Ground Floor, Bay Suites 1a Humewood Rd, Humerail , 6001 P O Box 21842 Port Elizabeth 6000 T: +27 (0) 41 509 4800 F: +27 (0) 41 509 4850 E: [email protected] www.srk.co.za

29 August 2018 535889

Algoa Consulting Mining Engineers No 2 Deer Park Deer Park Estate Port Elizabeth

Attention: Mr Clayton Weatherall-Thomas

Dear Clayton Hydrogeological Investigation at a Proposed Site for Mining in the Driftsands Area, Port Elizabeth

1. Introduction SRK Consulting South Africa (Pty) Ltd (SRK) was appointed by Algoa Consulting Mining engineers (ACME) to conduct a groundwater investigation at the proposed Site for the development of a mine in the Driftsands area in Port Elizabeth. SRK understands that a hydrogeological investigation is required to determine the nature and sensitivity of the groundwater environment underlying the study area, and the potential risks that the development may pose to the groundwater environment during its operation.

The study area is situated across a number of properties, namely the remainder of Erf 18 Schoenmakerskop, Erf 121 , remainder of Erf 1256 and Erven 1266, 2546, 2962 and 2963 Summerstrand. The study area is situated in the M20A Quaternary Catchment of the DWS.

According to the Background Information Document that we received from the Client, “the mining of sand minerals would be a simple operation, whereby only free-digging opencast open pit mining methods would be deployed. No blasting with explosives will take place, but only free-digging mining methods. Infrastructure development will be limited to the construction of roads and a portable wendy house for the security guard with a chemical latrine. No workshops will be built at the mine and no diesel, paints, oils or other hydrocarbons will be stored on-site. A chemical will be added during the screening process to provide the correct sand particle size. No water would be needed for the mining operation other than the water truck for dust suppression of the roads during windy conditions, and the wetting of loads.”

Partners R Armstrong, AH Bracken, N Brien, JM Brown, CD Dalgliesh, BM Engelsman, R Gardiner, M Hinsch, African Offices: Group Offices: W Jordaan, WC Joughin, DA Kilian, S Kisten, JA Lake, V Maharaj, DJ Mahlangu, I Mahomed, HAC Meintjes, Cape Town + 27 (0) 21 659 3060 Africa MJ Morris, GP Nel, VS Reddy, PJ Shepherd, MJ Sim, VM Simposya, HFJ Theart, KM Uderstadt, AT van Zyl, Durban + 27 (0) 31 279 1200 Asia MD Wanless, ML Wertz, A Wood East London + 27 (0) 43 748 6292 Australia Directors AJ Barrett, CD Dalgliesh, WC Joughin, V Maharaj, VS Reddy, PE Schmidt, PJ Shepherd Johannesburg + 27 (0) 11 441 1111 Europe Pietermaritzburg + 27 (0) 33 347 5069 North America Associate Partners PJ Aucamp, S Bartels, LSE Coetser, SG Jones, F Lake, L Linzer, L Nedeljkovic, RD O’Brien, Port Elizabeth + 27 (0) 41 509 4800 South America S Reuther, T Shepherd, JJ Slabbert, JS Stiff, M van Huyssteen, D Visser Pretoria + 27 (0) 12 361 9821

Consultants JR Dixon, PrEng; GC Howell, PrEng; T Hart, MA, TTHD; PR Labrum, PrEng; RRW McNeill, PrTech Eng; Rustenburg + 27 (0) 14 594 1280 PN Rosewarne, PrSci Nat, MSc; AA Smithen, PrEng; TR Stacey, PrEng, DSc; OKH Steffen, PrEng, PhD; Accra + 23 (3) 24 485 0928 PJ Terbrugge, PrSci Nat, MSc; DJ Venter; PrTech Eng Lubumbashi + 243 (0) 81 999 9775

SRK Consulting (South Africa) (Pty) Ltd Reg No 1995.012890.07

SRK Consulting Page 2 2. List of Abbreviations  NGA: National Groundwater Archive  DWS: Department of Water and Sanitation  TMG: Table Mountain Group  mS/m: milliSiemens per meter  EC: Electrical Conductivity  RBCA: Risk Based Corrective Action  CSM: Conceptual Site Model

3. Scope of Works SRK proposed the following Scope of Works in our proposal dated 11 June 2018 “Proposal: Hydrogeological Investigation at a Proposed Site for Mining in the Driftsands Area, Port Elizabeth, ” and was accepted by the Client:

 Conduct a desktop assessment of the hydrogeology of the Site and surrounding area (approximately 500 m radius of the boundary supplied by the Client). This will include a study of the geology, hydrogeology and topography; querying the National Groundwater Archive (NGA) – a database of the Department of Water and Sanitation (DWS) that contains information om boreholes that have been registered or licensed with the DWS; and assessing historical reports of groundwater investigations in the area (if available).  Conduct a hydrocensus, where neighbouring properties around the Site (up to a 500 m radius of the Site boundaries) will be visited. Information on existing boreholes, including borehole depth, water use, water level, the aesthetic character of the water and borehole position; will be gathered where available. Please note that SRK assumes that the neighbouring property owners are aware of the planned development. In urban areas (e.g. Summerstrand) a sample of properties will be visited only. The hydrocensus does not necessarily mean that all existing boreholes will be identified and located around the Site. This census is intended to gather groundwater information and is subject to the availability of such information. Where site access is denied, or existing boreholes are not shown to SRK, no information will be gathered. SRK can therefore not guarantee that all boreholes will be surveyed within the mentioned area. Provide a description of the potential impacts of the development on the hydrogeological regime in general, particularly during the operational phase.  Compile a letter report, summarising the findings of the investigation. Recommendations on appropriate mitigatory measures will be made, where required, to reduce the impact of the proposed development upon the groundwater quality of the area.

4. Results The results of the investigation are discussed in the section below. It must be noted that this investigation took place during a drought period in the Eastern Cape; and water levels may be lower than during normal rainfall conditions. 4.1 Desktop Study 4.1.1 Geology According to the publication “The Geology of the Port Elizabeth- Area” by F.G le Roux of the Council for Geoscience (2000), the geology underlying the proposed development comprises the Schelmhoek Formation of the Algoa Group. This formation is underlain by the Peninsula Formation of the Table Mountain Group (TMG); and to the west, potentially by the Sardinia Bay Formation.

Refer to Figure 1 for a map with the geology of the area.

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 3 The Schelmhoek Formation comprises unconsolidated, windblown fine- to medium-grained sand and occurs up to 6 km inland from the coast. The sand is calcareous quartz sand of aeolian origin, and can be up to 140 m thick in some areas.

The Peninsula Formation comprises light-grey supermature sandstone that is quartzitic in places. Vein quartz and subordinate shale layer are present in places. The maximum thickness of the layer is 3000 m.

The Sardinia Bay Formation is an arenaceous (sandstoney) formation that is seen as folded metasedimentary outcropping along the coast in the Schoenmakerskop and Sardinia Bay area. The formation comprises a basal metaconglomerate which is overlain by quartzitic sandstone. The sandstone is intercalated with black phyllitic shale and conglomerate.

A few perennial fresh-water springs daylights on the coast west of Schoenmakerskop, and is a result of groundwater movement towards the sea, on the contact between the Quaternary deposits and the TMG. 4.1.2 Hydrogeology According to the publication “An Explanation of the 1:500 000 General Hydrogeological Map of Port Elizabeth 3324” by P.S Meyer of the Department of Water Affairs and Forestry (1998), the Quaternary alluvial deposits (which includes the Schelmhoek Formation) can deliver yields ranging between 0.1 and 15 L/s. These sandy deposits can be described as a primary aquifer1.

A yield analysis indicated that 7% of boreholes yield less than 0.5 L/s and 26% yield more than 5 L/s. Groundwater quality varies substantially, with conductivities ranging between 20 mS/m (potable) and 600 mS/m (not potable, SANS 241:2015 Drinking Water Standard Limit for conductivity is 170 mS/m). These changes in water quality can be ascribed to changes in geology and depth of drilling. Sodium, calcium magnesium, chloride, alkalinity and sulphate often exceeds the maximum allowable limits for drinking water for this group.

A networks of joints and fractures control infiltration, recharge, storage and movement of groundwater in the often brittle TMG formations (of which the Peninsula and Sardinia formations form a part). Fracturing may extend down several hundred meters and deep groundwater circulation is one of the notable groundwater characteristics of the TMG. Despite the often highly fractured nature of the TMG, secondary groundwater storage is often limited, which could result in rapid depletion of an aquifer when water is abstracted. Springs often issue from the TMG sandstones. High-yielding boreholes (> 5 L/s) have been developed in the TMG (and its water quality is generally between 10 and 100 mS/m (the SANS 241:2015 specifies 170 mS/m as the Standard Limit for drinking).

