PAN AFRICAN RESOURCES PLC - Proposed Financing for Eikhulu Tailings Project

Proposed Financing for Elikhulu Tailings Project

Pan African Resources PLC, the Africa-focused precious metals producer, is pleased to announce a proposed comprehensive funding package for the Elikhulu Tailings Project, comprising:

• a proposed placing (the “Placing”) to existing and new institutional investors of 291,480,983 new ordinary shares of 1 pence each (“Placing Shares” or “New Ordinary Shares”) at an issue price of 14 pence per Placing Share or ZAR2.42 per Placing Share (together the “Issue Price”) to raise approximately ZAR705 million (US$51 million); and
• a ZAR1.0 billion (US$72 million) underwritten seven-year debt facility which has been agreed in principle with Rand Merchant Bank, a division of FirstRand Bank Limited (“RMB facility”).

The funding package will be used to fast-track development of the Company’s Elikhulu Tailings Project in South Africa (“Elikhulu” or the “Project”) following publication of the Definitive Feasibility Study for the Project, announced on 5 December 2016. Elikhulu is expected to produce approximately 56,000 ounces of gold per year for its first eight years of operations and 45,000 ounces of gold for the remaining five years. Commissioning and first gold of the Project is forecast and expected in the final quarter of the 2018 calendar year.

Capitalised terms not otherwise defined in the text of this Announcement are defined in Appendix III ("Definitions") of this Announcement.

Cobus Loots, Chief Executive Officer of PAF, commented:

“The completion of the proposed equity portion of the Elikhulu funding package and subsequent construction of the project will represent another key milestone for the Group. Elikhulu is expected to deliver low-risk and low-cost gold production within a relatively short timeframe.  This initiative, together with our recently announced coal disposal, is consistent with our strategy of pursuing and executing value accretive opportunities both within and outside of South Africa.”

Funding highlights

• Placing to raise gross proceeds of approximately ZAR705 million (US$51 million)  subject to demand at the Issue Price of 14 pence per Placing Share or ZAR2.42 per Placing Share (discounts of approximately 12.5 percent and 11.0 percent to the Company’s share price of 16 pence per share and ZAR2.72 per share respectively as at market close on 11 April 2017);
• The net proceeds of the Placing will be used in conjunction with the proposed c. ZAR1.0 billion (US$72 million) RMB facility to fund the US$120 million total capital expenditure to bring Elikhulu into production; and
• The balance of the net proceeds of the Placing will be used for working capital.

Details of the Placing

• The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated bookbuilding process (the “Bookbuild”). The Company has appointed Numis Securities Limited (“Numis”), Hannam & Partners (Advisory) LLP (“H&P”) and Peel Hunt LLP (“Peel Hunt”) as the UK placing agents and The Standard Bank of South Africa Limited (“Standard Bank”) and Rand Merchant Bank, a division of FirstRand Bank Limited (“RMB”) as the South African placing agents (together, the “Placing Agents” or “Bookrunners”) in connection with the Placing, which will be undertaken in accordance with the terms and conditions set out in Appendix I to this Announcement. Pursuant to the terms of the Placing Agreement, the Placing Agents have conditionally agreed to use their reasonable endeavours to place the Placing Shares on a non-underwritten basis at the Issue Price with both existing and new institutional investors. Members of the public are not entitled to participate in the Placing.

• The Placing Agents will immediately commence the Bookbuild. The books are expected to close no later than 12.00 p.m. BST / 1.00 p.m. SAST today. The timing of the closing of the books and the announcement of allocations may be accelerated or delayed at the Placing Agents’ sole discretion. This Announcement gives details of the terms and conditions of, and the mechanics of participation in, the Placing.

• The price at which the Placing Shares are to be placed will be the Issue Price. The Bookbuild will establish the number of Placing Shares to be issued at the Issue Price, which will be agreed between the Placing Agents and the Company following completion of the Bookbuild.

• The total number of Placing Shares issued in the Placing will be determined subject to demand. The Directors of the Company, in consultation with the Placing Agents, reserve the right to adjust the final size of the Placing. The number of Placing Shares will be announced on a Regulatory Information Service and SENS following completion of the Bookbuild.

The Company will apply for admission of the Placing Shares to trading on AIM (“UK Admission”) and to the JSE for the listing of the Placing Shares on the Main Board of the JSE ("South African Admission" and together with the UK Admission, “Admission”). Subject to the Placing Agreement not having been terminated in accordance with its terms, it is expected that Admission of the Placing Shares will occur on or around 19 April 2017.

