the information contained herein without the prior written consent of the Company.

• The information in this Presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Daniel

van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 28 years with more than 15 years directly associated with gold mining specifically..Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears.

Transforming Gold Mining in South Africa | 2016

Disclaimer

2

Corporate Overview

LONG TERM DEBTS Beatle Rock A$ 0.45m 8/16 BMIL Loan A$ 0.25m 9/16 Tasman Convertible (fixed $0.009) A$ 1.65m 6/17 APCIG A$ 4.75m 10/16 KEY MANAGEMENT & DIRECTORS George Jenkins CEO and Director of SWM – Metallurgist (Australian/South African) Trevor Fourie Director/Acting Chairman – (Australian) Stephen Gemell Director – Mining Engineer (Australian) Bill Richie Yang, Director (Australian) COMPANY SECRETARY Peter Hunt Transforming Gold Mining in South Africa | 2016 ASX code: SWJ Current share price: AUD $0.013 Market Capitalisation: AUD $23.5 million (Source: ASX website) Mineral Resources: 2.99Moz Free floating shares: 1.81 billion MAJOR SHAREHOLDERS Tasman Funds Management Pty Ltd High Gift Investments Ltd Best Wealth Winner Ltd Smart Vision Investment Group Ltd Khan International Ltd 3

Transforming Gold Mining in South Africa | 2016

Immediate implementation of the Pre-Mined Residue Project (PMR)

• In-house project study near completion
• Pre-explored, pre-developed, pre-drilled, pre-blasted material.
• To re-commence production at 40,000 tpm by Q1 of 2017,
• Low all in cash cost with exchange rate advantages.
• Low capital to start utilising existing infrustructure, plant and

processing facilities.

• Short lead time to production.

Compelling Near Term Production Opportunity in South Africa’s “New” Gold Province

Investment Summary: Exploiting South Africa’s new “Gold Province” outside of the Witwatersrand and Greenstones

• Large fully permitted acreage in prolific gold producing region with large JORC compliant

Mineral Resource of 2.99Moz (see page 39 “Resource Table”)

• Compelling near term PMR project plus Hard Rock projects
• Long term plan for an additional brand new Biox-Plant for a 150,000 – 200,000 oz pa

Operation

• Targeting additional exploration ounces of 0.34 to 3.07 Moz (Hard Rock) plus 0.7Moz to

2.4Moz (PMR) (see tables on page 40 & 41)

• Transforming gold mining in South African

Description Value

All in Sustainable Cost per Tonne (Over Stage One) US$57/t All in Sustainable Cost per Tonne 2017 US$42/t Initial CapEx (20% Contingency) US$15.1m Stage One LOM 10 Years 4

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Exploiting South Africa’s “New” Gold Province Sabie / Pilgrim’s Rest Gold Firlds

TGME – Pilgrim’s Rest / Sabie Mines: Large fully permitted South African Acreage 62000 Ha. (75km North to South and 25km East to West)

Transforming Gold Mining in South Africa | 2016 5

TGME Projects – Locations in South Africa’s “New” Gold Province

Transforming Gold Mining in South Africa | 2016 6

TGME Projects – Locations in South Africa’s “New” Gold Province

Northern Central Southern

TGME CIL Au Plant

Three Broad Areas

• Northern

– Resources, PMR targets

• Central – Pilgrim’s Rest Township (Area
• f Focus for Proposed PMR start up)

– Resources, PMR targets – CIL Gold Plant, – Full elution circuit, – Existing tailing dams on-site

• Southern – Sabie Township

– Resources, PMR targets, – Existing tailings

7 Transforming Gold Mining in South Africa | 2016

History – Gold Production in South Africa

Transforming Gold Mining in South Africa | 2016 8

History – Gold Production in South Africa

Transforming Gold Mining in South Africa | 2016

• In 1873 the first payable gold field was discovered in South Africa’s Eastern Gold-Fields in the Sabie area,

some 300kms from the Witwatersrand (WITS) which, at the time, had no identity.

