07 Oct - 4 min read

Completion of a Competent Persons Report

Completion of a Competent Persons Report

Incorporated in the Republic of South Africa)
(Registration number 2003//02016106)
Share Code: WEZ
ISIN: ZAE000075859
(“the Company” or “Wesizwe”)


The Wesizwe Bakubung Mine project commenced in 2011 after securing project funding and
equity injection from a major Chinese consortium CAJIL. The BPM project development and
construction for the first stage 1mtpa is in the final stages with commissioning of the process
plant planned to commence in December 2021 and steady state production from March 2022.
The mine will be scaled up to the nameplate capacity of 3mtpa from 2025 and reach full
production in 2027.

The Competent Persons Report-CPR for the BPM Project was last done during the original
Bank Feasibility Study in 2009. It became necessary to update the CPR as the SAMREC
codes governing the compiling of this document were reviewed and adopted in 2017.

Ukwazi Mining Consulting Services was appointed to update the CPR to include the SAMREC
code requirements as well as to include the latest mine development and construction
philosophy and the prevailing mine design and layouts. This work commenced in 2020 and
was completed in August 2021.
The Wesizwe-Bakubung Platinum Mine started first by updating the Definitive Feasibility
Study-DFS in April 2020 through an independent specialist consulting company Woods Plc.
The report for which was completed in October 2020. The CPR compilation was also
commenced few weeks later to run in parallel and it was put through several iterations until
this final revision which was then sent to the JSE readers panel. The comments from the
reader’s panes were updated into the final document.

The competent person used the information provided by the company’s Mineral Resources
department to do a new geological block model. Statistical analysis was completed on the
composite data grouped by facies type. Each intersection was composited for platinum,
palladium, rhodium, gold, copper and nickel concentrations by utilizing the weighting by
thicknesses and densities. The assumptions and conclusions were arrived at and clarified with
the mine’s technical services department.

A two-dimensional grade estimate was generated for the Merensky reef and Upper Group 2
Chromitite layer. The facies boundaries were treated as soft boundaries as the facies were
observed to be transitional. The Mineral Resource estimation was completed using ordinary
kriging for each variable. Geological losses were determined for each facies type based on
the number of intersections that were available and the number of intersections which were
affected by disruptive geological features.

The Mineral Resource estimate is reported in accordance with the guidelines of the SAMREC
Code (2016 Edition). The Competent Person responsible for the Mineral Resource estimation
and classification is Mr. Ken Lomberg (Pr.Sci.Nat.). He is a Director of Pivot Mining
Consultants (Pty) Ltd – South Africa, was appointed by Bakubung Minerals (Pty) Ltd to be the
Competent Person: Mineral Resources in accordance with The SAMREC Code, 2016 edition
and was responsible for preparing or supervising the preparation of this report in respect of
the material assets of the Bakubung Platinum Mine. Mr. Lomberg is independent and holds
no interests in Wesizwe or any of its subsidiaries. He has also approved the information below
in writing signed off the section containing this information.

A summary of the Mineral Resource estimate as at 1 August 2020 is shown in the table below.

                                                       CPR 2021
                              Reef                Mt      4E g/t   Moz
               Measured                      6.53         6.52     1.37
  Mineral      Indicated                     21.92        5.28     3.72
 Resource      Inferred                      14.1         4.36     1.97
                Total                        42.55        5.16     7.06
               Measured                           0         0       0
  Mineral      Indicated                     34.84        4.66     5.21
                              UG 2
 Resource      Inferred                      10.14        4.63     1.51
                Total                        44.98        4.65     6.72
               Measured                      6.53         6.52     1.37
  Mineral      Indicated   MR + UG           56.75        4.90     8.93
 Resource      Inferred       2              24.24        4.47     3.48
                Total                        87.52        4.90     13.79

Table 1: Resources statement summary-CPR 2021

The new resources statement was then converted to a reserve statement through modifying
factors from then a valuation of the project was conducted.

The financial impact of the Competent Persons Report (CPR) mine plan can best be
expressed in the movement of Net Present Value (NPV). The CPR independently performs a
valuation and reports a NPV of R 18.27bn for the BPM project using a Weighted Average
Capital Cost (WACC) of 8%. It is to be noted that the CPR valuation also uses different price
                      Valuation (ZAR million)
    Approach                                                        Basis
                    Low        Base    High
 Discounted cash    16 121   18 266   24 486   69.5 million tonnes Mineral Reserve, 17.6 million
 flow net present                              tonnes Inferred Mineral Resources, 35 year life
 value model                                   of mine, discount rates applied 8%

                    2 130    2 662    3 195    Mineral c and Mineral Reserve valuations per
                                               troy ounce of contained metal, 13.8 million troy
                                               ounces contained in Mineral Resources

When applying the CPR mine plan to Wesizwe ’s Financial Model, the NPV is significantly less
at R11.29bn as a result of using a WACC of 10.84% and using different forecast prices. The
WACC of 10.84% is consistent with that used in December 2020 and the WACC used when
testing the project for impairment.

7 October 2021

PSG Capital

Date: 07-10-2021 10:15:00
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