Alexkor Limited Select Committee 8 March 2005

INDEX Location Corporate Structure Financial Review Challenges Mining Litigation Way Forward

LOCATION

Northern Cape Semi desert with limited agricultural potential Small seasonal tourist industry Local economy mineral driven

CORPORATE STRUCTURE

Alexkor Limited Alexander Bay Mining (ABM)Social InfrastructureAlexander Bay Trading (ABT) North Mine South Mine River Mine Shallow Marine Deep Marine Hospital Schools Recreation 437 Houses Dairy Farm Oyster Farm Citrus Farm Ostritch Farm Guest Houses Airport

FIANCIAL REVIEW

Results Compared to FY’03 Earnings per share up 570% to 71.5 cents Return on shareholders funds of 89% Operating expenses well contained up 0.2% to R238 million US$ price per carat up 9% Diamond production up 0.6% to 79,725 carats US$ exchange rate down 22% Cash and cash equivalent at year end up 6% to R71.4 million Profit margin rose from 2.14% to 13,50% The current ratio at 1:4.09 Diamond production income decreased from R251.2 million to R million. Net asset value per share improved from 27.2 cent to cents. ABT reduced the operating loss by 98% to R82,276 from R5.02 million Capex (Replace of property, plant and equipment) up 43% to R15.9 million Exploration spend up 497% to R13.5 million Net tangible value up to 358 cents/share from 316 cents/share

NET PROFIT/(LOSS)

Diamond prices achieved

Net operating expenses (R millions)

Available Cash as at 30 June 2004

Revenue Total Revenue R264 million

ABM operating profit

MINING

Marine Mining

5 Year Carat Plan

Revenue/Profit Plan

CHALLENGES

Major Challenges Massive replacement Capex Extensive exploration on land Land Claims case Litigation Long term liabilities

Timeline Timeline: –18 Dec 2003, DPE Min, N.C Premier, Dep. Min Land Affairs + RV community + LRC –23 Dec 2003, RV Community submitted proposal to Government. –31 March 2004 Government responds to RV settlement proposal. –LCC 1 st & 2 nd April 2004 New DPE Alexkor 15/07/2004 –Main Hearing 2005

RV Settlement Proposal 90% of Alexkor Shareholding 10% Transfer to NAMDA Restoration of the rights in the subject land –Ownership of subject land; –The right to minerals in the subject land. –Exclusive beneficial use & occupation of land. Compensation for minerals extracted Repair of and compensation for environmental damage NB: Undue burden on the governments LTD resources.

Rationale Controlling interest to an SEP Mitigate against over reliance on Government fund Viability of Mining Activities needs a capital injection of ±R500 million SEP: Infuse technical & strategic expertise to the company Government: –Oversight RoleS –T –Exit Strategy L –T –ImplementationSpec Period Alexkor to invest in other sustainable economic development models Government cannot provide seed funding Participation by BOD level in carving the final end state of Alexkor Ltd

Capital additions vs disposals

Exploration costs (R millions)

LITIGATION

NABERA / ALEXKOR REMUNERATION FOR VALUE ADDED MANAGEMENT FEE AND CHARGEABLE COSTS Snowden jointly appointed Nabera claimed R3.1 million ¹/з of R357 million R119 million Misapplication/Inconsistent application of agreed Valuation Methodology Technical/Legal advice Will oppose claim Internal Auditors Nabera owes R826,603 Mediation Parties are prepared to talk Alexkor put R6.1 Million in trust

WAY FORWARD

Long term liabilities Provision for post medical retirement aid decreased by R5 million. Total liability is R86.5 million employees still on our books. Valuation was based on 2/3 contribution, whereas it should have been 100%. Contribution increase: In service employees 10.2% and pensioners 17.5% 2004 As of 1 January 2004: Capping of medical aid Pensioners moved from Executive Option to Comprehensive Option.

EMPR, Vol3,CSIR,1994: R17.58 June 30, 2004 escalated R32.93 June 30, 2004 Rehabilitation Trust Fund: R8.8 October 2003, monthly contribution increased from R to R Prescribed formula in the Aide-Memoire of DME (R201,518) Reg of Mineral Act 50 of 1991 –SPC determining the quantum –Completion towards end of first semester FY’05 Long term liabilities (continued…)