DEVELOPING A LONG TERM FUTURE FOR ZIMBABWES PGM INDUSTRY A P R I - - PowerPoint PPT Presentation

DEVELOPING A LONG TERM FUTURE FOR ZIMBABWE’S PGM INDUSTRY

A P R I L 2 0 1 9

PROJECT OVERVIEW

 Karo Mining Holdings’ project in Zimbabwe will establish a large‐scale vertically integrated Platinum Group Metals (‘PGMs’) mining complex, located in the Great Dyke in Zimbabwe  Karo Mining Holdings’ will design and construct fully integrated facilities to ensure the maximum extraction of value from mining, through the value chain to final base metal and precious metal refining  Karo Mining Holdings’ will execute the project in partnership with the Government of Zimbabwe, under the Investment Project Framework Agreement signed on 22 March 2018

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Karo Platinum

Estimated 96 Moz (4E) 4E grade of 3.2 gpt

Unki Mine Resource of 30.5 Moz (4E) 4E grade of 4.19 gpt Mimosa Mine Resource of 13.9 Moz (4E) 4E grade of 3.61 gpt Hartley Platinum Mine Resource of 28.2 Moz (4E) 4E grade of 4.03 gpt

Harare Snakes Head

Ngezi Mine Resource of 72.6 Moz (4E) 4E grade of 3.34 gpt

MANAGEMENT TEAM

LOUCAS POUROULIS

Chairman

SHAWN MCCORMICK

Director

MICHAEL JONES

Director

JOSEPHAT ZIMBA

Country Manager The management of Karo has overseen the building of some of the largest and most successful mines in the world, from Eland Platinum, Barplats and Tharisa in chrome and platinum projects, to Petra Diamonds, Keaton Energy, Toro Gold, Alufer and Rainbow Rare Earths

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PROJECT STRUCTURE

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KARO PROJECTS OVERVIEW

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KARO PLATINUM

 Karo Platinum has been awarded a Special Grant in the Great Dyke in the Mashonaland West District for an area of 23 903 ha  Karo Platinum will operate the open cast and underground mining of the platinum concession, with approximately 14.4 Mtpa of run of mine ore  Conceptual designs are based on the operation of four open pit mining

• perations that will transition to underground operations

 Phased implementation of mining determined by feasibility studies  Team has +100 years of experience developing and delivering mines throughout Africa

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Pt 46.4% Pd 36.4% Rh 3.9% Ru 3.7% Ir 2.4% Au 7.2%

TYPICAL PRILL SPLIT FOR MAIN SULPHIDE ZONE

KARO REFINING

 Local downstream beneficiation of mineral products  Karo Refining will include concentration, smelting and refining to produce PGMs, including a base metal refinery and precious metal refinery  At steady state, the platinum mining complex is expected to produce 1.4 Moz of refined PGMs per annum  Refineries will treat up to 2.0 Moz of PGMs per year, providing 0.6 Moz for toll‐refining capacity for other PGM producers in the country

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The refinery complex will comprise:  PGM concentrators  Smelter complex  Base metals refinery  Precious metal refinery

KARO POWER GENERATION

 Initial terms were that Karo Power would establish a thermal power plant with a capacity of 600 MW  It has subsequently been agreed, subject to the issue of an Independent Power Producers License and signed bankable PPA, that in place of a thermal power plant, Karo Power will initially construct 300 MW of renewable solar PV energy  Karo Power will establish a 300 MW solar PV renewable energy power plant, in 50 MW solar PV modules  Current Zimbabwe installed capacity is 2 000 MW, but the country requires 11 000 MW of electricity to achieve its vision

• f becoming a middle income country by 2030

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RENEWABLE ENERGY

 Energy generation is dominated by coal and hydro power  Vast renewable energy sources available in the country  Solar radiation averages 20 MJ/m2/day  The 300 MW capacity will be developed in 6 x 50 MW solar PV modules  After investigations, the Zimbabwean National Power Grid cannot accept the 300 MW solar PV supply at one single point  First 100 MW will be fed into the Selous substation, in the form of the first two 50 MW modules  Other substations have been identified for the remaining 200 MW supply  Estimated timeline is nine months for the construction and commissioning of a 50 MW module

9 REN21, 2018. SADC Renewable Energy and Energy Efficiency Status Report (Paris: REN21 Secretariat)

KARO COAL MINES

 Karo Coal will identify a prospective coal area with the intention to establish a metallurgical coal facility  Once an area has been identified, Karo Coal will apply for a special grant over an agreed coal rich area  A key focus would be the viable extraction of primary metallurgical coal products, which will be utilised for Karo Mining Holdings' value addition initiatives, with the surplus being supplied to the local Zimbabwean ferroalloy and steel industries