1 Aquifers in which water moves through the integranular spaces formed at the same time as the geological formation.

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Figure 1: Geology

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 5 4.1.3 National Groundwater Archive (NGA) Database During the desk study, the NGA database of the Department of Water and Sanitation (DWS) was searched for information on existing boreholes within a 1 km radius of the proposed study area. Forty seven (47) boreholes were located, of which 32 had information stored on the database (other than the identifier and coordinate). These are shown in Table 1 and Figure 2. Some of the holes are identified as monitoring holes, for instance the ones at the Arlington Waste Site and the Driftsands Waste Water Treatment Works. Table 1: NGA Borehole Information Water Level EC Water Strike Total Airlift Borehole ID Latitude Longitude pH Depth (m) (mbgl) (mS/m) Depth (m) Yield (l/s) ARLM6 -34.02010 25.57073 No Info 140 7.3 42 13, 32 1.3 ARLM2A -34.01772 25.56812 7.85 155 7.3 80 36, 53 1.4 ARLM2 -34.01758 25.56735 8.25 154 7.4 36 31 1.3 EC/M20/0367 -34.01640 25.55620 4.60 No Info No Info 30 No Info 0.5 EC/M20/0324 -34.02047 25.63716 22.00 No Info No Info No Info No Info No Info EC/M20/0595 -33.99888 25.64825 No Info No Info No Info 51 29, 43 1.1 EC/M20/0604 -33.99885 25.65625 No Info No Info No Info 31 13, 23 1.4 EC/M20/0609 -33.99786 25.65739 No Info No Info No Info 55 19, 44 1 EC/M20/0412 -33.99458 25.65737 No Info No Info No Info 30 No Info 1.3 EC/M20/0426 -33.99381 25.64759 No Info No Info No Info 96 No Info No Info EC/M20/0608 -33.99367 25.65022 No Info No Info No Info 61 54 0.8 EC/M20/0410 -33.99265 25.65538 No Info No Info No Info 78 No Info 4.4 EC/M20/0423 -33.99197 25.65091 13.00 No Info No Info No Info No Info 0.8 EC/M20/0422 -33.99161 25.65116 No Info No Info No Info 42 No Info 0.8 EC/M20/0601 -33.99154 25.64911 No Info No Info No Info 61 41 0.9 EC/M20/0415 -33.99143 25.65211 No Info No Info No Info 50 No Info 2.8 EC/M20/0418 -33.99133 25.64951 6.58 No Info No Info 70 No Info No Info EC/M20/0599 -33.99103 25.65744 No Info No Info No Info 58 43, 55 3 EC/M20/0419 -33.99082 25.64843 No Info No Info No Info 42 No Info No Info EC/M20/0405 -33.99075 25.65822 No Info No Info No Info 40 No Info 0.8 EC/M20/0402 -33.99063 25.65374 No Info No Info No Info 32 No Info 2.2 EC/M20/0421 -33.99062 25.64798 No Info No Info No Info 60 No Info No Info EC/M20/0424 -33.99005 25.65230 No Info No Info No Info 40 No Info 2.8 EC/M20/0425 -33.98995 25.65294 7.10 No Info No Info No Info No Info No Info EC/M20/0401 -33.98943 25.65331 No Info No Info No Info 50 No Info 4.4 EC/M20/0607 -33.98909 25.65425 No Info No Info No Info 67 41, 60 0.3 EC/M20/0399 -33.98818 25.65537 No Info No Info No Info 30 No Info No Info EC/M20/0020 -34.01697 25.60103 No Info 246 7.3 39 No Info No Info EC/M20/0021 -34.01678 25.60444 No Info 132 6.9 69 No Info No Info EC/M20/0017 -34.01575 25.60383 No Info 201 7.3 9.5 No Info No Info EC/M20/0018 -34.01494 25.60514 No Info 209 7.3 9.5 No Info No Info EC/M20/0019 -34.01400 25.60319 No Info 181 7.2 14 No Info No Info The data indicates the following:

 Water was intersected during drilling between 13 and 60 m bgl.  Water levels in the area ranges between 4.6 and 22 m bgl (average 9.9 m bgl);  Borehole depths range between 9.5 and 96 m bgl.  EC measurements range between 132 and 246 mS/m. The limit (lifetime consumption) for drinking water according to the SANS 241:2015 is 170 mS/m.  pH measured between 6.9 and 7.2. The acceptable range according to the SANS 241:2015 Standard for Drinking Water is between 5.5 and 9.5.  Airlift yields measured between 0.3 and 4.4 L/s.  For two of the boreholes water strike depth and water level information is available. In both the water strike depth was deeper than the water level depth, indicating that the groundwater is under pressure in fractures and as soon as one drills through the fractures, the water level will reach hydrostatic equilibrium and settle at that point.

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Figure 2: NGA Borehole Information

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Figure 3: Estimated Surface and Groundwater Flow Direction

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4.1.4 Surface Water and Shallow Groundwater Drainage The study area slopes to the east and south, in the direction of the coast. Elevations across the study area varies between 60 and 80 m amsl. It is estimated that shallow groundwater flow (and also deeper flow) will be towards the ocean in the south (for the majority of the study area towards the west), and to the east for the eastern part of the study area. Refer to Figure 3 for estimated flow directions. 4.2 Hydrocensus During the hydrocensus, the study area and selected properties within a 1 km radius were visited to collect information on any existing boreholes within the area. Eight boreholes were identified during the hydrocensus. Additionally, boreholes were observed in some erven and complexes, but there was no access to these properties. From the hydrocensus it is clear that groundwater is frequently used, especially in the Summerstrand area for household use. Hydrocensus information is given in Table 2 and borehole positions are shown in Figure 4. No groundwater users were identified down-gradient of the study area to the south, but numerous were identified down-gradient to the east of the study area in Summerstrand. Table 2: Hydrocensus Information Water Depth Airlift Yield SRK Identification Latitude Longitude Comment Level (m) (m) (L/s) Borehole locked, inaccessible, looks like Driftsands BH 1 -34.01678 25.60444 N/A N/A N/A monitoring borehole Borehole blocked, inaccessible, looks Driftsands BH 2 -34.01575 25.60383 N/A N/A N/A like monitoring borehole Lid welded shut, inaccessible, looks like Driftsands BH 3 -34.01400 25.60319 N/A N/A N/A monitoring borehole Drilled by municipality. Water strikes at Driftsands NMBM BH 1 -34.01392 25.60099 7.28 120 1.3 50 & 98 m Drilled by municipality. Water strikes at Driftsands NMBM BH 2 -34.01329 25.60204 9.56 150 10 64, 90 m and deeper. Municipal supply. Water used for irrigation only. EC:189 Maranatha BH -33.99517 25.61515 4.80 N/A N/A mS/m, pH: 7.88 Used for irrigation, owner says water was Summerstrand BH 1 -33.99409 25.64888 N/A 65 N/A tested and good enough for human consumption. Schoenies Pump Drilled by municipality. Water strikes at -34.02730 25.548461 6.5 120 1.3 Station BH 20, 80, 84 m Summerstrand Complexes Majority of complexes has signs on gates stating that borehole water is in use. Inaccessible. The following can be summarised from the data gathered during the hydrocensus:

 Water levels measured ranged between 4.8 and 9.56 m bgl (average 7 m bgl).  Borehole depths ranged between 65 and 150 m bgl;  Airlift yields varied between 1.3 and 10 L/s;  The water is often used for irrigation of gardens, but some people mentioned that the water is of drinking water quality. 4.3 Historical information SRK have been involved in a number of monitoring projects in the study area, and the following is known:

 Water levels in the sandy aquifer (Quaternary sediments) range between 0.2 and 4 m bgl. These levels are dependent on rainfall and can become shallower or deeper depending on recharge.  Water levels in the deeper fractured aquifer (TMG) have been measured to range between 0.1 and 10 m bgl.

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 9

Figure 4: Hydrocensus Information

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 10

5. Impact Assessment From the desktop study, hydrocensus and site work, the following can be accentuated with regards to the impact assessment:

 Numerous boreholes are present in the area surrounding the study area and the groundwater is being used for irrigation, monitoring or drinking water.  Water level measurements taken during the hydrocensus varied between 4.80 and 9.56 m bgl; whereas historical data reveals water levels ranging between 0.1 and 22 m bgl.  A water level measurement of 0.1 m bgl was taken in a borehole drilled into the hard rock TMG aquifer; and a measurement of 0.2 m bgl was taken in a borehole drilled into the sandy aquifer. These measurements were taken a few years back when the rainfall was higher in the NMBM, and these levels will most likely have dropped somewhat during the drought.  It must be noted that the NMBM is experiencing one of its worst droughts in the past 80 years, and that water levels is likely influenced by the drought. During periods of higher rainfall, water levels, specifically in the sandy aquifer, will likely be higher.