Placing Agreement

The Placing Agreement contains customary warranties given by the Company to the Placing Agents as to matters relating to the Company and its business and a customary indemnity given by the Company to the Placing Agents in respect of liabilities arising out of or in connection with the Placing. The Placing Agents are entitled to terminate the Placing Agreement in certain circumstances prior to admission of the Placing Shares, including circumstances where any of the warranties are found not to be true or accurate or were misleading and upon the occurrence of certain other events. The Placing Shares will be issued to Placees credited as fully paid and will, upon issue, rank pari passu in all respects with the PAF ordinary shares then in issue, including all rights to receive all dividends and other distributions declared, made or paid following Admission of such Placing Shares. The Placing Shares are not being made available to the public or being offered or sold in any jurisdiction where it would be unlawful to do so. The Placing is not being underwritten by the Placing Agents or any other person.

The Placing Agents may choose to accept or reject bids, either in whole or in part, on the basis of allocations determined at their discretion (in agreement with the Company) and may scale down any bids for this purpose on such basis as it may determine. Investors should refer to their trade confirmation.

UK and European Investors

Investors in the UK, the EU and Switzerland who qualify for participation in the Placing may participate in accordance with the terms and conditions of the Placing which are set out in Appendix I to this Announcement.

South African investors

Investors in South Africa who qualify for participation in the Placing may participate in accordance with the terms and conditions of the Placing which are set out in Appendix I to this Announcement.

US Investors

The Placing is being made outside the United States in “offshore transactions” within the meaning of, and pursuant to, Regulation S under the US Securities Act.

Exchange Rates

In this Announcement, references to "pounds sterling", "£", "pence" and "p" are to the lawful currency of the United Kingdom, references to "US dollars", "US$" and "cents" are to the lawful currency of United States of America and references to "South African Rand", "R" and "ZAR" are to the lawful currency of the Republic of South Africa. Unless otherwise stated, the basis of translation of pounds sterling into US dollars for the purposes of inclusion in this Announcement is £1.00/US$1.25 and the basis of translation of pounds sterling into South African Rand is £1.00/ZAR17.26. Translation of US dollars into South African Rand is US$1.00/ZAR13.83.

Your attention is drawn to the detailed terms and conditions of the Placing described in Appendix I to this Announcement, which forms part of this Announcement and sets out further information relating to the Bookbuild and the terms and conditions of the Placing, and to Appendix II to this Announcement which sets out certain risk factors in connection with the Placing.

Expected Timetable of Principal Events

(1) Each of the times and dates set out in the above timetable and mentioned in this announcement and in any other document issued in connection with the Placing is subject to change by the Company (with the agreement of the Bookrunners, in certain instances), in which event details of the new times and dates will be notified to the London Stock Exchange and the JSE Limited and, where appropriate, to Shareholders through an announcement on a Regulatory Information Service and on SENS.

(2) Any reference to a time in this announcement is to UK time, unless otherwise specified.

(3) 12.00 p.m. refers to midday.

(4) If the Placing proceeds, the Bookbuild will close once the Placing Agents (in consultation with the Company) have decided sufficient applications for Placing Shares have been received.

Background to and reasons for the Placing

The net proceeds of the Placing will be used to advance Elikhulu towards expected first gold production in the final quarter of 2018 with the mine construction anticipated to commence in the third quarter of 2017. Fast tracking earthworks and placing deposits for long lead items whilst awaiting the full RMB facility draw down will have numerous advantages to the Company in maintaining its proposed timelines.  The Company received credit approval for a ZAR1.0 billion (US$72 million) underwritten loan facility with RMB.  It is a 7-year term (capital to be repaid through equal quarterly repayments after a grace period of 2 years) at a competitive prevailing interest rate.  The debt facility has credit approval but remains subject to finalisation of definitive legal agreements, and the fulfilment of conditions precedent including licensing approvals and other conditions typical/customary for a facility of this nature.  As part of their credit approval process, RMB appointed the Mineral Corporation, as an independent technical advisor, to review the DRA DFS for fatal flaws. Their review did not identify any such flaws.  The debt redemption profile is matched to that of the Elikhulu project’s cash flows and the projects funding is not expected to impact on PAR’s ability to pay dividends during the construction period.