• The Sabie-Pilgrims Rest gold-field produced the first genuine gold rush in South Africa. It also produced

the first gold coins (The Burger’s sovereign).

• Around this time, the Transvaal Gold Mining and Estates (TGME) company was born which produced

gold for over 100 years.

• Gold was discovered in WITS in 1886 on farm Langlaagte which later became Johannesburg
• WITS became the largest goldfield in the world and by 1925 made up over 50% of Global gold sales
• Four distinct stages of development on WITS:
• 1880 – 1910 : Discovery to formation of Union of South Africa. Rapid growth with interruption during Boer War
• 1911 – 1951 : Slower rate of growth with interruptions or effects from local and global events (Witwatersrand

Rebellion and First and Second World Wars)

• 1952 – 1965 : Rapid growth through introduction of mines on farther reaches of WITS complex as well as improved

deep mining technologies

• 1966 – Present : Decline in production due to depletion of reserves and increased environmental management

costs of acid mine drainage water and high cost on mining

• Some analysts predict that only 33 years of minable underground reserve left in the WITS fields

The rebirth of the “New” Gold Province in the Sabie-Pilgrim’s Rest Gold Fields.

9

Historical Production – the tip of the iceberg

Northern & Central

• 1872 - 1972 : ≈ 4.27 million ounces
• 2005 - 2014 : ≈ 0.23 million ounces

Southern

• 1872 – 1972 : ≈ 2.15 million ounces
• Glynns Lydenburg : ≈ 1.2 million ounces
• Elandsdrift : ≈ 78,000 ounces

Area also produced significant volumes of copper, silver, superphosphates (fertilizers) and pyrites (for sulphuric acid production)

Transforming Gold Mining in South Africa | 2016 10

Historical Production – Zoom In

General Area Operations Description Period Ounces Northern 12 Mines plus alluvial workings 1893 – 1930 152,400 18 mines in the Pilgrims Rest area 1889 – 1972 3,940,000 TGME Mines 2005 – 2014 233,765 Central Graskop Area 1873 – 1958 32,000 Alluvial Workings 1873 - 1958 144, 779 Total 4,502,944

11 Transforming Gold Mining in South Africa | 2016

Historical Production

Transforming Gold Mining in South Africa | 2016

General Area Operations Description Period Ounces Southern 15 Mines in Sabie Area plus alluvial workings 1872 – 1958 2,110,881 Spekboom Alluvial 1873 – 1958 37,179 Other South of Sabie, Rietvlei Mine 1928 - 1933 5,000 Total 2,153,060

12

Historical Production: TGME Limited - Established 1896

Transforming Gold Mining in South Africa | 2016

• First 20 years above 10 g/t
• Next 45 years around 8 g/t
• PMR has been produced at mining grades of between 8 and 10 g/t mined hence the high value of

the material

13

History – Stonewall’s TGME (Sabie / Pilgrim’s Rest)

Transforming Gold Mining in South Africa | 2016

• The Transvaal Gold Exploration Company was established in 1883
• Company reconstituted as Transvaal Gold Mining Estates Ltd (TGME) and registered as a company on 16 May

1895

• By 1896, all the small workings consolidated and owned and managed by TGME
• Production initially from extensive alluvial diggings followed by open cast mining of oxidized primary reefs then

into underground mining of oxidized reef and then fresh un-oxidized reef

• 1955 TGME acquires Glynn’s Lydenburg Ltd. (in operation since 1898 and now called Sabie Mining (PTY) Ltd).

