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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to the action you should take, please consult your broker, Central Securities Depository Participant (CSDP),
banker, attorneys, accountant or other professional advisor immediately.
Action required
All shareholders
If you have disposed of all or any of your shares in Absolute Holdings Limited, this circular should be handed to the purchaser of such
shares or to the broker, CSDP, banker or agent through whom you disposed of such shares. Detailed action required by shareholders is
set out on page 12 of this circular.

ABSOLUTE HOLDINGS LIMITED


(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN: ZAE000144267
Share code: ABO

(Absolute or the Company)

CIRCULAR TO SHAREHOLDERS,
INCORPORATING REVISED LISTING PARTICULARS
regarding
the acquisition of:
an effective 60% interest in Bauba A Hlabirwa Mining Investments (Proprietary) Limited for a purchase
consideration of R340 623 000 to be settled through the issue of 68 124 600 new shares in Absolute at
an issue price of R5.00 per share; and
incorporating the potential further acquisition of an effective 60% interest in the Houtbosch prospecting
right subject to the notarial execution and registration of the already granted prospecting right, for an
additional consideration of R105 948 000, which will be settled though the issue of 21 189 600 new
shares in Absolute at an issue price of R5.00 per share; and
an increase in the Companys authorised share capital from 25 000 000 shares of R1.00 each to 200 000 000
shares of R1.00 each;
the specific issue of up to 30 000 000 shares for cash to non-related parties at a price to be determined;
the issue of approximately 1 875 598 shares to Qinisele Resources at a price to be determined;
a proposed waiver of a mandatory offer;
repositioning of the Company by:
the reconstitution of the board of directors;
a proposed name change of the Company to Bauba Platinum Limited;
the transfer of the Companys listing to the Main Board of the JSE Limited; and
amendment to the share incentive scheme;
and incorporating
a notice convening a general meeting of the Companys shareholders;
a form of proxy (for use by certificated shareholders and dematerialised shareholders with own name
registration only);
a form of surrender (for use by certificated shareholders in relation to the change of name of the Company);
and
Revised Listing Particulars.

CORPORATE INFORMATION

Directors

Secretary, Registered Office

MK Diale* (Chairman)
AM Sher*# (Deputy Chairman)
MW Rosslee (Chief Executive Officer)
GP Sequeira (Financial Director)
JJ Serfontein*

Arcay Client Support (Proprietary) Limited


(Registration number 1998/025284/07)
Arcay House II
Number 3 Anerley Road
Parktown, 2193
(PO Box 62397, Marshalltown, 2107)

*Non-executive
#Independent
Sponsor

Independent Expert and


Independent Reporting Accountants

Arcay Moela Sponsors (Proprietary) Limited


(Registration number 2006/033725/07)
Arcay House II
Number 3 Anerley Road
Parktown, 2193
(PO Box 62397, Marshalltown, 2107)

Moore Stephens (Jhb) Corporate Finance


(Proprietary) Limited
(Registration number 2007/023666/07)
7 West Street
Houghton, 2198
(PO Box 1574, Houghton, 2041)

Corporate Advisor

Competent Person

Qinisele Resources (Proprietary) Limited


(Registration number 1997/022049/07)
6th Floor, West Towers
Sandton City Towers
Cnr Rivonia Road and 5th Street
Sandton, 2146
(PO Box 2345, North Riding, 2162)

Venmyn Rand (Proprietary) Limited


(Registration number 1998/004918/07)
First Floor, Block G
Rochester Place
173 Rivonia Road
Sandton, 2146
(PO Box 782761, Sandton, 2146)

Transfer Secretaries

Auditors to Absolute

Computershare Investor Services (Proprietary) Limited


(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)

TAG Incorporated
(Practice number 961450)
Emwil House West, 15 Pony Street,
Tijgervallei Office Park, Silver Lakes, 0081
(Private Bag X35, Lynnwood Ridge, 0040)

Banker

Attorney

Nedbank Limited
(Registration number 1951/000009/06)
2nd Floor, Block F
Corporate Place
135 Rivonia Road
Sandown, 2196
(PO Box 1144, Johannesburg, 2000)

Routledge Modise Incorporated, trading as


Eversheds in association with Eversheds LLP
(Registration number 1992/006150/21)
22 Fredman Drive
Sandton, 2146
(PO Box 78333, Sandton, 2146)

Place and date of incorporation


South Africa, 14 November 1986

TABLE OF CONTENTS

Page
Corporate information

Definitions and interpretations

Action required by shareholders

12

Salient dates and times

13

Salient features of Bauba

14

Circular to shareholders
1. Introduction

18

2. Incorporation, history and nature of business

19

3. The acquisition

19

4. The waiver of the mandatory offer and confirmation of no special arrangements

25

5. Name change of Company

25

6. Share issue for cash

26

7. Issue of shares to Qinisele Resources and proposed amendment to


share incentive scheme

27

8. Increase in authorised share capital

27

9. Reconstitution of the board

27

10. Historical financial information

28

11. Major shareholders

28

12. Share capital and other information

29

13. Directors and key management

30

14. Material borrowings, commitments and contingent liabilities

33

15. Material contracts

34

16. Adequacy of capital

34

17. Material changes

34

18. Litigation statement

35

19. Exchange Control Regulations

35

20. Opinions and recommendations

36

21. Directors responsibility statement

36

22. Consents

36

23. Costs

36

24. Code of Corporate Practice and Conduct

37

25. General meeting of shareholders

37

26. Documents available for inspection

38

Page
Annexure 1

Reporting accountants report on the historical financial information of Bauba

39

Annexure 2

Historical financial information of Bauba for the years ended 28 February 2009
and 28 February 2010

41

Independent reporting accountants assurance report on the consolidated


pro forma financial information of Absolute Holdings Limited

50

Pro forma financial effects of the transactions and pro forma income statement
and balance sheet

52

Annexure 5

Reporting accountants report on the historical financial information of NMR

57

Annexure 6

Historical financial information of NMR for the year ended 28 February 2010

59

Annexure 7

Share price history of Absolute

64

Annexure 8

Executive summary of Competent Persons Report on the Bauba Project

66

Annexure 9

Location map

89

Annexure 10

Independent expert opinion in relation to the waiver of the offer to


minority shareholders

90

Annexure 3
Annexure 4

Notice of general meeting of shareholders of Absolute

96

Form of proxy (for use by certificated and own name dematerialised shareholders only)

Attached

Form of surrender (yellow)

Attached

Revised Listing Particulars and appendices

105

DEFINITIONS AND INTERPRETATIONS

In this circular, unless otherwise stated or the context so requires, the words in the first column have the
meanings stated opposite them in the second column, words in the singular shall include the plural and
vice versa, words denoting one gender include the other and expressions denoting natural persons include
juristic persons and associations of persons:
Absolute or the Company

Absolute Holdings Limited (Registration number 1986/004649/06), a


public company duly incorporated in South Africa on 14 November
1986, currently listed on the VCM, having its registered address at
Arcay House II, 3 Anerley Road, Parktown, Johannesburg and the
controlling shareholder of which is Calulo Resources, currently holding
4 872 811 shares (30.43%);

Absolute Tiles

Absolute Tiles (Proprietary) Limited (Registration number


2002/004264/07), a private company duly incorporated in South Africa
on 28 February 2002, having its registered address at 41 Sprite Street,
Faerie Glen, Pretoria and which company was formerly a wholly owned
subsidiary of Absolute;

the acquisition or
the Bauba acquisition

the acquisition of a 60% interest in Bauba from:


the Bauba sellers (25.6% directly); and
the NMR sellers (34.4% indirectly through the acquisition of 100% of
the NMR shares),
in terms of the acquisition agreement;

the acquisition agreement

the agreement between Absolute, Bauba, the Bauba sellers, NMR and
the NMR sellers dated 12 February 2010, in terms of which Absolute
will acquire:
an effective 60% direct and indirect interest in the share capital of
Bauba for a purchase consideration of R340 623 000 to be settled
through the issue of 68 124 600 new ordinary Absolute shares at
an issue price of R5.00 per Absolute share, in an asset for share
transaction in terms of section 42 of the Income Tax Act, following
which the Bauba sellers and NMR sellers will hold an effective 81%
direct interest in the share capital of Absolute prior to the minimum
capital raising; and
the Houtbosch prospecting right, subject to the grant and notarial
execution and registration of the Houtbosch prospecting right with
Bauba, for an additional consideration of R105 948 000 to be settled
through the issue of a further 21 189 600 new ordinary Absolute
shares at an issue price of R5.00 per Absolute share; and
in terms of which Absolute is required to secure a minimum capital
raising of R60 000 000;

the Act

the Companies Act, No. 61 of 1973, as amended, and the Corporate


Laws Amendment Act, No. 24 of 2006;

Allied Quartzite

Allied Quartzite (Proprietary) Limited (Registration number


1965/000550/07), a private company duly incorporated in South Africa
on 21 January 1965 and having its registered address at 43 Duke
Street, Observatory, Cape Town, from which Lubtalk acquired mineral
leases in 2008;

Arcay Client Support

Arcay Client Support (Proprietary) Limited (Registration number


1998/025284/07), a private company duly incorporated in South Africa
on 18 December 2008 and having its registered address at Arcay
House II, 3 Anerley Road, Parktown, Johannesburg;

Arcay Moela Sponsors

Arcay Moela Sponsors (Proprietary) Limited (Registration number


2006/033725/07), a private company duly incorporated in South Africa
on 27 October 2006 and having its registered address at Arcay House
II, 3 Anerley Road, Parktown, Johannesburg;

Bapedi Nation

the Bapedi Nation of Sekhukhuneland, a shareholder of Bauba,


holding 47 ordinary shares in the entire issued share capital of
Bauba, constituting 37.6% of the issued share capital of Bauba, which
shareholding will be retained in Bauba;

Bauba

Bauba A Hlabirwa Mining Investments (Proprietary) Limited


(Registration number 2006/039054/07), a private company incorporated
in South Africa on 19 December 2006, having its registered address at
Ground Floor, ICR House, Alphen Office Park, Constantia Main Road,
Constantia, Cape Town, which company is held directly and indirectly
by the Bapedi Nation (37.6%), Hlabirwa (8.0%), NMR (34.4%) and
Highland (20.0%) and which company will be held by Absolute (60%),
Bapedi Nation (37.6%) and Hlabirwa (2.4%) pursuant to the acquisition;

Bauba Platinum

Bauba Platinum Limited (Registration number 1986/004649/06), being


the proposed new name of Absolute;

Bauba Project

the underlying assets acquired from Bauba covered by the Project


Area;

the Bauba sellers

Hlabirwa and Highland;

Bauba shares

32 shares of R1.00 each in the issued share capital of Bauba held by


the Bauba sellers constituting 25.6% of the entire issued share capital
of Bauba, which are sold by the Bauba sellers as follows:
Highland 25 ordinary shares of R1.00 each (20%); and
Hlabirwa 7 ordinary shares of R1.00 each (5.6%);

the board

the board of directors of Absolute as constituted from time to time;

business day

any day excluding a Saturday, Sunday or a South African public


holiday;

Calulo Investments

Calulo Investments (Proprietary) Limited (Registration number


1999/019685/07), a private black economic empowerment company
duly incorporated in South Africa on 9 August 1999, having its registered
address at Platinum Place, Turnberry Office Park, 48 Grosvenor Road,
Bryanston, Johannesburg, which company currently holds 95% in
Calulo Resources;

Calulo Resources

Calulo Resources (Proprietary) Limited (Registration number


2002/027188/07), a private company duly incorporated in South Africa
on 31 October 2002, having its registered address at Platinum Place,
Turnberry Office Park, 48 Grosvenor Road, Bryanston, Johannesburg
and the controlling shareholder of which is Calulo Investments;

Central Cluster

means the farms Magneetsvlakte 541KT and Dingaanskop 543KT;

certificated shareholders

shareholders who have not dematerialised their Absolute share


certificates in terms of Strate;

certificated shares

those shares represented by share certificate(s) or other physical


documents of title which have not been surrendered for dematerialisation
in terms of the requirements of Strate;

CIPRO

Companies and Intellectual Property Registration Office;

circular or this circular

all the documents contained in this bound document, dated


7 May 2010, including the circular to shareholders and annexures
thereto, notice of the general meeting of shareholders, form of proxy,
form of surrender (yellow) and incorporating Revised Listing Particulars
with appendices thereto;

claw back or repurchase

the potential reduction of the purchase consideration through the


cancellation or repurchase of shares against certain of the farms in the
Southern Cluster as follows:
Groot Vygenboom 284KT 20 628 000 Absolute shares; and
Genokakop 285KT 16 405 200 Absolute shares,
totalling a maximum possible cancellation or repurchase of 37 033 200
Absolute shares as further detailed in paragraph 3.1.2 of the circular;

claw back shares or


repurchase shares

such number of shares to be cancelled or repurchased in terms of


the claw back, which shares will be held in trust for a minimum period
of two years. Should any court application citing Bauba and/or the
Company be brought for a remedy which will result in revocation or
cancellation of any rights in the Southern Cluster within the two year
period, then the restrictions will continue to apply until the matter has
been finally resolved and the court applications finalised;

Closing Date

the third business day after fulfilment of the conditions precedent as


further detailed in paragraph 3.3 of the circular;

common monetary area

the Republic, the Kingdoms of Swaziland and Lesotho and the Republic
of Namibia;

Competition Authorities

the applicable competition authorities in terms of the Competition Act,


No. 89 of 1998, as amended;

controlling shareholder

Calulo Resources, which currently controls the board and holds


4 872 811 shares (30.42%) in Absolute subsequent to the recent issue
of shares for cash prior to December 2009 and prior to the transactions;
and
Highland after the transactions, which will hold 61 085 027 shares,
which will be approximately 44.5% in Absolute pursuant to the
transactions;

CSDP

Central Securities Depository Participant;

CV

curriculum vitae;

Danene Trust

Danene Trust (Masters reference IT2184/2004), represented


by JH Wessels, the family trust of JH Wessels (ID number
670412 5178 088);

dematerialised shareholders

holders of dematerialised shares;

dematerialised shares

those shares that have been incorporated into the Strate system and
which are held on the Companys sub-register in electronic form in
terms of the Custody and Administration of Securities Act of 1992;

Dikopane

Dikopane NN Mining (Pty) Limited (Registration number


2008/018567/07), duly incorporated in South Africa on 4 August 2008,
having its registered address at Eco Park Estates, Highveld, Centurion,
0176 a company in which Absolute holds a 49% interest and has an
option to acquire a further 11% interest;

directors or the directors

the directors of Absolute at the date of this circular, as listed on the


inside front cover of this circular;

DMR

the Department of Mineral Resources (formerly the Department of


Minerals & Energy;

effective date

the effective date of the acquisition of Bauba, being the day after the
Closing Date;

finalisation date

the date of finalisation of the change in name of the Company, being


no later than Friday, 25 June 2010, or such later date as may be
announced on SENS and in the press;

general meeting of shareholders

the general meeting of shareholders to be held at 10h00 on Monday,


7 June 2010 at Arcay House II, Number 3 Anerley Road, Parktown,
Johannesburg to consider, and if deemed fit, approve the special
and ordinary resolutions contained in the notice of general meeting of
shareholders attached to this circular;

group or the group

Absolute and its subsidiaries from time to time;

Highland

Highland Trading Investments Limited (BVI company number


1389186), a company duly registered according to the company
laws of the British Virgin Islands, a non-resident and foreign company
administered and controlled by Oak Trustees at Guernsey Channel
Islands having its registered address at c/o Oak Trust Guernsey
Limited, 18 20 Le Pollet, St Peter Port, Guernsey, GY11WH and which
company will become the controlling shareholder in Absolute pursuant
to the approval of the transactions;

Hlabirwa

Hlabirwa Mining Investments (Proprietary) Limited (Registration


number 2000/017808/07), formerly Cle du Cap No. 35 (Proprietary)
Limited, a private company duly incorporated in South Africa on
3 August 2000 having its registered address at Ground Floor, ICR
House, Alphen Office Park, Constantia Main Road, Constantia, Cape
Town, the controlling shareholders of which are or will be the son, Victor
Thulare, and widow, Maria Thulare of the late Kgosi Sekhukhune Rhyne
Thulare, the King of the Bapedi Nation through a discretionary trust for
the benefit of the said son and widow and their descendents and such
other beneficiaries as the trustees may be entitled to nominate, one of
the Bauba sellers which will retain a 2.4% shareholding in Bauba;

Houtbosch

the farm Houtbosch 323KT;

Houtbosch acquisition

the additional acquisition of the Houtbosch prospecting right to be


settled through the issue of the Houtbosch payment shares;

Houtbosch payment shares

the purchase consideration for a 60% participation in the Houtbosch


prospecting right being R105 948 000 to be settled through the issue
of 21 189 600 new ordinary shares in Absolute at R5.00 per share, as
follows:

Houtbosch prospecting right

Math-Pin Trust 2 104 857 ordinary shares of R1.00 each;


Danene Trust 773 008 ordinary shares of R1.00 each;
Kumane Trust 773 008 ordinary shares of R1.00 each;
Pimlico Investment Trust 238 375 ordinary shares of R1.00 each;
Orata Trust 830 366 ordinary shares of R1.00 each;
Highland 14 492 290 ordinary shares of R1.00 each; and
Hlabirwa 1 977 696 ordinary shares of R1.00 each;

the prospecting right granted over Houtbosch;

IFRS

International Financial Reporting Standards;

Income Tax Act

Income Tax Act, 58 of 1962, as amended;

Johnson Matthey

Johnson Matthey Plc, a specialty chemicals company focused on


core skills in catalysis, precious metals, fine chemicals and process
technology;

JSE or the JSE

the JSE Limited (Registration number 2005/022939/06), a public


company duly incorporated in South Africa on 1 July 2005 having its
registered address at 1 Exchange Square, 2 Gwen Lane, Sandown, a
licenced stock exchange in accordance with the Securities Services
Act, No. 36 of 2004;

Kumane Trust

Kumane Trust (Masters reference IT2180/2004) duly represented by


NPJ van der Hoven, the family trust of NPJ van der Hoven (ID number
550817 5165 080;

last practicable date

Thursday, 29 April 2010, being the last practicable date prior to the
finalisation of this circular;

Lekkersing Diamond Quartzite


mine or Lekkersing quartzite

the diamond quartzite sandstone mining operation in the Richterveld,


conducted through Lenopodi;

Lenopodi

Lenopodi (Proprietary) Limited, formerly Absolute Coleccions


(Proprietary) Limited (Registration number 2002/004142/07), a private
company duly incorporated in South Africa on 22 February 2002,
having its registered address at 1st Floor, Block B, Sandhurst Office
Park, corner of Rivonia Road and Katherine Street, Sandton, which
company is a wholly owned subsidiary of Absolute;

Listings Requirements

the Listings Requirements of the JSE;

Lubtalk Investments

Lubtalk Investments (Proprietary) Limited (Registration number


2003/024338/07), a private company duly incorporated in South Africa
on 1 October 2003, having its registered address at Platinum Place,
Turnberry Office Park, 48 Grosvenor Road, Bryanston, Johannesburg,
which company holds the Lekkersing Diamond Quartzite mine, the
controlling shareholder of which is Lenopodi, currently holding 90%;

Main Board

the Main Board of the list of the JSE;

Math-Pin Trust

Math-Pin Trust (Masters reference IT7205/2001), duly represented by


Dr Nakedi Mathews (Mathews) Phosa, the family trust of Mathews
Phosa (ID number 520901 5784 087);

Minerals Act

the Minerals Act, No. 50 of 1991, which has since been repealed and
replaced by the Mineral and Petroleum Resources Development Act,
No. 28 of 2002;

minimum capital raising

the minimum capital to be raised in terms of the acquisition agreement,


being R60 000 000, required for the mining work programme, as
further detailed in paragraphs 1 and 3.1 of the circular which amount
can be amended, subject to the parties agreeing in writing and which
has been assumed to be raised through the issue of 12 000 000 new
shares at an assumed issue price of R5.00 per share for the purpose of
this circular and which issue of shares will form part of the share issue
for cash;

m oz

million ounces;

MPRDA

Mineral and Petroleum Resource Development Act of 2002, as


amended;

Mt

million tonnes;

name change

the proposed name change for Absolute to Bauba Platinum Limited or


such other name as may be approved by CIPRO;

NMR

Ndarama Mineral Resources (Proprietary) Limited (Registration


number 2006/035052/07), a private company duly incorporated in
South Africa on 9 November 2006 having its registered address at
Ground Floor, ICR House, Alphen Office Park, Constantia Main Road,
Constantia, Cape Town, the current shareholders of which are the
Math-Pin Trust (17.3%), Danene Trust (6.35%), Kumane Trust (6.35%),
Pimlico Investment Trust (2.0%), Orata Trust (6.8%) and Highland
(61.2%), which company holds 34.4% in Bauba and is being acquired
100% by Absolute;

NMR sellers

collectively the Math-Pin Trust, Danene Trust, Kumane Trust, Pimlico


Investment Trust, Orata Trust and Highland;

NMR shares

means collectively 23 087 shares of R1.00 each in the issued share


capital of NMR held by the NMR sellers, constituting 100% of the entire
issued share capital of NMR, which are sold by the NMR sellers as
follows:
Math-Pin Trust 4 000 ordinary shares of R1.00 each;
Danene Trust 1 469 ordinary shares of R1.00 each;
Kumane Trust 1 469 ordinary shares of R1.00 each;
Pimlico Investment Trust 453 ordinary shares of R1.00 each;
Orata Trust 1 578 ordinary shares of R1.00 each; and
Highland 14 118 ordinary shares of R1.00 each,
which company holds 34.4% in Bauba;

Northern Cluster

means the farms Feasantlaagte 506KT, Zwitzerland 473KT, the


remainder of Indi 474KT and Schoonoord 462KT;

odd lot offer

the offer to odd lot shareholders to repurchase odd lot shares pursuant
to the share consolidation at a repurchase price of R4.00 per share as
approved by shareholders in general meeting and which shares have
been subsequently placed under the Companys general authority to
issue shares for cash in accordance with the Listings Requirements;

Orata Trust

the Orata Trust (Masters reference IT7512/1997), duly represented by


PC Pienaar, the family trust of PC Pienaar (ID number 640505 5074 087);

other Absolute Mineral Assets

other than Lekkersing Diamond Quartzite, the other mineral assets


and interests held by Absolute, comprising picture stone, coal through
Dikopane and lime prospecting permits;

parties

the parties to the acquisition agreement, namely Absolute, Bauba,


NMR, the Bauba sellers and the NMR sellers;

PGMs

Platinum Group Metals;

Pimlico Investment Trust

Pimlico Investment Trust (Masters reference IT4574/96), duly


represented by AM Slabber, the family trust of AM Slabber (ID number
570104 5003 082);

Project Area

collectively the Central Cluster, Northern Cluster and Southern Cluster;

purchase consideration

the purchase consideration for the Bauba acquisition being


R340 623 000 to be settled through the issue of 68 124 600 new
Absolute ordinary shares, as follows:

Math-Pin Trust 6 767 116 ordinary shares of R1.00 each;


Danene Trust 2 485 224 ordinary shares of R1.00 each;
Kumane Trust 2 485 224 ordinary shares of R1.00 each;
Pimlico Investment Trust 766 376 ordinary shares of R1.00 each;
Orata Trust 2 669 627 ordinary shares of R1.00 each;
Highland 46 592 737 ordinary shares of R1.00 each; and
Hlabirwa 6 358 296 ordinary shares of R1.00 each;

the purchaser

Absolute;

Qinisele Resources

Qinisele Resources (Proprietary) Limited (Registration number


1997/022049/07), a private company duly incorporated in South Africa
on 18 December 1997, having its registered address at Second Floor,
3 Sturdee Avenue, Rosebank, the directors of the company being
Robert Andrew Brady and Eric Hugh Dennis Tucker and 25.1% of
which company is held by Absolute, with 74.9% continuing to be held
by the Qinisele Resources shareholders;

Qinisele Resources shareholders

the shareholders in Qinisele Resources, being the RAB Investment Trust,


the Susanna Catarina Du Toit Trust (Masters reference IT1584/00), the
Tucker Boys Trust, Andreas Markus Lobert and Robert Grant Philpot;

the RAB Investment Trust

the RAB Investment Trust (Masters reference IT8199/02), the family


trust of Robert Andrew Brady;

Rand or R

South African Rand;

resolutions

the special and ordinary resolutions, to be considered and, if deemed


fit, approved by the requisite majority of Absolute shareholders at the
general meeting convened to authorise the transactions;

Revised Listing Particulars

the listing particulars, dated Monday, 17 May 2010, including all


appendices thereto, incorporated into this circular;

Richtersveld Quartzite

Richtersveld Quartzite Company Limited (Registration number


1965/002784/06), a public company duly incorporated in South Africa
on 31 March 1965 and having its registered address at 43 Duke Street,
Observatory, Cape Town;

SAMREC

the South African Mineral Resources Committee;

SAMREC Code

the South African code for reporting of mineral resources and mineral
reserves, including the guidelines contained therein;

SENS

the Securities Exchange News Service of the JSE;

share consolidation

the consolidation of the share capital of the Company on the basis


of 1 share for every 100 shares held, consolidating the par value of
the share capital of the Company from shares of 1 cent per share to
R1.00 per share, as approved by shareholders in general meeting on
17 February 2010;

shareholders or
Absolute shareholders

registered holders of ordinary shares in Absolute as at the date of


this circular;

shares or ordinary shares

ordinary shares of R1.00 each in the authorised and issued share


capital of Absolute;

10

share issue for cash

the specific issue, in one tranche or several tranches, of up to


R150 000 000 through the issue of up to 30 000 000 additional Absolute
shares at an issue price to be determined as detailed in paragraph 6
of the circular, to certain existing shareholders, strategic shareholders
and local and off-shore institutions yet to be identified in order to raise
the capital required to finance the groups mining projects and working
capital going forward in terms of the acquisition agreement, which
issue of shares will incorporate the minimum capital raising required in
terms of the Bauba acquisition agreement;

South Africa or the Republic

the Republic of South Africa;

Southern Cluster

means the farms Genokakop 285KT and Groot Vygenboom 284KT;

SRP

Securities Regulation Panel established in terms of section 440(B) of


the Act;

SRP Code

Securities Regulation Code and Rules of the SRP;

Strate

the settlement and clearance system used by the JSE, managed


by Strate Limited (Registration number 1998/022242/06), a public
company duly incorporated in South Africa on 9 November 1998
having its registered address at 9 Fricker Road, Illovo Boulevard, Illovo
and which company is a registered Central Securities Depository in
terms of the Security Services Act, No. 36 of 2004;

targeted resource

exploration target as defined in the SAMREC Code;

transactions

collectively the Bauba acquisition (incorporating the potential


repurchase), the increase in the authorised share capital, the share
issue for cash, the Houtbosch payment shares, the issue to Qinisele
Resources; the name change, the reconstitution of the board and the
proposed waiver of the mandatory offer;

transfer secretaries

Computershare Investor Services (Proprietary) Limited (Registration


number 2004/003647/07) of Ground Floor, 70 Marshall Street,
Johannesburg, 2001;

the Tucker Boys Trust

the Tucker Boys Trust (Masters reference IT 7320/96), the family trust
of Eric Hugh Dennis Tucker (ID number 600509 5043 082);

VAT

value-added taxation in terms of the Value-Added Tax Act, 89 of 1991;

VCM

Venture Capital Market; and

the vendors or the Sellers

collectively the Bauba sellers and NMR sellers.

