Merafe Resources Integrated Annual Report 2018

MERAFE RESOURCES INTEGRATED ANNUAL REPORT 2018 27 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES STATEMENT PERFORMANCE For the complete Mineral Resources and Mineral Reserves statement including definitions of the categorisation of mineral resources and reserves as per the SAMREC Code 2009, descriptions and exploration activities, geological settings of the reserves (including maps and diagrams), legal entitlement, methods and assumptions, material risk factors and a summary of environmental funding and management, see Appendix 1 to this report and our online Integrated Annual Report for 2018. See page 60 of the report for the Directors' report and for the statement on mining rights and mining operations. the Venture has applied for a renewal of the Prospecting Right on the farms Richmond and St George. This application has been granted and executed during 2018. In addition, an application has been submitted to incorporate Richmond and St George into the eastern mines Mining Right. The MG1 Chromitite Layer is being mined at the eastern mining complex using underground trackless mining methods on a bord-and-pillar mining layout. Comparison of Mineral Resource and Mineral Reserve estimates with previous year’s estimates The annual Mineral Resource and Mineral Reserve estimates are compared with the previous year’s statement and reconciled each year after the estimates have been finalised. Changes in the year on year tonnage and grade estimates are mainly due to mining depletion and changes in the Mineral Resource and Mineral Reserve tonnages and grades due to additional geological information. The biggest movement in the year on year Mineral Resource estimate is the disposal of portions of the Klipfontein/ Waterval and the Kroondal Gemini resource blocks in favour of Lanxess Chrome Mining (Pty) Ltd (“LCM”). The Venture will be compensated for these resources as and when LCM mine the resources. The disposed resource blocks amount to 8.098mt. Material risk factors There are no foreseen material risk factors that could affect the validity of the current Mineral Resource and Mineral Reserve statement. All the legislative requirements have been met with respect to the rights to mining and prospecting for which the Mineral Resources and Mineral Reserves have been reported. All the operating mines are mining under new order, executed Mining Rights. The Prospecting Rights of all the prospecting areas have been converted to new order Prospecting Rights. Introduction The purpose of this report is to document the Mineral Resources and Mineral Reserves of Merafe Resources (Merafe) in accordance with the requirements of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, 2016 (SAMREC). All Merafe’s operations are part of a pooling and sharing venture with Glencore Operations South Africa Proprietary Limited (the Glencore-Merafe Chrome Venture (the Venture)). Merafe has a 20.5% attributable beneficial interest in the Mineral Resources and Mineral Reserves of the Venture. The estimates in this document are as at 31 December 2018. To arrive at a Mineral Resources and Mineral Reserves estimate for 31 December 2018, the budgeted production for July 2018 to December 2018 has been subtracted from the total estimates. The Mineral Resource and Mineral Reserve information in the tables on the following pages is based on information compiled by a Competent Person (as defined by the SAMREC Code). Type of mining and mining activities The Venture has chrome mining operations along the Western and Eastern Limbs of the Bushveld Complex. The operations along the Western Limb of the Bushveld Complex comprise the Waterval, Kroondal and Boshoek Mines. The LG6 Package at both Waterval and Kroondal mines is mined underground using trackless mining methods on a bord-and-pillar layout. Boshoek Mine is 20km northwest of Rustenburg. The MG1, LG5 and LG6 chromitite layers are the mineable open pit layers in the Boshoek area. Boshoek Mine has been put on care and maintenance. The Townlands Extension 9 Prospecting Right area is an exploration project and exploration activities have been put on hold with the Venture applying for a Retention Permit. The eastern mining complex of the Venture consists of Thorncliffe, Magareng and Helena mines which are situated along the southern portion of the Eastern Limb of the Bushveld Complex. Adjacent to these farms,