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Diamond Core Resources Diamond Core Resources Presentation by Presentation by Theo Bot Theo Botoula ulas – s – MD Dia D Diamond Core ond Core James Allan – James Allan – Joi oint advi nt advisor sor and capital raising manager and capital raising manager April 2006 April 2006 James Allan & Associates

Diamond Core Resources Diamond Core Resources Contents Contents • Company info- share price, market value, shareholders • Diamond market • Diamond geology and exploration • Diamond Core projects • Samadi – background and projects • The merger • Capital raising • Summary James Allan & Associates

Diamond Core Resources Diamond Core Resources Directors Directors • Andre Louw – Chairman. Geologist and ex MD of Ocean Diamond Mining and executive director Trans Hex Group • Theo Botoulas – MD. Mining Engineer. 16years mining and asset management and financial industry experience • David Levithan – Attorney. 20 years mineral rights and minerals law. • Shalom Nachom – Specialised diamond dealer 40 years experience James Allan & Associates

Diamond Core Resources Diamond Core Resources Share price since relisting Share price since relisting James Allan & Associates

Diamond Core Diamond Core Market Value Market Value 500 400 R Millions 300 200 100 On re-listing March 2004 0 After the Current merger and February 2006 On suspension capital raise -100 October 2002 James Allan & Associates

Diamond Core Resources Diamond Core Resources Shareholder profile after merger and capital after merger and capital Shareholder profile raising raising • I nstitutions 66% • RMBAM • Peregrine • Craton •Prior to merger • Foord institutional shareholder base • Metam > 50% • Stanlib • Cadiz •Capital raising R232m • Plus 2 international • I ndustry 16% • Private 18% • 294m shares in issue • 10% traded since 1 January James Allan & Associates

Diamond Core Resources Diamond Core Resources Strategy Strategy Market Cap R350m Organic growth Exploration Acquisitions Samadi alluvials Paardeberg Skeyfontein + Other acquisitions? Market Cap?? James Allan & Associates

Diamond market Diamond market 6 0 0 0 50 0 0 4 0 0 0 De Beers stocks have 3 0 0 0 2 0 0 0 declined 10 0 0 0 Polished prices have recovered Sources: De Beers and polished prices.com James Allan & Associates

Graph of World Rough Diamond Production Graph of World Rough Diamond Production vs Demand vs Demand Source: WWW International Source: WWW International 14 12 10 8 US$bn 6 Demand 4 Production 2 0 2005 2006 2007 2008 2009 2010 YEAR James Allan & Associates

Demand for Rough Diamonds in Various Demand for Rough Diamonds in Various Size Categories Size Categories Source: WWW International Source: WWW International 6 + 2 ct 5 + 0.66 ct - 0.66 ct 4 US$bn 3 2 1 0 2005 2006 2007 2008 2009 2010 YEAR James Allan & Associates

Supply/demand deficit Supply/demand deficit Source JA Presentation to World Diamond Conference Perth 2005 Source JA Presentation to World Diamond Conference Perth 2005 • Demand grow Demand growth to 2010 - th to 2010 - $4-5bn? $4-5bn? • Supply growth to 2010 - Supply growth to 2010 - $1.5bn? 1.5bn? • Canada $950m (Snap Lake, Victor, Diavik, Jericho) Canada $950m (Snap Lake, Victor, Diavik, Jericho) • Botswana $250m (Jwaneng, Orapa) Botswana $250m (Jwaneng, Orapa) • South Africa $150m (Venetia) South Africa $150m (Venetia) • Angola and other >$200m? Angola and other >$200m? • Deficit – Deficit – 15-17% of current supply>Prices 5-17% of current supply>Prices James Allan & Associates

Market Deficit to 2010 Market Deficit to 2010 3.5 3 B 2.5 o t 2 s w 1.5 a n 1 a 0.5 0 3% 4% 5% 6% 7% Market Growth (annual) Source JA Presentation to World Diamond Conference 2005 James Allan & Associates James Allan & Associates

South African Mines South African Mines Production Split (2004) Production Split (2004) Source:DBR Submission to Parliament 2005 Submission to Parliament 2005 Source:DBR 500 450 400 $900m $400m 350 “non-cuttable “cuttable In SA” In SA” 300 250 Total Value 200 Paardeberg $m 150 100 Samadi Alluvials 50 0 2000 0-100 100-200 200-300 300-400 400-500 500-600 600-700 700-800 800-900 900-1000 1000-1100 1100-1200 1200-1300 1300-1400 1400-1500 1500-1600 1600-1700 1700-1800 1800-1900 1900-2000 $/carat James Allan & Associates