The Company published the results of its Elikhulu Definite Feasibility Study (the “DFS” or the “Study”) on 5 December 2016, which indicates excellent recoverable grades and gold production, attractive financial returns and a low execution risk, with the DFS results surpassing expectations of previous technical and financial assessments of the Project.

At a US$1,180 per ounce gold price the DFS results outlined a NPV₉ of US$75.6 million, real post-tax IRR of 34.3% and low all in sustaining costs of US$527 per ounce of gold (cash costs US$440 per ounce) for a 13 year LOM gold production at an average of 52,000 ounces per annum. 56,000 ounces of gold is expected to be produced by the Project per year during the initial eight years of operations.

The Study included the finalisation of detailed plant engineering and process design work, enhanced geotechnical, hydrological and hydrogeological studies, as well as a robust mine plan, which should allow for the commencement of mine construction in the third quarter of the 2017 calendar year. First gold forecast from the Project is for the final quarter of the 2018 calendar year.

The DFS Study is published on the PAF website and can be viewed on the following link:

http://www.panafricanresources.com/wp-content/uploads/DRA-DFS-Executive-Summary-Final.pdf

Use of proceeds

The net proceeds of the Placing will be used in conjunction with the RMB facility to fund the US$120 million total capital expenditure to bring Elikhulu into production. The balance of the net proceeds of the Placing will be used for working capital.

Current Trading and Prospects

The Company announced its results for the six months ended 31 December 2016 on 22 February 2017, in which the Company reported gold production of 91,613 ounces for the first half of 2017.

The Company also announced on 20 February 2017 that it had sadly suffered a fatality on its Evander 7 shaft complex on 15 February 2017, and that Evander’s management had initiated studies which identified critical infrastructure issues requiring remedial action, to ensure safe and sustainable operation of Evander 7 and 8 shafts.

The nature of these refurbishments require a suspension of Evander’s underground mining operations for a period of up to 55 days, during which critical infrastructure issues will be addressed. Evander’s tailings and surface operations will be unaffected by the underground mining suspension.

The cost of the shaft refurbishment programmes is expected to be approximately ZAR40 million, which will be funded from the Company’s existing banking facilities.

In light of these recent developments, the Company has revised its gold production guidance for the financial year ending 30 June 2017 from 195,000 ounces to approximately 181,000 ounces.

The Company announced on 5 April 2017 that it has concluded an agreement with Coal of Africa Limited (“CoAL”), whereby the Company will dispose of all its shares and loan accounts in its wholly-owned subsidiary, Pan African Resources Coal Holdings Proprietary Limited (“PAR Coal”), the holding company of Uitkomst, to CoAL for a total consideration of cash and shares to the value of ZAR275 million.

Further to the announcement on 20 February 2017, the Company provided an update on 10 April 2017, stating the refurbishment of the 7 and 8 shaft complex is progressing according to schedule and is expected to be completed on 15 April 2017 within the original ZAR40 million cost estimate.

All of the Company’s announcements can be found on the website at http://www.panafricanresources.com/.

Other Opportunities

Although the Company’s current focus is on bringing Elikhulu to production in the near-term, PAF regularly reviews opportunities to enhance its business through acquisitions, joint ventures and other combinations with companies, in line with its stated objectives.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

For more information, please visit www.panafricanresources.com

Important Information

This Announcement, including its Appendices, contains forward-looking statements, including but not limited to statements about the costs of, and the Company's ability to successfully construct, commission and execute, the Project. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and therefore are based on current beliefs and expectations about future events. Forward-looking statements are not guarantees of future performance and the Group's actual operating results and financial condition, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this announcement. In addition, even if the Group's operating results, financial condition and liquidity, and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Accordingly, prospective investors should not rely on these forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. None of the Company, the Directors or the Bookrunners undertake any obligation nor do they intend to revise or update any document unless required to do so by applicable law, the Prospectus Rules, the Disclosure Requirements or the Transparency Rules.

Neither this Announcement (including its Appendices) nor the Placing constitutes or is intended to constitute an offer to the public in South Africa in terms of the South African Companies Act, 2008 (the “South African Companies Act"). In South Africa this Announcement is only being distributed to, and is only directed at, and any investment or investment activity to which this announcement relates is available only to, and will be engaged in only with, persons in South Africa who (i) fall within the categories of persons set out in section 96(1)(a) of the South African Companies Act or (ii) are persons who subscribe, as principal, for Placing Shares at a minimum placing price of R1,000,000, as envisaged in section 96(1)(b) of the South African Companies Act, in each case to whom the Placing is specifically addressed.