Sabie is a subsidiary of Stonewall along with TGME

• Between 1895 and 1970 TGME and Sabie Mines produced 5moz of gold at an average recovered grade of 10.35

g/t

• Large-scale Mining ceased in 1971.
• The primary mineralisation characterised by narrow, flat-reefs generally less than a meter thick with grades

from 1-50 g/t

• Typically ore bodies mined in the past had grades of 20-25 g/t over average reef thickness of 40-45 cm (800-

1125 cmg/t)

• The payability of historic development averaged 30% (Fowler, 1968)
• From 1968 to 2010 TGME tenements portfolio were collectively owned and operated by Rand Mines Properties

Limited, Randgold & Exploration Ltd and Simmer & Jack Mines Ltd.

• In August 2010, Stonewall Mining Pty Ltd purchased 100% of the equity in TGME and Sabie Mines

14

• PMR discovered in 2013 as part of data review during exploration activities
• Discrepancy identified between milled volumes and volumes of “mined out” stopes. Waste rock dumps

should have been larger than what they actually were. Question asked where this material had gone to

• Inspections underground revealed that material had been placed into the mined out stopes
• Sampling and analysis indicated that material had grade, particularly in the fine fractions and the PMR

project was born

• Extensive sampling completed in Beta and Poniekranz Mines indicated sufficient grade to pursue conversion

into production

• Bulk mining trials completed in early 2015 with lessons learnt for further implementation planning
• Project halted in May 2015 due to illegal strike by workers
• Company recapitalised throughout second half of 2015
• Project reviewed in Q3 of 2015 and revised strategy of risk reduction, extended production timeframes and a

broader view on PMR mines available for production implemented

• Internal study is complete. Document currently being finalised
• A PMR resource delineation sampling program scheduled for Q3/Q4 2016, funding required

PMR Project - Introduction

Transforming Gold Mining in South Africa | 2016 15

PMR Project – History of PMR Material

Transforming Gold Mining in South Africa | 2016 16

• Gold deposits that outcropped on surface were mined into the underground sections following gold “veins”
• As the mining progressed into underground sections the stopes were low in height and followed a general 5

phase mining approach

PMR Project – History of PMR Material

Transforming Gold Mining in South Africa | 2016

• A stabilised mine area is clean of material, has a retaining “Stonewall” built

and is now ready to mine for gold ore Phase 1 Drill and Blast Ore : The ore is drilled and blasted into void and is ready for high grading through hand sorting Phase 2 Hand Sorting : Hand sorting removes visible and large sized high grade material leaving a residue Lighting equipment used for hand sorting was primitive (candle and paraffin headlamps) resulting in an ineffective hand sorting process which also did not cater for effective fines removal. The fines carry the higher values and was left in the stopes

17

PMR Project – History of PMR Material

Transforming Gold Mining in South Africa | 2016

Phase 4 Drill and Blast Waste : The waste is drilled and blasted into the void and is now ready for packing against “Stonewalls” Phase 5 Clean Up : The waste is packed against “Stonewalls” and support is put in place for the next cycle of mining Phase 3 Residue Packing : The residue is packed against “Stonewalls”

18

Production for Central Division in proximity of existing Plant and infrustructure:

• Successfully Trialled in 2015
• In house project study completed
• Targeting 40,000 tpm mined, 27,000 tpm milled
• Commissioning of project in Q1 of 2017 and full

production by Q2 of 2017

PMR Production Strategy

Transforming Gold Mining in South Africa | 2016 Northern Central Southern

TGME CIL Au Plant Mine

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Beta Dukes Browns Hill Dukes South Poniekranz Theta Clewer

19

* This is a strategic target only, not a forecast or

• projection. Refer forward looking statement on

page 2.

PMR – Production Chain

Transforming Gold Mining in South Africa | 2016

Mining Pre-Concentration

• Two PMR mines
• perational at

19,500 tonnes per month per mine

• Material pre-concentrated

using wet screening.

• 90% of gold concentrated into

68 % of mass.

• Targeted screen size 17mm.
• + 17mm discarded.
• - 17mm material to plant.
• Target 27,000 tpm of Material from Pre-Concentration step into plant,

milled, thickened and processed through CIL plant.