Rough Diamond Price I ncreases Since 2002 Rough Diamond Price I ncreases Since 2002 SourceJA Presentation to World Diamond Conference Perth 2005 Presentation to World Diamond Conference Perth 2005 SourceJA 80 70 60 50 Percent 40 30 20 10 0 Middle Orange Market Average Indian Goods River James Allan & Associates

Diamond exploration process Diamond exploration process • The importance of being “on craton” • Locate your target area • Regional geology-geophysics • Soil sampling> jigging> picking> chemical probe analysis • I dentify targets • Drilling • Bulk sampling • Pre-feasibility and feasibility studies • Mining James Allan & Associates

The importance of being “ “on on craton craton” ” The importance of being Figure 6. The model for diamond formation and transport to surface is quite simple. Diamonds form in the relatively cooler conditions underneath thick cratonic crust and have to be transported to surface quickly before they resorb at lower pressures closer to the earths surface. James Allan & Associates

The importance of being “ “on on craton craton” ” The importance of being James Allan & Associates

Diamond Core Resources projects Diamond Core Resources projects Paardeberg East Paardeberg East James Allan & Associates

Diamond Core Resources projects Diamond Core Resources projects Paardeberg East Paardeberg East James Allan & Associates

Diamond Core Resources projects Diamond Core Resources projects Paardeberg East East Paardeberg • SAMREC code requirements • Geologists signed off Paardeberg inferred ore resource statement in terms of the SAMREC code • Facts: 200 000 tons processed and 19 000 carats recovered • Management assumes a base grade 9.5 cpht • Management estimates the in situ grade to be higher • Historical $100 per carat James Allan & Associates

Diamond Core Resources projects Diamond Core Resources projects Skeyfontein Skeyfontein • Background • Model BEE deal – lauded by Northern Cape DME • Prospecting right PR 01/ 2005 NC granted and issued • Current exploration programme • Way forward James Allan & Associates

Diamond Core Resources projects Diamond Core Resources projects Skeyfontein Skeyfontein Figure 11. The Skeyfontein project area is a large piece of ground in a known diamondiferous kimberlite field. James Allan & Associates

Diamond Core Resources projects Diamond Core Resources projects Skeyfontein – Skeyfontein – Stream Sediment Sampling Stream Sediment Sampling James Allan & Associates

Background to Samadi Background to Samadi • Company formed in period when Diamond Core Resources suspended (Oct 2002) and under threat of liquidation order • Shalom Nachom owns 24% of Samadi and 17% of Diamond Core • Specific strategy to pursue alluvial projects along the Middle Orange River • Common directors : Shalom Nachom, David Levithan, Theo Botoulas James Allan & Associates

Samadi Samadi Alluvial properties Alluvial properties James Allan & Associates

Samadi and Diamond Core’ ’s s Samadi and Diamond Core alluvial properties alluvial properties James Allan & Associates

Why the Middle Orange River? Why the Middle Orange River? • Large diamonds : Average size> 2.5cts> $1500/ ct • Geology of the Middle Orange forms meanders and alluvial terraces • Rooikoppies have been successfully mined • Calcrete layer could not be penetrated • Basal gravels carry diamonds James Allan & Associates

James Allan & Associates Gravel Profile Gravel Profile

Size : frequency distribution Size : frequency distribution MIDDLE ORANGE RIVER (courtesy James MIDDLE ORANGE RIVER (courtesy James Allan) Allan) Diamond distribution of Saxendrift Percent carats larger than Z 0.01 Mining & exploration Statistically inadequate to be used in the plot 1 10 20 30 50 90 98 99.99 0.01 0.1 1 10 100 200 300 Carats per stone James Allan & Associates James Allan & Associates

Size : frequency distribution Size : frequency distribution • 90% of stones are above 1 carat • > 30% of stones are above 10 carats • Approximately 3% of stones are above 100 carats The area is known for recovery of large, good quality stones James Allan & Associates

Comparable mine Comparable mine Saxendrift (Trans Hex) Saxendrift (Trans Hex) • Listed as GEM in 1998 • Bought by Mvela and reversed into Trans Hex in May 2000 for R75m • Large diamonds - $1 200/ ct • 18 600 carats in 2004> $22m revenue • Contribution to Trans Hex estimated at R400m to March 2005 • PAT estimated at R275m to March 2005 • Above data from James Allan’s analysis James Allan & Associates