11

ACTION REQUIRED BY SHAREHOLDERS

All shareholders
If you have disposed of all your shares in Absolute, this circular should be handed to the purchaser of such
shares or to the broker, banker or agent through whom you disposed of such shares.
Certificated shareholders
If you are a certificated holder and you are unable to attend the general meeting of Absolute shareholders
to be held at 10h00 on Monday, 7 June 2010 at the registered office of the Company at Arcay House II,
Number 3 Anerley Road, Parktown, Johannesburg and wish to be represented thereat, you must complete
and return the attached form of proxy in accordance with the instructions contained therein and lodge it with,
or post it to, the transfer office, namely Computershare Investor Services (Proprietary) Limited, so as to be
received by them no later than 10h00 on Friday, 4 June 2010.
Dematerialised shareholders with own name registration
If you have dematerialised your shares with own name registration and you are unable to attend the general
meeting of Absolute shareholders to be held at 10h00 on Monday, 7 June 2010 at the registered office of the
Company at Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg and wish to be represented
thereat, you must complete and return the attached form of proxy in accordance with the instructions
contained therein and lodge it with, or post it to, the transfer office, namely Computershare Investor Services
(Proprietary) Limited, so as to be received by them no later than 10h00 on Friday, 4 June 2010.
Dematerialised shareholders other than those with own name registration
If you hold dematerialised shares in Absolute through a CSDP or broker other than with an own name
registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the
general meeting in order for your CSDP or broker to provide you with the necessary Letter of Representation
to do so, or should you not wish to attend the general meeting in person but wish to be represented thereat,
you must timeously provide your CSDP or broker with your voting instruction in order for the CSDP or broker
to vote in accordance with your instruction at the general meeting.
Copies of the circular, in English, can be obtained from the registered office of the Company.

12

SALIENT DATES AND TIMES

2010
Circular and notice of general meeting to be posted to shareholders on

Monday, 17 May

SENS announcement regarding publication of SAMVAL report on Lekkersing

Tuesday, 25 May

Last day for lodging forms of proxy at 10h00 on

Thursday, 3 June

General meeting at 10h00 on

Monday, 7 June

Announcement of results of the general meeting published on SENS on

Monday, 7 June

Announcement of results of the general meeting published in the press and


special resolution submitted to CIPRO on

Tuesday, 8 June

Special resolution and name change certificate expected to be registered


by CIPRO on or about

Tuesday, 22 June

Listing of new shares in relation to the transactions on the JSE from


commencement of business on or about

Friday, 25 June

Finalisation data announced on SENS by no later than

Friday, 25 June

Finalisation data announced in the press by no later than


Last day to trade shares in the name of Absolute in order to be recorded as
a shareholder by the record date on
Listing of and trading in shares under the new JSE code BAU and ISIN: ZAE000145686
commences on
Record date for determining those shareholders whose shares will be subject
to the change of name on

Monday, 28 June
Friday, 9 July
Monday, 12 July
Friday, 16 July

Date of issue of new replacement share certificates, provided that the old share
certificates have been lodged by 12h00 on the record date (share certificates
received after this time will be posted within five business days of receipt)
on or about

Monday, 19 July

Dematerialised shareholders will have their accounts at their CSDP or broker


updated on

Monday, 19 July

Notes:
1.

The abovementioned dates and times are South African dates and times and are subject to amendment. Any such amendment will
be announced on SENS and in the press.

2.

Should they wish to attend or vote at the above general meeting, dematerialised shareholders are required to advise their CSDP or
broker by the cut-off time stipulated above or in accordance with their agreements with their CSDP or broker.

3.

Share certificates in the name of Absolute will not be able to be dematerialised or rematerialised after Friday, 9 July 2010.

13

SALIENT FEATURES OF BAUBA

The board of directors released announcements dated 15 February 2010 and 17 May 2010, proposing the
acquisition of an effective 60% controlling interest in Bauba in terms of an agreement dated 12 February
2010 and addendum thereto dated 3 May 2010. The agreement contained a number of conditions precedent
which needed to be met prior to the issue of this circular. The acquisition will transform the Company into
a junior miner with its main focus being on platinum resources and will also result in a change in control
together with a restructure of the board of directors.
The proposed acquisition gives effect to Absolutes stated strategic intention of procuring mineral assets for
exploration and bringing such assets to production.
1. THE BAUBA PROJECT AND LOCATION
Bauba holds prospecting rights over eight farms (refer to location map below) which are prospective
for platinum mineralisation in the Eastern Bushveld Igneous Complex, encompassing an area
of approximately 50km in length and 6km in width (approximating 12 700 hectares) along the Leolo
mountain range in the Limpopo Province, collectively the Bauba Project. The farms cover the known
down-dip extent of several current development projects and operating mines on the Eastern limb of
the Bushveld Igneous Complex. The geological location is expected to reveal both Merensky Reef and
UG-2 Chromitite Layer occurrences as extensive exploration programmes have been conducted on the
properties neighbouring the Bauba Project.
The prospecting rights are geographically clustered as follows:
The Southern Cluster comprising the farms Genokakop 284 KT and Grootvygenboom 285 KT as well
as the Houtbosch prospecting right as described in paragraph 2 below;
The Central Cluster comprising the farms Magneetsvlakte 541 KS and Dingaanskop 543 KT; and
The Northern Cluster comprising the farms Fisant Laagte 506 KT, the remainder of Indi 474 KS,
Zwitzerland 473 KS and Schoonoord 462 KS.
A location map is set out below:

14

2. HOUTBOSCH PROSPECTING RIGHT


In addition, Bauba has been granted a prospecting right over Houtbosch. This prospecting right is pending
notarial execution and registration in the Mining Titles Registration Office. Upon this being achieved, in
the name of Bauba, Absolute will issue an additional 21 189 600 shares in Absolute to the vendors at
an issue price of R5.00 per share and equating to an additional consideration of R105 948 000 as the
Company will effectively hold a 60% interest in the Houtbosch prospecting right through its effective 60%
shareholding in Bauba.
3. CONSIDERATION PAYABLE
The purchase consideration of R340 623 000 is to be settled through the issue of 68 124 600 new shares
in Absolute at an issue price of R5.00 per share.
The consideration for the Houtbosch prospecting right is to be settled through the issue of an additional
21 189 600 new shares in Absolute at an issue price of R5.00 per share.
4. ISSUE OF SHARES FOR CASH TO FUND WORK PROGRAMME
In order to determine the nature and extent of the platinum mineralisation (including a resource base
which is SAMREC compliant) the Company intends to secure commitments from both existing and new
shareholders for a minimum capital raising of R60 million. The full amount of funds raised will be employed
by the Company on drilling, the geological assaying and modeling, the early design and planning work
(including scoping study) and for working capital requirements.
To that effect, R20 million of the above funds will be advanced to Bauba to be applied to
a systematic exploration programme, designed in conjunction with an Independent Competent
Person, to determine the resource base (SAMREC compliant), geological nature and extent, depth and
structure. The exploration programme will comprise of geological mapping, 3D seismic surveys and
diamond drilling.
Drilling will be undertaken in a predetermined sequence starting with the Southern and Central clusters
followed by the Northern cluster. On 6 April 2010 two drill rigs were established on site. Drilling is
progressing well.
The remaining balance of R40 million will be available for working capital and ongoing drilling, geological
and exploration related costs.
It is the intention of the Company to raise up to R150 million, inclusive of the above minimum capital
raising in order to fast track the drilling and exploration of the mineral assets.
5. NAME CHANGE AND TRANSFER TO THE MAIN BOARD OF THE JSE
As part of a repositioning and rebranding exercise it is proposed that the Company changes its name
to Bauba Platinum Limited pursuant to the Bauba acquisition, which holds primarily platinum resource
assets.
The Company will transfer to the Main Board of the JSE and trade under the share code BAU, subject
to the Company retaining the spread of shareholders as required in terms of the Listings Requirements.
6. RECONSTITUTION OF THE BOARD AND MANAGEMENT TEAM
Mr Petrus (Pine) Pienaar is to be appointed as Chief Executive Officer (CEO) to complement the
management team of Mr Mark Rosslee, whose appointment will change from CEO to Financial Director.
To give full effect to the change in control and the development of the new business imperative offered
by the Bauba Project, a change in the composition of the board is proposed, which will include the
proposed appointment of Messrs Jonathan Best (Chairman), Kenneth Dicks and Sholto Dolamo, all of
whom will be appointed as independent non-executive directors. Dr Mathews Phosa will be appointed
as a non-executive director. The profiles of the new directors are contained in Appendix 6 to the Revised
Listing Particulars.

15

The Company also has access to the consultative expertise of Mr Dennis Tucker and geologist
Mr Stephen Gain.
The combined team has extensive PGM industry knowledge, corporate finance and deal-making
experience with access to a widespread network within the South African mining and corporate
environment.
Full details of the board restructure are contained in paragraph 9 of the circular.
7. BBBEE (BROAD-BASED BLACK ECONOMIC EMPOWERMENT)
The proposed transactions will ensure full compliance with the requirements and spirit of participation by
Historically Disadvantaged South Africans (HDSAs) in the mining industry as per the Mining Charter.
The Bapedi Nation holds 37.6% in Bauba, whilst Hlabirwa will retain its interest in the Bauba Project
through its direct retained shareholding in Bauba of 2.4% and its indirect shareholding of 3.6% through
its 6.1% shareholding in Absolute, thereby ensuring the continuous involvement of the surrounding
community. Whilst Absolute is aware that chieftainship of the Bapedi Nation remains unresolved, this
does not impact on the Bauba acquisition or the legal status of the mineral rights as the Bapedi Nation
is not a vendor. The Company has received legal opinion confirming this position.
The Math-Pin Trust (deemed to be BEE) and Calulo will hold an effective 6.5% and 3.6%, which equates
to a 3.9% and 2.2% interest in the Bauba Project, respectively. The effective cumulative interest by BEE
in the Bauba Project will therefore equate to 49.7%. The Company is committed to the development of
these properties to the benefit of the surface right owners through a detailed community development
plan in terms of which these prospecting rights were conferred.
8. SOUND PLATFORM TO CREATE VALUE
The board believes the proposed transaction provides the Company with:
a significant project that is strategically located down-dip from three existing producing platinum
mines and three development projects;
exposure to the platinum market which is poised for significant growth and investment over the next
five to ten years;
Johnson Matthey predicts that 2010 to 2015 will see major platinum supply deficits due to:
the increased auto catalyst demand from a growing Chinese economy;
a stagnation in platinum production globally due to cost pressures having eroded the profitability
of marginal, high cost operations;
new planned production having been delayed by the 2008/9 financial crisis; and
surging Exchange Traded Funds demand and limited new supply are believed to create a
positive and sustained platinum price response;
the technical and financial skills necessary to manage the Bauba Project from greenfield exploration
to a bankable feasibility study through to full development of the Bauba Project;
the potential to create a formidable and sustainable producer in the junior South African platinum
sector, and the opportunity to participate in further sector consolidation;
access to an experienced mining team with an extensive corporate finance and deal-making
background. The team also has access to a widespread network within the mining and corporate
environment; and
a value-adding relationship with the Bapedi Nation, which includes active participation and
representation in the Bauba Project.
The Companys strategic intention will be to develop a mine and thereby take advantage of an anticipated
future supply deficit in the global platinum arena arising from the stagnation in South African production
and the continual shift to extract from the deeper areas over the next 10 years.
Through this acquisition, the Company will continue to transform its primary business to that of an explorer
and developer of mineral assets, developing its considerable resources, with the intention of establishing
a mine producing an initial 350 000 ounces of PGMs per annum in the next 10 years, expanding
to 1 million ounces of PGMs per annum within 20 years.

16

To maximise shareholder value, the immediate objectives of the Company are:


to produce a SAMREC compliant resource statement, through the execution of a detailed investigative
exploration programme focused on the known mineralisation targets of the Merensky Reef and UG-2
chromatite, initiated by diamond drilling, geological and geophysical mapping and interpretation of
the areas of interest followed by:
a scoping study and bankable feasibility study.
9. NATURE OF BUSINESS
The primary business of the Company post implementation of the transactions will be:
the exploration and development of the Bauba Project with the intention of establishing a mine
producing an initial 350 000 ounces of PGMs per annum in the next 10 years, expanding production
to 1 million ounces per annum within 20 years from the overall resource base;
the pursuit of acquisitive opportunities in the PGM sector that will enhance shareholder value; and
to consider projects with joint venture partners with technical deep level mining expertise and/or
funding.
10. ISSUE OF SHARES TO QINISELE RESOURCES
Qinisele Resources has agreed to accept settlement of 70% of its transaction fee through the issue of
new shares in the Company. At an assumed issue price of R5.00 this would equate to 1 430 617 and
444 981 new shares to be issued to Qinisele Resources in respect of the Bauba acquisition and the
Houtbosch acquisition, respectively.
11. NAME CHANGE AND TRANSFER TO THE MAIN BOARD OF THE JSE
As part of a repositioning and rebranding exercise it is proposed that the Company changes its name
to Bauba Platinum Limited pursuant to the Bauba acquisition, which holds primarily platinum resource
assets. The name reservation has been approved by CIPRO and is subject to the registration of the
special resolution to be contained in the notice of General Meeting.
The Company will transfer to the Main Board of the JSE and trade under the share code BAU, subject to
the Listings Requirements.
12. REVERSE TAKEOVER
Shareholders are cautioned that the implementation of the proposed acquisition will result in the issue
of more than 100% of the current issued share capital of the Company, a change in control and the
reconstitution of the board of directors and accordingly will result in a reverse takeover of Absolute for
the purposes of the Listings Requirements, which stipulate that the Company can only retain its listing
following the reverse takeover if the JSE is satisfied that the Company continues to qualify to be listed. The
directors of Absolute are confident that the Company will meet this requirement post the implementation
of the proposed acquisition.
13. CHANGE OF CONTROL AND WAIVER OF MANDATORY OFFER
On implementation of the transactions, the vendors shareholding in Absolute will increase from 0% to
approximately 65.1% (pursuant to the share issue for cash and the Houtbosch payment shares) and more
specifically, Highlands shareholding will be approximately 44.5% post the transactions. The acquisition
is thus an affected transaction under the SRP Code, which ordinarily would require the vendors to make
a mandatory offer to acquire the Absolute shares owned by all Absolute shareholders at an offer price of
R5.00 per share.
14. DATE OF GENERAL MEETING
A general meeting will be held at Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg at
10h00 on Monday, 7 June 2010 in order to approve the various transactions detailed in this circular.

17

ABSOLUTE HOLDINGS LIMITED


(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN: ZAE000144267
Share code: ABO

(Absolute or the Company)


Directors
MK Diale* (Chairman)
AM Sher*# (Deputy Chairman)
MW Rosslee (Chief Executive Officer)
GP Sequeira (Financial Director)
JJ Serfontein*
*Non-executive
#Independent

CIRCULAR TO SHAREHOLDERS

1. INTRODUCTION
The board of directors released announcements on SENS and in the press dated 15 February 2010 and
17 May 2010 detailing, inter alia, the proposed acquisition of an effective 60% direct and indirect interest
in Bauba in terms of an acquisition agreement dated 12 February 2010. The purchase consideration
of R340 623 000 will be settled through the issue of 68 124 600 new ordinary shares in Absolute at an
issue price of R5.00 per share, which represented a premium of 66% to the market price at the time of
the announcement. In addition, the agreement provides for a minimum capital raising of R60 000 000
to be raised by Absolute to fund the initial work programme. In addition, Bauba has been granted
a prospecting right over Houtbosch, which grant is pending notarial execution and registration. Upon this
being achieved, in the name of Bauba, Absolute will issue an additional 21 189 600 shares in Absolute
to the vendors at an issue price of R5.00 per share and equating to a consideration of R105 948 000,
as Absolute will effectively hold a 60% interest in the Houtbosch prospecting right through its 60%
shareholding in Bauba. It is, however, intended that the Company will raise up to R150 000 000 (including
the minimum capital raising of R60 million detailed above) through a share issue for cash, which will
incorporate the minimum capital raising required in terms of the Bauba acquisition agreement.
The acquisition will result in a change in control of Absolute and, due to the issue of shares for the
transactions exceeding 100% of its current issued share capital, the acquisition will constitute a reverse
listing in accordance with the Listings Requirements. The Company will need to increase its authorised
share capital to facilitate the acquisition. Pursuant to the acquisition, it is proposed that the Company will
change its name to Bauba Platinum Limited.
In addition, the change in control of Absolute is an affected transaction as defined in the SRP Code and,
accordingly requires compliance with the SRP Code.
It is further intended that the Company issues shares to directors and Arcay Client Support in terms
of a specific issue of shares to related parties in order to settle existing obligations owed to these
related parties. This will not require shareholder approval in terms of paragraph 5.51(g) of the Listings
Requirements as the total number of shares issued will be less than 0.25% on a cumulative basis pursuant
to the transactions and will only be approved by directors pursuant to the transactions.
These transactions will require the approval of Absolute shareholders in general meeting in terms of the
Listings Requirements and the SRP Code.

18

The purpose of this circular is to:


provide Absolute shareholders with all the necessary information relating to the transactions as well as
the implications thereof, in accordance with the Listings Requirements and the SRP Code; and
give notice of its intention to convene the general meeting in order to consider, and if deemed fit, pass
with or without modification, the special and ordinary resolutions as set out in the notice of general
meeting of Absolute shareholders, attached to and forming part of this circular.
2. INCORPORATION, HISTORY AND NATURE OF BUSINESS
2.1

Incorporation, nature of business and history


For full details of incorporation, history and nature of business refer to paragraph 2 of the Revised
Listing Particulars.

2.2

Growth prospects
The primary business of the Company post implementation of the transactions will be:
the exploration and development of the Bauba Project with the intention of establishing a mine
producing an initial 350 000 ounces of PGMs per annum in the next 10 years, expanding
production to 1 million ounces per annum within 20 years from the overall resource base;
the pursuit of acquisitive opportunities in the PGM sector that will enhance shareholder value;
and
to consider projects with joint venture partners with technical deep level mining expertise and/or
funding.

2.3

Other Absolute mineral assets and liabilities


The existing mining and exploration assets of Absolute will either be exploited or disposed of in
due course and will not be material to the group post the Bauba acquisition. In terms of the Bauba
acquisition agreement, the other Absolute mineral assets will be disposed of on a best endeavours
basis. It is intended that the existing shareholder loan owing to Calulo will be reduced through
revenues and cash flows arising from these assets as well as from proceeds arising from the
disposal of these assets and as such, it is intended that these assets will be pledged as security
for the Calulo loan until such time as the loan is fully repaid. This will have the effect of ring fencing
the existing assets and major obligations and the proceeds from the share issue for cash will be
solely applied to the mining projects and working capital requirements of the group going forward.
A formal loan agreement embodying the above intention will be entered into pursuant to the approval
of the transactions.

3. THE ACQUISITION
3.1

Details and terms of the acquisition


Absolute has agreed, with effect from the closing date, to acquire from the vendors an effective
60% direct and indirect interest in the share capital of Bauba for a purchase consideration of
R340 623 000, to be settled through the issue of 68 124 600 new shares in Absolute at an issue
price of R5.00 per Absolute share in an asset for share transaction in terms of section 42 of the
Income Tax Act. In addition, the agreement provides for additional funding of R60 000 000 to be
raised by Absolute (minimum capital raising). This represents an effective 81% direct interest of the
vendors in the share capital of Absolute prior to the share issue for cash and approximately 65.1%
post the transactions. The purchase price will be applied to the mineral assets and no goodwill
will arise on the acquisition. The shares in Bauba and NMR will be transferred into the name of the
Company at the date of issue of the 68 124 600 new shares in Absolute. The Bapedi Nation and
Hlabirwa have elected to retain direct shareholdings in Bauba of 37.6% and 2.4%, respectively.
The Bauba Project consists of prospecting rights over eight farms (Refer to Location Map
in Annexure 9) which are prospective for platinum mineralisation in the Eastern Bushveld
Igneous Complex, encompassing an area of approximately 50km in length and 6km in width
(approximating 12 700 hectares) along the Leolo mountain range in the Limpopo Province.

19

The farms cover the known down-dip extent of several current development projects and operating
mines on the Eastern limb of the Bushveld Igneous Complex. The geological location is expected
to reveal both Merensky Reef and UG-2 Chromitite Layer occurrences as extensive exploration
programmes have been conducted on the properties neighbouring the Bauba Project.
The prospecting rights are geographically clustered as follows:
The Southern Cluster comprising the farms Genokakop 284 KT and Grootvygenboom 285 KT;
The Central Cluster comprising the farms Magneetsvlakte 541 KS and Dingaanskop 543 KT; and
The Northern Cluster comprising the farms Fisant Laagte 506 KT, the remainder of Indi 474 KS,
Zwitzerland 473 KS and Schoonoord 462 KS.
3.1.1

Houtbosch Prospecting Right


Bauba has been granted a prospecting right over Houtbosch. This prospecting right is
pending notarial execution and registration in the Mining Titles Registration Office. Upon
this being achieved, in the name of Bauba, Absolute will issue an additional 21 189 600
new shares in Absolute to the vendors at an issue price of R5.00 per share and equating
to a consideration of R105 948 000, as Absolute will effectively hold a 60% interest in the
Houtbosch prospecting right through its 60% shareholding in Bauba. Pursuant to the issue
of shares for the Houtbosch prospecting permit, the vendors will hold approximately 65.1%
in Absolute.
The issue and allotment of the Houtbosch Payment Shares will be within 7 (seven) days
after the date of registration of the Notarial Deed of Cession of the Houtbosch prospecting
right in the name of Bauba.

3.1.2

Claw back or repurchase


There is currently a review application pending in the North Gauteng High Court of South
Africa, Pretoria brought by Rustenburg Platinum Mines Limited (RPM) and ARM Mining
Consortium Limited against a decision of the DMR and citing certain other Parties in respect
of the refusal of the DMR of an application to grant prospecting rights in respect of certain
farms, some of which are farms forming part of the Southern Cluster in respect of which
the DMR has granted prospecting rights to Bauba on 19 December 2007 (the Southern
Rights). Those prospecting rights have been notarially executed. Bauba is not a party to,
nor has it been cited in the High Court application. Accordingly, the parties have no reason
not to proceed with the transaction recorded in the acquisition agreement on the terms and
conditions stipulated.
These rights were applied for in terms of section 104 of the MPRDA, and granted in terms of
this section, which grants communities the preferential right to be awarded the prospecting
rights subject to them, inter alia, having the necessary financial and technical resources
to develop these for the benefit of the local community. The rights have been granted for
a period of five years, and the MPRDA provides for a further five-year period for renewal.
If any one of the Southern Rights or all of the Southern Rights in the Southern Cluster, are
at any time after the Signature Date revoked by any requisite authority or cancelled in
terms of a valid Court Order, and if the revocation or cancellation of any Southern Right is
not overturned and all remedies of Bauba or its successor in title have been exhausted,
including all appeals, reviews, administrative steps, new applications in respect of the
Southern Rights to the DMR and any appeals, reviews or administrative steps in respect
thereof, and all court applications concluded with no further appeals or reviews possible,
so as there is no prospect of Bauba retaining or acquiring afresh or on any basis the
Southern Rights or any of them, then such number of claw back shares will be returned to
the Purchaser by the vendors for cancellation.

20

The vendors shall for a period of two years after 12 February 2010 not alienate, transfer,
cede, assign, pledge, encumber, furnish as collateral or by way of a guarantee, or in any
other manner or form deal with the claw back shares until the period of two years has
elapsed. If a court application citing Bauba and/or the Purchaser is brought for a remedy
which will result in revocation or cancellation of any Southern Rights within the two-year
period, then the restrictions above will continue to apply until the matter has been finally
resolved and the court applications finalised also with reference to the preceding sub
paragraphs. The CSDP account or such similar account to be held by the Sellers will be
endorsed with a note reflecting the provisions of this clause.
3.1.3

Other matters
No other book debts have been guaranteed. Normal warranties have been provided in
relation to an acquisition of this nature. As the Company will be acquiring shares in Bauba
and NMR, any liabilities for accrued taxation will be settled by Bauba and NMR, respectively.

3.2

Rationale for the Bauba acquisition


The proposed acquisition will give effect to the Companys stated strategic intention of procuring
mineral assets for exploration and bringing such assets to production. The proposed acquisition
provides the Company with:
a significant project area that is strategically located down-dip from three existing producing
platinum mines and three development projects;
exposure to the platinum market which is poised for significant growth and investment over the
next five to ten years;
o Johnson Matthey predicts that 2010 to 2015 will see major platinum supply deficits due to:
the increased auto catalyst demand from a growing Chinese economy;
a stagnation in platinum production globally due to cost pressures having eroded the
profitability of marginal, high cost operations;
new planned production having been delayed by the 2008/9 financial crisis; and
surging Exchange Traded Funds demand and limited new supply will create a positive and
sustained platinum price response;
the technical and financial skills necessary to manage the Bauba Project from greenfield
exploration to a bankable feasibility study through to development of the Bauba Project;
the potential to create a formidable and sustainable producer in the junior South African platinum
sector, and the opportunity to participate in further sector consolidation;
access to an experienced mining team with an extensive corporate finance and deal-making
background. The team also has access to a widespread network within the mining and corporate
environment;
an experienced senior management team with excellent credentials, to be spearheaded by
Mr Pine Pienaar (former Mvelaphanda Resources CEO) as CEO the enlarged group; and
a value-adding relationship with the Bapedi Nation, who through the retention of their interest in
the Bauba Project will be able to contribute to the projects development and thereby increase
the involvement by Historically Disadvantaged South Africans (HDSAs) in the platinum mining
sector.
The Bauba Project consists of eight farms which are prospective for platinum mineralisation in the
Eastern Bushveld Igneous Complex, encompassing an area of approximately 50km in length and
6km in width (approximating 12 700 hectares) along the Leolo mountain range in the Limpopo
Province. The farms cover the down-dip extent of several current development projects and
operating mines on the Eastern limb of the Bushveld Igneous Complex. The geological location
is believed to reveal both Merensky Reef and UG-2 Chromitite Layer occurrences as extensive
exploration programmes are being and have been conducted on the properties adjacent to the
Bauba Project.

21

A targeted resource has been estimated by geologist Mr Stephen Gain (Pr.SciNat Msc) using
average modifying factors from projects and mines on adjacent properties. An initial estimate of
the in situ resource tonnages on the farms is 700 Mt which could include in excess of 100 m oz
PGMs metal content. This in situ targeted resource estimation is considered conservative but is not
SAMREC Code compliant. This target resource has been independently verified by Venmyn and is
now estimated to be 138m oz PGMs, the details of which are included in Annexure 8 to this circular.
Bauba has designed a detailed investigative exploration programme that will be initiated by diamond
drilling, geological and geophysical mapping, and interpretation of the areas of interest. The drilling
sequence will commence on the Southern Cluster, followed by the Central and Northern Clusters
to determine the mineral resource base and the style of mineralisation. The drilling programme will
extend through to the base of the Bushveld Igneous Complex to establish the form and style of the
PGM mineralisation in the Middle and Lower groups of the Bushveld Igneous Complex, based on
public information from adjacent properties. The programme will focus on the known mineralisation
targets of the Merensky Reef and UG-2 Chromitite.
Results from the initial drilling, which commenced in April 2010, will form the basis of the balance
of the drilling programme on the Southern Cluster with the aim of establishing the extent of the
resource, which would be converted to a fully compliant reserve statement to form the basis of the
Bankable Feasibility Study.
3.3

Conditions precedent
The proposed Acquisition is still subject to the fulfilment of the following conditions precedent:
Absolute confirming in writing to the vendors and submitting written proof on or before the date
of the general meeting that it has secured irrevocable undertakings from potential investors for
the purposes of raising capital in the minimum amount of R60 000 000 (sixty million rand);
the shareholders of Absolute by 30 June 2010 pass in general meeting such resolutions as
may be necessary for the acquisition to proceed and that Absolute submits written proof to the
vendors thereof by 30 June 2010;
the board of Absolute obtaining the requisite shareholder resolution by 30 June 2010 providing
that, in the event of the claw back contemplated in terms of acquisition agreement applying,
such number of shares in Absolute, as more fully set out in paragraph 3.1 above, be returned
to Absolute and if a court does not sanction the cancellation thereof (upon an application being
made to a competent court for the cancellation of such number of the shares in the Absolute),
then in such event, Absolute buys back such number of shares in Absolute from the vendors at
a purchase price of R1.00 (one rand) (it being deemed by the Parties that such number of the
shares in the Absolute were issued and allotted for no consideration and shall be void ab initio);
Absolute obtaining its shareholders approval and waiver of the requirement for the Sellers to
make a mandatory offer to minorities in terms of the SRP Code in general meeting; and
the entering into of a formal loan agreement between Absolute and Calulo Investments.
As at the last practicable date, all the conditions precedent have been met with the exception of
the approval of the acquisition and associated transactions, namely the share issue for cash and
increase in authorised share capital, by Absolute shareholders in general meeting.