• Once through CIL section gold is recovered in Elution circuit and then

smelted into bars for sale.

Processing

20

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Transforming Gold Mining in South Africa | 2016

PMR Production Data

Description Value Average annual mining volume 445,000 t Initial Life of project 10 years Average Mined Grade Subject to PMR Resource Delineation Program in Q3 2016

• Low per tonne unit cost
• Technically of low Risk
• Stage One 10 Year initial life of project developed

21

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Transforming Gold Mining in South Africa | 2016

• Low initial Capital requirement
• Sustaining Capital spread over life of project (10 years)

PMR Study Data

Description Value Initial Capital (2016/2017) US$ 15.1 Million Sustaining Capex (2018 – 2026) US$ 6.1 Million Total LOM Project Capital Requirement US$ 21.2 Million

22

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

• The PMR project plan is focussed on maximising mechanisation. The following equipment has

been selected :

• Conveyors to clear material from the mine( to replace scrapers used in trial mining)
• Scrapers in stopes to remove bulk of material and transfer onto conveyors (no hand lashing of

material)

• Transvac machines to remove bulk of fines and deposit onto conveyors (no hand lashing)
• High pressure water for final clean up of fines and pumping of water and fines out of mine
• Conditions at diferent mines dictate selection of the mechanised equipment for the mining

process

• The company owns LHD’s that may be used in some of the sections of some of the mines
• Hydraulic reclamation will also be trialed as a mining technique to be tested in mines with

space restrictions of certain mines

– Capital cost is low however operational risk is high hence this technique not being proposed as the mining method commencement of the project; however – Hydraulic reclamation is expected to reduce capital and operating costs and require fewer personnel. The process will be reviewed after trial mining section is completed

PMR Project – Focussed on Mechanisation

Transforming Gold Mining in South Africa | 2016 23

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

• Labour compliment reflects compromise between capital expenditure and operating expenditure
• Investment of additional capital for larger equipment for underground and Pre-Conditioning sections presents
• pportunity to reduce number of personnel and therefore operating costs. Less shifts required to get same

volumes

• Increased capital expenditure on larger equipment should reduce labour requirements and cost.
• Careful,management of labour is intended to mitigate issues that mining companies typically experience with

the lower level employees within the workforce

• Remuneration policies have been considered in order to improve productivity e.g. production and

performance bonuses

PMR Project – Labour (foundation for years to come)

Transforming Gold Mining in South Africa | 2016

Staff Functional Area Salaries Wages Total Corporate 5

• 5

Finance and Administration 9

• 9

Safety 1

• 1

HR, Training and Health

• Environment

3 6 9 Security 1

• 1

Stores 1 1 2 Technical Services

• Mining

17 97 114 Maintenance 7 8 15 Pre-Conditioning and Plant 7 43 50 Total 51 155 206

24

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Transforming Gold Mining in South Africa | 2016

PMR Implementation Schedule

• Mining rights for Beta approved, awaiting official notification from DMR. Amended Mine Works

Programme to be submitted to DMR for review currently Hard Rock Mining Proposed

• Mining rights for Dukes approved. Amended Mine Works Programme to be submitted to DMR for review

currently Hard Rock Mining Proposed

• Environmental Permitting approved for greater TGME area including PMR project mines
• Future amendments to mining rights and permitting to be completed as part of normal operational

processes

• Implementation schedule and assumes fully funded position to run activities concurrently as well as cater

for redundancy

• Detailed planning and engineering prior to commencing with capital expenditure

Description M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 Resource Delineation Drafting, Submission and Approval of Amended Mines Works Programme for Beta and Dukes Detailed Mine Design Beta and Dukes Detailed Engineering Design Mines and Plant Mine Equiping Plant Upgrade/Refurbishment Commissioning (Gold Sales Commence M10) Full Production

25

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

• Market Review shows project is well positioned in South African industry
• Review considered a cross section of mines in WITS and Barberton Areas

