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INVESTOR SITE VISIT – WONDERKOP SMELTER 6 MAY 2016 Presented by Zanele Matlala (CEO) and Amanda Magro (Wonderkop – General Works Manager) Presented by Zanele Matlala (CEO) and Kajal Bissessor (FD) Legal notice/disclaimer This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been taken from sources considered by Merafe Resources to be reliable but no warranty is given that such information is accurate or complete and it should not be relied upon as such. Views and opinions expressed in this presentation reflect the judgment of Merafe Resources as of the date of this presentation and are subject to change. Merafe Resources will not be responsible for any liability for loss or damage of any kind which arises, directly or indirectly, and is caused by the use of any of the information provided. The entire presentation is subject to copyright with all rights reserved. The information contained herein shall not be published, rewritten for broadcast or publication or redistributed in any medium without prior written consent from Merafe Resources. Prospective investors should take appropriate investment advice and inform themselves as to applicable legal requirements, exchange control regulations and tax considerations in the countries of their citizenship, residence or domicile. The distribution of the information contained in this presentation in certain countries may be restricted by law and persons who access it are required to inform themselves and to comply with any such restrictions. This information does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Past performance is not a guarantee of future performance. The price of shares can go down as well as up and may be affected by change in exchange rates, market conditions and risks associated with a mining venture. 2 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 PROGRAMME 1. Depart Lanseria 08h30 2. Arrive Wonderkop Smelter 10h30 3. Welcome by CEO, Zanele Matlala 4. Presentation and Safety Video by Amanda Magro 5. Guests Change in Safety Apparel 6. Site Visit 11h00 7. Lunch 13h00 8. Depart for Lanseria 14h15 3 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 TABLE OF CONTENTS 1. Overview of the Glencore – Merafe Venture 2. Historical projects 3. Challenges facing the SA Ferrochrome Industry 4. Comparison of Smelting Technologies 5. Our Marketing Agents Offering 6. Labour Relations 7. Overview of the Wonderkop Smelter and Bokamoso Pelletising and Sintering Plant 4 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 Glencore – Merafe Chrome Venture Smelters Ports Mines Maputo ● Lydenburg ❶ Kroondal ❻ Design Capacity: 396kt FeCr Richards Bay ● Processing Capacity: 1,730kt Furnaces: 3 Premus and 1 semi- Production Capacity: 967kt closed conventional Durban ● Waterval West ❼ Lion Ferrochrome (I & II) ❷ Processing Capacity: 480kt Design Capacity: 720kt FeCr Production Capacity: 240kt ❷❾ Furnaces: 4 Premus ⓫ ❹ ⓬❶ Lion II commissioned during H1 ❺ ❸ ❿ UG2 Plants – West ❽ ❼ ❽ ❻ Production Capacity: 2,220kt Wonderkop ❸ ● Design Capacity: 553kt FeCr Thorncliffe ❾ Furnaces: 6 semi-closed ❿ conventional with Bokamoso Processing Capacity: 1,380kt Outokumpu pelletising Production Capacity: 871kt ● Helena ❿ Boshoek (PSV) ❹ Processing Capacity: 1,380kt Design Capacity: 240kt FeCr ● Production Capacity: 814kt Furnaces : 2 Outokumpu closed with pelletising Magareng ⓫ Rustenburg ❺ Processing Capacity: 1,380kt Production Capacity: 731kt Design Capacity: 430 kt FeCr Furnaces: 6 semi-closed conventional with Tswelopele UG2 Plants – East ⓬ Outokumpu pelletising Production Capacity: 133kt Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 5 Diversified Operations • Geographically – 22 furnaces – 8 mines (ore and quartzite) – 9 UG2 concentrator plants . Long term contracts • Technologically – Conventional Process, Semi-Closed . 