Part X Technical Report An Independent Competent Persons’ Report on the Material Properties of Global Enterprises Corporate Limited Prepared for: Global Enterprises Corporate Limited and JPMorgan Cazenove Prepared by: SRK Consulting (South Africa) (Proprietary) Limited, SRK House, 265 Oxford Road, Illovo, Johannesburg, Gauteng Province, Republic of South Africa. Tel: +27-(0)11-441 1111 Fax: +27-(0)11-441 1139 26 June 2006 116 Part X—Technical Report An Independent Competent Persons’ Report on the Material Properties of Global Enterprises Corporate Limited Executive Summary Introduction SRK Consulting (South Africa) (Proprietary) Limited (“SRK”) has been commissioned by the directors of Global Enterprises Corporate Limited (“GEC”) to prepare an independent competent persons’ report (“CPR”) on the material assets and liabilities associated with the following Cu-Co projects located near Kolwezi in the Katanga Province of the Democratic Republic of Congo (the “Material Properties”): • KOV, a mining project; • Kananga, an exploration project; and • Tilwezembe, an exploration project. GEC has a 75% interest in each of the Material Properties, with the remaining 25% held by Gécamines (la Générale des Carrières et des Mines). The exploitation rights to the Material Properties are held in a joint venture vehicle DCP SARL (DRC Copper and Cobalt Project, “DCP”). These have been valued by SRK using valuation techniques appropriate to the stage of development of each project. SRK was approached by GEC to prepare a CPR on the Material Properties in accordance with the admission requirements of the Alternative Investment Market (“AIM”) of the London Stock Exchange in anticipation of a listing of the Company on AIM during 2006. This CPR has been prepared in accordance with the Guidance Note for Mining, Oil and Gas Companies issued by AIM on 16 March 2006. Details of data/information used to prepare this CPR are as follows: • Gécamines Western Proposal—pre-feasibility study, Report No M3037, Bateman Metals (as lead consultant) 15 June 2005; • DRC Copper/Cobalt Project SARL—Definitive Feasibility Study (“DFS”), compiled by GEC, May 2006 (with input from a consortium of independent consultants); • Financial Evaluation Model for the KOV Project, as part of the Definitive Feasibility Study for the KOV Project, compiled by Global Enterprises Corporate, May 2006; The effective date (the “Effective Date”) of this report is deemed to be 1 July 2006, and is co-incident with the Valuation Date and cashflow projections as incorporated herein. The achievability of LoM Plans, budgets and forecasts are neither warranted nor guaranteed by SRK. The forecasts for the KOV project as presented and discussed herein have been developed by SRK based on information supplied to it by GEC, and cannot be assured; they are necessarily based on economic assumptions, many of which are beyond the control of GEC. Future cash flows and profits derived from such forecasts are inherently uncertain and actual results may be significantly more or less favourable. GEC, DCP and the Material Properties Global Enterprises Corporate Limited (“GEC”), a company registered in the British Virgin Islands, is 100% owned by Nikanor plc. Following execution of a Memorandum of Understanding on 5 May 2004, GEC and Gécamines entered into a Joint Venture Agreement (“JVA”) on 9 September 2004 in relation to the rehabilitation and exploitation of three brownfield Cu-Co mines within Gécamines’ “Group West” operational zone located near Kolwezi in the Katanga Province of the Democratic Republic of Congo (“DRC”) (see Figure 2.1). The JVA comprises the mines of KOV, Kananga and Tilwezembe, the processing facilities of the Kolwezi Concentrator and an existing electro-refinery at Luilu (the “Existing Electro-Refinery”), and certain rights in relation to the Shituru refinery in Likasi. 117 Part X—Technical Report DCP SARL (DRC Copper and Cobalt Project, “DCP”) is a joint venture vehicle established by Gécamines and GEC under the laws of the DRC for the exploitation of the KOV, Kananga and Tilwezembe deposits. DCP, a company registered in the DRC, is held 75% by GEC and its nominees and 25% by Gécamines. Three exploitation permits for the KOV, Kananga and Tilwezembe open pit mines were transferred from Gécamines’ existing mining title Exploitation Permit No 525 (Permis d’Eploitation, “PE”). The three exploitation permits provide DCP with the exclusive right to conduct exploration, development and exploitation activities with respect to copper and cobalt (as well as related mineral substances) within the relevant mining zones. A key commercial term of the JVA involves the lease or granting of certain rights to DCP with respect to following processing facilities (together the “Processing Facilities”): • The Kolwezi Concentrator (“KZC”); • The Existing Electro-Refinery (together with waste sites and certain infrastructure together “Luilu facilities”) • Certain buildings and workshops (such as those at SKM) (“KOV