22

3.4

Reverse take-over and transfer of listing


Shareholders are cautioned that the implementation of the proposed acquisition will result in the
issue of more than 100% of the current issued share capital of the Company, a change in control
and the reconstitution of the board of directors and accordingly will result in a reverse takeover
of Absolute for the purposes of the Listings Requirements, which stipulate that the Company
can only retain its listing following the reverse take-over if the JSE is satisfied that the Company
continues to qualify to be listed. The directors of Absolute are confident that the Company will
meet this requirement post the implementation of the proposed acquisition as the company already
has approximately 1 400 shareholders and the share issue for cash will ensure that the minimum
shareholding of 20% to be held by the general public will be achieved. The listing on the Main
Board is conditional on the company maintaining the said shareholder spread requirements.
Pursuant to the approval of the transactions and the Company maintaining its spread of shareholders,
the Company will transfer its listing to the Main Board.

3.5

Change of control and waiver of mandatory offer


Approval and implementation of the proposed acquisition will result in the vendors owning more
than 35% of the issued shares in the Company. At the general meeting to approve the proposed
acquisition referred to below, Absolute shareholders shall be asked to waive the requirement for a
mandatory offer at R5.00 per share that would otherwise apply in terms of Rule 8 of the SRP Code.
An application will then be lodged with the SRP seeking dispensation in terms of Rule 8.7 of the
SRP Code, which deals with the obligation to make a mandatory offer. Further details are set out in
paragraph 4 below.

3.6

Change of name and transfer of listing


To mark the beginning of a new era for the Companys entry into the platinum sector and to reflect
the change in the nature of the Companys business to that of exploring and developing the Bauba
Project with the intent of establishing a PGM producing mine, Absolute will embark on a repositioning
and rebranding exercise which will include a change of the Companys name as detailed in
paragraph 5 below. Pursuant to the approval of the transactions and the Company maintaining its
spread of shareholders, the JSE has approved the transfer of the listing of the Company to the Main
Board, which is part of the repositioning of the Company as a junior explorer, developer and miner.

3.7

Pro forma financial effects of the transactions


The table below reflects the unaudited pro forma financial effects of the proposed transactions.
These have been prepared in terms of the Listings Requirements, are for illustrative purposes only
and due to their nature, may not truly reflect Absolutes financial position or results of operations. It
has been assumed for purposes of the pro forma financial effects that the transactions took place
with effect from 1 July 2009 for income statement purposes and 31 December 2009 for balance
sheet purposes. The directors of Absolute are responsible for the preparation of the unaudited
pro forma financial effects. The reporting accountants limited assurance report on the unaudited
pro forma financial effects is set out in Annexure 3 to this circular.

23

24
(19.09)
(19.09)
176.98
(12.66)
15 325
16 012

(0.19)
(0.19)
1.77
(0.13)

1 532 545

1 601 185

107 202

106 515

(0.27)

(17.77)
55.16

(9.57)

After
Bauba
acquisition3

119 202

118 515

48.28

(14.25)
98.13

(6.88)

After
specific
issue
(minimum)4

644.5%

673.3%

481.4%

25.4%
(44.6%)

64.0%

Change
(%)

137 202

136 515

105.18

(9.94)
148.49

(3.54)

After
specific
issue
(maximum)5

756.9%

790.8%

930.8%

47.9%
(16.1%)

81.5%

Change
(%)

82 168

81 482

70.04

(20.73)
134.97

(10.01)

After claw
back and
assuming
minimum
specific
issue6

(31.1%)

(31.2%)

(45.1%

(45.5%)
37.5%

(45.5%)

Change
(%)

100 168

99 482

144.07

(13.64)
197.33

(4.86)

After claw
back and
assuming
maximum
specific
issue7

(27.0%)

(27.1%)

(37.0%)

(37.2%)
32.9%

(37.3%)

Change
(%)

Notes:
1. The Before financial information is based on Absolutes published unaudited interim results for the six months ended 31 December 2009.
2. After the 1:100 share consolidation and odd lot offer as approved by shareholders in general meeting on 17 February 2010.
3. The After the Bauba acquisition column is based on the assumption that the issue of 68 124 600 new ordinary shares in respect of the Bauba acquisition (excluding Houtbosch) and 21 189 600
new ordinary shares in respect of the Houtbosch acquisition was effective from 1 July 2009 for basic (loss)/earnings per share and headline (loss)/earnings per share and 31 December 2009 for net
asset value and tangible net asset value purposes. The basic (loss)/earnings per share and headline (loss)/earnings per share include the results of Bauba for the year ended 28 February 2010,
extracted from the audited annual financial statements of Bauba for the year ended 28 February 2010. The results have been adjusted to reflect a six-month period only (with the exception of the
gain from sale of capital asset of R10 150 000, where the full amount is included).
The acquisition has been accounted for in terms of the revised IFRS 3: Business Combinations, as the expected effective date is after 1 July 2009, being the effective date of the revised
statement. As this is a reverse acquisition, the fair value of the consideration transferred has been determined with reference to the fair value of the consideration transferred (based on the value of
R573.23 million attributed to the Bauba Project) and in terms of IFRS 6: Exploration for and Evaluation of Mineral Resources, the cost associated with the acquisition of Absolutes mineral assets has
been capitalised to the cost of exploration and evaluation assets.
The After Bauba acquisition financial information includes transaction costs of R16.634 million and related tax effects as follows:
R10 218 690 payable to Qinisele Resources including the issue of 1 430 617 new shares to QR at an assumed price of R5.00 in respect of the Bauba acquisition (excluding Houtbosch);
R3 178 440 payable to Qinisele Resources including the issue of 444 981 new shares to QR at an assumed issue price of R5.00 in respect of the Houtbosch acquisition); and
Total other transaction costs of R3 237 000.
4. The After specific issue (minimum) financial information assumes:
Issue of 12 000 000 new ordinary shares at R5.00;
Capital raising fees of R3 million payable to Qinisele Resources that have been set-off against share premium;
The proceeds of R60 million from the specific issue;
Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million for basic
loss/earnings per share and headline loss/earnings per share purposes only; and
The tax effects of the above.
5. The After specific issue (maximum) financial information assumes:
Issue of 30 000 000 new ordinary shares at R5.00;
Capital raising fees of R7.5 million payable to Qinisele Resources that have been set-off against share premium;
The proceeds of up to R150 million from the specific issue;
Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million for basic
loss/earnings per share and headline loss/earnings per share purposes only; and
The tax effects of the above.
6. The After claw back and assuming minimum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and minimum specific issue and subsequent reduction of
the purchase consideration via the repurchase of 37 033 200 Absolute shares.
7. The After claw back and assuming maximum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and maximum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.

(Loss)/earnings per share (c)


Headline (loss)/earnings
per share (c)
Net asset value per share (c)
Tangible net asset value
per share (c)
Weighted average number of
shares in issue (000)
Number of shares in issue
(000)

Before the
acquisition1

After
share
consolidation
and odd
lot offer2

4. THE WAIVER OF THE MANDATORY OFFER AND CONFIRMATION OF NO SPECIAL ARRANGEMENTS


On implementation of the transactions, the vendors shareholding in Absolute will increase from 0% to
approximately 65.1% (pursuant to the share issue for cash and the Houtbosch payment shares) and more
specifically, Highlands shareholding will be approximately 44.5% post the transactions. The acquisition
is thus an affected transaction under the SRP Code, which ordinarily would require the vendors to make
a mandatory offer to acquire the Absolute shares owned by all Absolute shareholders at an offer price of
R5.00 per share.
The SRP has advised that it is willing to consider an application to grant a dispensation to the vendors,
in terms of the SRP Code, from the obligation to make a mandatory offer at R5.00 per share to acquire
the ordinary shares of Absolute shareholders if Absolute shareholders in general meeting other than
the Bauba Sellers, NMR Sellers and any person acting in concert (as defined in the SRP Code) with
the vendors waive their right to require the vendors to make a Mandatory Offer and subject to the SRP
considering any representations (if any) made by Absolute shareholders, as contemplated below.
Any Absolute shareholder who wishes to object to the dispensation shall have 10 days from the date
of posting of this circular to raise such an objection with the SRP. Objections should be made in writing
and addressed to The Executive Director, Securities Regulation Panel at the following address:
Physical:
Ground Floor
2 Sherborne Road (off Jan Smuts Avenue)
Parktown
2193
Postal:
PO Box 91833
Auckland Park
2006
Fax: +27 11 482 5635
and should reach the SRP by not later than the close of business on 27 May 2010 in order to be considered.
If any submissions are made to the SRP within the permitted timeframe, the SRP will consider the merits
thereof and, if necessary, provide the Sellers with an opportunity to make representations to the SRP.
Thereafter, subject to the waiver in general meeting being granted by the Absolute shareholders, the SRP
will rule on the requirement for a mandatory offer.
The granting of the aforesaid waiver and of the dispensation is a condition precedent to the acquisition.
5. CHANGE IN NAME OF COMPANY
It is proposed that the Company will change its name to Bauba Platinum Limited pursuant to the acquisition
in order to align its name with the new focus on PGMs. A special resolution will be proposed to change
the name from Absolute Holdings Limited to Bauba Platinum Limited. The name reservation has been
approved by CIPRO and is subject to the registration of the special resolution contained in the notice of
General Meeting attached to this circular.
For a period of not less than one year, the Company will reflect the former name Absolute Holdings
Limited on all documents of title in brackets beneath the new name of Bauba Platinum Limited.
In addition, for a period of not less than three years, the Company will reflect the former name Absolute
Holdings Limited on all circulars beneath the new name of Bauba Platinum Limited, in accordance
with the Listings Requirements.
In terms of the Listings Requirements, approval was granted by the JSE for the change of name and
for the abbreviated name Bauba to be used with the share code BAU and the ISIN will be changed
to ZAE000145686.
5.1

Salient dates and procedures to be followed by shareholders


5.1.1

Subject to the approval and implementation of the change of name, the attention
of shareholders is drawn to the following dates:

25

5.1.1.1 the results of the general meeting will be released on SENS Monday, 7 June 2010;
5.1.1.2 last date to trade in Absolute Holdings Limited shares in the JSE in order to be
recorded as a shareholder by the record date of the name change is Friday,
9 July 2010;
5.1.1.3 shares will commence trading under the new name on Monday, 12 July 2010; and
5.1.1.4 the record date for purposes of determining those shareholders whose shares will
be subject to the change of name is Friday, 16 July 2010.
5.2

Surrender of share certificates by certificated shareholders


Subject to the passing and registration of the special resolution necessary for the change of name,
it is necessary for certificated shareholders to surrender their share certificates in order to replace
them with certificates reflecting the change of name.
Certificated shareholders are requested to complete the attached form of surrender (yellow) in
accordance with the instructions it contains and return it to the transfer secretaries.
5.2.1

To facilitate the timeous receipt by certificated shareholders of replacement share


certificates, certificated shareholders who wish to anticipate the implementation of the
change of name and who do not wish to deal in their existing shares prior to the change
of name, are requested to surrender their share certificates to the transfer secretaries by
completing the attached form of surrender (yellow) in accordance with the instructions it
contains and return it to the transfer secretaries.

5.2.2

Share certificates so received will be held by the transfer secretaries pending the change
of name being approved by shareholders at the general meeting. In the event that the
change of name is not approved, the transfer secretaries will, within five business days
thereafter, return the certificates to the certificated shareholders concerned, by registered
post, at the risk of such shareholders.

5.2.3

In the event that the change of name is approved, the transfer secretaries will, within five
business days thereafter, post the new share certificates to the certificated shareholders
concerned, by registered post, at the risk of such shareholders.

5.2.4

Dematerialised shareholders must not do anything as their accounts at their CSDP or broker
will be automatically updated.

In the event that certificated shareholders do not complete the attached form of surrender and who
later wish to obtain a share certificate in the new name of the Company, such shareholders will be
required to return their share certificates to the transfer secretaries together with certified copies of
identity documents, if in own name, or if otherwise, certified copies of company/trust documents.
6. SHARE ISSUE FOR CASH
6.1

As part of the conditions precedent in terms of the acquisition agreement, the Company is required
to raise a minimum amount of R60 million for additional capital to be applied towards a working
programme in respect of the Bauba Projects and for working capital. This amount may be changed,
if amended in writing between the parties. Absolute is seeking shareholder approval to raise up
to R150 million through the issue of up to 30 000 000 additional new Absolute shares, in one or
more tranches, at a price to be determined through a road show, to interested off-shore and local
investors, institutions, certain existing shareholders and the local market, all of whom are to be
identified during the road show prior to the general meeting on 7 June 2010. The discount at which
the share issue for cash will take place is not known at the last practicable date and will be based
on market conditions prevailing at the time of the capital raising.
These shares will not be issued to related parties as defined in the Listings Requirements and will
result in a maximum dilution of 15.8% assuming the issue of the Houtbosch payment shares. The
shares will be of a class already in issue and will rank pari passu with the existing shares in issue.
Qinisele Resources will seek indications of interest from private and institutional investors to acquire
shares in Absolute. The results of the share placement will be announced on SENS and in the press.
In the event of an over subscription for the share issue for cash, the directors will allocate the shares
on an equitable basis in accordance with the Listings Requirements. There is no intention to extend
a preference to any particular individual, company or group.

26

6.2

The resolution authorising the share issue requires a 75% majority of the votes cast in favour of the
resolution, excluding any parties and their associates, participating in the specific issue of shares
for cash.

7. ISSUE OF SHARES TO QINISELE RESOURCES AND PROPOSED AMENDMENT TO SHARE


INCENTIVE SCHEME
7.1

Issue of shares to Qinisele Resources


Qinisele Resources has agreed to accept settlement of 70% of its transaction fee through the issue
of new shares in the Company. At an assumed issue price of R5.00 this would equate to 1 430 617
and 444 981 new shares to be issued to Qinisele Resources in respect of the Bauba acquisition and
the Houtbosch acquisition, respectively. The pro forma financial effects of this share issue are set out
in paragraph 3.7 and Annexure 4 to this circular. The actual issue price will be at a 10% discount of
the 30-day Volume Weighted Average Price determined at the date that the issue is agreed in writing
between the Company and Qinisele Resources . The Company holds 25.1% in Qinisele Resources.
Qinisele Resources is not a related party as defined in the Listings Requirements as it does not hold
an interest in the Company, it does not have board representation in the Company and does not hold
infuence over the Company. The shares to be issued will be of a class already in issue, will be issued
under the Companys general authority and rank pari passu with the existing shares in issue. These
shares will be held in trust for a period of two years in accordance with paragraph 5.127 of the Listings
Requirements.

7.2

Proposed amendment to share incentive scheme


The Company intends making a minor amendment to the Companys share incentive scheme
in order to allow for consultants, part-time employees, contractors and advisors to participate
in the Absolute Share Incentive Scheme (scheme) due to the nature of the business not
necessarily warranting full-time employment at present. A resolution authorising this amendment
has been included in the notice of general meeting. Pursuant to the shareholder approval, the
amended share incentive scheme will be lodged for registration with the Master of the High Court.
The scheme will be applied on the same basis as for employees for such consultants, part-time
employees and advisors. The scheme does not provide for the automatic lapsing once an employee
is no longer employed. Clause 17.2.2.2 of the scheme states that any time before an option
is exercised the option may be cancelled in the event of voluntary termination of the employment
of the holder. Part-time employees, contractors and advisors will be treated on the same basis
as it does not make commercial sense, given the size of the Company, that the Company employs
full-time people at present.

8. INCREASE IN AUTHORISED SHARE CAPITAL


In order to facilitate the acquisition, the share issue and the Houtbosch payment shares, shareholders
are required to approve an increase in the authorised share capital of the Company from 25 000 000
ordinary shares of R1.00 each to 200 000 000 shares of R1.00. The notice of general meeting contains a
special resolution for the proposed increase in ordinary share capital.
9. RECONSTITUTION OF THE BOARD
The Company is proposing to reconstitute the board to reflect the new controlling shareholder of the
Company after the acquisition. Gabby Sequeira and Mpho Diale, representatives of Calulo Resources, as
well as Abe Sher and Jan Serfontein will therefore be resigning pursuant to the approval of the transactions
in general meeting. No payment will be made to these directors in relation to the resignations.
Mr Pine Pienaar is to be appointed as CEO to complement the management team of Mr Mark Rosslee,
whose appointment will change to Financial Director.
To give full effect to the change in shareholding and the development of the new business imperative
offered by the Bauba Project, a change in the composition of the board is proposed, which will include
the proposed appointment of Mr Jonathan Best (as Chairman) and Messrs Kenneth Dicks and Sholto
Dolamo as independent non-executive directors, all of whom have extensive experience in the mining
industry. Dr Mathews Phosa will be appointed as a non-executive director.
The Company will also have access to the consultative expertise of Mr Dennis Tucker and geologist
Mr Stephen Gain. The combined team has extensive PGM industry knowledge, corporate finance and
deal-making experience with access to a widespread network within the South African mining and
corporate environment.

27

Subject to the approval of shareholders at the general meeting on Monday, 31 May 2010, the board will
be reconstituted as follows:
CEO: Mr Pine Pienaar;
Financial Director: Mr Mark Rosslee;
Chairman: Mr Jonathan Gourlay Best;
Independent Non-executive directors: Messrs Kenneth Dicks and Sholto Dolamo; and
Non-executive director: Dr Mathews Phosa.
The names, ages, qualifications, nationality, business address and function as well as a brief curriculum
vitae of each of the above directors of the Company are set out in paragraph 3.1 and Appendix 6 to the
Revised Listing Particulars.
10. HISTORICAL FINANCIAL INFORMATION
10.1 Extracts of historical financial information
Extracts of the historical financial information of Bauba for its first two years of operation for the
periods ended 28 February 2009 and 28 February 2010 are set out in Annexure 2 to this circular.
Extracts of the historical financial information of NMR for its first year of operation for the period
ended 28 February 2010 are set out in Annexure 6 to this circular.
10.2 Reporting accountants report
The reporting accountants reports on the historical information of Bauba and NMR, as set out in
Annexure 2 and Annexure 6 to this circular, are included in Annexure 1 and Annexure 5 to this
circular, respectively.
11. MAJOR SHAREHOLDERS
11.1 Shareholders, other than directors, directly and indirectly beneficially interested in 5% or more in the
ordinary share capital of the Company at the last practicable date were as follows:
Shareholder

Number
of shares

Percentage
holding

Calulo Resources
Tucker Boys Trust
Discount Toy Cash and Carry CC
RAB Investment Trust

4 922 811
1 865 149
1 005 500
944 798

30.74%
11.65%
6.28%
5.90%

Total

8 738 258

54.57%

No shareholders are indirectly beneficially interested in 5% or more in the ordinary share capital of
the Company at the last practicable date.
Shareholder, other than directors, directly and indirectly beneficially interested in 5% or more in the
ordinary share capital of the Company following the implementation of the transactions is as follows:
Number
of shares

Percentage
holding

Highlands

61 085 027

44.5%

Total

61 085 027

44.5%

Shareholder

11.2 Take-over bid


Other than the change in control as detailed in paragraph 3.5 above, to the best of the knowledge
of the directors, Absolute is not the subject of an announced or expected take-over bid.

28

12. SHARE CAPITAL AND OTHER INFORMATION


12.1 Prior to, and after, the implementation of the transactions and the increase in authorised share
capital, the share capital of the Company will be as follows:
Before

R000

Authorised
25 000 000 shares of R1.00 each

25 000

Issued
16 011 848 shares of R1.00 each
Share premium

16 012
112 412

After the acquisition settled through the issue of 68 124 600 new shares and
increase in authorised share capital
Authorised
200 000 000 shares of R1.00 each

200 000

Issued
84 136 448 shares of R1.00 each
Share premium

84 136
384 910

After the share issue for cash (assumed at 30 000 000 shares at an assumed
issue price of R5.00 per share)
Issued
114 136 448 shares of R1.00 each
Share premium

114 136
504 910

After the Houtbosch payment shares settled through the issue


of 21 189 600 shares
Issued
135 326 048 shares of R1.00 each
Share premium

135 326
589 669

After the issue of shares to Qinisele Resources of 1 875 598 shares


Issued
137 201 646 shares of R1.00 each
Share premium

137 202
597 171

12.2 Alterations to share capital


12.2.1 At the Annual General Meeting held on 7 November 2007, shareholders approved the
increase in the authorised share capital of the Company from R10 000 000 divided into
1 000 000 000 ordinary shares with a par value of R0.01 per share by R5 000 000 to
R15 000 000 by the creation of an additional 500 000 000 ordinary shares with a par value
of R0.01 per share.
12.2.2 At the Annual General Meeting held on 10 December 2008, shareholders approved the
increase in the authorised share capital of the Company from R15 000 000 divided into
1 500 000 000 ordinary shares with a par value of R0.01 per share by R10 000 000 to
R25 000 000 by the creation of an additional 1 000 000 000 ordinary shares with a par value
of R0.01 per share.

29

12.2.3 At the General Meeting held on 17 February 2010, shareholders approved the consolidation
of the authorised share capital of the Company from R25 000 000 divided into 2 500 000 000
ordinary shares with a par value of R0.01 per share to R25 000 000 divided into 25 000 000
ordinary shares with a par value of R1.00 per share and the consolidation of the issued
share capital of the Company from R16 011 848 divided into 1 601 184 758 ordinary shares
with a par value of R0.01 per share to R16 011 848 divided into 16 011 848 ordinary shares
with a par value of R1.00 per share.
12.2.4 At the General Meeting held on 17 February 2010, shareholders approved the repurchase
of up to 21 414 odd lot offer shares at R4.00 per share, subject to the approval of the
consolidation of the share capital of the Company as detailed in paragraph 12.2.3 above.
The odd lot offer closed on 1 April 2010 and the Company repurchased 17 996 odd lot
offer shares, which have been immediately issued under the Companys general authority
to issue shares for cash. The Company does not hold any treasury shares at the last
practicable date.
12.2.5 Details of shares issued during the preceding three years are set out in paragraph 4.2 of
the Revised Listing Particulars.
12.2.6 The ordinary shares are listed on the JSE. All the authorised and issued ordinary shares
are of the same class and rank pari passu in all respects. In terms of a resolution passed
at the Annual General Meeting held on 27 January 2010, the unissued ordinary shares are
under the control of the directors of Absolute until the next annual general meeting of the
Company, subject to the provisions of section 221 of the Act and the Listings Requirements.
12.2.7 No commission or consideration has been paid by the Company during the two years
preceding the date of this circular, nor is it intended to pay a commission or a consideration
to any person subscribing for or agreeing to subscribe for any of the Companys securities.
12.2.8 Other than the repurchase of shares in terms of the recent odd lot offer, which shares have
since been reissued as detailed in paragraph 12.2.4 above, there has been no repurchase
of shares up until the last practicable date.
12.3 Other information
12.3.1 Inter-company transactions and balances
Details of inter-company transactions and balances are contained in note 10 and 23 of the
annual financial statements of Absolute in Appendix 1 to the Revised Listing Particular,
which is attached to this circular. In addition, inter-company loans and receivables pursuant
to the acquisition are set out in Appendix 5 to the Revised Listing Particulars.
12.3.2 Share trading history
The share trading history of Absolute is set out in Annexure 7 to this circular. The JSE is the
only stock exchange on which Absolute securities are listed.
13. DIRECTORS AND KEY MANAGEMENT
13.1 Directors information

30

Name and designation

Age

Business address

Occupation

Mpho Kingston Diale *


(Chairman)

40

Platinum Place
Turnberry Office Park
48 Grosvenor Road, Bryanston

Businessman

Abe Max Sher *#


(Deputy Chairman)

72

20 Platinum Road
Bedfordview

Civil Engineer and


Property Developer

Mark William Rosslee


(Chief Executive Officer)

48

First Floor, Fern Centre


Corner Gateside and Cedar Road
Dainfern

Chartered
Accountant

Name and designation

Age

Business address

Occupation

Gabriel Paulino Sequeira


(Financial Director)

37

Platinum Place
Turnberry Office Park
48 Grosvenor Road, Bryanston

Financial Director

Jan Jonathan Serfontein *#

47

Corner Godfrey and Gilder Streets


Garsfontein, Pretoria

Geologist

* Non-executive
# Independent
Also directors of subsidiaries of the Company

All of the above directors are South African. A complete list of other directorships for the directors is
disclosed in Appendix 3 to the Revised Listing Particulars, which is attached to this circular.
None of the directors have been convicted of an offence involving dishonesty, declared bankrupt,
insolvent or entered into voluntary compromise arrangements, nor have they been publicly criticised
by any statutory or regulatory authorities or disqualified by a court from acting as a director, manager
or conducting the affairs of a company.
There were no receiverships, compulsory liquidations, creditors voluntary liquidations,
administrations, company voluntary arrangements or any compromise with creditors generally or
any class of creditors, where any director is or was a director with an executive function of such
company at the time of, or within 12 months preceding such events. All of the above directors have
completed directors declarations in terms of Schedule 21 of the Listings Requirements relating to
the appointment of new directors. Copies of the declarations are available for inspection.
Brief profiles on each of the directors are included in Appendix 6 to the Revised Listing Particulars,
details of which are attached to this circular.
13.2 Directors interests in securities
13.2.1 The current directors interests in the ordinary share capital of the Company as at the last
practicable date were as follows:
2009

Beneficially held
Direct
Indirect

Total shares
held

Total

MK Diale*
MW Rosslee
GP Sequeira
AM Sher*
JJ Serfontein*#

16 667
200 000

930 584

232 646

244 891

930 584

232 646
16 667
444 891

5.81%
0.00%
1.45%
0.10%
2.78%

Total

216 667

1 408 121

1 624 788

10.15%

*Non-executive
#Independent

No shares are held directly or indirectly by associates.


None of the directors have traded in the shares of Absolute from 30 June 2009 to the last
practicable date. In terms of an agreement signed on 30 June 2008, JJ Serfontein sold
62 500 000 shares to Calulo at 3 cents per share. Of these, the remaining 42 500 000 shares
will be transferred to Calulo during April 2010. The above table represents the directors
effective shareholding as though this transfer had been effected as at the last practicable
date.
13.2.2 The remuneration package of MW Rosslee provides for the allocation of 300 000 shares
(30 000 000 shares before the share consolidation) under the Companys share incentive
scheme, which scheme was approved by shareholders in a general meeting on 31 March
2009. The shares remain unissued at the date of this circular as the scheme still has to be
registered with the Master of the High Court.
The directors interests in the ordinary share capital of the Company following the
implementation of the transactions are detailed in paragraph 3.3 of the Revised Listing
Particulars.