PMR Peer Review

NOTE: The data below reflects the 2015 costs of the other producers and no escalations have been applied to these mines when considering the comparison Transforming Gold Mining in South Africa | 2016

Here we are

26

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Peers’ Mine Locations

Transforming Gold Mining in South Africa | 2016 27

Transforming Gold Mining in South Africa | 2016

Central / Northern Divisions (Pilgrim’s Rest)

• Phase 1

– Bring PMR into production

• Phase 2

– Bring Blyde Tailings dam into production – New Processing Plant Required, no crushing or milling

• Phase 3

– Bring 5 hard rock mines into production at 10 ktpm per mine – New Processing Plant Required including crushing and milling – Mines 1 and 2 will feed new plant – Second new Processing Plant Required including crushing and milling – Mines 3 & 4 will feed second plant – Mine 5 will require crushing and milling and the Tailings plant will be utilised to process this ore

Our Long Term Production Strategy

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

28

Transforming Gold Mining in South Africa | 2016

Southern Division (Sabie)

• Phase 1

– Bring PMR into production – New processing plant required

• Phase 2

– Bring Glynns Lydenburg Tailings dam into production – New Processing Plant Required, no crushing or milling

• Phase 3

– Bring hard rock mines into production at 10 ktpm per mine – New Processing Plant Required including crushing, milling and BIOX – Mines 1 and 2 will feed new plant – Second new Processing Plant Required including crushing and milling and extension to BIOX – Mines 3 & 4 will feed second plant – Bring additional tailings into production

Our Long Term Production Strategy

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

29

Northern / Central - Pilgrim’s Rest

Transforming Gold Mining in South Africa | 2016

Production Target Ounces: From PMR to Primary Ore

Southern - Sabie

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

PMR Subject to Proposed Resource Delineation

Tailings

• 3,500

4,800 4,000 3,900 2400

• Primary
• 13,400

28,800 44,200 66,600 77,200 77,200 77,200 77,200 Subtotal (Excluding PMR)

• 3,500

18,200 32,800 48,100 69,000 77,200 77,200 77,200 77,200 Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

PMR Subject to Proposed Resource Delineation

Tailings

• 4,300

4,300 4,300 4,300 4,300 200

• Primary
• 13,400

28,800 44,200 59,700 61,700 61,700 61,700 Subtotal (Excluding PMR)

• 4,300

17,700 33,100 48,500 64,000 61,900 61,700 61,700 30

TOTAL – Pilgrims and Sabie

Transforming Gold Mining in South Africa | 2016

Production Target Ounces: From PMR to Primary Ore

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

PMR Subject to Proposed Resource Delineation

Tailings

• 3,500

9,100 8,300 8,200 6,700 4,300 200

• Primary
• 13,400

42,200 73,000 110,800 136,900 138,900 138,900 138,900

Total

• 3,500

22,500 50,500 81,200 117,500 141,200 139,100 138,900 138,900

31

TGME Gold Fields

• 7 Mining Rights
• 6 Prospecting Rights
• 62,000 Ha in the Eastern Goldfields of

South Africa

• 2.99 Moz Au resource (see table on

page 39)

• Hard Rock Exploration Target of 0.33 –

3.07 Moz (see table on page 40)

• Estimated PMR material between 0.72
• 2.44 Moz Au (see table on page 41)
• Gold

fields divided in Northern (Vaalhoek), Central (Pilgrim’s Rest) and Southern Sections (Sabie)

• Existing plant in Central section
• Proposed future MEGA plant at Sabie

32 Transforming Gold Mining in South Africa | 2016

Sabie/Pilgrim’s Rest – Regional Geological Setting

Transforming Gold Mining in South Africa | 2016 33

Geology

• Situated in the Sabie-Pilgrim’s Rest Goldfield where

gold occurs in sedimentary host rocks of the Transvaal Supergroup.