Bearing in mind the source - pathway - receptor concept, the following can be concluded for the Site:

 Potential sources of contamination or potential impacts:

 Potential pollutants from the sanitation system (bacteria, nitrate, nitrite, ammonia etc.)  Potential hydrocarbon pollutants from vehicles on Site (fuels, oils etc.)  The proprietary chemical to be added during screening

The mining company disclosed that the composition of the chemical to be used during screening consists mainly of building lime, and is used as a plasticiser. The exact chemical composition could not be shared since it is confidential. Plasticiser is an additive that increases plasticity or decreases the viscosity of a material and makes it more workable. Lime itself is a calcium based mineral, similar in composition to calcrete that is common in the geology cross the study area, and it is not seen as a potential pollutant. Based on the information provided to us by the Client, it is our opinion that lime will not have a negative effect on the groundwater environment with regards to pollution.

Unfortunately, without the specific chemical composition of the plasticiser, its impact on the groundwater environment cannot be further evaluated.

 Potential pathways: Sand and shallow groundwater  Potential receptors: Groundwater as a natural resource; groundwater users (current and future); the ocean; and utilisers of the ocean or beach (e.g. swimming, hiking etc.). In terms of the Risk Based Corrective Action (RBCA) approach, i.e. when consideration must be given whether to remediate contamination or not, risk is considered to be present when a complete link exists between the source, pathway and receptor. However, in predicting whether a receptor might be contaminated, there is risk when there is a contamination source. SRK understands that the DWS considers all groundwater as a natural resource that must be protected, irrespective of the current water quality. No contamination or further contamination is allowed. Should pollutants come into contact with the sands, it will likely follow the following routes:  Seeping through the permeable sands towards the water table.  Moving within the saturated zone towards the ocean in the south.

Refer to Figure 6 for a generalised conceptual site model (CSM) of the perceived underground conditions within the study area – with regards to potential pollutants; to Figure 7 for a generalised conceptual site model (CSM) of the perceived underground conditions within the study area – with regards to the reduction of thickness or removal of the sandy aquifer; and to Figure 5 for the location of the CSM. The CSM reflects (amongst others) the study area, potential pollutants, the sandy and hard rock aquifers, the ocean, the

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 11 estimated water level during drought conditions and during higher rainfall periods, and the estimated flow directions of potential pollutants.

Please note that the model will remain the same across the study area since the geological and hydrogeological information known to us remains the same.

The following data gaps are identified:

 Measured groundwater level beneath the study area (more specifically the chosen site for mining).  Extent to which attenuation of potential pollutants will take place  The extent of water level fluctuation that may occur during periods of high rainfall and tidal changes (i.e. the water level might become shallower during periods of higher rainfall).  Depth to which mining will take place.  The specific composition of the plasticiser.

Figure 5: Location of Conceptual Site Model

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Figure 6: Generalised Conceptual Site Model – Potential Pollutants

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Figure 7: Generalised Conceptual Site Model – Reduced Thickness / Removal of Sandy Aquifer

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The evaluation of potential pollutants from on-site activities is discussed with the document “A Protocol to Manage the Potential of Groundwater Contamination from On Site Sanitation” (the Groundwater Protocol - an assessment tool developed by the DWS for determining the risk that sanitation systems poses to groundwater) as a guideline. Even though we acknowledge that not all potential pollutants from the site are from sanitation, most of the principles remain sound to use for various pollutants.

The Groundwater Protocol states risk levels to be based on three factors:

 The vulnerability of the aquifer  The contamination load from the particular sanitation system (or specific potential pollutant)  The strategic value or current and/or future use of water from the aquifer

Aquifer Vulnerability

According to the Groundwater Protocol, the vulnerability of an aquifer is related to the distance that the contaminants must travel to reach the water table (vertically), and the ease with which it can flow through the soil and rock layers above the water table.