31

13.3 Directors interests in transactions


In terms of a circular to shareholders dated 22 September 2008, the Company made an unconditional,
fully underwritten, renounceable rights offer, as supported by an irrevocable undertaking,
of 214 008 081 new ordinary shares of R0.01 each to Absolute shareholders recorded in the register
at the close of business on Friday, 10 October 2008 at a subscription price of 6 cents per rights offer
share, in the ratio of one rights offer share for every 4.00160 Absolute shares held.
The purpose of this rights offer was to enlarge the Companys capital base in order to provide the
equity to fund the mining projects at the Diamond Quartzite and Picturestone quarries as well as to
provide working capital in order to expand the business operations of the Absolute group.
This rights offer was fully underwritten by Calulo Resources. MK Diale and GP Sequeira hold an
indirect interest in Calulo Resources through Calulo Investments, in which they hold a 20% and 5%
interest, respectively. JJ Serfontein holds a 5% interest in Calulo Resources directly.
Other than as disclosed in this paragraph 13.3, which details the underwriting of the rights offer,
no director is or has been, interested in any transaction which is, or was, unusual in its nature or
conditions, or significant to the business of Absolute and which was effected by Absolute during the
current or immediately preceding year or which remains in any respect outstanding or unperformed
during an earlier financial period.
13.4 Directors remuneration and terms of appointment
The remuneration of the existing directors of Absolute will not be varied as a result of the transactions
as contained in this circular.
Other than MW Rosslee, there exist no service agreements for the directors of Absolute. The fees
payable to the non-executive directors are however agreed and authorised at a meeting of the
board of directors and then paid subsequent thereto.
13.4.1 MW Rosslee was appointed as Chief Executive Officer of Absolute on 1 September 2008
at a remuneration package of R2 400 000 cost to Company per annum. Thus for the year
ended 30 June 2009 he received gross remuneration for a period of 10 months amounting
to R2 000 000. In addition, the remuneration included an allocation of 300 000 shares
from the Companys share incentive scheme, which shares have not yet been issued. The
shares were to vest over a two-year period. The service agreement provides for a onemonth termination period and contains a restraint of trade for one year after termination.
13.4.2 GP Sequeira is remunerated by Calulo Investments. GP Sequeira does not receive this
fee. He is employed by Calulo Investments on terms which are usual for such a position
and specifically his employment is subject to a one-month termination period. In prior
years Calulo Investments charged a management fee of R15 000 per month to Lenopodi,
inter alia, for the service of GP Sequeira. This arrangement was terminated with effect
from 1 July 2009.
13.4.3 All directors receive fees for attendance at board meetings. The remuneration paid to
directors for the year ended 30 June 2009 is summarised below:

MW Rosslee^
GP Sequeira
MK Diale*
AM Sher*#
JJ Serfontein*#

Salaries
R

Bonuses
R

Fees
R

Expenses
R

Share
options
R

Share
benefits
R

2 000 000

24 000
40 000
40 000

104 000

Total
^ Appointed 1 September 2008
* Non-executive
# Independent

32

GP Sequeira received remuneration from Calulo Investments as follows:

GP Sequeira

Salaries
R

Bonuses
R

Fees
R

Expenses
R

Share
options
R

Share
benefits
R

1 200 000

500 000

13.4.4

M Diale, JJ Serfontein and AM Sher are remunerated by Absolute per board or committee
meeting attendance, which remuneration was approved at the Annual General Meeting as
R24 000 per meeting for a chairman and R16 000 for other members.

13.4.5

Other than as disclosed above in paragraph 13.4.1 above, no material benefits were
received by the directors.

13.4.6

Other than MW Rosslee, directors do not hold any share options.

13.4.7

The group does not have a pension or provident plan. The shareholders have approved
a share incentive scheme at a general meeting held on 31 March 2009. The scheme is
pending registration with the Master of the High Court as the prior attorney firm did not
lodge the share incentive scheme. The Companys new attorneys, Eversheds, have since
lodged the share incentive scheme for registration. Salient features of the share incentive
scheme are set out in Appendix 9 to the Revised Listing Particulars.

13.4.8

There have been no commission, gain or profit sharing arrangements entered into
with the directors other than the interest in the underwriting agreement as detailed in
paragraph 13.3 above.

13.4.9

Arcay Client Support acts as company secretary to Absolute at a fee of R8 000 per month.

13.4.10 No fees have been paid, or are payable, to third parties in lieu of directors fees for any of
the directors.
13.4.11 No other technical, consulting or other fees are payable, directly or indirectly, a part of
which is then paid to a director of the Company.
13.4.12 No amounts are payable to the directors of Absolute in respect of emoluments, fees, share
options, technical, consulting or other fees.
13.4.13 Qinisele Resources is paid a monthly retainer of R75 000 and, in terms of its mandate,
can earn a success fee of 5% on introduction of a transaction with a deal value of up to
R100 million and 3% on transactions above R100 million. In addition, a capital raising fee
of 5% will be payable in the event that Qinisele Resources is mandated to raise capital for
any transaction. Absolute holds 25.1% in Qinisele Resources, and thus the Company and
its directors have an indirect benefit from Qinisele Resources. However, the directors of
Absolute do not have any direct interest in this fee as at the last practicable date.
Details of directors remuneration pursuant to the acquisition are detailed in paragraph 3.4 in the
Revised Listing Particulars, which is attached to this circular.
13.5 Appointment, retirement, qualification, remuneration and voting powers
Appendix 2 to the Revised Listing Particulars, which is attached to this circular, contains provisions
extracted from the articles of association of the Company regarding the qualification, appointment,
retirement and terms of office of directors (Article 94), the remuneration of directors and voting
powers and voting in relation to interests of the directors.
13.6 Key management
Profiles of key management are set out in Appendix 6 to the Revised Listing Particulars.
14. MATERIAL BORROWINGS, COMMITMENTS AND CONTINGENT LIABILITIES
Appendix 5 to the Revised Listing Particulars, which is attached to this circular, sets out the details of
the borrowing powers of the Company exercisable by the directors and the manner in which borrowing
powers may be varied. No instances have occurred during the past three years where the borrowing
powers of the Company have been exceeded.

33

Details of the Companys and its subsidiaries current material commitments, lease payments and
contingent liabilities are set out in paragraph 11.4 of the Revised Listing Particulars which is attached to
this circular.
In addition to the debts repayable as detailed in Appendix 5 to the Revised Listing Particulars, which is
attached to this circular, the Company has normal trade creditors amounting to approximately R3.7 million
at the last practicable date.
Bauba and NMR had no material borrowings at the last practicable date.
15. MATERIAL CONTRACTS
15.1 The following agreements of Absolute are regarded as being material in relation to this circular and
the Company:
15.1.1 The acquisition agreement dated 12 February 2010 relating to the acquisition of Bauba and
related transactions detailing, inter alia, the Bauba acquisition for a purchase consideration
of R340 623 000, the potential acquisition of the Houtbosch prospecting right and the
minimum capital raising requirement of R60 million.
15.2 The following agreements of Absolute were entered into within the two years prior to the date of this
circular:
15.2.1 the mandate agreement between Absolute and Qinisele Resources dated 17 March 2008
relating to corporate advisory services provided to Absolute by Qinisele Resources;
15.2.2 the acquisition agreement with Allied Quartzite and Richtersveld Quartzite Company dated
27 June 2008 to acquire businesses at a cost of R1.8 million to be settled through the
issue of 45 000 000 shares at 4 cents per share (equating to 450 000 shares at R4.00 post
consolidation);
15.2.3 the agreement with the Qinisele Resources shareholders dated 5 August 2008 relating
to the acquisition of Qinisele Resources for a consideration of R20 000 000.04 settled
through the issue of 333 333 334 shares at 6 cents per share (equating to 3 333 333 shares
at R6.00 post consolidation); and
15.2.4 the agreement with the Dikopane Shareholders dated 29 July 2009 relating to the acquisition
of 49% of Dikopane for a consideration of R1 million, settled in equal portions of cash
of R500 000 and the issue of 8 333 333 shares at 6 cents (equating to 83 333 shares
at R6.00 post consolidation).
There is no outstanding obligation or settlement that is material to the Company or its subsidiaries
as at the last practicable date.
15.3 The above contracts will be available for inspection at the registered office of the Company
as detailed in paragraph 26 below.
16. ADEQUACY OF CAPITAL
After considering the effect of the transactions, the directors of Absolute are of the opinion that the working
capital available to the Company and its subsidiaries, and pursuant to the transactions, is sufficient for
the groups present requirements for a period of 12 months as at the date of this circular.
17. MATERIAL CHANGES
Other than the acquisition disclosed in paragraph 3 above, there have been no material changes in the
financial or trading position of the Company or its subsidiaries since the publication of the unaudited
results of Absolute for the six months ended 31 December 2009.

34

18. LITIGATION STATEMENT


The Company and its subsidiaries are not party to any legal or arbitration proceedings, nor, as far as the
directors of the Company are aware, are there any legal or arbitration proceedings pending or threatened
against Absolute, which may have, or have had in the 12 months preceding the date of this circular, a
material effect on the groups financial position, as enlarged by the transactions.
Bauba and NMR are not party to any legal or arbitration proceedings, nor, as far as the directors of the
Bauba, NMR and the Company are aware, are there any legal or arbitration proceedings pending or
threatened against Bauba or NMR, which may have, or have had in the 12 months preceding the date of
this circular, a material effect on Bauba or NMRs financial position
There is currently a review application in the North Gauteng High Court of South Africa, Pretoria brought
by Rustenburg Platinum Mines Limited and ARM Mining Consortium Limited against a decision of the
DMR and citing certain other Parties in respect of the refusal of the DMR of an application to grant
prospecting rights in respect of certain farms, some of which are farms forming part of the Southern
Cluster in respect of which the DMR has granted prospecting rights to Bauba on 19 December 2007..
Those prospecting rights have been notarially executed. Bauba is not a party to, nor has it been cited
in the above High Court application. Accordingly, the parties have no reason not to proceed with the
transaction recorded in the acquisition agreement on the terms and conditions stipulated.
19. EXCHANGE CONTROL REGULATIONS
19.1 The following summary is intended as a guide and is therefore not comprehensive. If you are in any
doubt hereto, please consult your professional advisor.
South African Exchange Control Regulations
A former resident of the common monetary area who has emigrated from South Africa may use
blocked Rand to subscribe for ordinary shares in terms of this circular.
All payments in respect of ordinary shares using blocked Rand must be made through an
authorised dealer in foreign exchange.
Share certificates issued in respect of certificated shares subscribed for using blocked Rand in
terms of this prospectus will be endorsed non-resident. Such share certificates will be placed
under the control of the authorised dealer through whom the payment was made. Statements
issued to non-resident dematerialised shareholders will be restrictively endorsed as nonresident.
Shares subsequently re-materialised and issued in certified form, will be endorsed non-resident
and will be sent to the authorised dealer in foreign exchange through whom the payment was
made.
Any shares issued pursuant to the use of emigrant blocked funds will be credited to their blocked
share accounts at the CSDP controlling their blocked portfolios.
If applicable, refund monies payable in respect of an unsuccessful application, emanating from
blocked Rand accounts will be returned to the authorised dealer administering such blocked
Rand accounts for the credit of such unsuccessful applicants blocked Rand account.
Applicants resident outside the common monetary area
A person who is not resident in the common monetary area should obtain advice as to whether
any governmental and/or legal consent is required and/or whether any other formality must be
observed to enable a subscription to be made in terms of the offer.
This circular accordingly does not constitute an offer in any area or jurisdiction in which it is illegal
to make such an offer. In such circumstances, this circular and any application form are provided
for information purposes only.
All share certificates issued to non-residents of South Africa will be endorsed non-resident in
terms of the Exchange Control Regulations. Statements issued to dematerialised shareholders
will be restrictively endorsed as non-resident.

35

19.2 Non-residents who are emigrants from the common monetary area
Share certificates reflecting the change of name will be restrictively endorsed non-resident in
terms of the Exchange Control Regulations and will be sent to the shareholders authorised dealer
in foreign exchange in South Africa controlling their blocked assets.
19.3 All other non-residents
Share certificates reflecting the change of name will be restrictively endorsed non-resident in
terms of the Exchange Control Regulations.
With regard to dematerialised shareholders whose registered addresses are outside the common
monetary area, their shares will be annotated in the Companys relevant sub-register as non-resident
and statements will be restrictively endorsed in terms of those regulations.
20. OPINIONS AND RECOMMENDATIONS
20.1 The board of directors have considered the terms and conditions of the transactions and are of the
opinion that such terms and conditions are fair and reasonable and that the implementation of the
transactions will be to the long-term benefit of the shareholders.
The directors are of the opinion that the future prospects of the group are sound and refer
shareholders to paragraph 2.2 of the Revised Listing Particulars, which is attached to this circular.
20.2 Accordingly, the board of directors recommends that shareholders vote in favour of the special and
ordinary resolutions relating to the transactions at the general meeting of shareholders.
20.3 The directors of Absolute who have direct and indirect interests in the issued share capital of the
Company support the transactions and intend, to vote in favour of the transactions in respect of all
their shares.
20.4 Shareholders are referred to the independent expert opinion in relation to the waiver of the offer to
minority shareholders, which is contained in Annexure 10 to this circular.
20.5 Shareholders are recommended to consult their professional advisors regarding the action to be
taken in relation to the transactions.
21. DIRECTORS RESPONSIBILITY STATEMENT
The directors of Absolute, whose names are given in paragraph 13.1 above, collectively and individually,
accept full responsibility for the accuracy of the information given and certify that to the best of their
knowledge and belief there are no facts that have been omitted which would make any statement false
or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this
circular contains all information required by law and the Listings Requirements and the SRP Code.
22. CONSENTS
The reporting accountants, corporate advisors, competent person, auditors, transfer secretaries and
sponsor have all consented, in writing, to their reports being included in the circular and Revised Listing
Particulars, where applicable, and to act in the capacities stated and to their names being used in this
circular and have not withdrawn their consents prior to the finalisation of this circular.
23. COSTS
The estimated costs, excluding VAT, relating to the circular based on a capital raising of a minimum of
R60 million and maximum of R150 million, are set out below:

36

Entity for the documentation work

Assuming capital
raising of a minimum
of R60 million
R000

Assuming capital
raising of a maximum
of R150 million
R000

Moore Stephens for reporting accountant services


and independent expert services
Qinisele Resources for corporate advisory and capital raising
Arcay Moela Sponsors for sponsor fees
Venmyn for Competent Persons Report on Bauba
Eversheds for legal work
SRP for review and approval of circular
JSE for documentation fees
CIPRO for share creation duty
JSE for listing fees
Computershare SA transfer registrar
Estimated printing costs and advertising costs

135
16 397
500
625
550
100
53
875
94
25
280

135
20 897
500
625
550
100
53
875
94
25
280

Total

19 634

24 134

The JSEs fees for the inspection of the Competent Persons Report will be charged at an hourly rate. This
fee is, therefore, still outstanding at the last practicable date.
As at the last practicable date, suppliers for printing, publication and distribution had not been finalised.
These costs are estimated at R280 000 and relate to the printing and distribution of the circular and
publishing of related announcements. The total costs relating to the circular are accordingly estimated
at R19.634 million and R24.134 million, assuming a capital raising of a minimum of R60 million and
maximum of R150 million, respectively (excluding VAT). The above fees include R3.178 million payable
only on successful implementation of the Houtbosch acquisition. All the abovementioned costs will be
borne by Absolute.
Of the fees payable to Qinisele Resources for corporate advisory and capital raising, the fees payable
in respect of capital raising are payable in cash, whereas the fees payable in respect of corporate
advisory services are payable approximately 30% in cash and 70% via the issue of shares in Absolute.
Accordingly, Qinisele Resources has agreed to accept 1 875 598 shares in settlement of a portion of
its fees, assuming an issue price at a 10% discount of the 30 day Volume Weighted Average Price
determined at the date, that the issue is agreed in writing beween the Company and Qinisele Resources,
as detailed in paragraph 7.1 above, subject to approval thereof by shareholders in general meeting.
The issue price has been assumed at R5.00 for the purpose of this circular and any remainder of the total
fee payable to Qinisele Resources will be settled in cash.
There were no preliminary expenses incurred by the Company within the three years preceding the date
of this circular.
24. CODE OF CORPORATE PRACTICE AND CONDUCT
The board of directors is committed to the principles of openness, integrity and accountability and the
provision of timeous, meaningful reporting to stakeholders. A corporate governance report addressing
the guiding principles as set out in the Code of Corporate Practice and Conduct as contained in the
King II and King III Reports on Corporate Governance (the King Report), together with details of Absolutes
compliance with the various aspects of the King Report as required by the Listings Requirements, is set
out in Appendix 4 attached to and forming part of the Revised Listing Particulars.
25. GENERAL MEETING OF SHAREHOLDERS
The general meeting of Absolute shareholders will be held at Arcay House II, Number 3 Anerley Road,
Parktown, Johannesburg at 10h00 on Monday, 7 June 2010 in order to consider and, if deemed fit,
to pass with or without modification, the special and ordinary resolutions necessary to implement the
transactions set out in this circular. A notice convening such general meeting is attached to, and forms
part of, this circular.

37

A form of proxy, for use by those certificated shareholders and own name registered dematerialised
shareholders who are unable to attend the general meeting but wish to be represented thereat, is
attached to, and forms part of this circular. A duly completed form of proxy must be received by the
transfer secretaries by not later than 10h00 on Thursday, 3 June 2010.
Dematerialised shareholders who hold dematerialised shares in Absolute through a CSDP or broker and
do not have an own name registration, must timeously advise their CSDP or broker of their intention to
attend and vote at the general meeting or be represented by proxy thereat in order for the CSDP or broker
to provide the necessary Letter of Representation to do so, or should shareholders not wish to attend the
general meeting in person, must timeously provide their CSDP or broker with the voting instructions in
order for the CSDP or broker to vote in accordance with their instructions at the general meeting.
In terms of the Listings Requirements, any unlisted shares or shares held through a share incentive
scheme or treasury shares will be precluded from voting at the general meeting.
26. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at the registered office of Absolute at
Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg, during normal business hours from
Monday, 17 May 2010 up to and including Monday, 7 June 2010:
26.1

the material contracts as detailed in paragraph 15 of this circular;

26.2

the reporting accountants reports on the historical financial information on Bauba and NMR
as well as the pro forma financial effects of the transactions on the balance sheet and income
statement;

26.3

the memoranda and articles of association of Absolute and its subsidiaries;

26.4

the memoranda and articles of association of Bauba and NMR;

26.5

the interim results for the six months ended 31 December 2009 and the audited financial
statements of Absolute for the years ended 30 June 2009, 30 June 2008 and 30 June 2007;

26.6

the audited financial statements of Bauba and NMR for the years ended 28 February 2010 and
28 February 2009;

26.7

the letters of consent received from the independent expert and independent reporting
accountants, competent person, corporate advisors, auditors, sponsor, lawyers and transfer
secretaries;

26.8

the Competent Persons Report on Bauba;

26.9

the latest Competent Persons Report on Lekkersing Diamond Quartzite Natural Stone and other
Absolute Mineral Assets, dated 25 March 2010;

26.10 copies of existing and new directors declarations in terms of Schedule 21 of the Listings
Requirements;
26.11 power of attorneys signed by each director;
26.12 copies of existing and new service agreements with MW Rosslee and PC Pienaar, respectively;
26.13 the independent advice letter from Moore Stephens relating to the waiver of the mandatory offer;
and
26.14 a signed copy of this circular and Revised Listing Particulars.
MW Rosslee
ABSOLUTE HOLDINGS LIMITED
Johannesburg
17 May 2010
FOR AND ON BEHALF OF ALL THE OTHER DIRECTORS OF ABSOLUTE HOLDINGS LIMITED, IN
TERMS OF POWERS OF ATTORNEY GRANTED TO HIM BY SUCH DIRECTORS.

38

ANNEXURE 1

REPORTING ACCOUNTANTS
INFORMATION OF BAUBA

REPORT

ON

THE

HISTORICAL

FINANCIAL

The directors of Absolute Holdings Limited


Arcay House II
Number 3 Anerley Road
Parktown, 2193
Dear Sirs
REPORT OF THE INDEPENDENT REPORTING ACCOUNTANTS ON THE HISTORICAL FINANCIAL
INFORMATION IN RESPECT OF BAUBA A HLABIRWA MINING INVESTMENTS (PROPRIETARY)
LIMITED (BAUBA)
1. INTRODUCTION
At your request and for the purposes of the circular to Absolute Holdings Limited (Absolute) shareholders,
to be dated on or about 17 May 2010, we present our report on the historical financial information of
Bauba, as set out in Annexure 2 of the circular, in compliance with the Listings Requirements of the JSE
Limited (JSE Listings Requirements).
2. RESPONSIBILITY AND PURPOSE OF REPORT
The directors of Absolute are responsible for the compilation, contents and preparation of the circular
and for the accuracy of the information contained therein. The directors of Absolute are responsible for
the financial information to which this report on the historical financial information of the Company relates,
and from which the report has been prepared. Our responsibility is to express an opinion on the historical
financial information included as Annexure 2 to the circular.
3. HISTORY AND OWNERSHIP
Bauba was incorporated in the Republic of South Africa on 18 December 1997. The financial year-end
is end of February each year.
4. SCOPE
The auditors of Bauba are Bruk Munkes & Co. We have audited the financial information of Bauba for the
year ended 28 February 2010, and reviewed the financial information for the year ended 28 February 2009.
5. SCOPE OF AUDIT
We conducted our audit in accordance with International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the annual financial statements for the year ended 28 February 2010 are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the annual financial statements. The procedures selected depend on the auditors judgement, including
the assessment of the risks of material misstatement of the annual financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entitys preparation and fair presentation of the annual financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the annual financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.

39

6. SCOPE OF REVIEW
We conducted our review in accordance with the International Standard on Review Engagements 2400.
This standard requires that we plan and perform the review to obtain moderate assurance as to whether
the financial information for the year ended 28 February 2009 is free of material misstatement. A review is
limited primarily to enquiries of company personnel and analytical procedures applied to financial data
and thus provide less assurance than an audit. We have not performed an audit of the abovementioned
financial information and, accordingly, we do not express an audit opinion thereon.
7. OPINIONS
In our opinion, the historical financial information of Bauba for the year ended 28 February 2010 as
reported in Annexure 2 fairly presents, in all material respects, the financial position as of that date, in
accordance with International Financial Reporting Standards, the Companies Act in South Africa and the
JSE Listings Requirements.
Based on our review, nothing has come to our attention that causes us to believe that the historical
financial information of Bauba for the year ended 28 February 2009 as reported in Annexure 2 is not fairly
presented, in all material respects, in accordance with International Financial Reporting Standards, the
Companies Act in South Africa and the JSE Listings Requirements.
8. CONSENT
We consent to the inclusion of this report, which will form part of the circular to the shareholders
of Absolute.
Yours faithfully
MOORE STEPHENS CORPORATE FINANCE (PROPRIETARY LIMITED
Registered Auditors
Chartered Accountants SA
Per: Nick Lazanakis
7 West Street
Houghton, 2198
30 April 2010

40

ANNEXURE 2

HISTORICAL FINANCIAL INFORMATION OF BAUBA FOR THE YEARS ENDED


28 FEBRUARY 2009 AND 28 FEBRUARY 2010

This annexure contains a report on the historical financial information of Bauba. The information is taken
from Baubas audited financial statements for the years ended 28 February 2009 and 28 February 2010.
The accounting policies adopted for purposes of this report comply, and have been consistently applied
in all material respects, with International Financial Reporting Standards and have been reported on by
Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited as detailed in Annexure 1 to this circular.
The same accounting policies and methods of computation have been followed as compared to the prior
year. The financial statements have been audited by Bruk Munkes & Co. and they were reported on without
qualification.
GENERAL INFORMATION
Main business and operations
Incorporation
The company was incorporated on 19 December 2006 and obtained its certificate to commence business on
the same day. Bauba was dormant until its first year of operation being for the year ended 28 February 2009.
Review of activities
Main business and operations
The company is engaged in the exploration and mining of mineral resources and operated principally in
South Africa.
Authorised and issued share capital
25 ordinary shares were issued during the year under review.
Dividends
The dividends already declared and paid to shareholders during the year are as reflected in the attached
statement of changes in equity.
Directors
The directors of the company during the year and to the date of this report are as follows:
Name
Motubatse Ben Bokgobelo
Moruthane Ben Sekhukhune
Victor Thulare
Nicolaas Phillipus Jacobus van der Hoven
Jurie Hendrik Wessels

Changes
(Deceased 12 June 2009)

Secretary
The secretary of the company is Elizabeth Stephanie Moult of:
Postal address:
2 Chaplin Close
Kirstenhof
7806

41

1. BASIS OF PREPARATION
The consolidated income statements, balance sheets, statements of changes in equity, cash flow
statements and the related notes for the years ended 28 February 2010 and 28 February 2009 (Historical
Financial Information), have been extracted, without adjustment from the audited statutory financial
statements of Bauba A Hlabirwa Mining Investment (Pty) limited (Bauba or the Company). The audited
statutory financial statements of the Company for the years ended 28 February 2010 and 28 February
2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) and
have been reported on without qualification by Bruk Munkes & Co. The results have been reported on by
Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited as detailed in Annexure 1 to this circular.
The Historical Financial Information is the responsibility of the directors of Absolute.
2. CONSOLIDATED INCOME STATEMENTS
The consolidated income statements of Bauba for the years ended 28 February 2010 and 2009 are set
out below:
Audited
Year ended
28 Feb 2010
R

Audited
Year ended
28 Feb 2009
R

Revenue
Operating expenses

(2 236 428)

(6 350)

Operating profit
Investment revenue
Other Income
Finance costs

(2 236 428)
866 153
10 150 000
(823)

(6 350)
608 277
3 563 776
(2 463)

Profit before taxation


Taxation

8 778 902
(1 660 856)

4 163 240
(666 779)

7 118 046

3 496 461

7 118 046

3 496 461

Gain on sale of capital asset

(8 729 000)

(4 300 000)

Headline profit/(loss)

(1 610 954)

(803 539)

Earnings/(loss) per share (cents)


Headline (loss)/earnings per share (cents)
Dividends per share (cents)
Weighted average number of shares in issue (000)

5 981 551
(1 353 743)
4 921 000
119

3 496 461
(803 539)

100

Profit for the year


Reconciliation of profit/(loss) attributable to members
of Absolute and headline profit/(loss)
Profit for the year

42

3. CONSOLIDATED BALANCE SHEETS


The consolidated balance sheets of Bauba as at 28 February 2010 and 2009 are set out below:
Audited
Year ended
28 Feb 2010
R

Audited
Year ended
28 Feb 2009
R

1 077 169
2 600

28 126
100

1 079 769

28 226

6 170
6 923 149

19 219
13 615 895

6 929 319

13 635 114

8 009 088

13 663 340

2 500 100
4 463 257

100
3 496 461

6 963 357

3 496 561

1 045 731

666 779
9 500 000

1 045 731

10 166 779

Total equity and liabilities

8 009 088

13 663 340

Number of shares in issue (000)


Net asset value per share (cents)
Net tangible asset value per share (cents)

125
5 570 686
5 570 686

100
3 496 561
3 496 461

Note(s)
ASSETS
Non-current assets
Property, plant and equipment
Loans to shareholders

7
8

Current assets
Trade and other receivables
Cash and cash equivalents

9
10

Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Retained income

11

Liabilities
Current liabilities
Current tax payable
Trade and other payables

12

4. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY


The consolidated statements of changes in equity of Bauba for years ended 28 February 2010 and 2009
are set out below:
Share
capital
R

Share
premium
R

Total share
capital
R

Retained
income
R

Total
equity
R

Balance at 1 March 2008


Changes in equity:
Profit for the year
Issue of shares

100

100

3 496 461

3 496 561

Balance at 1 March 2009

100

100

3 496 461

3 496 561

25

25

2 499 975

2 499 975

25
2 499 975

2 500 000

7 188 046

(6 151 250)
966 796

7 188 046
25
2 499 975
(6 151 250)
3 466 796

125

2 499 975

2 500 100

4 463 257

6 963 357

11

11

11

Changes in equity:
Profit for the year
Issue of shares
Share premium on issued shares
Dividends
Total changes
Balance at 28 February 2010
Note

43

5. CONSOLIDATED STATEMENTS OF CASH FLOWS


The consolidated cash flow statements of Bauba for the years ended 28 February 2010 and 2009 are
set out below:

Note(s)

Audited
Year ended
28 Feb 2010
R

Audited
Year ended
28 Feb 2009
R

Cash flows from operating activities


Cash (used)/generated from operations
Interest income
Finance costs
Tax paid

15

Net cash from operating activities

(11 579 165)


866 153
(823)
(1 281 904)
(11 995 739)

9 476 699
608 277
(2 463)

10 082 513

Cash flows from investing activities


Purchase of property, plant and equipment
Proceeds from sale of capital asset

Net cash from investing activities

(1 193 257)
10 150 000

(30 394)
3 563 776

8 956 743

3 533 382

Cash flows from financing activities


Proceeds on share issue
Shareholders loan
Dividends paid

12

2 500 000
(2 500)
(6 151 250)

100
(100)

Net cash from financing activities

(3 653 750)

Total cash movement for the year


Cash at the beginning of the year

(6 692 746)
13 615 895

(13 615 985)

6 923 149

13 615 895

11

Total cash at end of the year

6. ACCOUNTING POLICIES
6.1

Nature of operations
Bauba carries on the business of exploration and mining of mineral resources. The company was
registered in 2006 but only commenced operation in the 2009 financial year.