• TGME mineralization hosted in northeast-striking

disconcordant carbonate reefs in Malmani Dolomites in flat, bedding parallel shears located mainly on shale partings.

• Gold mineralization at Rietfontein is hosted in

granites within a shear zone.

• Different operations exploit different reefs in the

area, e.g. Frankfort – Bevett’s and Theta Reefs, Beta – Beta Reef, Duke’s Hill – Rho Reef. Hermansburg, DG2 and DG1 target surface gold mineralisation.

• Vaalhoek Rock Dump comprises untreated material

from the historical Vaalhoek Mine. Glynn’s Lydenburg and Elandsdrift tailings dumps comprise historically mined out and processed tailings from various regional gold mines.

34 Transforming Gold Mining in South Africa | 2016

Transforming Gold Mining in South Africa | 2016

Geology – Significant Gold Mineralisation and Reefs’

35

Geology continued

Transforming Gold Mining in South Africa | 2016

• Similar sections may be expected in

Vaalhoek and Glynn’s Lydenburg Area – horizontal reefs

• Rietfontein represents shear zone gold

mineralization in granites rather than the typical carbonate veins – vertical reefs

36

Arbitration Update: Shandong Qixing Iron Tower Co.

The Arbitration against Shandong Qixing Iron Tower Co., Ltd is complete, awaiting an award, likely by end August 2016

Where: Hong Kong International Arbitration Centre The Claim: US$118.5 million Costs: Litigation funding Consortium (funded)

• Funders share is 45 percent of a successful claim
• Stonewall retains 55 percent of a successful claim

Key Process and Timeline：

• Stonewall’s Statement of Claim submitted (May 2015)
• Qixing’s Statement of Defense submitted (July 2015)
• Stonewall’s Claimants response submitted (November 2015)
• Qixing’s Response submitted (December 2015)
• Tribunal hearing completed (11 to 14 March 2016)
• Final decision (by 1 September 2016 – as indicated by Tribunal)
• Enforcement through the courts in China (if necessary)

Transforming Gold Mining in South Africa | 2016 37

Corporate Chart

Transforming Gold Mining in South Africa | 2016

Stonewall Resources Pty Ltd (ASX: SWJ) (the “Company”) Stonewall Mining (Pty) Ltd (“Stonewall”) Transvaal Gold Mining Estate (Pty) Ltd (“TGME”) Sabie Mines (Pty) Ltd (“Sabie”) Bosveld Mines (Pty) Ltd (“Bosveld”)

100% 74% 74% 74% Australian Parent South African Subsidiary companies

38

(The other 26% interest in the subsidaries are owned by the local BEE groups)

Resources Table – June 2014

Transforming Gold Mining in South Africa | 2016

Mineral Resource Category Type of Operation Tonnage Gold Grade Gold Content Mt g/t Kg 000 oz Measured UG 0.170 4.77 811 26.1 Surface 0.151 1.59 240 7.7 Tailings 2.294 0.77 1,770 56.9 Total Measured 2.615 1.08 2,821 90.7 Indicated UG 2.903 5.82 16,902 543.3 Surface 3.173 0.88 2,811 90.4 Tailings 0.012 0.58 7 0.2 Total Indicated 6.088 3.20 19,720 633.9 Total Measured & Indicated 8.703 2.59 22,541 724.6 Inferred UG 16.151 3.90 63,028 2,026.5 Surface 0.801 0.80 642 20.7 Tailings 2.124 3.06 6,503 209.0 Rock Dump 0.121 1.59 192 6.2 Plant Floats 0.041 0.54 22 0.7 Beta Main 0.109 0.81 88 2.8 Total Inferred 19.346 3.64 70,475 2,266.0

39

Further Immediate Exploration Target

Transforming Gold Mining in South Africa | 2016

• Completed first phase of surface exploration at Beta
• 6,601m drilled in 2013/2014, lab testworks halted due to 2014/2015 corporate restructure.