For the study area, an average water level of less than 10 m is expected. However, this may vary depending on specifically where the development is to take place, rainfall or drought conditions etc. The depth to water level will also reduce depending on the depth to which is mined; reducing the thickness of the unsaturated zone as mining continues to go deeper below the current elevation of the study area. The aquifer vulnerability can thus be described as being:

 Extremely high where the water level is less than 2 m bgl. This indicates a high risk to contamination and a short traveling distance to the water table.  High where the water level is 2 – 5 m bgl. This indicates a high risk to contamination and a medium traveling distance to the water table.  Medium-high where the water level is 5-10 m bgl. This indicates a medium risk to contamination and medium traveling distance to the water table.

The aquifer will be vulnerable to many contaminants, except those that are highly absorbed, filtered and/or readily transformed.

According to the Groundwater Protocol Table 1 “Assessment of the Reduction of Contaminants in the Unsaturated Zone”, sand possesses the capacity to create a good barrier to the movement of biological contaminants (therefore highly reducing bacterial and viral contaminants), but with minimal reduction in nitrates, phosphates and chemical contaminants (e.g. hydrocarbon). The flow rate through sands in the unsaturated zone is considered medium (0.1 – 10 m/day); and its capacity to absorb contaminants is minimal, even though it creates an effective barrier. Because of the perceived narrow (and narrowing as mining takes place) unsaturated zone, unfortunately the effectiveness of the sandy barrier and attenuation of pollutants are reduced.

Should the soils beneath the Site be more silty or clayey, then the flow rate through the unsaturated zone will reduce and may be slow (10 – 100 mm/day). The character of the soils to reduce contaminants in the unsaturated zone will be the same as for the sands mentioned above, except that the capacity of the media to absorb contaminants will be medium and not minimal.

Contamination Loads & Contamination Type/Concentrations

The contamination load of each specific pollutant refers to the volume, intensity, concentration and duration that it is released into the environment. For contamination load risks that are minimal, there will be a low overall risk. For contamination load risks that are high, there will be a high overall risk. Therefor the load of any potential pollutants must be reduced, managed or contained as much as possible, which will reduce the load risk to minimal (only present under upset or abnormal conditions e.g. a leak or spillage/overflow).

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 15 Strategic Value or Current / Future Use of Groundwater

Currently there are a number of groundwater users around the study area and the aquifer is a potential potable groundwater resource (both the shallow and deeper aquifers. With the ongoing drought that the NMBM have been experiencing, and have experienced in the past, the aquifer identified underneath the study area is definitely an exploitable target for groundwater supply in the future, and have been utilised already by the municipality and private owners. 5.1 Potential Impacts Potential impacts for the development can be described under normal conditions (where all systems function as intended with no spillages or leakages) and upset conditions (where there is major failure and pollutants gets into contact with the sands). 5.1.1 Normal conditions Sanitation System: In order to contain any sanitation pollutants, it is recommended that a closed sanitation system should be implemented for the Site. With a closed sanitation system in place, the risk of contaminants reaching the groundwater is considered to be minimal. Such a sanitation system will be designed to isolate pollutants from the environment, therefore basically eliminating risk.

Hydrocarbon pollutants from on-site vehicles / breakdowns / maintenance of vehicles: If good housekeeping prevail, no hydrocarbons are allowed to spill onto the surface and all used hydrocarbons will be taken off site and disposed of at an authorised facility, then the risk of contamination is considered minimal. Draining of oil or fuel on site should be avoided, or if conducted, should be done on a leak-proof barrier to prevent any hydrocarbon from getting onto the sands and into the underground environment. Vehicles with oil or fuel leaks should be fixed, and drip trays should be used continuously where the vehicles are parked (until they are fixed).

Mitigation:

Sanitation System: Should a closed sanitation system be used, then the risk to contamination of the groundwater is considered minimal for this area; and no mitigation measures that should be applied. However, this is based on the assumption that the sanitation system will be maintained as intended and not overloaded. No spillages should take place.