6.2

Presentation of annual financial statements


The financial information for the year ended 28 February 2010 has been prepared on the historical
cost basis and is in accordance with IFRS. The accounting policies are consistent with the prior
year.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment
in value.
The initial cost comprise of its purchase price and any directly attributable costs in bringing the
asset to its working condition and location for its intended use. Expenditure incurred after the
asset has been put into operation, such as repairs, maintenance and over haul costs, are normally
recognised as expense in the period the costs are incurred. In situations where it can be clearly
demonstrated that the expenditure has improved the condition of the asset beyond the originally
assessed standard of performance, the expenditure is capitalised as an additional cost of property,
plant and equipment.
Depreciation is calculated to write down the cost less estimated residual value of all property, plant
and equipment by equal annual installments over their expected useful economic lives. The lives
generally applicable are:
Furniture and fixtures
Motor vehicles

44

6 years
5 years

The remaining useful lives, residual values and depreciation method are reviewed and adjusted,
if appropriate, at financial year-end to ensure that such periods and method of depreciation are
consistent with the expected pattern of economic benefits from the items of property, plant and
equipment.
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
An item of property, plant and equipment is derecognised when either it has been disposed or
when it is permanently withdrawn from use and no future economic benefits are expected from its
use or disposal. Any gains or losses arising on the retirement and disposal of an item of property,
plant and equipment are included in the consolidated income statement in the period of retirement
or disposal.
Intangible assets exploration and evaluation assets
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as
exploration and evaluation assets on an area of interest basis. Costs incurred before the Company
has obtained the legal rights to explore an area are recognised in the income statement.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current
and either:
the expenditures are expected to be recouped through successful development and exploitation
of the area of interest; or
activities in the area of interest have not at the reporting date, reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if: (i) sufficient data exists to
determine technical feasibility and commercial viability and (ii) facts and circumstances suggest
that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing,
exploration and evaluation assets are allocated to cash-generating units to which the exploration
activity related. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in
an area of interest are demonstrable, exploration and evaluation assets attributable to that area
of interest are first tested for impairment and then reclassified from intangible assets to mining
property and development assets within property, plant and development.
Intangible assets development costs
Development costs relating to major development programmes are capitalised. Development
costs consist primarily of expenditure to develop the technology to commercialisation. Day-today development costs to maintain production are expensed as incurred. Initial development
and preproduction costs relating to a new technology, including amortisation and depreciation to
develop the technology, are capitalised until commissioning of production facilities.
The Company reviews the carrying amount of development assets and development costs when
circumstances suggest the carrying amount may not be recoverable. Recoverability is assessed
using estimates of future cash flows on a discounted basis, including revenues, operating costs
and future capital expenditures. Where necessary a reduction in carrying amount is recorded.
Financial assets
The Company classifies its financial assets in the following categories: at fair value through profit or
loss, loans and receivables, and available for sale. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of its financial
assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading.
A financial asset is classified in this category if acquired principally for the purpose of selling in
the short-term. Derivatives are also categorised as held for trading unless they are designated
as hedges. Assets in this category are classified as current assets.

45

(b) Loans and receivables


Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are classified as non-current assets.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category
or not classified in any of the other categories. They are included in non-current assets unless
management intends to dispose of the investment within 12 months of the balance sheet date.
Deferred taxation
Deferred tax is recognised on all differences where the transactions or events that give the Group
an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred
by the balance sheet date. Deferred tax assets are recognised when it is more likely than not that
they will be recovered. Deferred tax is measured using rates of tax that have been enacted or
substantively enacted by the balance sheet date.
Financial instruments
Interest receivable and payable is accrued and credited/charged to the income statement in the
period to which it relates.
Liquid resources
Liquid resources comprise funds on deposit at not less than 24 hours notice.
Operating leases
Rentals payable under operating leases are charged on a straight line basis over the term of the
lease.
Critical estimates and judgements
In the application of the Companys accounting policies management is required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that
are not readily apparent from other sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant. Actual results may
differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate
is revised if the revision affects only that period; or in the period of the revision and future periods
if the revision affects both current and future periods.
(a) Impairment of goodwill
The Company tests annually whether goodwill has suffered any impairment, in accordance with
the accounting policy. The recoverable amounts of cash-generating units have been determined
based on value-in-use calculations. These calculations require the use of estimates. As at the
year end, it was deemed that goodwill is not impaired.
(b) Impairment of exploration assets
The Company tests exploration assets for impairment when indicators of impairment arise,
in accordance with the accounting policy. Impairment reviews are carried out on a project
by project basis, with each project representing a potential single cash-generating unit.
The impairment reviews require the use of judgement.

46

7. PROPERTY, PLANT AND EQUIPMENT


2010
R
Cost
valuation

Accumulated
depreciation

2009
R
Carrying
value

Cost
valuation

Furniture and fixtures


30 394
Motor vehicles
1 193 257

(7 335)
23 059
(119 326) 1 073 931

30 394

(2 268)

28 126

Total

(126 661) 1 096 990

30 394

(2 268)

28 126

1 223 651

Accumulated
depreciation

Carrying
value

Details of prospecting rights held by the company are as follows:


PROVINCE CLUSTER

FARM
NAME

Limpopo

Schoonoord

Northern Cluster

FARM
NUMBER
462KS

SIZE
(ha)
2,212



Remainder of Indi

474KS

1,516

Zwitzerland

473KS

1,952

Fisant Laagte

506KS

2,013

Magneetsvlaakte

541KS

1,129

APPLICATION
NAME

PROSPECTING
RIGHT
No.

Bauba A Hlabirwa
Mining Investments
(Pty) Limited

DATE
ISSUED

EXPIRY
DATE

7 June
2006

6 July
2011

256/2006PR








Central
Cluster



Dingaanskop

543KS

1,036

Grootvygenboom

284KT

1,610

Genokakop

285KT

1,304

248/2006PR


256/2006PR



Southern
Cluster



8. LOANS TO SHAREHOLDERS
2010
R

2009
R

43
2 510
47

43
10
47

2 600

100

2010
R

2009
R

6 171

19 219

2010
R

2009
R

19 185
6 903 964

1 826
13 614 069

6 923 149

13 615 895

Ndarama Mineral Resources (Pty) Ltd


Hlabirwa Mining Investments (Pty) Ltd
The Bapedi Nation

The above loans bear no interest and there are no fixed terms of repayment.
9. TRADE AND OTHER RECEIVABLES

Value-added tax
10. CASH AND CASH EQUIVALENTS

Cheque account
Call account

47

11. SHARE CAPITAL


2010
R

2009
R

1 000

1 000

125
2 499 975

100

2 500 100

100

2010
R

2009
R

9 500 000

2010
R

2009
R

Authorised
1000 ordinary shares of R1.00 each
875 unissued ordinary shares are under the control of the directors
in terms of a resolution of members passed at the last general meeting.
This authority remains in force until the next annual general meeting.
Issued
125 ordinary shares of R1.00 each
Share premium

12. TRADE AND OTHER PAYABLES

Advanced deposits received


13. OPERATING PROFIT

Operating profit for the year is stated after accounting for the following:
Operating lease charges premises
Proceeds on sale of capital asset
Depreciation on property, plant and equipment
Employee costs

60 000
(10 150 000)
144 214
1 555 973

(3 563 776)

14. CASH (USED IN)/GENERATED FROM OPERATIONS

Profit before taxation

2010
R

2009
R

8 778 902

4 163 240

144 241
(10 150 000)
(866 153)
823

(3 563 776)
(608 277)
2 463
2 268

13 049
(9 500 000)

19 219
9 500 000

(11 579 165)

9 476 699

Adjustments for:
Depreciation and amortisation
Proceeds from sale of capital asset
Interest received
Finance costs
Depreciation
Changes in working capital
Trade and other receivables
Trade and other payables

48

15. DIRECTORS EMOLUMENTS


Total directors emoluments for the year ended 28 February 2009 amounted to R790 000 comprising a
basic salary as follows:
Motubatse Ben Bokgobelo
Moruthane Ben Sekhukhune
Victor Thulare
Nicolaas Phillipus J van der Hoven
Jurie Hendrik Wessels

R 90 000
R 90 000
R 60 000
R275 000
R275 000

Total directors emoluments for the year ended 28 February 2010 amounted to R1 313 308.76, comprising
a basic salary, as follows:
Basic salary
Motubatse Ben Bokgobelo (deceased 12 June 2009)
Moruthane Ben Sekhukhune
Victor Thulare
Nicolaas Phillipus J van der Hoven
Jurie Hendrik Wessels
Ntoampe Isaac Mampuru (appointed director February 2009)

R 40 429.60
R121 288.80
R136 491.84
R502 495.56
R502 495.56
R 10 107.40

16. CAPITAL ASSETS


Capital assets consist of prospecting rights in respect of which no values have been placed.
17. POST BALANCE SHEET EVENTS
The directors are not aware of any matter or circumstances arising since the end of the financial year to
the date of this report.
18. OVERVIEW OF OPERATIONS
2009
The Prospecting Rights to Chrome Ore and Platinum group metals, in all seams emanating from an
agreed area on the farm Moeijelijk 412KS held under the Prospecting Right 330PR was disposed of
to Spectrex (Pty) Ltd on 29 July 2008. The sale was subject to a Section 11 Approval by Department
of Minerals & Energy. The total purchase consideration amounted to R31.5 million with an amount of
R5 million being a non-refundable deposit/payment, regardless of a Section 11 approval or not.
2010
On 29 July 2008 during the previous financial year, the rights were conditionally sold subject to a
Section 11 Approval by Department of Minerals & Energy. Purchase consideration: R31.5 million, with
an amount of R5 million being a non-refundable deposit/payment, regardless of a Section 11 approval
or not and accounted for as the Sale of a Capital Asset during that year. On 21 May 2009 (the current
financial year) the Sale of Prospecting Rights Agreement entered into by and between the parties became
unconditional and a further R10 150 000 received.
In addition to the prospecting rights detailed in Note 7 above, Bauba has been granted a prospecting
right over the following property, which is pending notarial execution and registration in the Mining Titles
Registration Office:
PROVINCE CLUSTER

FARM
NAME

Limpopo

Houtbosch

Southern
Cluster

FARM
NUMBER
323KT

SIZE
(ha)
1,712

APPLICATION
NAME
Bauba A Hlabirwa
Mining Investments
(Pty) Limited

PROSPECTING
RIGHT
No.
Pending

DATE
ISSUED

EXPIRY
DATE

Pending Pending

19. SEGMENTAL INFORMATION


No segmental information has been presented as the company operates in one segment within
South Africa.

49

ANNEXURE 3

INDEPENDENT REPORTING ACCOUNTANTS ASSURANCE REPORT ON THE


CONSOLIDATED PRO FORMA FINANCIAL INFORMATION OF ABSOLUTE HOLDINGS
LIMITED

The directors of Absolute Holdings Limited


Absolute Holdings Limited
PO Box 62397
Marshalltown
2107
INDEPENDENT REPORTING ACCOUNTANTS ASSURANCE REPORT ON THE UNAUDITED PRO FORMA
BALANCE SHEET, INCOME STATEMENT AND FINANCIAL EFFECTS ON ABSOLUTE HOLDINGS
LIMITED (ABSOLUTE) OF THE ACQUISITION OF A 60% INTEREST IN BAUBA A HLABIRWA MINING
INVESTMENTS (PROPRIETARY) LIMITED AND RELATED MINIMUM CAPITAL RAISING REQUIREMENT
OF R60 MILLION THROUGH AN ISSUE OF SHARES
Introduction
The definitions and interpretations contained in the circular of which this report forms part have been used
throughout this report.
We have performed our limited assurance engagement in respect of the unaudited pro forma financial
effects and financial effects on the income statement and balance sheet (collectively the pro forma financial
information) of Absolute set out in paragraph 3.7 and Annexure 3 to this circular, to be dated on or about
17 May 2010, issued in connection with the acquisition of a 60% interest in Bauba (the acquisition) and
the related capital raising of R60 million, which for the purpose of the pro forma financial effects has been
assumed as being raised through the issue of up to 12 000 000 new shares in Absolute at an issue price of
R5.00 per share for the purpose of the pro forma financial effects (the minimum capital raising). In addition,
the pro forma financial effects of the capital raising through the issue of 30 000 000 new shares in Absolute
at an issue price of R5.00 per share has also been assumed (the share issue for cash). The potential
repurchase of shares was also considered.
The pro forma financial information has been prepared in accordance with the Listings Requirements, for
illustrative purposes only, to provide information about how the acquisition and share issues might have
affected the reported historical financial information, had the acquisition, minimum capital raising and/or
share issue for cash and the share issue to Qinisele Resources as well as the potential share repurchase
been undertaken on 1 July 2009 for income statement purposes and on 31 December 2009 for balance sheet
purposes.
Directors responsibility
The directors are responsible for the compilation, contents and presentation of the pro forma financial
information contained in this circular and for the financial information from which it has been prepared. Their
responsibility includes determining that: the pro forma information financial information has been properly
compiled on the basis stated; the basis is consistent with the accounting policies of Absolute; and the
pro forma adjustments are appropriate for the purposes of the pro forma financial information disclosed in
terms of the Listings Requirements.
Reporting accountants responsibility
Our responsibility is to express our limited assurance conclusion on the pro forma financial information
included in this circular to Absolute shareholders. We conducted our assurance engagement in accordance
with the International Standard on Assurance Engagements applicable to Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information and the Guide on Pro Forma Financial Information
issued by The South African Institute of Chartered Accountants.

50

This standard requires us to comply with ethical requirements and to plan and perform the assurance
engagement to obtain sufficient appropriate evidence on which to base our conclusion.
We do not accept any responsibility for any reports previously given by us on any financial information used
in the compilation of the pro forma financial information, beyond that owed to those to whom those reports
were addressed by us at the dates of their issue.
Sources of information and work performed
Our procedures consisted primarily of comparing the unadjusted financial information with the source
documents, considering the pro forma adjustments in light of the accounting policies of Absolute, considering
the evidence supporting the pro forma adjustments and discussing the adjusted pro forma financial
information with the directors of Absolute in respect of the transactions.
In arriving at our conclusion, we have relied upon financial information prepared by the directors of Absolute
and other information from various public, financial and industry sources.
While our work performed has involved an analysis of the historical published audited financial information
and other information provided to us, our assurance engagement does not constitute an audit or review of
any of the underlying financial information conducted in accordance with International Standards on Auditing
or International Standards on Review Engagements and, accordingly, we do not express an audit or review
opinion.
In a limited assurance engagement, the evidence-gathering procedures are more limited than for a
reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance
engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention, which causes us to
believe that:
the pro forma financial information has not been properly compiled on the basis stated;
such basis is inconsistent with the accounting policies Absolute; and
the adjustments are not appropriate for the purposes of the pro forma financial information as disclosed in
terms of paragraphs 8.17 and 8.30 of the Listings Requirements.
We consent to the inclusion of this letter and the reference to our opinion in this circular in the form and
context in which it appears.
Yours faithfully
MOORE STEPHENS (JHB) CORPORATE FINANCE (PROPRIETARY) LIMITED
Chartered Accountants SA
Per: Nick Lazanakis
Johannesburg
7 West Street
Houghton, 2198
30 April 2010

51

ANNEXURE 4

PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS AND PRO FORMA


INCOME STATEMENT AND BALANCE SHEET

This unaudited pro forma financial information has been prepared for illustrative purposes only and because
of its nature may not fairly present Absolutes financial position and results of operations nor the effect and
impact of the acquisition going forward.
The tables below illustrate the pro forma balance sheet and income statement of Absolute after the
acquisition, related minimum capital raising of R60 million and related transactions, which has been assumed
at 12 000 000 shares at R5.00. In addition, the pro forma financial information is reflected as though the full
R150 000 000 is raised through the placement of a maximum of 30 000 000 new shares at R5.00 per share,
although the final placement pricing is still to be determined through a road show to investors. The recent
repurchase of shares in terms of the odd lot offer has not been taken into account in the pro forma effects as
the shares were immediately placed under the Companys general authority to issue shares for cash.
It has been assumed that the transactions were effective at 1 July 2009, being the beginning of Absolutes
financial period for the purposes of the pro forma income statement and on 31 December 2009 for the
purposes of the pro forma balance sheet. The unaudited pro forma income statement and balance sheet
have been prepared using accounting policies that comply with International Financial Reporting Standards
and that are consistent with those applied in the published unaudited interim results of Absolute for the six
months ended 31 December 2009.
The directors of Absolute are responsible for the compilation, contents and preparation of the unaudited
pro forma financial information contained in this document and for the financial information from which it has
been prepared. Their responsibility includes determining that: the unaudited pro forma financial information
has been properly compiled on the basis stated; the basis is consistent with the accounting policies of
Absolute; and the pro forma adjustments are appropriate for the purposes of the unaudited pro forma financial
information disclosed in terms of the JSE Listings Requirements.
The independent reporting accountants report on the pro forma financial information is set out in Annexure 3.

52

53

106 515

(19.09)
(19.09)
15 325

(2 925)

(2 925)

Net earnings for the period


Headline adjustment

Headline earnings

Earnings/(loss) per share (cents)


(0.19)
Headline earnings per share
(0.19)
Weighted average number of
shares in issue (000)
1 532 545

81 482

99 482

(4.86)
(13.64)

(13 565)

(4 836)
(8 729)

(4 836)

c.

Total other transaction costs of R3 237 000.

b. R3 178 440 payable to Qinisele Resources including the issue of 444 981 new shares to QR at an assumed issue price of R5.00 in respect of the Houtbosch acquisition); and

R10 218 690 payable to Qinisele Resources including the issue of 1 430 617 new shares to QR at an assumed price of R5.00 in respect of the Bauba acquisition (excluding Houtbosch);

Transaction costs of R16.634 million and related tax effects as follows:

a.

The issue of 68 124 600 new ordinary shares in respect of the Bauba acquisition (excluding Houtbosch) and the issue of 21 189 600 new ordinary shares in respect of the Houtbosch acquisition;

The After Bauba acquisition financial information asuumes:

(37 033)

(10.01)
(20.73)

(16 887)

(8 158)
(8 729)

(8 158)

(5 564)
728

4.

136 515

(8 428)
270

Extracted from the audited annual financial statements of Bauba for the year ended 28 February 2010. The Bauba results have been adjusted to reflect a six-month period only. All numbers have
been adjusted to reflect a six-month period with the exception of the gain from sale of capital asset of R10 150 000, where the full amount is included.

118 515

(3.54)
(9.94)

(13 565)

(16 887)
(6.88)
(14.25)

(4 836)
(8 729)

(4 836)

(8 158)
(8 729)

(8 158)

(20 152)
10 150
(538)
4 977

602

(20 754)

After the 1:100 share consolidation and odd lot offer.

(18 927)

(10 198)
(8 729)

(10 198)

(5 564)
728

(20 152)
10 150
(538)
2 112

602

(20 754)

3.

(1 400)

7 329
(8 729)

7 329

(8 428)
270

Claw
back
R000

Extracted from the published unaudited interim financial results of Absolute for the six months ended 31 December 2009.

(1 611)

7 118
(8 729)

7 118

(10 095)
(104)

(20 152)
10 150
(538)
4 977

602

(20 754)

After
specific
issue
(maximum)6
R000

After
claw back
and
assuming
maximum
specific
issue8
R000

2.

(2 925)

(2 925)

9 464
(2 135)

(20 152)
10 150
(538)
2 112

602

(20 754)

After
specific
issue
(minimum)5
R000

After
claw back
and
assuming
minimum
specific
issue7
R000

1.

Notes:

(9.57)
(17.77)

(2 925)

(2 925)

8 779
(1 661)

(20 152)
10 150
(538)
446

Net earnings for the period

(2 925)

(1 118)
10 150

433

(2 925)

(2 236)
10 150
(1)
866

602

(20 754)

Profit/(loss) before tax


Taxation

(2 400)

(538)
13

(1 118)

(2 400)

(538)
13

(2 236)

Operating loss
Other income
Finance charges
Interest income

602

(3 002)

After
Bauba
acquisition4
R000

602

(3 002)

Bauba
Adjusted
for six
months3
R000

Revenue
Profit on sale of subsidiary
General administrative expenses

After share
Consolidation
and odd
Before1
lot offer2
R000
R000

Bauba
actual
for the
year
ended
31 December
20093
R000

The unaudited pro forma income statement set out below presents the effects of the acquisition on the results of Absolute for the six months ended
31 December 2009 based on the assumption that the acquisition was effective 1 July 2009.

Unaudited pro forma income statement

54

Capital raising fees of R3 million payable to Qinisele Resources that has been set-off against share premium;

Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million; and

The tax effects of the above.

The tax effects of the above.

The acquisition has been accounted for in terms of the revised IFRS 3: Business Combinations, as the expected effective date is after 1 July 2009, being the
effective date of the revised statement. Due to the exploration nature of Absolute and the once-off costs associated with a transaction of this nature, these
pro forma effects are not expected to be of a continuing nature.

The After claw back and assuming maximum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and maximum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.

Finance income at 6.7% earned on the proceeds of the specific issue (less transaction costs), being the prevailing money market rates on deposits of greater than R10 million; and

8.

Capital raising fees of R7.5 million payable to Qinisele Resources that has been set-off against share premium;

The After claw back and assuming minimum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and minimum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.

Issue of 30 000 000 new ordinary shares at an assumed issue price of R5.00;

The maximum specific issue assumes:

Issue of 12 000 000 new ordinary shares at an assumed issue price of R5.00;

The minimum specific issue assumes:

7.

6.

5.

55

54 985
176.98
(12.66)
16 012

54 985

Total equity and liabilities

Net asset value per share (cents)


1.77
Net tangible asset value per share (cents)
(0.13)
Number of shares issued
1 601 185

26 647

2 996
7 221

2 996

7 221

26 647

4 225

4 225

19 426

19 426

Total liabilities

Current liabilities
Trade and other payables
Other financial liabilities
Current tax payable
Bank overdraft

18 904
522

18 904
522

28 338

28 338

Liabilities
Non-current liabilities
Long-term liabilities
Rehabilitation liability

16 012
12 326

16 012
12 326

EQUITY AND LIABILITIES


Equity
Share capital
Retained income
Non-controlling interests

3 110
54 985

3 110

54 985

1 553
942
330
285

51 875

51 875

1 553
942
330
285

30 365
1 510
20 000

30 365
1 510
20 000

Total assets

Current assets
Inventories
Trade and other receivables
Short-term receivables
Cash and cash equivalents

ASSETS
Non-current assets
Property, plant and equipment
Investment in associates
Investments in financial assets
Deferred tax
Loans to shareholders

Before1
R000

8 009

1 046

1 046

1 046

6 963

2 500
4 463

8 009

6 929

6 923

1 080

1 077

After share Bauba actual for


consolidation
the year ended
and odd
31 December
lot offer2
20093
R000
R000

55.16
(0.27)
107 202

86 820

27 693

8 267

4 225

1 046
2 996

19 426

18 904
522

59 128

69 267
(10 139)

86 820

2 783

1 553
948
330
(48)

84 037

60 493
1 510
20 000
2 032
3

After Bauba
acquisition4
R000

98.13
48.28
119 202

144 660

27 693

8 267

4 225

1 046
2 996

19 426

18 904
522

116 968

126 267
(9 299)

144 660

59 783

1 553
948
330
56 952

84 877

60 493
1 510
20 000
2 872
3

After
specific issue
(minimum)5
R000

148.49
105.18
137 202

231 420

27 693

8 267

4 225

1 046
2 996

19 426

18 904
522

203 728

211 767
(8 039)

231 420

145 283

1 553
948
330
142 452

86 137

60 493
1 510
20 000
4 132
3

After
specific issue
(maximum)6
R000

(37 033)

(6 066)

(6 066)

(6 066)

(6 066)

(6 066)

(6 066)

Claw
back
R000

134.97
70.04
82 168

138 594

27 693

8 267

4 225

1 046
2 996

19 426

18 904
522

110 902

120 201
(9 299)

138 594

59 783

1 553
948
330
56 952

78 811

54 427
1 510
20 000
2 872
3

197.33
144.07
100 168

225 354

27 693

8 267

4 225

1 046
2 996

19 426

18 904
522

197 662

205 701
(8 039)

225 354

145 283

1 553
948
330
142 452

80 071

54 427
1 510
20 000
4 132
3

After claw back After claw back


and assuming
and assuming
minimum
maximum
specific issue7
specific issue8
R000
R000

The unaudited pro forma balance sheet set out below presents the effects of the acquisition on the financial position of Absolute as at 31 December 2009 based
on the assumption that the acquisition was effective 31 December 2009.

Unaudited pro forma balance sheet

56

In terms of IFRS 6: Exploration for and Evaluation of Mineral Resources, the cost associated with the acquisition of Absolutes mineral assets has been capitalised to the cost of exploration and
evaluation assets.

Total other transaction costs of R3 237 000.

f.

Capital raising fees of R3 million payable to Qinisele Resources that has been set-off against share premium;

The proceeds of R60 million from the specific issue; and

The tax effects of the above.

The tax effects of the above.

Due to the exploration nature of Absolute and the once-off costs of this transaction, these pro forma effects are not expected to be of a continuing nature.

The After claw back and assuming maximum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and maximum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.

The proceeds of up to R150 million from the specific issue; and

8.

Capital raising fees of R7.5 million payable to Qinisele Resources that has been set-off against share premium;

The After claw back and assuming minimum specific issue assumes the implementation of the Bauba acquisition (including Houtbosch) and minimum specific issue and subsequent reduction
of the purchase consideration via the repurchase of 37 033 200 Absolute shares.

Issue of 30 000 000 new ordinary shares at an assumed issue price of R5.00;

The maximum specific issue assumes:

Issue of 12 000 000 new ordinary shares at an assumed issue price of R5.00;

The minimum specific issue assumes:

R3 178 440 payable to Qinisele Resources including the issue of 444 981 new shares to QR at an assumed issue price of R5.00 in respect of the Houtbosch acquisition); and

e.

d. R10 218 690 payable to Qinisele Resources including the issue of 1 430 617 new shares to QR at an assumed price of R5.00 in respect of the Bauba acquisition (excluding Houtbosch);

7.

6.

5.

Following the acquisition, the former Bauba shareholders will hold more than 80% of the combined entity. The guidance to IFRS 3 regarding fair value of the consideration transferred in respect
of a reverse acquisition scenario specifies that this value should relate to the fair value of the accounting acquirer rather than the accounting acquiree. IFRS 3 requires that the most reliable
basis of measuring the fair value of the accounting acquirer be used. Bauba is an unlisted entity. The fair value for 100% of Bauba equates to R573.23 million. For IFRS purposes, Absolute
shareholders acquired an effective interest of 10.1% of Bauba (16.8% of 60% of Bauba) for an effective purchase consideration of R57.9 million.

The After Bauba acquisition includes transaction costs of R16.634 million and related tax effects as follows:

The fair value of the number of equity interests calculated in that way can be used as the fair value of consideration transferred in exchange for the acquire. In other words, the purchase
consideration in a reverse acquisition is the consideration effectively transferred by the accounting acquirer to the shareholders of the accounting acquiree.

The acquisition has been accounted for in terms of the revised IFRS 3: Business Combinations, as the expected effective date is after 1 July 2009, being the effective date of the revised statement.
Adjustments relate to the issue of 68 124 600 new ordinary shares in respect of the Bauba acquisition and 21 189 600 new ordinary shares in respect of the Houtbosch acquisition. The acquisition
has been performed based on the guidance per IFRS 3:

4.

Extracted from the audited annual financial statements of Bauba for the year ended 28 February 2010.

3.

In a reverse acquisition, the accounting acquirer usually issues no consideration for the acquiree. Instead, the accounting acquiree usually issues its equity shares to the owners of the
accounting acquirer. Accordingly, the acquisition-date fair value of the consideration transferred by the accounting acquirer for its interest in the accounting acquiree is based on the number
of equity interests the legal subsidiary would have had to issue to give the owners of the legal parent the same percentage equity interest in the combined entity that results from the reverse
acquisition.

After the 1:100 share consolidation and odd lot offer.

2.

Extracted from the published unaudited interim financial results of Absolute for the six months ended 31 December 2009.

1.