13 of the 22 furnaces are conventional/semi-closed technology . Ore and reductants are fed cold with minimum pre-processing directly into open submerged arc furnaces . Lowest capital cost per tonne of alloy – Outokumpu Process . Basis for the 2 Boshoek chrome furnaces and Bokamoso & Tswelopele pelletising plants . A sintering and pelletising plant supplies cold pellets to the pre-heater of the closed submerged arc furnaces at Boshoek Smelter . Cold pellets are fed directly to the semi-closed furnaces . Result in an increase in chrome recovery, reduction in energy and ore efficiencies – Premus (Lydenburg and Lion I & II) . Developed and modelled at Lydenburg plant . A mixture of fine ore, reductants and binder is milled and pelletised . The pellets are pre-reduced in rotary kilns and the metallized pellets are hot charged to closed furnaces . The use of metallized pellets results in high chrome recoveries and the lowest specific energy consumption 6 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 Historic Projects Delivered on Time and on Budget 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Commissioning of Merger to form Glencore- Commissioning of Boshoek smelter Merafe Chrome Venture Lion I smelter Commissioning of Acquired interest in Bokamoso Pelletiser Wonderkop smelter and related mines 2011 2012 2013 2014 2015 Waterval Mine Commissioning Development - Commissioning Ramp-up of Tswelopele 360ktpa of Chrome of Lion II Smelter of Lion II Pelletiser Ore 7 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 Growth Through Innovation • Significant investments over the past decade to address: – Power efficiency – Power constraints – Ore efficiency – Process efficiency – Escalating costs • Lion phases 1 and 2 – Development of the Premus Technology • Bokamoso Pelletising Plant: Western limb, Wonderkop • Tswelopele Pelletising Plant: Western limb, Rustenburg • Magareng Mine: Eastern Limb, Steelpoort • UG2 Operations – Our own mines – Long term contracts with platinum producers 8 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 Challenges Facing the South African Ferrochrome Industry Glencore – Merafe Difference SA Ferrochrome Challenge The Glencore – Merafe Difference . Rapidly escalating power costs Growth Through Innovation • Lion I & II, Lydenburg: Premus technology • All other plants: Sintered pelletising technology . Power supply constraints Growth Through Innovation • Lion I & II, Lydenburg: Premus technology • All other plants: Sintered pelletising technology . Limited local coke supply Growth Through Innovation • Lion I & II, Lydenburg: Premus technology • All other plants: Sintered pelletising technology . Ore costs escalating Growth Through Innovation • Lion I & II, Lydenburg: Premus technology • All other plants: Sintered pelletising technology • Magareng, UG2 , own mines • Third part ore contracts . Faltering financial backing Financial Stability • Majority owned by Glencore PLC . Non integrated producers Fully Integrated Diversified Operations . Logistics constraints Diversified Port Usage Diversified Road and Rail Inland Transport . Labour Relations: Industrial Action Diversified Operations Diversified Logistics 9 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 Comparison of Smelting Technologies Premus technology provides a significant advantage Chrome Recovery for Available Technologies MWh per tonne for Available Technologies 95 6 90 90 88 5 4.4 4.1 85 4 3.5 % 80 77 3 2.4 75 2 68 70 per MWh alloytonne 1 65 0 Con Outk DC Arc Premus Con Outk DC Arc Premus Coke Consumption for Different Technologies Reduction in Coke Dependency Substitution with Anthracite which is a low cost reductant 60% 70 53% 55% 54% 60 52% 60 50% 44% 50 36% 40 40% 40 30% 30 19% 18 of % Anthracite 20% 20 12% 10% 6% 6% % Dry of Fixed Carbon 10 0 0 0% Con OutK DC Arc Premus 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 F Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 10 Our Marketing Agents Superior Offering • Logistics – Glencore has dedicated logistic teams in all major offices . Direct relationships with shipping lines, port agents and port authorities worldwide . Personnel available on site at load and discharge ports – Logistics solutions ensure smooth, uninterrupted supply to our customers – Diversified port usage . Maputo . Richards Bay . Durban – Dedicated storage areas – Dedicated warehouse space • Diversified road and rail inland transport – Contracts for both rail and road from inland plants to the ports – Major long term road and freight contracts • Dedicated global shipping desk – Caters and adapts to customer delivery requirements 11 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 Labour Relations • Sound Labour Relations – Employee Share Ownership Plan agreed with Unions – Competitive Salary Structure Home ownership incentivised . No hostels Full pension contribution from company Full medical aid from company • Low level of migrant labour • Corporate Social Investment Programme – Community projects 12 Merafe Resources Ltd | Investor Presentation – Wonderkop Site Visit 6 May 2016 WONDERKOP SMELTER “The home of modern, cost effective charge chrome production”