Continued Lab testwork for drill cores planned for Q2 of 2017

• Drilling at Vaalhoek intersected extensive sulphide mineralisation
• Some existing mines characterised by multiple reefs
• Exploration strategy expected to increase resources by an estimated 0.34 Moz to 3.07 Moz
• Glynn’s and Rietfontein reef extensions
• Vaalhoek reef and strike extensions

40

Project SW Minimum Tonnage Maximum Tonnage Minimum Grade Maximum Grade Minimum Ounces Maximum Ounces Cm Mt Mt g/t g/t Moz Moz TGME Mines: Vaalhoek 100 3.5 1.0 4.00 3.50 0.12 1.41 Beta 100 3.5 3.5 0.95 3.50 0.11 0.40 Sabie Mines Rietfontein 100 0.5 3.0 2.02 6.51 0.03 0.63 Glynn's 100 2.5 6.5 1.00 3.00 0.08 0.64 Total 100 10.1 24.1 1.03 3.97 0.33 3.07 The information in this Presentation that relates to Exploration Results, Exploration Targets, Mineral Resources or Ore Reserves is based on information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing

• f the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in

a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 30 years with more than 20 years directly associated with gold mining specifically. Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based

• n his information in the form and context in which it appears

Conceptual ounces in the exploration target

Refer forward looking statement on page 2. The Exploration Target is conceptual of nature, with low confidence and does not imply a resource

Further Immediate Exploration Target

Transforming Gold Mining in South Africa | 2016 41

Competent Person: Vaalhoek - the two exploration targets that have been determined from the historical resource block

• data. The widths of these target areas are based on the historical blocks with a value greater than 300

cmg/t. The average widths are 750 m and 1 120 m for the two target areas. The extent of the extension uses a maximum of 1 500 m and a minimum of 500 m which is roughly the width of the historical mining. This results in a potential tonnage of between 3.55 Mt and 10.96 Mt for the two target areas. The minimum grade has been based on the lowest category for the historical resource blocks (0 - 100 cmg/t) and the maximum grade is based on the highest category for the historical resource blocks (+400 cmg/t). Beta - The conceptual exploration target is based on the lateral extension of the Beta reef to the

• south. The area is estimated to be 983 000 m2 (between the yellow and purple lines). The grade is

expected to range between 95 cmg/t and 350 cmg/t (average of two drill holes in the area; from the current estimation model in that area).

Refer forward looking statement on page 2. The Exploration Target is conceptual of nature, with low confidence and does not imply a resource

Further Immediate Exploration Target

Transforming Gold Mining in South Africa | 2016 42

Competent Person: Rietfontein - These target areas and ounces are based mainly on historical resource block information and the areas that have been targeted are those with historical resource data indicating values greater than 300 cmg/t or 3.00 g/t over a stoping width of 100 cm. This "cut off" was used as it is a possible economic cut off for this type of mining at shallow

• depths. The ranges or lateral or down dip extent of

these conceptual target areas are not based on semi- variogram ranges of the mineralised zones but rather

• ptimistic forecasts of potential pay areas above 300

cmg/t or 3.00 g/t over a stoping width of 100 cm. Glynn's - The conceptual exploration targets (best potential at Glynn's), at Compound Hill and Malieveld, are based on the historical resource block data that was available. The lateral extent of these target areas are based on the historical blocks with a value greater than 300 cmg/t. The lengths for the three are 2 160 m, 630 m and 525 m respectively. The down dip extension is based on a minimum of 200 m which is approximately the extent of the historical mining and an average maximum of 500 m which is the optimistic view. The minimum value has been based on the lowest category for the historical resource blocks (0 - 100 cmg/t) and the maximum value is based on the highest category for the historical resource blocks (+300 cmg/t).