Notes:

ANNEXURE 5

REPORTING ACCOUNTANTS
INFORMATION OF NMR

REPORT

ON

THE

HISTORICAL

FINANCIAL

The directors of Absolute Holdings Limited


Arcay House II
Number 3 Anerley Road
Parktown, 2193
Dear Sirs
REPORT OF THE INDEPENDENT REPORTING ACCOUNTANTS ON THE HISTORICAL FINANCIAL
INFORMATION IN RESPECT OF NDAMARA MINERAL RESOURCES (PTY) LIMITED (NMR)
1. INTRODUCTION
At your request and for the purposes of the circular to Absolute Holdings Limited (Absolute) shareholders,
to be dated on or about 17 May 2010, we present our report on the historical financial information of
NMR, as set out in Annexure 6 of the circular, in compliance with the Listings Requirements of the JSE
Limited (JSE Listings Requirements).
2. RESPONSIBILITY AND PURPOSE OF REPORT
The directors of Absolute are responsible for the compilation, contents and preparation of the circular
and for the accuracy of the information contained therein. The directors of Absolute are responsible for
the financial information to which this report on the historical financial information of the Company relates,
and from which the report has been prepared. Our responsibility is to express an opinion on the historical
financial information included as Annexure 6 of this circular.
3. HISTORY AND OWNERSHIP
NMR was incorporated in the Republic of South Africa on 9 November 2006. The financial year end is
end of February each year.
4. SCOPE
The auditors of NMR are Bruk Munkes & Co. We have audited the financial information of NMR for the
year ended 28 February 2010, being the first year of operation.
5. SCOPE OF AUDIT
We conducted our audit in accordance with International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the annual financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the annual financial statements. The procedures selected depend on the auditors judgement, including
the assessment of the risks of material misstatement of the annual financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entitys preparation and fair presentation of the annual financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the annual financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.

57

6. OPINIONS
In our opinion, the historical financial information of NMR for the year ended 28 February 2010 as reported
in Annexure 2 fairly presents, in all material respects, the financial position as of that date, in accordance
with International Financial Reporting Standards, the Companies Act in South Africa and the JSE Listings
Requirements.
7. CONSENT
We consent to the inclusion of this report, which will form part of the circular to the shareholders of
Absolute.
Yours faithfully
MOORE STEPHENS (JHB) CORPORATE FINANCE (PROPRIETARY LIMITED
Registered Auditors
Chartered Accountants SA
Per: Nick Lazanakis
7 West Street
Houghton, 2198
30 April 2010

58

ANNEXURE 6

HISTORICAL FINANCIAL INFORMATION OF NMR FOR THE YEAR ENDED


28 FEBRUARY 2010

The historical information on NMR has been extracted from the audited financial statements for the year
ended 28 February 2010. NMR is audited by Bruk Munkes & Co and the results were reported on without
qualification. The results were prepared in accordance with International Financial Reporting Standards and
have been reported on by Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited as detailed in
Annexure 5 to this circular. The preparation and presentation of the historical financial information is the
responsibility of the directors of the Company and has been prepared in accordance with the accounting
policies of the Company.
Main business and operations
The company was incorporated on 9 November 2006 and obtained its certificate to commence business on
the same day. NMR was dormant until its first year of operation, being for the year ended 28 February 2010.
Review of activities
Main business and operations
The company is engaged in mining activities and operates principally in South Africa.
The operating results and state of affairs of the company are fully set out in the attached annual financial
statements and do not in our opinion require any further comment.
Net profit of the company was R2 112 506 (2009: profit R nil).
Dividends
The dividends already declared and paid to shareholders during the year are as reflected in the attached
statement of changes of equity.
Authorised and issued during the year under review.
11 509 ordinary shares were issued during the year under review.
Directors
The directors of the company during the year and to the date of this report are as follows:
Name

Nationality

Adriaan Martinus Slabber

South African

Jurie Hendrik Wessels

South African

Nicolaas Phillipus Jacobus van der Hoven

South African

Secretary
The secretary of the company is Elizabeth Stephanie Moult of:
Postal address

2 Chaplin Close
Kirstenhof
7806

59

Income Statement for the year ended 28 February 2010


The income statement of NMR for the year ended 28 February 2010 is set out below:
2010
R
Operating expenses

(3 523)

Operating loss
Investment revenue

(3 523)
2 116 030

Profit before taxation

2 112 507

Taxation

Profit for the year

2 112 507

Earnings per share (cents)


Headline earnings per share (cents)
Dividends per share (cents)
Weighted average number of shares in issue (000)

9 150
9 150
9 165
23 087

Balance Sheet for year ended 28 February 2010


The balance sheet of NMR for the year ended 28 February 2010 is set out below:
Note(s)
ASSETS
Non-current assets
Investments in associates
Loans to shareholders

2
3

2010
R

43
157 800
157 843

Current assets
Cash and cash equivalents

20 800

Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Retained income

178 643

179 309
(3 523)
175 786

Liabilities
Non-current liabilities
Loans from directors

43

Current liabilities
Trade and other payables

2 814

Total liabilities

2 857

Total equity and liabilities


Number of shares in issue (000)
Net asset value per share (cents)
Net tangible asset value per share (cents)

60

178 643
23 087
761.41
761.41

Statement of Changes in Equity for the year ended 28 February 2010


The statements of changes in equity of NMR for year ended 28 February 2010 is set out below:
Share
capital
R

Share
premium
R

Total share
capital
R

Balance at 1 March 2009


Changes in equity
Profit for the year
Issue of shares
Dividends
Total changes

23 087

23 087

156 222

156 222

179 309

179 309

2 112 507

(2 116 030)
(3 523)

Balance at 28 February 2010

23 087

156 222

179 309

(3 523)

175 786

Note(s)

2010
R

Note

Retained
income
R

Total
equity
R

2 112 507
179 309
(2 116 030)
175 786

Cash Flow Statements for year ended 28 February 2010


The cash flow statement of NMR for year ended 28 February 2010 is set out below:

Cash flows from operating activities


Cash used in operations
Dividends received

Net cash from operating activities

2 115 321

Cash flows from investing activities


Loans advanced by directors
Investment in associate

43
(43)

Net cash from investing activities


Cash flows from financing activities
Proceeds on share issue
Advance of shareholders loans
Dividends paid
Net cash from financing activities

(709)
2 116 030

179 309
(157 800)
(2 116 030)
(2 094 521)

Total cash movement for the year


Cash at the beginning of the year

20 800

Total cash at end of the year

20 800

61

ACCOUNTING POLICIES
Nature of operations
NMR carries on the business of exploration and mining of mineral resources. The Company was registered
in 2006 but only commenced operation in the 2010 financial year.
1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS
The annual financial statements have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and the Companies Act of South Africa, 1973. The annual
financial statements have been prepared on the historical cost basis, and incorporate the principal
accounting policies set out below.
These accounting policies are consistent with the previous year.
1.1

Investments in associates
An investment in an associate is carried at cost less any accumulated impairment.

1.2

Financial Instruments
Initial recognition and measurement
Financial instruments are recognised initially when the company becomes a party to the contractual
provisions of the instruments.
The company classifies financial instruments, or their component parts, on initial recognition as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement.
Financial instruments are measured initially at fair value, except for equity investments for which a
fair value is not determinable, which are measured at cost and are classified as available for sale
financial assets.
For financial instruments which are not at fair value through profit or loss, transaction costs are
included in the initial measurement of the instrument.

1.3

Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the
amount already paid in respect of current and prior periods exceeds the amount due for those
periods, the excess is recognised as an asset.
Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected
to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been
enacted or substantially enacted by the balance sheet date.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included in profit or loss
for the period, except to the extent that the tax arises from:
a transaction or event which is recognised, in the same or a different period, directly in equity; or
a business combination.
Current tax and deferred taxes are charges or credited directly to equity if the tax relates to items
that are credited or charges, in the same or a different period, directly equity.

1.4

Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents
the amounts receivable for goods and services provided in the normal course of business, net of
trade discounts and volume rebates, and value-added tax.

62

2. INVESTMENTS IN ASSOCIATES
Name of company

Listed/
Unlisted

Holding
2010
%

Cost
2010
R

Bauba A Hlabirwa Mining Investments (Pty) Ltd

Unlisted

34.40

43

The carrying amounts of associates are shown at cost net of impairment losses
3. LOANS TO SHAREHOLDERS
The Orata Trust

157 800

The above loan bears interest at prime, levied from 1 March 2010 and there are
no fixed terms of repayment.
4. SHARE CAPITAL
Authorised
100 000 ordinary shares of R1.00 each

100 000

76 913 unissued ordinary shares are under the control of the directors in terms
of a resolution of members passed at the last annual general meeting. This
authority remains in force until the next annual general meeting.
Issued
23 087 ordinary shares of R1.00 each
Share premium

23 087
156 222
179 309

5. LOANS FROM DIRECTORS


Nicolaas Phillipus Jacobus van der Hoven
Jurie Hendrik Wessels
Adriaan Martinus Slabber

15
14
14
43

The above loans bear no interest and there are no fixed terms of repayments.
6. CASH USED IN OPERATIONS
Profit before taxation
Adjustments for:
Dividends received

2 112 507
(2 116 030)

Changes in working capital


Trade and other payables

2 814
(709)

7. POST BALANCE SHEET EVENTS


The directors are not aware of any matter or circumstances arising since the end of the financial year to
the date of this report.
8. OVERVIEW OF OPERATIONS
Net profit of the company was R2 112 507 which included a dividend of R2 116 030 received from Bauba
A Hlabirwa Mining Investments (Pty) Ltd.

63

ANNEXURE 7

SHARE PRICE HISTORY OF ABSOLUTE

The share price history of the Companys ordinary shares traded on the JSE for the past three years up until
the last practicable date are given below:
Statistic date

High
(cents)

Low
(cents)

Close
(cents)

Volume traded

Value traded

Quarterly
30 March 2007
29 June 2007
28 September 2007
31 December 2007

4
4
3

3
3
2

4
4
3

1 138 200
115 800
540 000

39 146
4 575
12 800

31 March 2008
30 June 2008
30 September 2008
31 December 2008

3
6
5
5

3
6
4
3

3
6
5
4

15 000
250 000
646 250
23 388 689

450
15 000
25 912
914 974

31 March 2009
30 June 2009
30 September 2009
31 December 2009

5
3
5
5

2
2
2
3

2
3
5
3

11 870 788
8 202 056
30 368 000
23 284 517

338 442
199 647
1 284 499
827 981

30 January 2009
27 February 2009
31 March 2009
30 April 2009
29 May 2009
30 June 2009
31 July 2009
31 August 2009
30 September 2009
30 October 2009
30 November 2009
31 December 2009

2
3

5
5
4

2
2

4
3
3

2
2
2
2
3
5
5
5
5
4
3

75 000

95 000
39 025

140 000
9 901 280
7 772 337

1 500

1 900
1 080

5 800
363 284
237 965

31 January 2010
28 February 2010

78 133 993

4 262 774

7
6
6
6
6
6
6
6
6

6
6
6
5
6
6
5
5
6

6
6
6
6
6
6
6
6
6

745 600
1 650 558
2 103 858
2 050 038
4 612 996
1 023 780
3 847 418
475 800
2 454 760

45 176
99 033
126 231
122 130
276 780
61 427
230 125
27 290
147 286

Month ended

Daily
1 March 2010
2 March 2010
3 March 2010
4 March 2010
5 March 2010
8 March 2010
9 March 2010
10 March 2010
11 March 2010

64

Statistic date

High
(cents)

Low
(cents)

Close
(cents)

Volume traded

Value traded

Daily (continued)
12 March 2010
15 March 2010
16 March 2010
17 March 2010
18 March 2010
19 March 2010

6
6
6
6
6
545

5
6
6
5
5
260

6
6
6
5
6
500

3 399 802
302 000
334 000
4 231 324
432 119
599 555

203 166
18 120
20 040
252 859
24 135
2 585 009

600
520
520
500
480
452
440
444
499
498
545
545
545
500
462
467
465
480
475
445
440
439
450

530
511
500
450
452
420
425
430
444
480
498
545
498
460
460
465
460
430
430
430
415
439
439

530
520
510
500
452
425
430
444
499
498
545
545
498
460
462
465
460
430
430
430
440
439
439

60 000
5 000
10 588
44 450
3 859
70 968
13 340
1 671
8 572
29 346
6 203
25 628
23 404
1 532
720
5 730
5 730
12 105
2 730
66 497
4 323
5 000
10 157

329 365
25 576
53 061
217 647
17 511
309 967
57 344
7 233
39 033
144 682
30 996
139 673
117 809
7 143
3 317
26 649
26 393
54 069
12 684
286 125
18 649
21 950
44 699

Shares consolidated on the


basis of 1 share for every 100
shares held on 29 March 2010.
23 March 2010
24 March 2010
25 March 2010
26 March 2010
29 March 2010
30 March 2010
31 March 2010
1 April 2010
6 April 2010
7 April 2010
8 April 2010
9 April 2010
12 April 2010
13 April 2010
14 April 2010
15 April 2010
16 April 2010
19 April 2010
20 April 2010
21 April 2010
22 April 2010
23 April 2010
26 April 2010

65

ANNEXURE 8

EXECUTIVE SUMMARY OF COMPETENT PERSONS REPORT ON THE BAUBA


PROJECT

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


TABLE OF CONTENTS
! Locality, Property Description And
Neighbouring Properties
! Physiography Climate And Access
! Legal Tenure And Agreements

! Regional Geology

! Exploration Work Strategy

! Local Geology

! Estimated Exploration Costs

! Deposit Type And Mineralisation

! Effect Of Mineralisation Depth To Shaft Depths

! Reconnaissance Mineral Resource

! Brief Review Of Neighbouring Properties


! Conclusions And Recommendations

Statement

These documents comply with the Executive Summary requirements of Section 12.9 (h)

KEY FEATURES

Competent Persons and Competent Valuators:

Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.

Compiled by:

Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.

Effective Date :

14th April 2010.

Prepared For :

Absolute Holdings Limited, (Absolute).

Purpose:

This is an Independent assessment and verification of Bauba's PGE prospective properties on behalf of
Absolute Holdings. Absolute's strategic objective is to initially build a 0.35Moz p.a. PGE mine within the next
10 years and ramp it up to 1Moz p.a. within 20 years. The Company has entered into a binding agreement
with Bauba A Hlabirwa Mining Investments (Pty) Limited (Bauba) whereby Absolute will acquire a 60%
share in the PGE explorer.
th

Sources of Information :

Technical Reports as supplied by Qinisele Resources including Press releases of 16 February 2010 and a
Business Day article, Absolute takes 60% stake in the PGE explorer Bauba, as well as reports from the
public domain of adjacent mineral properties. Property areas were obtained from Win Deed, a Deeds and
Office Enquiry website.
th

Personal Inspection :

A site inspection was carried out on 25 February by Venmyn, Gain Consulting cc and Qinisele Resources
personnel. The Southern and Central Clusters were visited at the time.

Reliance on Other Experts:

Stephen Gain (Pr.Sci.Nat Msc), Snowden, Qinisele Resources.

Property Description and Location:

Bauba holds prospecting rights, in the North Eastern Bushveld Igneous Complex (BIC), over nine farms
extending over an area of approximately 56km in length and 6km in width (approximating 14,480ha). The

LOCATION WITHIN SOUTH AFRICA

farms have been grouped into three areas namely the Northern, Central and Southern Clusters. The

PROJECT
AREA

Johannesburg
Durban

Northern Cluster is being dealt with in this report. It consists of Schoonoord 462KS, Indie 474KS, Zwitzerland
473KS and Fisant Laagte 506KS. The total area is about 7,700ha. All the Bauba farms lie along the Leolo
mountain range in the Limpopo Province approximately 40km northwest of the Limpopo Province town of
Steelpoort and 245km northeast of Johannesburg. To the east and up-dip, the Bauba mineral assets are
surrounded by several current operating mines and development projects.

Cape Town

th

License Status:

Prospecting Right No. 256/2006 PR due to expire on the 6 July 2011.

Ownership Details:

Bauba owns the prospecting rights. These were ceded to Bauba, on 9 April 2007, by King Moruthane Ben

th

Sekhukhune and Motubatse Ben Bokgobela representing Sekhukhune Rhyne Thulare for and on behalf of
the Bapedi Nation. Absolute Holdings is in the process of acquiring 60% of the PGE explorer, Bauba.
Topography and Climate:

The Northern Cluster lies in a mountainous area with elevations lying between 800m and 1,270m. The
elevation difference between the peaks and the flat valleys is about 470m. The climate of the area is typical of
sub-tropical Highveld with warm moist summers and cool dry winters. The rainfall on the escarpments is
higher at 700mm compared to about 500mm in the valleys. Temperatures recorded at Steelpoort vary
0

between 30 C and 17.6 C in January and 21.6 C to 3.8 C in July. Extremes of 40 C and -2.3 C have also
been recorded.
Infrastructure and Accessibility:

The farms are relatively easy to access but field camps will have to be constructed. Access roads will be cut

Geological Setting and Deposit Type:

The Bauba prospects are located on the North Eastern Limb of the BIC, which lies on the eastern portion of

with the aid of bulldozers and water for drilling will have to be taken to site using bowsers.
the world's largest layered igneous intrusion and known to host more that 80% of the world's PGE's and

BUSHVELD IGNEOUS COMPLEX (BIC)

associated base and precious metal deposits. The farms lie down dip of existing mines and exploration
projects. Reconnaissance mapping carried out to-date shows that the farms lie in the Main and Upper Zones

Northern Limb
Eastern Limb

Mokopane

Steelpoort

PROJECT
AREA
Rustenburg

SCALE:

Corporate Reporting & Identity Specialists,


Annual Reports, Graphics

66

surface and 390m apart, with dips ranging between 18o W in the South East and 300 SW in the North West.
However, in the Northern to Central Cluster, two diapiric structures, the Paradys and the Phoshiri domes are

Middelburg

Pretoria

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of the BIC. The Critical Zone which is known to host both PGE targets, the Merensky Reef and the UG-2
Chromitite, lies directly below the Main Zone. These two layers are expected to be at least a 1,600m below

Western Limb

100km

thought to have deformed the Critical Zone rocks close to their outer edges, hence possibly uplifting the ore
hosting rocks closer to surface.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 1

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


The sudden downpours pose some risk of flooding in low-lying areas.
Temperatures recorded at Steelpoort vary between 300 and 17.60C in
January and 21.60 to 3.80C in July. Extremes of 400 and -2.30 C have also
been recorded.

1. LOCALITY, PROPERTY DESCRIPTION AND NEIGHBOURING


PROPERTIES
The Bauba farms lie along the Leolo mountain range in the Limpopo
Province. approximately 40km north-northwest of the Limpopo
Province town of Steelpoort and 245km northeast of Johannesburg.
The farms are surrounded, on the eastern side by operating PGE mines
and development projects on the North Eastern limb of the BIC. The
Northern Cluster, in particular, lies due west and down dip of Bokoni
Platinum mine and the Ga-Pasha PGE Project, both jointly-owned by
Anglo Platinum and Anooraq. The location of these properties is shown
in Figure 1 .

The mostly moderate climate means that exploration and mining


operations can be undertaken throughout the year, with no
extraordinary measures required.
Field camps will be constructed for the drilling. Where necessary,
access roads into the properties will be cut with the aid of bulldozers.
Water for drilling will be transported to site.

FIGURE 1: LOCATION MAP SHOWING THE BAUBA NORTHERN CLUSTER ON THE EASTERN BIC
Anglo Platinum Operating Mine
Anglo Platinum Prospecting Right/Option
Anooraq/Anglo Platinum Operating Mine
Bauba Project Areas(Absolute Holdings Ltd)
Implats/Misc Operating Mine
African Rainbow/Anglo Platinum
Operating Mine
Jubilee
Lesego
Nkwe Platinum
Anooraq
Chrome Mines
Smelters

Anooraq
(Bokoni)

Lesego
Platinum
(Phosiri)

disp
port uted
ion

EASTERN CHROME MINES


(Chrometco)

Northern Cluster
Project Area

SCHOONOORD
462 KS

AngloPlat/Anooraq
(Ga Phasha)

EASTERN CHROME MINES


(Mecklenburg)

INDIE 474 KS
ZWITZERLAND 473 KS

AngloPlat
(Twickenham)
FISANT LAAGTE 506 KS
MAGNEETSVLAAKTE 541 KS

Jubilee
Platinum

Central Cluster
Project Area

EASTERN CHROME MINES


(Clapham)

Implats
(Marula)

DINGAANSKOP 435 KS

MOOIHOEK
DILOKONG

GROOTVYGENBOOM
204 KT
MR

CR

UG2 Reef
Merensky Reef
Chromite Reef
Fault
Road
Railway
River
Limit
Town
Cross Section Lines

African Rainbow/
Angloplat
(Modikwa)

Southern Cluster
Project Area

Mooihoek

Bothashoek

EASTERN
CHROME MINES
(Montrose)

GENOKAKOP
285 KT

HOUTBOSCH
323 KT

Nkwe
Platinum

Steelpoort

Scale:

7.5km

TABLE 1: LEGAL TENURE


COUNTRY PROVINCE CLUSTER

FARM

FARM

NAME

No.

Fisant Laagte 506KS,


South Africa

2.

Limpopo

Northern

Corporate Reporting & Identity Specialists,


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(ha)

NAME

RIGHT

2,013

Bauba A
Hlabirwa
Mining
Investments
(Pty) Limited

256/2006PR

Zwitzerland

473KS

1,952

Indie

474KS

1,516

Schoonoord

462KS

2,212

PHYSIOGRAPHY, ACCESS AND CLIMATE


The Northern Cluster lies along the Leolo mountain range in the
Limpopo Province. The peaks are interspaced with flat valleys with
elevations lying between 800m and 1,270m. The elevation difference
between farms is about 470m. The climate of the area is typical of subtropical Highveld with warm moist summers and cool dry winters. The
rainfall on escarpments is higher at annual averages of 700mm
compared to about 500mm in the valleys. Precipitation is usually in the
form of thunderstorms during summer.

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AREA APPLICATION PROSPECTING DATE

3.

ISSUED

EXPIRY
DATE

7-Jun-06 6-Jul-11

LEGAL TENURE AND AGREEMENTS


The Prospecting Right 256/2006PR was issued in June 2006 to King
Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela, as
representatives of Sekhukhune Rhyne Thulare for and on behalf of the
Bapedi Nation. The Prospecting Right was ceded to Bauba on the 9th of
April 2007. This is due to expire on the 6th July 2011. Absolute has now
entered into a binding agreement with Bauba where Absolute will hold a
60% direct and indirect share in Bauba. (Table 1).

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 2

67

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


4. REGIONAL GEOLOGY
The Bauba prospects are located on the eastern limb of the BIC as
shown in Figure 2 .The limb forms part of three layered mafic-ultramafic
bodies, defined as the northern, western and eastern limbs. These form
an ellipse in plan, some 200km by 370km in extent with granites and
felsic volcanic in the central and southern regions. The Bushveld
Complex exhibits remarkably consistent layering that can be correlated
extensively throughout the geologic expression of the whole complex.

The Merensky Cyclic Unit and Merensky Reef


The Merensky Cyclic Unit occurs close to the top of the Critical Zone. At
Winnaarshoek this unit consists of a 2-5 meter thick feldspathic
orthopyroxenite that is overlain by norite-leuconorite, spotted
anorthosite and then mottled anorthosite. A similar stratigraphic
sequence is described on Nkwe's Garatau and Maandagshoek. The
Merensky pyroxenite is typically medium-grained, brownish-gray, and
can be described as feldspathic orthopyroxenite. Detailed microscopic
studies have shown the feldspathic pyroxenite to consist of mediumgrained (1-30mm) orthopyroxene with intercumulus plagioclase. This
rock can exhibit both poikilitic and porphyritic textures due the presence
of variably distributed, oikocrysts (10-20mm) of clinopyroxene.

Figure 2 portrays the plan view as well as the vertical representation of


the stratigraphy of the Bauba Project area in relation to the geology of
the Eastern BIC. The units in Table 2 are the units as they have been
described by S. Gain.

FIGURE 2: NORTHERN CLUSTER GEOLOGY ALONG THE EASTERN BIC


Lebowa Granite Suite
Alluvium
Upper Zone
Main Zone
Merensky Reef
UG2 Reef
Upper Critical Zone
Lower Critical Zone
Chromite Reef
Lower Zone
Southern Facies Lower Zone
Marginal Zone
UG2 Reef
Merensky Reef
Cross Section Lines

Anooraq
(Bokoni)

VMR

disp
port uted
ion

A
CR

Chromite Reef
Vandiferous Reef
Fault
Road
Railway
River
Limit
Town
Chrome Mines
Smelters

EASTERN CHROME MINES


(Chrometco)

SCHOONOORD
462 KS

Lesego
Platinum
(Phosiri)

ZWITZERLAND
473 KS

AngloPlat/Anooraq
(Ga Phasha)

INDIE 474 KS

Northern Cluster
Project Area

FISANT
LAAGTE
506 KS

EASTERN CHROME MINES


(Mecklenburg)

AngloPlat
(Twickenham)

MR

MAGNEETSVLAAKTE
541 KS

Central Cluster
Project Area

D
DINGAANSKOP
543 KS

Jubilee
Platinum

EASTERN CHROME MINES


(Clapham)

Implats
(Marula)

MOOIHOEK

RUSTENBURG LAYERED SUITE:


GROOTVYGENBOOM
204 KT

MERENSKY REEF
Upper
Group

UG2
UG1

Southern Cluster
Project Area

UPPER ZONE
MG4

PYROXENITE MARKER
Middle
Group

MAIN ZONE

MG3
MG2
MG1

LEGEND:

LOWER CRITICAL ZONE


LOWER ZONE

The Critical Zone


The Critical Zone, which lies below, contains well defined, and easy to
correlate, layers which can be broadly sub-divided into the rock types
dunite, harzburgite, pyroxenite, norite, anorthosite and chromitite.
These layers have both sharp and gradational contacts and progress
through subtle variations to produce leucocratic and melanocratic
variations of medium grained rocks. In places the rocks are pegmatoidal
and can form pipes and segregations. Later dolerite dykes intruded into
faults. The Critical Zone contains the main economic targets namely the
Merensky Reef and the UG2 chromitite layer.

68

Steelpoort

LG5

The Main Zone


The Main Zone is generally poorly layered and contains a monotonous
sequence of norite and gabbro-norite, with only minor anorthosite
layers which allow for stratigraphic correlation.

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Bothashoek

EASTERN
CHROME MINES
(Montrose)

Nkwe
Platinum

LG6 & LG6A

MARGINAL ZONE

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African Rainbow/
Angloplat
(Modikwa)

Mooihoek

HOUTBOSCH
323 KT

LG7

Lower
Group

F
GENOKAKOP
285 KT

Chromitite
Anorthosite
F
Norite
Pyroxenite

UPPER CRITICAL ZONE

DILOKONG

7.5km

Two thin chromitite layers occur to the top of the orthopyroxenite. At


Garatau the lower stringer is defined as the bottom reef contact or
(BRC) and the top reef contact (TRC). The TRC occurs some 1,8m
above the BRC (Winnaarshoek). The BRC is 1-25mm thick and is
generally less persistent than the 1-25mm thick TRC which is
commonly present and laterally persistent. Sulphide mineralization is
associated with both chromitite layers and can comprise up to 2% of the
mode.
The best combination of sulphide and associated PGE mineralization
occurs for about a metre below the TRC. Diffuse segregations and
selvages of pegmatoidal pyroxenite occur above the TRC and
sometimes below the BRC.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 3

Scale:

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
!

TABLE 2: STRATIGRAPHIC ZONES OF THE RUSTENBURG LAYERED SUITE


UNIT

THICKNESS

Upper Zone

Varies

Main Zone

3,900m

Upper Critical
Zone

DOMINANT LITHOGLOGY

DESCRIPTION

Gabbros with banded anorthosite and


magnetite layers.
Norite, gabbro-norite, anorthosite and
minor pyroxenite.

No chilled contact with the hanging wall rocks,


which consist of rhyolites and granophyres.
Comprises half of the RLS. Banding and layering
not well developed.
The base of the UCZ marked by cumulus
plagioclase. Norites dominate the UCZ, with
subordinate pyroxenites and anorthosites present
at intervals through the sequence.

Layered pyroxenites, norites,


anorthosites and chromitites.

1,400m
Pyroxenite inter-layered with
hartzburgite and chromitite.