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BENEFITS FOR ZIMBABWE

 Creation of approximately 15 000 direct jobs throughout the project timeline, including the construction phase  3 000 jobs during peak construction  Potential for 75 000 indirect jobs through secondary and tertiary industries  Safety is a core value and the project will be developed in an environmentally responsible manner  Sustainable economic growth  Development of strong local supply chain and service industry  Create significant training opportunities and skills development  Execute upliftment projects in local communities  Support further downstream value addition and beneficiation initiatives  State of the art laboratory  Export of high value PGM finished products from Zimbabwe, generating significant foreign currency inflows

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KARO PROJECTS DEVELOPMENT

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KARO PLATINUM EXPLORATION PROGRAMME

 Development permit awarded  DTM and geophysics completed  Two drilling contracts have mobilised  115 boreholes have been drilled, totalling over 18 000 m  Almost all holes have intersected the Main Sulphide Zone  Comprehensive QA/QC programme being run concurrently  Samples to be independently assayed  Competent Person has been appointed  Established a project team in Zimbabwe for the exploration phase, with four senior staff and four operations staff

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TYPICAL PROJECT PHASES

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Exploration

 Orientation drilling programme  Valuation drilling programme  Resource declaration  Preliminary economic assessment  Property

• wnership

review

Studies ‐ prefeasibility

 Metallurgical testwork  Preliminary mining and process design  Infrastructure requirements and availability  Production rates  Capital and

• perating costs

±25%  Permitting / authorisations requirements  Financial and market analysis  Trade off studies  Logistics  HAZOP

Studies ‐ feasibility

 Mining and process design  Infrastructure requirements  Production rates  Capital and

• perating costs

±15%  Financial and market analysis  Logistics  Equipment selection  Off take arrangements  Social, labour plan  HAZOP  Execution plan

Development

 Construction  Inspection and approvals  Commissioning

Production

 Monitor performance  Benchmark and analysis

TYPICAL LARGE SCALE PROJECT DEVELOPMENT TIMELINE

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Exploration Development

↑Confidence ↓Risk ↑Value

Evaluation Construction Production

Ability to accelerate typical project timelines – reducing exploration and evaluation phases

KARO POWER PROJECT DEVELOPMENT

 Appointed Atlantic Energy Partners as technical consultant, who will conduct the feasibility studies  Environmental consultant has been appointed to conduct the Environmental Impact Assessments on the identified sites  Grid impact studies have been commissioned with ZETDC for all the identified sites  Grid impact studies have been completed for the Selous and Alaska sites  EIA prospectus for the Selous site has been submitted to and approved by EMA  Geotechnical studies to be conducted  Feasibility study has started covering all identified sites  PPA negotiations with ZEDTC for 300 MW to start in the third quarter of 2019  IPP licence application and award from ZERA for 300 MW will follow signing of PPA

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SUSTAINABLE DEVELOPMENT

 Upholding principles of sustainable development of mining projects and creation of shared value  We adhere to the IFC Performance Standards on Environmental and Social Sustainability, a benchmark aligned with international best practice and responsible corporate citizenship  Extensive experience in mining operations and the safety and health of the team are paramount  Subscribe to culture of safety and zero harm  Develop and operate the project in an environmentally responsible manner  Community engagement and open communication  Comprehensive stakeholder engagement process conducted as part of the ESIA process  Extensive social development plan, skills development and training

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KARO NEXT STEPS

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PROJECT DEVELOPMENTS  Tharisa has taken a 26.8% holding in Karo Mining Holdings  Environmental prospectus has been submitted and approved by the EMA  EIA for the exploration programme is nearing completion  Initiated drilling programme  Metallurgical testwork to be conducted  Comprehensive stakeholder engagement undertaken

Regulatory approvals, including EIA A comprehensive exploration programme Post refinery value addition

• pportunities are also being

explored

CONCLUSION

 Multibillion dollar project for the Karo Platinum, Karo Refining and Karo Power Generation projects  Investing for the long term benefit of shareholders and Zimbabwe  Job creation and direct ownership play a role in the upliftment of communities  Committed to economic development of Zimbabwean economy  Delivering on the Government of Zimbabwe’s pledge to beneficiate raw materials  Secondary industry development  Skills development and technology transfer  Export of high value of final PGM products  Beginning the flow of much needed foreign direct investment in the Zimbabwean economy

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DISCLAIMER

These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity. Whilst the information contained herein has been prepared in good faith, neither Karo Mining Holdings (the ‘Company’) and its subsidiaries (together, the ‘Group’) nor any of the Group’s directors, officers, employees, agents or advisers make any representation or warranty in respect of the fairness, accuracy or completeness of the information or opinions contained in this presentation and no responsibility or liability will be accepted in connection with the same. The information contained herein is provided as at the date of this presentation and is subject to updating, completion, revision, verification and further amendment without notice. These Presentation Materials contain forward‐looking statements and information in relation to the Group. By its very nature, such forward‐ looking statements and information require the Company to make assumptions that may not materialise or that may not be

• accurate. Such forward‐looking information and statements involve known and unknown risks, uncertainties and other important factors

beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward‐looking information and statements. Nothing in this presentation should be construed as a profit forecast. Past performance cannot be relied on as a guide to future performance.

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