Current Trends in Mining Finance: Strategic and Financial Challenges Roy Hinkamper, KPMG LLP April 2013

2 © 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Asset Life Cycle Mining Asset Life Cycle Level of activity Time Evaluate country risks and market opportunities Search for commercially exploitable resources Removal of overburden and waste, and plant commissioning Permit and licence applications Commercial exploitation begins Expansion of mine and plant Commercial exploitation ends Closure of mine and plant Ongoing rehabilitation Bankable feasibility study (BFS) Prospecting rights application Pre-feasibility study Competent persons report Preliminary Economic Assessment (PEA) Construction of infrastructure and plant Note:(1)Estimated duration of stage in the mining asset life cycle (2)Reflects key activities only at each stage of the mining asset life cycle Design and implement market strategy ExpansionExplorationEvaluationDevelopmentProductionClosure 1-2 years years years years years years 1

3 © 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Asset life cycle Expansion 1-2 years 1 Exploration 2-10 years 1 Evaluation 3-6 years 1 Development 1-3 years 1 Production years 1 Closure 1-10 years 1 Market entry Transactions Financing and M&A Tax structuring Due diligence Integration Project development Feasibilities Financing Tax structuring Project execution Your asset life cycle – How KPMG can help Portfolio management Strategy development Scenario planning People and change Tax strategy and policy Projects Operating model development Supply chain transformation Cost and tax optimisation Business intelligence Business transformation Operational excellence Statutory audit Internal assurance Enterprise risk management Tax compliance Risk & compliance Strategic & scenario planning Community investment Materials stewardship Energy, water and carbon Mine rehabilitation Reporting and tax transparency Business resilience Forensic investigations Note: (1) Estimated duration of stage in the mining asset life cycle StrategyGrowth Performance Compliance Sustainability Mining – what we do

4 © 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Mining - what are the challenges? Risks Lower output, lower returns. Continuous escalation of capital costs. Dependence on exploration. Mitigation Exploration for new, higher grade ore bodies Process efficiency remediation to reduce costs. Introduction of new technology to streamline extraction and reduce costs. Current State Issues Decreasing grade of ore bodies. Higher volume of extraction and throughput to achieve output targets. Increased energy costs. Larger capacity infrastructure. Higher capital investment. Increased operating costs associated with higher levels of mining processing activity. Regulatory/Social Issues Mining companies face formidable challenges in maintaining profitability in an environment characterised by declining ore grades and flat commodity prices Consequences Continual need for improved productivity to maintain profit levels Decreasing net returns Pressure to open new mine sites. Dependency on capital funding

5 © 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Mining - Opportunity Areas Ore TransportDrill & Blast Crushing/ Grinding ProcessingExtraction Mine DevelopmentExplorationOperationClosure Potential Opportunity Areas Process Optimisation Mining processes are often poorly understood and have a great deal of interdependencies between different stages of the process. De-bottlenecking, lean techniques, process modeling and controls are significant value levers ProcurementProcurement in the mining industry can be a source of significant commercial and strategic value, especially in the current capacity constrained environment where suppliers are often in powerful bargaining positions. In addition to this a historic focus on production at the expense of costs can result in inflated procurement costs Asset ManagementImproved maintenance practices and planning activities can improve equipment availability and utilization through the use of advanced analytics to support predictive maintenance Production Planning Holistic scheduling of mine production and clear communication and co-ordination between value chain steps can result in improved overall system performance Sustainable Development The mining industry is facing increasing pressures on the use of land, and water and constraints on its generation of waste, a thorough understanding of these issues and appropriate strategies to address them can be a source of significant competitive advantage

Thank you Roy Hinkamper (314) © 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.