Critical Zone

Lower Zone

Varies ,
reaches a
maximum of
1,700m

Marginal Zone

Several
metres to
hundreds of
metres

Chromititeseams occur in three distinct groupings.


The LG series of seams occur exclusively in the
Lower Critical Zone, the MG series of seams
straddle the contact between the Lower and UCZ,
whereas the UG2 group of seams occur within
the UCZ. EconomicPGEmineralisationis hosted in
the Merensky Reef and UG2, a laterally continuous
pyroxenite unit containing PGE and base metal
sulphide mineralisation.

Thickness varies and thins over basement highs.


The most complete exposure is in the northeastern
part of the Eastern Limb of the RLS which occurs
as a series of dunite-harzburgite cyclically layered
units.
Contamination of the basic magmas by the
Unlayered, heterogeneous ultramafic enclosing host rocks. Sedimentary rock fragments
rocks mostly norites.
are contained as xenoliths in the lower portions.
Exposures of this zone are poor.
Cyclically layered units of dunitehartzburgite.

UG2 chromitite layer


The UG2 chromitite layer (UG2) is located some 350-360m below the
Merensky Reef (Gain, 1995). The following description of the UG2
pertains to work conducted on Garatau by Nkwe Platinum, but is typical
for this part of the Bushveld Complex. The UG2 is a composite layer
commonly, but not always, underlain by a basal pegmatoid. This is
overlain, through a dimpled contact, by a massive chromitite layer which
is 0,5 to 0,8m thick. This massive chromitite layer consists of fine
grained chromite grains with intercumulus orthopyroxene and
plagioclase and commonly has a sharp and planar upper contact. The
silicate minerals, found in the chromitite layer, form irregularly
distributed crystals which poikilitically enclose the chromite and form
mottles up to 15mm in diameter. The UG2 has up to 3 chromitite
stringers above which are enclosed within a fine- to medium-grained
feldspathic orthopyroxenite forming a composite package, 0,10-0,15m
thick. PGE mineralization is associated with very meager sulphide
(<1% of the mode) and increases towards the top and bottom of the
chromitite layer. It can also occur within the overlying chromitite
stringers and the basal pegmatoid.
Later Dykes, Pipes and Structural Setting
A detailed aeromagnetic survey, under the supervision of GAP
Geophysics, was conducted on the Garatau during 2007. Line spacing
was 50m and the ground clearance was 20-30m. This work, together
with diamond drilling, has allowed for the production of a map in which
the general structural setting is defined. S. Gain outlines that this work
has determined the following:!
both the Merensky Reef and the UG2 dip constantly at angles
varying from 6-8W. Indications are that dip reduces with depth as
the measurements on Maandagshoek showed an average dip of 910W;
!
the airborne magnetic information, combined with SPOT and
conventional airborne photography and ground mapping, show the
strike of the layering to be NNW-SSE;
!
dykes of a Karoo to post-Karoo age occur in the region. Two
prominent dykes on Garatau trend N-S and show a positive
magnetic polarity. The dykes are commonly vertical to sub-vertical.
If there is a dip, it is towards the east;
!
the dolerite dykes intrude along fault lines and structural zones of
weakness. Displacements (faulting) are generally minimal,
although one dyke on Garatau shows a 65m normal throw; and

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various ultramafic pipes occur on


Maandagshoek and Garatau. There is no
information on their composition and
whether they have been tested for their
PGE content.

The Genesis of the PGE sulphide


Mineralisation
The origin of the PGE mineralisation in the BIC
has been investigated for 100 years and
remains a matter of debate. A possibility exists
that PGE's are concentrated in primary basaltic
to komatiitic composition magma when a high
degree of partial melting (30%) of the upper
mantle occurs. Within this primary melt, some
mechanism to induce sulphide saturation was
active to produce a sulphide liquid which
segregates from the primary magma. Magma
mixing, crustal contamination and fractional
crystallisation are the most important
processes known to induce sulphide saturation
in magma during intrusion.

Once sulphide saturation of magma was


reached, a sulphide liquid segregated from the
primary magma and strong partitioning of
PGE's, Ni and Cu into this segregated liquid
took place. It is has been suggested that these sulphide droplets act as
a scavenging medium for the PGE's and the droplets collect on the floor
of the magma chamber where the ore-bearing layers form (Eales,
2001).

5.

LOCAL GEOLOGY
Reconnaissance mapping carried out has revealed that the farms lie in
the Main and Upper Zones of the BIC. The Critical Zone which is known
to host both PGE targets, the Merensky Reef and the UG2, lies directly
below the Main Zone.
Throughout the BIC the PGE and other mineral layers are tabular
bodies extending laterally over hundreds of square kilometres, resulting
in extensive mineral resources whose continuity has been established
over years of exploration and mining. Using exploration information
from public domain of companies surrounding the Northern Cluster, a
series of reef contours was constructed by S. Gain and used to predict
the behaviour of the mineralisation on the farms.
The two PGE layers are expected to have dips ranging between 180
west in the south-east and 300 South-Eest in the North-West under the
Northern Cluster farms.
Two diapiric structures, the Paradys and the Phoshiri domes are
thought to have deformed the Critical Zone rocks close to the outer
edges of the Northern and Central clusters, providing an uplift of the ore
host rocks closer to surface than the norm for the area. This is shown in
Figure 3 . The precise extent of the structural complexity of the area will
be a focus of the technical assessment of the area by Absolute.

6. DEPOSIT TYPE AND MINERALISATION


The mineralised Merensky Reef and UG2 are magmatic and layered,
segregation deposits containing economic quantities of PGE's and
base metals. The PGE's are associated with chromite and base metal
sulphides.
Depth of Mineralisation
The Merensky layer is expected to be between 1,600 to 2,500m below
surface in the Northern Cluster and the parting between the Merensky
and the UG2 is expected to be about 390m.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 4

69

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
FIGURE 3:SCHEMATIC E-W CROSS SECTION ILLUSTRATING THE EFFECT OF THE PHOSHIRI DOME ON THE STRATIGRAPHY

Government
Ground

Koppieskraal

E
Spelonk

2000m

LEGEND:
Upper Zone

Indie
474 Ks

Zwitzerland
473 Ks

Main Zone
Merensky Reef
UG2 Reef
Chromitite Layer

0m

Upper/Lower
Critical Zone

-2000m

Lower Zone
Marginal Zone

39km

1:100 000

FIGURE 4:SCHEMATIC E-W CROSS SECTION VIEW OF THE EASTERN BIC INCLUDING NORTHERN CLUSTER

2000m

Angloplat/anooraq
(Ga Phasha)

Zwitzerland
473 Ks

Indie
474 Ks

Waterkop

LEGEND:

Chromex
(Mecklenburg)

Upper Zone
Main Zone

mamsl

-2000m

0m

Merensky Reef
UG2 Reef
Chromitite Layer

Upper/Lower
Critical Zone
Lower Zone

Scale:

5km

Marginal Zone

8. EXPLORATION WORK STRATEGY


Desk top studies have already been carried out by S. Gain and
Snowden of the Clusters and surrounding properties. Due to the
remoteness of the area under review, a base camp will have to be
constructed and access roads to some of the drill sites be constructed
by bulldozers. The 1:10,000 topographic map has been used to lay
boreholes and roads for the Northern Cluster. Reconnaissance
mapping will be carried out in conjunction with the diamond drilling. S.
Gain suggests that field traverses using a portable magnetometer be
conducted to better define the positions of dykes, faults and ultra-mafic
pegmatoids. The results obtained will be plotted onto a 1:10,000 maps.

Figure 4 illustrates a schematic cross sectional view, through line A-B,


of the Eastern BIC including the Northern Cluster PGE prospects.
The section is important to illustrate the disposition of the chrome,
Merensky and UG2 mines in the area and the extent to which Absolute's
strategy to explore the deeper extension of the existing operation is
technically feasible. The figure also illustrates how the reefs outcrop on
surface on the adjacent Ga-Pasha property.
7. EXPLORATION TARGETS
Surrounding properties and projects were studied and used to predict
the resource parameters for the Northern Cluster target area.
Information was obtained from reports by S. Gain, Qinisele internal
reports, Snowden as well as projects and mines on the public domain.
The summary of these is shown in Table 3.

A phased diamond drilling programme was designed by Snowden and


reviewed by S. Gain. Wire-line logging and relative density analyses
have been included. The mother holes are to be deflected into four short
deflections from 6, 12, 15 and 24m above reef intersections. These
holes should go at least 1m into the footwall of the reef. S. Gain has
reviewed the Snowden work and has proposed starting four exploration
boreholes (S-001 to S-004) in the Northern Cluster. These are shown in
Figure 5.

The above parameters were then used to estimate a reconnaissance


estimate for the Northern Cluster in Table 4. The areas used are as
given through the Deeds' office website.

TABLE 3: EXPLORATION TARGETS FOR THE NORTHERN CLUSTER AS DEDUCED FROM THE EASTERN NEIGHBOURS
PROPERTY
Bokoni Mine
Ga-Pasha PGM Project
Northern Cluster

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70

EXPECTED
DIPS
REEF
MR
UG2
MR 140 to 180W
UG2
MR 300SW to 180W
UG2

MR-UG2
WIDTH
GEO
GRADE
PARTING (m) (m)
RD LOSS (%) 4E (g/t)
0.80 3.44
15
4.22
0.90 4.00
20
5.23
1.17 3.44
22
4.49
390
0.74 4.00
27
6.50
>2,500
0.99 3.44
19
4.29
0.82 4.00
23
5.55

REEF DEPTH (m)


MIN
MAX

1,600

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 5

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
TABLE 4 : EXPLORATION TARGET ESTIMATE FOR THE NORTHERN CLUSTER

4.00
4.00
4.00
4.00
4.00

0.82
0.82
0.82
0.82

72.6
49.7
64.0
66.0
252.3

S - 002 S - 001
SCHOONOORD
462 KS

S - 004
ZWITZERLAND
473 KS
INDIE
474 KS
FISANT LAAGTE
506 KS

Ga Pasha PGM Project


Ga Pasha is immediately south of Bokoni and is owned by Anooraq and
Anglo Platinum. It also lies due east of the Northern Clusters and is at a
Pre-Feasibility stage with potential for underground mining. The Project
area overlies the Critical Zone which strikes northwest-southeast and
0
0
0
dips 14 to 18 southwest with local deviations nearing 20 dip. At GaPasha, the Merensky and UG2 reefs are separated by about 390m. GaPasha uses a minimum potential mining width of 0.90m for its resource
estimate. The average resource width ranges between 0.93 and 0.95m.
Table 8 is a summary of the declared Mineral Resources. S. Gain
reports average geological losses of 27% in the Merensky Reef and
22% in the UG2 reef for Ga-Pasha.

Farm Boundary
Boreholes
Scale:

3km

The total depth per hole is predicted to be in the region of about 2,000m.
All the reef drilling, sampling, core storage and logging will be carried
out in accordance with the accepted industrial QA/QC normal practices
as defined in Table 1 of the SAMREC Code.
11.

EFFECT OF MINERALISATION DEPTH ON SHAFT DEPTHS


A study was carried out by Snowden to show the shaft depths of existing
mines and expected shaft depths of future mines. The Northern Cluster
lies in the middle range as shown in Figure 6:-

9. ESTIMATED EXPLORATION COSTS


S. Gain could provide the cost to drill the first four holes on the Northern
Cluster. The cost amounted to ZAR16.94m.

FIGURE 6: COMPARATIVE SHAFT DEPTHS OF EXISTING AND


PLANNED PROJECTS

TABLE 5: APPROXIMATE COSTS FOR DRILLING FOUR HOLES IN THE


NORTHERN CLUSTER.

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500

DEPTH (m)

1000
1500

Bokoni Platinum Mine (previously Lebowa Platinum Mine)


The Anglo Platinum Anooraq jointly-owned Bokoni Platinum Mine,
which has been in operation for over 30 years, lies due east and up dip
of the Northern Cluster. Both the UG2 and Merensky Reefs are being
mined from underground. The local geology is typical of that described
for the Eastern Limb.

2000

10. BRIEF REVIEW OF NEIGHBOURING PROPERTIES

SHAFT DEPTH
0

2500

NORTHERN CLUSTERNo. OF DEPTH PERTOTAL COST ZARm


COST ZARm
COST ITEM
HOLES HOLE (m) METRES EXCL VAT
INCL VAT
Geology Staff
1.34
1.53
Road building
2.00
2.28
Diamond Drilling
4
2,000
8,000
10.00
11.40
Analytical costs
0.87
0.99
other
0.65
0.74
TOTAL
14.86
16.94

Nkwe
(Inferred)

Jubilee
(Feasibility)

Project Area
Chromitite Reef
UG2 Reef
Merensky Reef

23.1
15.8
20.4
21.0
80.4

On a macro scale dyke swarms cut the farms Zeekoegat, Middelpunt


and Umkoanestad with a northeast predominant direction. They can
vary in width up to 10m wide. The dykes do not present serious
problems during mining and previous and current mining operations
report insignificant displacements. In 2009, Bokoni refined 57,200oz of
4PGE. The reserves and resources published by Anglo Platinum as at
the end of 2009 are shown in Table 6 and 7 respectively. Two expansion
projects, the Middelpunt Hill UG2 expansion and the Brakfontein
Merensky expansion are well advanced and will progressively increase
the platinum production of Bokoni Mine. Stoping widths appear to be
standardized to 0.95m for both reefs.

S - 003

Northern Cluster
Project Area

12.9
8.8
11.3
11.7
44.7

Bauba (Southern Cluster)

disp
u
port ted
ion

23
23
23
23

Steve Gain obtained geological information from Bokoni Mine for the
area. The geologic losses at Bokoni are estimated to be 20% for the
Merensky Reef and 15% for the UG-2 chromitite layer. The losses are
attributable to potholes (UG2-9% and Merensky-16%), pegmatites,
which replace the reef (<3% for both reefs), dykes (4% in both reefs),
structural and alteration features such as faults, shears, joints, veins
and alteration zones, which cause minor complications in mining.

FIGURE 5: PROPOSED BOREHOLE POSITIONS FOR


THE NORTHERN CLUSTER

Lesego
Platinum
(Phosiri)

5.55
5.55
5.55
5.55

Marikana

10.3
7.0
9.1
9.3
35.7

Bauba (Central Cluster)

19
19
19
19

*The potential quantity, quality and


content as expressed above are
conceptual in nature and there has
been insufficient exploration to
define Mineral Resources and it is
unclear if further exploration will
result in the determination of a
Mineral Resource.

Union Richard

4.29
4.29
4.29
4.29

Amandebult #3

75.0
51.4
66.2
68.2
260.7

Northam #1

0.99
0.99
0.99
0.99

Bauba (Northern Cluster)

3.44
3.44
3.44
3.44

UG2
WIDTH
GRADE GEO
UG2 TOTAL
RD (m)
(Mt) 4E (g/t) LOSS (%) (Moz) (Moz)

Impala #17

RD

GEO
MR
LOSS (%) (Moz)

Amandebult

2,212
1,516
1,952
2,013
7,693

MERENSKY
GRADE
(Mt)
4E (g/t)

WIDTH
(m)

Northam #2

FARM NAME
Northern Cluster*
Schoonoord
Indie
Zwitzerland
Fisant Laagte
TOTAL

AREA
(ha)

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 6

71

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Northern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
TABLE 6: MINERAL RESERVE BY MINE/PROJECT AS AT 31ST December 2009
MINE/PROJECT

OWNERSHIP

Bokoni Platinum Mine

CATEGORY
Proved
49% Anglo Platinum, 51% Anooraq Probable
Total

MERENSKY
Mt
4E PGE g/t 4E MOZ
19.0
4.53
2.9
5.1
4.14
0.6
24.1
4.44
3.5

UG2
Mt
4E PGE g/t 4E MOZ
33.1
5.47
5.7
8.6
5.31
1.4
41.6
5.44
7.1

TABLE 7: MINERAL RESOURCE BY MINE/PROJECT AS AT 31ST December 2009


MINE/PROJECT

MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
24.7
5.92
4.7
Indicated
29.0
5.73
5.3
49% Anglo Platinum, 51% Anooraq
Inferred
92.0
5.55
16.3
TOTAL 145.7
5.65
26.3
OWNERSHIP

Bokoni Platinum Mine

UG2
(Mt)
4E PGE (g/t) 4E (Moz)
108.8
6.75
23.7
73.9
6.82
16.1
131.2
6.78
28.6
313.9
6.78
68.4

TABLE 8: MINERAL RESOURCE BY MINE/PROJECT AS AT 31ST December 2009


MINE/PROJECT

MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
8.4
4.32
1.2
Indicated
48.2
4.65
7.1
49% Anglo Platinum, 51% Anooraq
Inferred
180.0
4.45
25.7
TOTAL 236.6
4.49
34.2
OWNERSHIP

Ga-Pasha PGM Project

UG2
(Mt)
4E PGE (g/t) 4E (Moz)
24.9
6.50
5.1
57.3
6.56
12.0
186.7
6.48
39.0
268.9
6.50
56.1

12. CONCLUSIONS AND RECOMMENDATIONS


The Northern Cluster is situated within a prime segment of the Eastern Limb of the BIC, where numerous companies are prospecting and successfully mining
PGE's from the Merensky Reef and UG2. The exploration approach for the project is systematic and appropriate for the style of mineralisation and the expected
target resource would be of a sufficient quantity to support the exploration programme being suggested. Prospecting rights are still valid and the companies
should initiate exploration.
As part of the second generation mines that would soon come into production, the Bauba properties are relatively 'shallow' still. Geologically the Bauba project
should be suitable for mining as the mineralised reefs are expected to be continuous, judging from their neighbours. The reefs have partings in excess of 390m
and this may have advantages in that the two reefs can be co-extracted without affecting mining sequences and geotechnical properties. The disadvantages
are that the accesses haulages etc cannot be shared between the two reefs.
Though collectively the Clusters are considered potentially deep mines, South Africa has the capabilities and the technology to mine down to 4,000m below
surface as evidenced by the current deep mining in the Witwatersrand gold mines.
13. REFERENCE TO RISK IN THE FULL CPR
As of the effective date, Venmyn is not aware of any significant risk that could affect Absolute's business plan and production plans other than the normal risks
associated with a mining of the PGE's, construction and operation of a PGE processing plant as detailed in Section 18 of the CPR.
14. COMPETENT PERSONS DECLARATION
Venmyn is an independent advisory company. Its consultants, have extensive experience in preparing competent persons', technical advisors' and valuation
reports for mining and exploration companies. Venmyn's advisors have, collectively, more than 75 years of experience in the assessment and evaluation of
mining projects and are members in good standing of appropriate professional institutions. The signatories, advisors and associates to this report are qualified
to express their professional opinions on the values of the mineral assets described. To this end, Competent Persons and Competent Valuators Certificates are
presented in the full CPR.
Neither Venmyn, its staff, nor associates have or have had any interest in this project capable of affecting their ability to give an unbiased opinion and have not
and will not, receive any pecuniary or other benefits in connection with this assignment, other than normal consulting fees. Absolute Holdings Limited has
warranted in writing that it has openly provided all material information to Venmyn, which, to the best of its knowledge and understanding, is complete, accurate
and true.
Venmyn have prepared this Section 12 Executive Summary from the Independent Competent Persons' Report on the Northern Cluster of the Bauba Mineral
Platinum Properties for Absolute Holdings Limited and state that the Executive Summary is a true reflection of the full CPR.

InterAction
Corporate Reporting & Identity Specialists,
Annual Reports, Graphics

72

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 7

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
TABLE OF CONTENTS
! Locality, Property Description And
Neighbouring Properties
! Physiography Climate And Access
! Legal Tenure And Agreements

! Regional Geology

! Exploration Work Strategy

! Local Geology

! Estimated Exploration Costs

! Deposit Type And Mineralisation

! Effect Of Mineralisation Depth To Shaft Depths

! Reconnaissance Mineral Resource

! Brief Review Of Neighbouring Properties


! Conclusions And Recommendations

Statement

These documents comply with the Executive Summary requirements of Section 12.9 (h)

KEY FEATURES

Competent Persons and Competent Valuators:

Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM,
FGSSA, IOD, AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.

Compiled by:

Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.

Effective Date :

14th April 2010.

Prepared For :

Absolute Holdings Limited, (Absolute).

Purpose:

This is an Independent assessment and verification of Bauba's PGE prospective properties on


behalf of Absolute Holdings. Absolute's strategic objective is to initially build a 0.35Moz p.a. PGE
mine within the next 10 years and ramp it up to 1Moz p.a. within 20 years. The Company has entered
into a binding agreement with Bauba A Hlabirwa Mining Investments (Pty) Limited (Bauba)
whereby Absolute will acquire a 60% share in the PGE explorer.
Technical Reports as supplied by Qinisele Resources including Press releases of 16th February 2010

Sources of Information :

Business Day article, Absolute takes 60% stake in the PGE explorer Bauba, as well as reports
from the public domain of adjacent mineral properties. Property areas were obtained from Win
Deed, a Deeds and Office Enquiry website.
A site inspection was carried out on 25th February by Venmyn, S. Gain from S.Gain Consulting cc and

Personal Inspection :

Qinisele Resources personnel. The Southern and Central Clusters were visited at the time.
Reliance on Other Experts:

Stephen Gain (Pr.Sci.Nat Msc), Snowden, Qinisele Resources.

Property Description and Location:

Bauba holds prospecting rights, in the North Eastern Bushveld Igneous Complex (BIC), over nine
farms extending over an area of approximately 56km in length and 6km in width (approximating

LOCATION WITHIN SOUTH AFRICA

14,480ha). The farms have been grouped into three areas namely the Northern, Central and
PROJECT
AREA

Johannesburg

Southern Clusters. The Central Cluster is being dealt with in this report. It consists of the
Magneetsvlaakte 541KS and Dingaanskop 543KS. The combined area of the two farms covers just

Durban over 2,100ha. All the Bauba farms lie along the Leolo mountain range in the Limpopo Province

approximately 40km northwest of the Limpopo Province town of Steelpoort and 245km northeast of
Johannesburg. To the east and up-dip, the Bauba mineral assets are surrounded by several current
operating mines and development projects.

Cape Town

License Status:

Prospecting Right No. 248/2006PR and Prospecting Right No. 256/2006PR both due to expire on
the 6th July 2011.
Bauba owns the prospecting rights. These were ceded to Bauba, on 9th April 2007, by King

Ownership Details:

Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela representing Sekhukhune Rhyne
Thulare for and on behalf of the Bapedi Nation. Absolute Holdings is in the process of acquiring 60%
of the PGE explorer, Bauba.
Topography and Climate:

The Central Cluster lies in rugged terrain with elevations lying between 980m and 1200m. The
elevation difference between the two farms forming the Central Cluster is about 220m. The climate
of the area is typical of sub-tropical Highveld with warm moist summers and cool dry winters. The
rainfall on the escarpments is higher at 700mm compared to about 500mm in the valleys.
Temperatures recorded at Steelpoort vary between 300C and 17.6 0C in January and 21.60C to 3.8 0C
in July. Extremes of 40 0C and -2.3 0C have also been recorded.

Infrastructure and Accessibility:

The farms are relatively easy to access but field camps will have to be constructed. Access roads will

Geological Setting and Deposit Type:

The Bauba prospects are located on the North Eastern Limb of the BIC, which lies on the eastern

be cut with the aid of bulldozers and water for drilling will have to be taken to site using bowsers.
portion of the world's largest layered igneous intrusion and known to host more that 80% of the

BUSHVELD IGNEOUS COMPLEX (BIC)

world's PGE's and associated base and precious metal deposits. The farms lie down dip of existing
mines and exploration projects. Reconnaissance mapping carried out to-date shows that the farms

Northern Limb
Eastern Limb

Mokopane

targets, the Merensky Reef and the UG-2 Chromitite, lies directly below the Main Zone. These two

Western Limb
Steelpoort

PROJECT
AREA
Rustenburg

SCALE:

Corporate Reporting & Identity Specialists,


Annual Reports, Graphics

layers are expected to be at least 1,400m below surface and 400m apart, with dips ranging between
110 W and 120 W in the Central Cluster. However, in the Northern to Central Cluster, two diapiric

Middelburg

Pretoria

InterAction

lie in the Main and Upper Zones of the BIC. The Critical Zone which is known to host both PGE

100km

structures, the Paradys and the Phoshiri domes are thought to have deformed the Critical Zone rocks
close to their outer edges, hence uplifting the ore hosting rocks closer to surface.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 8

73

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


1.

2.

LOCALITY, PROPERTY DESCRIPTION AND NEIGHBOURING


PROPERTIES
The Bauba farms lie along the Leolo mountain range in the Limpopo
Province, approximately 40km north-northwest of the Limpopo
Province town of Steelpoort and 245km northeast of Johannesburg.
The farms are surrounded, by operating PGE mines and development
projects on the eastern side. The Central Cluster, in particular, lies due
west and down dip of Twickenham Platinum Mine and Tjate Project as
seen in Figure 1.

The climate of the area is typical of sub-tropical Highveld with warm


moist summers and cool dry winters. The rainfall on escarpments is
higher at annual averages of 700mm compared to about 500mm in the
valleys. Precipitation is usually in the form of thunderstorms during
summer.
The sudden downpours pose some risk of flooding in low-lying areas.
Temperatures recorded at Steelpoort vary between 30 and 17.6C in
January and 21.6 to 3.8C in July. Extremes of 40 and -2.3 C have
also been recorded. The mostly moderate climate means that
exploration and mining operations can be undertaken throughout the
year, with no extraordinary measures required.

PHYSIOGRAPHY, ACCESS AND CLIMATE


The Central Cluster lies along the Leolo mountain range in the Limpopo
Province, with elevations lying between 980m and 1,200m.

FIGURE 1: LOCATION MAP SHOWING THE BAUBA CENTRAL CLUSTER ON THE EASTERN BIC
FIGURE 2 : PICTURE ILLUSTRATING THE
ACCESSIBILITY OF THE CENTRAL CLUSTER
Anooraq
(Bokoni)

Northern Cluster
Project Area

SCHOONOORD
462 KS

Lesego
Platinum
(Phosiri)

disp
port uted
ion

INDIE
474 KS
ZWITZERLAND 473 KS

EASTERN CHROME MINES


(Chrometco)

AngloPlat/Anooraq
(Ga Phasha)

EASTERN CHROME MINES


(Mecklenburg)

AngloPlat
(Twickenham)
FISANT LAAGTE 506 KS
MAGNEETSVLAAKTE 541 KS

Jubilee
Platinum

Central Cluster
Project Area

Implats
(Marula)

EASTERN CHROME MINES


(Clapham)

DINGAANSKOP 435 KS

MOOIHOEK
GROOTVYGENBOOM
Anglo Platinum Operating Mine
204 KT
Anglo Platinum Prospecting
E
Right/Option
Anooraq/Anglo Platinum
Southern Cluster
Project Area
Operating Mine
GENOKAKOP
Bauba Project Areas
285 KT
(Absolute Holdings Ltd)
Implats/Misc Operating Mine
HOUTBOSCH
African Rainbow/Anglo Platinum
323 KT
Operating Mine
Jubilee
Lesego
Nkwe Platinum
TABLE 1: LEGAL TENURE
Anooraq
FARM
Chrome Mines
COUNTRY PROVINCE CLUSTER
NAME
Smelters

South
Africa

Limpopo

DILOKONG
F

African Rainbow/
Angloplat
(Modikwa)

Corporate Reporting & Identity Specialists,


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74

Bothashoek

EASTERN
CHROME MINES
(Montrose)

Nkwe
Platinum

FARM
No.

Scale:

CR

7.5km

AREA
(ha)

Magneetsvlaakte 541KS

1,129

Dingaanskop

1,036

543KS

APPLICATION PROSPECTING
NAME
RIGHT No.
Bauba A
248/2006PR
Hlabirwa
Mining
Investments 256/2006PR
(Pty) Limited

UG2 Reef
Merensky Reef
Chromite Reef
Fault
Road
Railway
River
Limit
Town
Cross Section Lines
DATE
ISSUED

EXPIRY
DATE

7-Jun-06

6-Jul-11

Field camps will be constructed for the drilling. Where necessary,


access roads into the properties will be cut with the aid of bulldozers.
Water for drilling will be transported to site.
The picture illustrates part of the terrain visited during the site visit on
Dingaanskop farm in February 2010.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 9

MR

Steelpoort

Central

The elevation difference between Magneets Vlaakte 541KS and


Dingaanskop 543KS is about a 220m. The areas visited were
accessible through dirt roads as seen in Figure 2. There were some flat
areas that will be easily accessible for rigging up diamond drilling
machines.