Refer forward looking statement on page 2. The Exploration Target is conceptual of nature, with low confidence and does not imply a resource

Transforming Gold Mining in South Africa | 2016

• Although not yet included in the Company’s resource statement, significant sampling, mapping and accesses to

multiple mines (more than 1,500 samples) and testing for both grade and fractional analysis has shown the prevalence of the material across the mines

• The estimation of the conceptual exploration target is based on an in situ grade range of between 1.28 g/t and

2.13 g/t albeit that this may vary from one area to the next

Conceptual PMR Target

Area Historical Mined Area @ 93 % Minimum Tonnage Maximum Tonnage Minimum assumed Grade Maximum assumed Grade Minimum Estimated Gold Maximum Estimated Gold Minimum Estimated Gold Maximum Estimated Gold 000 000 m² Mt Mt g/t g/t Kg Kg Moz Moz Northern Division 1.87 2.55 5.17 1.28 2.13 3,250 10,992 0.104 0.353 Central Division 4.52 6.15 12.49 1.28 2.13 7,846 26,537 0.252 0.853 Southern Division 6.54 8.89 18.05 1.28 2.13 11,341 38,359 0.365 1.233 Total 12.94 17.60 35.71 1.28 2.13 22,436 75,888 0.721 2.440

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Refer forward looking statement on page 2. The numbers is conceptual of nature, with low confidence and does not imply a resource

Transforming Gold Mining in South Africa | 2016

Conceptual PMR Target

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Refer forward looking statement on page 2. The numbers is conceptual of nature, with low confidence and does not imply a resource

Competent Person: PMR Exploration Target Methodology TGME has undertaken a study on the residual broken rock that historically had been packed in the old mining stopes. The historical mines that were accessible have been investigated to get an understanding of the potential of the "residue mining" in the historical operations. The investigations undertaken by the mine personnel at Beta and Theta mine revealed old mining areas packed with broken rock which has been sampled in places. Grade

• Some 1,500 samples have been taken in such areas. The samples were analysed for gold grade. This sampling was done randomly without

consideration given to obtain a representative sample.

• The grade range of between 1.28 g/t to 2.13 g/t is based upon a 25% variance from the mean of all sampled values combined to achieve a mean
• f 1.7 g/t.

Volume

• The area was determined for the individual mines from the historical mining plans and reduced by 7% to account for the open development areas

already existant in the current mining void. All historical mining areas have been assumed to contain material based on the areas investigated although it was not possible to investigate all the areas due to access restrictions.

• The height of the broken rock has been estimated to range from 80 cm to 120 cm and is based based on stoping widths of 90 cm to 140 cm which

were factorised by a packing of 80% for the stoping width and swelling factor of an additional 5%.

• The density applied to for the residue has been ranged from 1.7 to 2.3 t/m³, and is based upon a variance of 15% from the mean of 2.0 t/m³. It

has been assumed that the broken density of the PMR represents approximately 65% of the possible unmined rock density of the reef (2.7 t/m³). Content

• Mathematical calculations: – Kg = Tons x Grade /1000
• Kg to ounces conversion factor – 32.15075 ounces/kg

Transforming Gold Mining in South Africa | 2016

Extraordinary Value Proposition

Market Capitalisation – Where are we heading?

$0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000

History & Future Value of Stonewall

Debt Market Capitalisation

• 2011 Acquiring phase: Market

Valuation - AUD90m; Long term debt - AUD Nil

• 2012 Listing phase: Market

Cap – AUD108m; Long term debt – AUD4m

• 2013/4

Transaction phase: Market Cap – AUD120m; Long term debt – AUD7m

• 2015

Consolidation phase: Market Cap – AUD10 - 15m; Long term debt – AUD12m

• 2016 -> Transitioning phase:

Market Cap – AUD20m - ??m; Long term debt – AUD6m

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Transforming Gold Mining in South Africa | 2016

Thank You

Trevor Fourie

Australian Director Mobile: +61 414 324 960 trevor@stonewallmining.com Bill Richie Yang Australian Director Mobile: +61 404 831 804 richiey@stonewallmining.co.za

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www.stonewallresources.com.au