facilities”); • Treatment of concentrates at the Shituru hydro-metallurgical treatment plant in Gécamines’ Central Group operational zone around the town of Likasi. In return for the use of the KZC, the Luilu facilities and the KOV facilities, a percentage of net sales receipts (2% for the first four years and 1.5% thereafter) will be payable to Gécamines. The JVA also gives DCP a right of first refusal on surplus production of acid and/or lime from any of Gécamines’ neighbouring plants. As the Processing Facilities are not required for the planned operations at KOV, the lease/ granting of rights has been treated as a material contract, although it will not form part of the valuation of GEC. The KOV mining project comprises the four large orebody fragments of Kamoto East, Oliveira and Virgule (hence the name KOV) and FNSR. The open pit operations of KOV and Kamoto East are situated at Latitude 10°42’S and Longitude 25°25’E, some 5km west of the town of Kolwezi in the Katanga Province in the south-eastern part of the DRC (Figure 2.2). From the aerial photo of the KOV and Kamoto East pits (Figure 2.3), it can be seen that the existing opencast mine workings are filled with water. A programme to dewater the pits and the surrounding slopes is planned to start in the fourth quarter of 2006. A significant asset within the existing infrastructure at KOV is a KRUPP waste conveyor system, complete with in-pit crushers and a large spreader, capable of handling 64Mt of waste per year. This conveyor system operated for only 6 months in 1997. Thyssen-Krupp engineers inspected the system in March 2006 and reported that the conveyor system was in very good condition. The Kananga project is situated at Latitude 10°40’S and Longitude 25°28’E some 5km north of the town of Kolwezi. The deposit has not been adequately drilled but is believed to continue largely uninterrupted over a strike length of about 6km. The ore is mainly oxide in nature with very little sulphide material in the mineralogy. Predominant copper minerals are malachite and pseudo-malachite associated with the cobalt mineral, heterogenite. The host rock is both dolomitic and siliceous. Copper and cobalt head grades are reasonably well defined using both current and historical records from the Gècamines geology database and from head grades of ore processed in the KZC concentrator. The resulting oxide concentrate was leached and refined at the ‘Old’ Luilu and Shituru refineries, located at Kolwezi and Likasi respectively, producing a “B” grade copper cathode and cobalt metal. The Kananga pit is located close to the Dilala River and wetland and is also within 20m of the Lubumbashi-Lobito railway line. The Tilwezembe project is located at Latitude 10°47’S and Longitude 25°42’E some 27km south east of Kolwezi, close to the Lualaba River on the road to Likasi. Mining has taken place intermittently since 1999. 118 Part X—Technical Report A rail siding and contractors yard was established close to the site. Due to a shortage of rolling stock and locomotives, a stockpile of ore had been created close to the siding. The deposit has not been adequately drilled but is believed to continue largely uninterrupted over a strike length of about 6km. The ore is mainly oxide in nature with very little sulphide material in the mineralogy. Predominant copper minerals are malachite and pseudo-malachite associated with the cobalt mineral, heterogenite. The host rock is both dolomitic and siliceous. Copper and cobalt head grades are reasonably well defined using both current and historical records from the Gècamines geology database and from head grades of ore processed in the KZC concentrator. The resulting oxide concentrate was leached and refined at the ‘Old’ Luilu and Shituru refineries, located at Kolwezi and Likasi respectively, producing a “B” grade copper cathode and cobalt metal. The Tilwezembe deposit is very rich in cobalt, but also contains a high proportion of manganese that requires an adjustment to the processing method for this ore. GEC and Gécamines entered into a JVA in relation to the rehabilitation and exploitation of the KOV, Kananga and Tilwezembe mines near Kolwezi. The JVA was structured for consistency with the provisions of the Code and included the following key elements: • Obligation to pay customs duties, taxes (30% tax on profits, 10% turnover tax on local sales of goods made and 5% for services rendered locally) and royalties (due to the Public Treasury at 2% of sales proceeds for non-ferrous metals, net of transport, insurance and sales costs); • Obligation to pay surface area fees (US$5/ha/yr to cover costs of services rendered, plus a surface area tax of US$0.08/ha/yr, for the area covered by the PE); • Obligations with respect to the protection of the environment; and • Leasing by Gécamines (as Lessor) of the Processing Installations to the JVA (as Lessee), including obligations of the Lessee to maintain asset condition, meet taxes, observe all laws and make investments to ensure development.