This Announcement (including its Appendices) and the information contained in it is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia, collectively the "United States") or any Excluded Territory or any other jurisdiction where to do so might constitute a violation of local securities laws or regulations. The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.

This Announcement is for information purposes only and does not constitute an offer or invitation to sell or issue or the solicitation of an offer to buy, acquire or subscribe for New Ordinary Shares to or by anyone in any Excluded Territory or to any person to whom it is unlawful to make such offer or invitation or undertake such solicitation. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Subject to certain exceptions, the securities referred to herein may not be offered or sold in any Excluded Territory or to, or for the account or benefit of any national resident or citizen of any Excluded Territory. This Announcement does not constitute an extension into the United States of the offer mentioned in this Announcement, nor does it constitute nor form part of an offer to sell securities or the solicitation of an offer to buy securities in the United States. The New Ordinary Shares have not been and will not be registered under the US Securities Act or under any securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Ordinary Shares may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into or within the United States absent registration under the US Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the New Ordinary Shares in the United States. The New Ordinary Shares may not be offered or sold to, or for the account or benefit of, any ADR holder. Subject to certain exceptions, no action has been taken by the Company or by the Bookrunners that would permit an offer of the New Ordinary Shares or possession or distribution of this announcement in the Excluded Territories or any other jurisdiction where action for that purpose is required, other than the United Kingdom and the Republic of South Africa. No public offering of the shares referred to in this Announcement is being made in any Excluded Territory or elsewhere.

This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Bookrunners or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Numis, H&P and Peel Hunt, each of which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (“FCA”), are each acting exclusively for the Company and no one else in connection with the Placing, and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice, in relation to the Placing or any other matter referred to in this Announcement.

RMB and Standard Bank are each acting exclusively for the Company and no one else in connection with the Placing, and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice, in relation to the Placing or any other matter referred to in this Announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Bookrunners by the Financial Service and Markets Act 2000, as amended, or the regulatory regime established thereunder, or by the London Stock Exchange or the AIM Rules for Companies and AIM Rules for Nominated Advisers, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Bookrunners, nor any of their respective affiliates, directors, officers, employees or advisers accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to, the contents of this announcement, including its accuracy or completeness, or for any other statement made or purported to be made by it, or on behalf of it, the Company, the Directors or any other person, in connection with the Company, the New Ordinary Shares and the Placing, and nothing in this document should be relied upon as a promise or representation in this respect, whether or not to the past or future. Each of the Bookrunners and their respective affiliates, directors, officers, employees and advisers accordingly disclaims to the fullest extent permitted by law all and any responsibility or liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Announcement or any such statement.

The distribution of this Announcement and the offering of the New Ordinary Shares in certain jurisdictions other than the United Kingdom and the Republic of South Africa may be restricted by law. Subject to certain exceptions, no action has been taken by the Company or the Bookrunners that would permit an offering of the New Ordinary Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in the Excluded Territories or in any other jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company, and the Bookrunners to inform themselves about, and to observe, any such restrictions.

Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

No statement in this Announcement (including its Appendices) is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

The New Ordinary Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than on AIM, a market operated by the London Stock Exchange and the exchange operated by the JSE Limited.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

APPENDIX I

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY

REGARDING THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (WHICH IS FOR INFORMATION PURPOSES ONLY) AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (C) IN THE REPUBLIC OF SOUTH AFRICA, PERSONS WHO (1) FALL WITHIN THE CATEGORIES OF PERSONS SET OUT IN SECTION 96(1)(A) OF THE SOUTH AFRICAN COMPANIES ACT, 2008 OR (2) ARE PERSONS WHO SUBSCRIBE, AS PRINCIPAL, FOR PLACING SHARES AT A MINIMUM PLACING PRICE OF R1,000,000, AS ENVISAGED IN SECTION 96(1)(B) OF THE SOUTH AFRICAN COMPANIES ACT, 2008, IN EACH CASE TO WHOM THE PLACING IS SPECIFICALLY ADDRESSED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

NEITHER THIS ANNOUNCEMENT (INCLUDING ITS APPENDICES) NOR THE PLACING CONSTITUTES OR IS INTENDED TO CONSTITUTE AN OFFER TO THE PUBLIC IN SOUTH AFRICA IN TERMS OF THE SOUTH AFRICAN COMPANIES ACT, 2008.

THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933 (THE "US SECURITIES ACT") OR UNDER ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS DEFINED IN REGULATION S UNDER THE US SECURITIES ACT) EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH THE US SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED STATES.

THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES.

Persons who are invited to and who choose to participate in the Placing by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given (the "Placees"), will (i) be deemed to have read and understood this Announcement, including this Appendix, in its entirety; and (ii) be making such offer on the terms and conditions contained in this Appendix I and Appendix II, including being deemed to be providing (and shall only be permitted to participate in the Placing on the basis that they have provided) the representations, warranties, acknowledgements and undertakings set out herein.

In particular each such Placee represents, warrants and acknowledges that:

1. it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
2. it is and, at the time the Placing Shares are acquired, will be outside the United States and is acquiring the Placing Shares in an "offshore transaction" in accordance with Rule 903 or Rule 904 of Regulation S under the US Securities Act and is acquiring beneficial interests in the Placing Shares for its own account; if acquiring the Placing Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account; and
3. if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the relevant Bookrunner has been given to each such proposed offer or resale.

The Company and each of Numis, Hannam & Partners, Peel Hunt, RMB and Standard Bank will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful.

These materials may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States. These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States absent (i) registration under the U.S. Securities Act of 1933, as amended (the "US Securities Act") or (ii) an available exemption from registration under the US Securities Act. The securities mentioned herein have not been, and will not be, registered under the US Securities Act and will not be offered to the public in the United States. The Placing Shares are being offered and sold outside the United States to non-US persons (as defined in Regulation S under the US Securities Act) in "offshore transactions" within the meaning of Regulation S.

This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in Australia, Canada, Japan or in any other jurisdiction in which such publication or distribution would be unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer in this Announcement. No public offer of securities of the Company is being made in the United Kingdom or elsewhere.

Neither the announcement to which this Appendix is attached (including the appendices thereto) nor the Placing constitutes or is intended to constitute an offer to the public in the Republic of South Africa in terms of the South African Companies Act, 2008 (the “South African Companies Act"). In the Republic of South Africa the announcement is only being distributed to, and is only directed at, and any investment or investment activity to which this announcement relates is available only to, and will be engaged in only with, persons in South Africa who (i) fall within the categories of persons set out in section 96(1)(a) of the South African Companies Act or (ii) are persons who subscribe, as principal, for Placing Shares at a minimum placing price of ZAR1,000,000, as envisaged in section 96(1)(b) of the South African Companies Act, in each case to whom the Placing is specifically addressed.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and none of the Placing Shares have been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada or Japan. Accordingly, none of the Placing Shares may (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or any other jurisdiction outside the United Kingdom and the Republic of South Africa.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

Details of the Placing Agreement and the Placing Shares

The Bookrunners are acting as agents for and on behalf of the Company in connection with the Placing and have entered into a placing agreement (the "Placing Agreement") with the Company under which each of the Bookrunners has severally agreed to use its respective reasonable endeavours to procure Placees to subscribe for the Placing Shares at a price of 14 pence per Placing Share or ZAR2.42 per Placing Share (together the “Issue Price”), on the terms and subject to the conditions set out herein.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of one penny per share in the capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares, and will on issue be free of all claims, liens, charges, encumbrances and equities.

Application for admission to trading on AIM and the JSE

Applications will be made for the Placing Shares to be admitted to trading on the AIM market operated by the London Stock Exchange plc (“AIM”) and to trading on the exchange operated by JSE Limited (“JSE”) (together, "Admission"). It is expected that settlement for the Placing Shares and Admission will take place on or around 8.00 a.m. London time on 19 April 2017 (or such other time and date as the Bookrunners may agree with the Company, but no later than 28 April 2017) 2017.

The Placing is conditional upon, amongst other things, Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms.

Participation in, and principal terms of, the Placing

1. The Bookrunners are arranging the Placing as placing agents of the Company for the purpose of procuring Placees at the Issue Price for the Placing Shares following completion of the Bookbuilding Process (as defined below).

2. Commencing today, the Bookrunners will be conducting an accelerated bookbuilding process (the "") to determine demand for participation in the Placing by Placees. This Appendix I gives details of the terms and conditions of, and the mechanics of participation in, the Placing. Numis, Hannam & Partners and Peel Hunt will be conducting the Bookbuilding Process in the United Kingdom, and RMB and Standard Bank will be conducting the Bookbuilding Process in the Republic of South Africa.

3. Participation in the Placing will only be available to persons who are Relevant Persons and who may lawfully be, and are, invited to participate by a Bookrunner.

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