Hydrocarbon pollutants from on-site vehicles / breakdowns / maintenance of vehicles: All hydrocarbons must be contained in suitable containers and all used hydrocarbons must be removed off site. All surfaces where there will be worked with hydrocarbons must be sealed off from the environment. No hydrocarbon should be discharge to stormwater and/or sewer and must be cleaned (pumped out) before reaching maximum holding capacity. Pumped fluids must be taken off site to an approved / authorised disposal facility. 5.1.2 Upset / Abnormal Conditions Under upset conditions, the following scenarios is imagined (amongst others):

 An “open” sanitation system is installed where pollutants can reach the groundwater on a continual basis;  Under circumstances where a closed sanitation system is not maintained or is damaged to such an extent that pollutants from sewage gets into direct contact with the surface for an extended period of time;  A spillage on site where a closed sewage system is knocked over or the honey sucker trucks have a spillage when cleaning out the sanitation system;  There is a breakdown on site of machinery (e.g. trucks) and it is fixed where it broke down, resulting in oils or fuel leaking onto the ground.  A workshop area is created on site for fixing and maintaining machinery, where hydrocarbons regularly get into contact with the surface.

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 16 For these scenarios, the contamination load will be high, and the potential for it to reach the water table is increased, resulting in a high overall risk to groundwater. Under these conditions, the DWS will determine the extent to which remediation should take place.

Mitigation:

Sanitation System: Installation of a closed sanitation system will minimise the contamination risk. Should failure or spillages occur, the groundwater quality down-gradient of the failure must be tested to determine the impact and possible spread. The results will determine whether remedial action is required.

Hydrocarbon pollutants from on-site vehicles / breakdowns / maintenance of vehicles: The maintenance and fixing of vehicles should be avoided for the Site. If it cannot be avoided, then maintenance should take place on a surface that seals off pollutants from the environment, and all hydrocarbon should be removed from Site and disposed of at an approved / authorised disposal facility. Any spillages that do occur, must be cleaned immediately and the spilled fluids / contaminated materials removed off site. 6. Conclusions and Recommendations Based on the information obtained and analysed above, the following conclusions can be made:

 The desktop study indicated that the sandy aquifer and the deeper hard rock aquifer in the study area is a carrier of potable groundwater and is currently used for groundwater supply purposes (private and municipal).  Water level measurements taken during the hydrocensus varied between 4.80 and 9.56 m bgl; whereas historical data reveals water levels ranging between 0.1 and 22 m bgl.  A water level measurement of 0.1 m bgl was taken in a borehole drilled into the hard rock TMG aquifer; and a measurement of 0.2 m bgl was taken in a borehole drilled into the sandy aquifer. These measurements were taken a few years back when the rainfall was higher in the NMBM, and these levels will most likely have dropped somewhat during the drought.  It must be noted that the NMBM is experiencing one of its worst droughts in the past 80 years, and that water levels is likely influenced by the drought. During periods of higher rainfall, water levels, specifically in the sandy aquifer, will likely be higher.

The following recommendations / mitigation measures are made:

 It is recommended that a closed sanitation is installed for the Site, where effluent is completely sealed off from the underground environment. This will minimise / eliminate the risk to groundwater.  Vehicle maintenance, fixing of breakdowns, refuelling and draining of oil or fuel on site should be avoided; or if conducted, should be done on a leak-proof barrier to prevent any hydrocarbon from getting onto the sands and into the underground environment. Vehicles with oil or fuel leaks must not be allowed on site. If good housekeeping prevail, no hydrocarbons are allowed to spill onto the surface and all used hydrocarbons will be taken off site and disposed of at an authorised facility, then the risk of contamination is considered minimal.  Because of the sensitivity of the aquifer, it is recommended that a monitoring network must be installed to monitor potential changes over time in the groundwater environment. The boreholes should be installed in the primary sandy aquifer, and about four of five boreholes are recommended (depending on the layout of the site that is chosen for mining). The positions of the boreholes must be determined by a hydrogeologist in order to position them optimally to detect potential changes in the groundwater environment. After the installation of the monitoring network, sampling can be conducted on a quarterly basis for the first year. If the results are stable, then monitoring can be reduced to six-monthly.

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018 SRK Consulting Page 17 Yours faithfully,

Riona Kruger (Pr Sci Nat) Gert Nel (Pr Sci Nat) Senior Geoscientist Principal Hydrogeologist and Partner

SRK Consulting (South Africa) (Pty) Ltd

Disclaimer Opinions presented in this report apply to the site conditions and features as they existed at the time of SRK’s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which SRK had no prior knowledge nor had the opportunity to evaluate.

KRUR/NELG 535889 ACME Driftsands Mine Groundwater Investigation_Jul2018_Rev1 Aug 2018