InterAction

Mooihoek

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


3.

LEGAL TENURE AND AGREEMENTS


The Prospecting Rights, 248/2006PR and 256/2006PR were issued in
June 2006 to King Moruthane Ben Sekhukhune and Motubatse Ben
Bokgobela, as representatives of Sekhukhune Rhyne Thulare for and
on behalf of the Bapedi Nation. The two Prospecting Rights were ceded

The Main Zone


The Main Zone is generally poorly layered and contains a monotonous
sequence of norite and gabbro-norite, with only minor anorthosite
layers which allow for stratigraphic correlation.

to Bauba on the 9th of April 2007.

The Critical Zone


The Critical Zone, which lies below, contains well defined, and easy to
correlate, layers which can be broadly sub-divided into the rock types
dunite, harzburgite, pyroxenite, norite, anorthosite and chromitite.
These layers have both sharp and gradational contacts and progress
through subtle variations to produce leucocratic and melanocratic
variations of medium grained rocks.

Both Rights are due to expire on the 6th of July 2011. Absolute has now
entered into a binding agreement with Bauba where Absolute will hold a
60% direct and indirect share in Bauba (Table 1).

FIGURE 3: CENTRAL CLUSTER GEOLOGY ALONG THE EASTERN BIC


Lebowa Granite Suite
Alluvium
Upper Zone
Main Zone
Merensky Reef
UG2 Reef
Upper Critical Zone
Lower Critical Zone
Chromite Reef
Lower Zone
Southern Facies Lower Zone
Marginal Zone
UG2 Reef
Merensky Reef
Cross Section Lines

Anooraq
(Bokoni)

Lesego
Platinum
(Phosiri)
A

A
CR
VMR

Chromite Reef
Vandiferous Reef
Fault
Road
Railway
River
Limit
Town
Chrome Mines
Smelters

EASTERN CHROME MINES


(Chrometco)

SCHOONOORD
462 KS

INDIE
474 KS
ZWITZERLAND
473 KS

Northern Cluster
Project Area

AngloPlat/Anooraq
(Ga Phasha)

FISANT
LAAGTE
506 KS

EASTERN CHROME MINES


(Mecklenburg)

AngloPlat
(Twickenham)

MR

MAGNEETSVLAAKTE
541 KS

Central Cluster
Project Area

D
DINGAANSKOP
543 KS

Jubilee
Platinum

EASTERN CHROME MINES


(Clapham)

Implats
(Marula)

MOOIHOEK

RUSTENBURG LAYERED SUITE:


GROOTVYGENBOOM
204 KT

MERENSKY REEF
Upper
Group

UG2
UG1

Southern Cluster
Project Area

UPPER ZONE
MG4

PYROXENITE MARKER
Middle
Group

MAIN ZONE

MG3
MG2
MG1

LEGEND:

LOWER CRITICAL ZONE


LOWER ZONE

Corporate Reporting & Identity Specialists,


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Steelpoort

LG5

REGIONAL GEOLOGY
The Bauba prospects are located on the eastern limb of the BIC as
shown Figure 3. The limb forms part of three layered mafic-ultramafic
bodies, defined as the northern, western and eastern limbs. These form
an ellipse in plan, some 200km by 370km in extent with granites and
felsic volcanic in the central and southern regions. The Bushveld
Complex exhibits remarkably consistent layering that can be correlated
extensively throughout the geologic expression of the whole complex.
Figure 3 portrays the plan view as well as the vertical representation of
the stratigraphy of the Bauba Project area in relation to the geology of
the Eastern BIC. The units in Table 2 are the units as they have been
described by S. Gain.

InterAction

Bothashoek

EASTERN
CHROME MINES
(Montrose)

Nkwe
Platinum

LG6 & LG6A

MARGINAL ZONE

4.

African Rainbow/
Angloplat
(Modikwa)

Mooihoek

HOUTBOSCH
323 KT

LG7

Lower
Group

F
GENOKAKOP
285 KT

Chromitite
Anorthosite
F
Norite
Pyroxenite

UPPER CRITICAL ZONE

DILOKONG

Scale:

7.5km

In places the rocks are pegmatoidal and can form pipes and
segregations. Later dolerite dykes intruded into faults. The Critical Zone
contains the main economic targets namely the Merensky Reef and the
UG2 chromitite layer.
The Merensky Cyclic Unit and Merensky Reef
The Merensky Cyclic Unit occurs close to the top of the Critical Zone. At
Winnaarshoek this unit consists of a 2-5 meter thick feldspathic
orthopyroxenite that is overlain by norite-leuconorite, spotted
anorthosite and then mottled anorthosite. A similar stratigraphic
sequence is described on Nkwe's Garatau and Maandagshoek. The
Merensky pyroxenite is typically medium-grained, brownish-gray, and
can be described as feldspathic orthopyroxenite.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 10

75

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


TABLE 2: STRATIGRAPHIC ZONES OF THE RUSTENBURG LAYERED SUITE
UNIT

THICKNESS

Upper Zone

Varies

Main Zone

3,900m

Upper Critical
Zone

DOMINANT LITHOGLOGY

DESCRIPTION

Gabbros with banded anorthosite and


magnetite layers.
Norite, gabbro-norite, anorthosite and
minor pyroxenite.

No chilled contact with the hanging wall rocks,


which consist of rhyolites and granophyres.
Comprises half of the RLS. Banding and layering
not well developed.
The base of the UCZ marked by cumulus
plagioclase. Norites dominate the UCZ, with
subordinate pyroxenites and anorthosites present
at intervals through the sequence.

Layered pyroxenites, norites,


anorthosites and chromitites.

1,400m

Chromititeseams occur in three distinct groupings.


The LG series of seams occur exclusively in the
Lower Critical Zone, the MG series of seams
straddle the contact between the Lower and UCZ,
whereas the UG2 group of seams occur within
the UCZ. EconomicPGEmineralisationis hosted in
the Merensky Reef and UG2, a laterally continuous
pyroxenite unit containing PGE and base metal
sulphide mineralisation.

Later Dykes, Pipes and Structural Setting


A detailed aeromagnetic survey, under the
supervision of GAP Geophysics, was
conducted on the Garatau during 2007. Line
spacing was 50m and the ground clearance
was 20-30m. This work, together with diamond
drilling, has allowed for the production of a map
in which the general structural setting is
defined. S. Gain outlines that this work has
determined the following:-

both the Merensky Reef and the UG2 dip


constantly at angles varying from 6-8W.
Indications are that dip reduces with depth
as the measurements on Maandagshoek
showed an average dip of 9-10W;
!
the airborne magnetic information,
Thickness varies and thins over basement highs.
Varies ,
The most complete exposure is in the northeastern
combined with SPOT and conventional
reaches a
Cyclically layered units of duniteLower Zone
part of the Eastern Limb of the RLS which occurs
maximum of hartzburgite.
airborne photography and ground
as a series of dunite-harzburgite cyclically layered
1,700m
mapping, show the strike of the layering to
units.
Several
Contamination of the basic magmas by the
be NNW-SSE;
metres to
Unlayered, heterogeneous ultramafic enclosing host rocks. Sedimentary rock fragments
!
dykes of a Karoo to post-Karoo age occur
Marginal Zone
hundreds of
rocks mostly norites.
are contained as xenoliths in the lower portions.
in the region. Two prominent dykes on
metres
Exposures of this zone are poor.
Garatau trend N-S and show a positive
Detailed microscopic studies have shown the feldspathic pyroxenite to
magnetic polarity. The dykes are commonly
consist of medium-grained (1-30mm) orthopyroxene with intercumulus
vertical to sub-vertical. If there is a dip, it is towards the east;
plagioclase. This rock can exhibit both poikilitic and porphyritic textures
!
the dolerite dykes intrude along fault lines and structural zones of
due the presence of variably distributed, oikocrysts (10-20mm) of
weakness. Displacements (faulting) are generally minimal,
clinopyroxene. Two thin chromitite layers occur to the top of the
although one dyke on Garatau shows a 65m normal throw; and
orthopyroxenite. At Garatau the lower stringer is defined as the bottom
!
various ultramafic pipes occur on Maandagshoek and Garatau.
reef contact or (BRC) and the top reef contact (TRC). The TRC
There is no information on their composition and whether they have
occurs some 1,8m above the BRC (Winnaarshoek). The BRC is 1been tested for their PGE content.
25mm thick and is generally less persistent than the 1-25mm thick TRC
which is commonly present and laterally persistent. Sulphide
The Genesis of the PGE sulphide Mineralisation
mineralization is associated with both chromitite layers and can
The origin of the PGE mineralisation in the BIC has been investigated
comprise up to 2% of the mode. The best combination of sulphide and
for 100 years and remains a matter of debate. A possibility exists that
associated PGE mineralization occurs for about a metre below the
PGE's are concentrated in primary basaltic to komatiitic composition
TRC. Diffuse segregations and selvages of pegmatoidal pyroxenite
magma when a high degree of partial melting (30%) of the upper mantle
occur above the TRC and sometimes below the BRC.
occurs. Within this primary melt, some mechanism to induce sulphide

Critical Zone

Pyroxenite inter-layered with


hartzburgite and chromitite.

UG2 chromitite layer


The UG2 chromitite layer (UG2) is located some 350-360m below the
Merensky Reef (Gain, 1995). The following description of the UG2
pertains to work conducted on Garatau by Nkwe Platinum, but is typical
for this part of the Bushveld Complex. The UG2 is a composite layer
commonly, but not always, underlain by a basal pegmatoid. This is
overlain, through a dimpled contact, by a massive chromitite layer
which is 0,5 to 0,8m thick. This massive chromitite layer consists of fine
grained chromite grains with intercumulus orthopyroxene and
plagioclase and commonly has a sharp and planar upper contact. The
silicate minerals, found in the chromitite layer, form irregularly
distributed crystals which poikilitically enclose the chromite and form
mottles up to 15mm in diameter.

saturation was active to produce a sulphide liquid which segregates


from the primary magma. Magma mixing, crustal contamination and
fractional crystallisation are the most important processes known to
induce sulphide saturation in magma during intrusion.
Once sulphide saturation of magma was reached, a sulphide liquid
segregated from the primary magma and strong partitioning of PGE's,
Ni and Cu into this segregated liquid took place. It is has been
suggested that these sulphide droplets act as a scavenging medium for
the PGE's and the droplets collect on the floor of the magma chamber
where the ore-bearing layers form (Eales, 2001).
5.

The UG2 has up to 3 chromitite stringers above which are enclosed


within a fine- to medium-grained feldspathic orthopyroxenite forming a
composite package, 0,10-0,15m thick. PGE mineralization is
associated with very meager sulphide (<1% of the mode) and increases
towards the top and bottom of the chromitite layer. It can also occur
within the overlying chromitite stringers and the basal pegmatoid.

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LOCAL GEOLOGY
Reconnaissance mapping carried out has revealed that the farms lie in
the Main and Upper Zones of the BIC. The Critical Zone which is known
to host both PGE targets, the Merensky Reef and the UG2, lies directly
below the Main Zone.
Throughout the BIC the PGE and other mineral layers are tabular
bodies extending laterally over hundreds of square kilometres, resulting
in extensive mineral resources whose continuity has been established
over years of exploration and mining.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 11

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
Using exploration information from public domain of companies
surrounding the Bauba properties a series of reef contours were
constructed by S. Gain and used to predict the behaviour of the
mineralisation on the Central Cluster. These showed that the reefs
should have shallowed to dips of about 11 to 12to the west compared
to the Northern Cluster.

Merensky and UG2 mines in the area and the extent to which Absolute's
strategy to explore the deeper extension of the existing operation is
technically feasible.
7.

The Central Cluster area is traversed by faults and dykes and has a
known presence of unconformable pegmatoids on adjacent properties.
Destructive intrusions in the form of IRUP (iron rich replacement
pegmatites) are recorded on the adjacent Marula Platinum property.
These together with potholes have been known to disturb the Critical
Zone on the Eastern limb.

The parameters were then used to estimate a reconnaissance estimate


for the Central Cluster in. The areas used are as given through the
Deeds' office website. Table 4 below.

However in the Northern to Central Clusters, two diapiric structures, the


Paradys and the Phoshiri domes are thought to have deformed the
Critical, Main and Upper Zone rocks close to their outer edges,
providing an uplift of the ore host rocks closer to surface than the norm
for the area. S. Gain predicts that this could influence the continuity of
the mineralization through structural influences, especially closer to the
western sides of the Central Cluster. Absolute will assess this area
through their exploration program.

8.

DEPOSIT TYPE AND MINERALISATION


The mineralised Merensky Reef and UG2 are magmatic and layered
segregation deposits containing economic quantities of PGE's and
base metals. The PGE's are associated with chromite and base metal
sulphides.

EXPLORATION WORK STRATEGY


Desk top studies have already been carried out by S. Gain and
Snowden of the Clusters and surrounding properties. Due to the
remoteness of the area under review, a base camp will have to be
constructed and access roads to some of the drill sites be constructed
by bulldozers. The 1:10,000 topographic map has been used to lay
boreholes and roads for the Central Cluster.
Reconnaissance mapping will be carried out in conjunction with the
diamond drilling. S. Gain suggests that field traverses using a portable
magnetometer be conducted to better define the positions of dykes,
faults and ultra-mafic pegmatoids. The results obtained will be plotted
onto a 1:10,000 maps.
S. Gain proposes a vibroseis survey to the eastern edge of the Paradys
structure along well established roads in Dingaanskop farm to
determine the depth of the target layers.

Depth of Mineralisation
The first intersections of the Merensky are expected to be between
1,400m and 2,400m below surface under the Central Cluster and the
parting between the Merensky and UG2 is expected to be 400m.

A phased diamond drilling programme for four boreholes, MT-001 to


MT-004 was designed by S. Gain. Wire-line logging and relative density
analyses will be included. The mother holes are to be deflected into four
short deflections from 6, 12, 15 and 24m above reef intersections.
These holes should go at least 1m into the footwall of the reef. The plan
view is shown in Figure 5.

Figure 4 illustrates a schematic cross sectional vertical view of the


Eastern BIC including the Bauba Central Cluster PGE prospects. The
section through line C-D is important to illustrate the disposition of the
chrome,

Central
Cluster

Fernkloof

W
C

Quartzhill

2000m

FIGURE 4 : SCHEMATIC E-W CROSS SECTION OF THE EASTERN BIC INCLUDING THE
CENTRAL CLUSTER
Tjate

Twickenham

LEGEND:

E
D

Implats
(Marula)

Main Zone

mamsl

0m

-2000m

6.

EXPLORATION TARGETS
Surrounding properties and projects were studied and used to predict
the resource parameters for the Central Cluster target area. Information
was obtained from reports by S. Gain, Qinisele internal reports,
Snowden as well as projects' and mines' reports posted on the public
domain. The summary of these is shown in Table 3.

4,8km

Merensky Reef
UG2 Reef
Chromitite Layer

Lower Zone
Marginal Zone

5km

Scale:

Upper/Lower
Critical Zone

1:100 000

TABLE 3: EXPLORATION TARGETS FOR THE CENTRAL CLUSTER AS DEDUCED FROM THE EASTERN NEIGHBOURS
EXPECTED
DIPS
REEF
0
MR
12 WSW
UG2
MR
160W
UG2
MR
11 0 to 120W
UG2

PROPERTY
Tjate Project
Twickenham Mine
Central Cluster

REEF DEPTH (m)


MIN
722

1,400

MR-UG2
WIDTH
GEO
GRADE
MAX PARTING (m) (m)
RD LOSS (%) 4E (g/t)
900
1.01 2.93
25
4.00
400
0.98 3.85
30
6.00
1.00
5.04
5.77
2,400
1.01 2.93
25
4.52
0.98 3.85
30
5.89

TABLE 4: EXPLORATION TARGET ESTIMATE FOR THE CENTRAL CLUSTER

FARM NAME
Central Cluster*
Magnetsvlakte
Dingaanskop
TOTAL

AREA
(ha)

RD

1,129 3.39
1,036 3.39
2,164

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WIDTH
(m)
1.01
1.01

MERENSKY
GRADE
(Mt)
4E (g/t)
38.5
35.3
73.7

4.52
4.52

GEO
MR
LOSS (%) (Moz)
25
25

*The potential quantity, quality and


content as expressed above are
conceptual in nature and there has
been insufficient exploration to
define Mineral Resources and it is
13.5 unclear if further exploration will
12.4 result in the determination of a
25.9 Mineral Resource.

UG2
WIDTH
GRADE GEO
UG2 TOTAL
RD (m)
(Mt) 4E (g/t) LOSS (%) (Moz) (Moz)

5.5 3.85
5.1 3.85
10.6 3.85

0.98
0.98

42.6
39.1
81.7

5.89
5.89

30
30

8.0
7.3
15.3

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 12

77

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


FIGURE 6: PROPOSED BOREHOLE SITE FOR MT003
ON DINGAANSKOP FARM

FIGURE 5: PROPOSED BOREHOLE POSITIONS


FOR THE CENTRAL CLUSTER
LEGEND

Central Cluster
Project Area

Project Area
Chromitite Reef
UG2 Reef
Merensky Reef
Farm Boundary
Boreholes

MT - 001
MAGNEETSVLAAKTE
541 KS
MT - 002
MT - 003

Jubilee
Platinum

MT - 004

DINGAANSKOP
543 KS

Scale:

3km

Nkwe
Platinum

Tjate Project
The project area lies down-dip between Twickenham and the Central
Cluster and is owned by Jubilee. It consists of these farms; Tjate 249,
Fernkloof 539 and Quartzhill 542. Diamond drilling to date has
intersected both reefs. Snowden reports that the Merensky has been
intersected at depths between 722 to 900m and the UG2 between
1,076 and 1,290m. The average separation in the area is about 400m.
The two reefs are reported to be similar to the Twickenham ones. The
entire sequence of rocks at Tjate strikes south-southeast and dips at
12 south-westerly.

The borehole, MT003, will be sited on an accessible and flat area as


shown in Figure 6. The picture was taken looking north from
Dingaanskop farm. The borehole depths for the Central Cluster are
expected to be between 1,800 and 2,200m each in length. Hence a total
of 8,800m is budgeted for in the Central Cluster holes.
All the reef drilling, sampling, core storage and logging will be carried
out in accordance with the accepted industrial QA/QC normal practices
as defined in Table 1 of the SAMREC Code.
9.

ESTIMATED EXPLORATION COSTS


S. Gain could provide the cost to drill the four holes on the Central
Cluster. The cost amounted to ZAR18.08m. The costs for the vibroseis
surveys are not included.

Destructive intrusions in the form of IRUP (iron rich replacement


pegmatites) are recorded on the adjacent Marula Platinum property.
These are pipe like bodies that take up any shape across or concordant
to the layers and cause dramatic displacement in the dips and strike of
the ore bodies. Sometimes they cause partial to total replacement of the
reefs, mineral alterations in the UG2 from chromites to magnetites and
sulphidic PGE minerals to ferro-platinum PGE's. The destructive nature
of these bodies is such that they have influences up to 300m away from
their location. Geological losses in this area have been estimated to be
25% because of these bodies. Apparent thicknesses recorded on
exploration results range between 0.91 and 1.07m for the Merensky
and 0.88 to 1.12m for the UG2.

TABLE 5: APPROXIMATE COSTS FOR DRILLING FOUR HOLES IN THE CENTRAL


CLUSTER.
CENTRAL CLUSTER No. OF DEPTH PERTOTAL COST ZARm
COST ZARm
COST ITEM
HOLES HOLE (m) METRES EXCL VAT
INCL VAT
Geology Staff
1.34
1.53
Road building
2.00
2.28
Diamond Drilling
11.00
12.54
4
2,200
8,800
Analytical costs
0.87
0.99
other
0.65
0.74
TOTAL
15.86
18.08

10.

A study was carried out to show the shaft depths of existing mines and
expected shaft depths of future mines. The Bauba Clusters lie in the
middle range as shown in Figure 7.

BRIEF REVIEW OF NEIGHBOURING PROPERTIES


Twickenham Platinum Mine
The 100% Anglo Platinum owned underground mine lies due west of
the Central Cluster. The mine is classified as a project in execution,
producing only about 10,000 tonnes a month. The local geology is very
typical as that described for the Eastern Limb. The average recorded

true dip of the orebody is about 16 SW and stoping widths of about


0.90m. Table 6 and Table 7 summarise the Reserve and Resource
figures for Twickenham as at the end of year 2009.
TABLE 6: MINERAL RESOURCE BY MINE/PROJECT AS AT 31ST December 2009
MINE/PROJECT
Twickenham Platinum Mine

OWNERSHIP
100% Anglo Platinum

CATEGORY (Mt)
Proved
Probable
TOTAL

MERENSKY
4E PGE (g/t) 4E (Moz)

UG2
(Mt)
4E PGE (g/t) 4E (Moz)
1.0
4.99
0.2
73.5
4.96
11.7
74.5
4.96
11.9

ST

TABLE 7: MINERAL RESOURCE BY MINE/PROJECT AS AT 31 December 2009


MINE/PROJECT
Twickenham Platinum Mine

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OWNERSHIP
100% Anglo Platinum

MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
23.5
5.02
3.80
Indicated
29.9
5.20
5.00
Inferred
108.0
5.00
17.40
TOTAL 161.4
5.04
26.20

UG2
(Mt)
4E PGE (g/t) 4E (Moz)
5.9
6.34
1.2
25.8
6.21
5.1
133.8
5.66
24.3
165.5
5.77
30.7

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 13

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Central Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
11.

EFFECT OF MINERALISATION DEPTH ON SHAFT DEPTHS


A study was carried out by Snowden to show the shaft depths of existing
mines and expected shaft depths of future mines. The Central Cluster
lies in the middle range as shown in Figure 7.
FIGURE 7: COMPARATIVE SHAFT DEPTHS OF EXISTING AND
PLANNED PROJECTS

Nkwe
(Inferred)

Jubilee
(Feasibility)

Marikana

Bauba (Central Cluster)

Union Richard

Amandebult #3

Northam #1

Bauba (Northern Cluster)

Impala #17

Amandebult

500
1000

Northam #2

DEPTH (m)

1500

Bauba (Southern Cluster)

SHAFT DEPTH
0

The reefs have partings in excess of 350m and this may have advantages in
that the two reefs can be co-extracted with minimum effect on mining
sequences and geotechnical properties between the reefs. as part of the
second generation group of mines, the Central Cluster would be considered
an averagely deep mine when the second generation mines come into
production in the future.
Though collectively the Clusters are considered potentially deep mines,
South Africa has the capabilities and the technology to mine beyond
2,000m to 4,000m below surface as evidenced by the current deep mining
in the Witwatersrand gold mines.
13. REFERENCE TO RISK IN THE FULL CPR
As of the effective date, Venmyn is not aware of any significant risk that
could affect Absolute's business plan and production plans other than the
normal risks associated with a mining of the PGE's, construction and
operation of a PGE processing plant as detailed in Section 18 of the CPR.

2500

2000

14. COMPETENT PERSONS DECLARATION

12.

CONCLUSIONS AND RECOMMENDATIONS

The Central Cluster is situated within a prime segment of the Eastern Limb
of the BIC, where numerous neighbouring companies are prospecting and
successfully mining PGE's from the Merensky Reef and UG2. The
proximity of the Central Cluster to the Tjate, well drilled and explored
properties, would expedite the understanding of the geology and
mineralisation in this area.
The exploration approach for the project is systematic and appropriate for
the style of mineralisation; and the estimated target is of a sufficient quantity
to support the exploration programme being suggested. Prospecting rights
are still valid and the company should initiate exploration. Absolute has
already got plans in place to explore the target fully.

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Venmyn is an independent advisory company. Its consultants, have


extensive experience in preparing competent persons', technical advisors'
and valuation reports for mining and exploration companies. Venmyn's
advisors have, collectively, more than 75 years of experience in the
assessment and evaluation of mining projects and are members in good
standing of appropriate professional institutions. The signatories, advisors
and associates to this report are qualified to express their professional
opinions on the values of the mineral assets described. To this end,
Competent Persons and Competent Valuators Certificates are presented in
the full CPR.
Neither Venmyn, its staff, nor associates have or have had any interest in
this project capable of affecting their ability to give an unbiased opinion and
have not and will not, receive any pecuniary or other benefits in connection
with this assignment, other than normal consulting fees. Absolute Holdings
Limited has warranted in writing that it has openly provided all material
information to Venmyn, which, to the best of its knowledge and
understanding, is complete, accurate and true.
Venmyn have prepared this Section 12 Executive Summary from the
Independent Competent Persons' Report on the Northern Cluster of the
Bauba Mineral Platinum Properties for Absolute Holdings Limited and state
that the Executive Summary is a true reflection of the full CPR.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 14

79

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
TABLE OF CONTENTS
! Locality, Property Description And
Neighbouring Properties
! Physiography Climate And Access
! Legal Tenure And Agreements

! Regional Geology

! Exploration Work Strategy

! Local Geology

! Estimated Exploration Costs

! Deposit Type And Mineralisation

! Effect Of Mineralisation Depth To Shaft Depths

! Reconnaissance Mineral Resource

! Brief Review Of Neighbouring Properties


! Conclusions And Recommendations

Statement

These documents comply with the Executive Summary requirements of Section 12.9 (h)

KEY FEATURES

Competent Persons and Competent Valuators:

Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA

Compiled by:

Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA

Effective Date :

14th April 2010.

Prepared For :

Absolute Holdings Limited, (Absolute).

Purpose:

This is an Independent assessment and verification of Bauba's PGE prospective properties on behalf of
Absolute Holdings. Absolute's strategic objective is to initially build a 0.35Moz p.a. PGE mine within the next
10 years and ramp it up to 1 Moz p.a. within 20 years. The Company has entered into a binding agreement
with Bauba A Hlabirwa Mining Investments (Pty) Limited (Bauba) whereby Absolute will acquire a 60%
share in the PGE explorer.
Technical Reports as supplied by Qinisele Resources including Press releases of 16th February 2010

Sources of Information :

Business Day article, Absolute takes 60% stake in the PGE explorer Bauba, as well as reports from the
public domain of adjacent mineral properties. Property areas were obtained from Win Deed, a Deeds and
Office Enquiry website.
Personal Inspection :

A site inspection was carried out on 25th February by Venmyn, S. Gain from Gain Consulting cc and Qinisele

Reliance on Other Experts:

Stephen Gain (Pr.Sci.Nat Msc), Snowden, Qinisele Resources.

Property Description and Location:

Bauba holds prospecting rights, in the North Eastern Bushveld Igneous Complex (BIC), over nine farms

Resources personnel. The Southern and Central Clusters were visited at the time.

extending over an area of approximately 56km in length and 6km in width (approximating 14,480ha). The

LOCATION WITHIN SOUTH AFRICA

farms have been grouped into three areas namely the Northern, Central and Southern Clusters. The

PROJECT
AREA

Johannesburg
Durban

Southern Cluster is being dealt with in this report. It consists of Groot Vygenboom 284 KT, Genokakop
285KT and Houtbosch 323 T.The total area covers just over 4,626ha. All the Bauba farms lie along the Leolo
mountain range in the Limpopo Province approximately 40km northwest of the Limpopo Province town of
Steelpoort and 245km northeast of Johannesburg. To the east and up-dip, the Bauba mineral assets are
surrounded by several current operating mines and development projects.

Cape Town

License Status:

Prospecting Right No. 256/2006PR due to expire on the 6th July 2011.

Ownership Details:

Bauba owns the prospecting rights. These were ceded to Bauba, on 9th April 2007, by King Moruthane Ben
Sekhukhune and Motubatse Ben Bokgobela representing Sekhukhune Rhyne Thulare for and on behalf of
the Bapedi Nation. Absolute Holdings is in the process of acquiring 60% of the PGE explorer, Bauba.

Topography and Climate:

The Southern Cluster lies in rugged terrain inter-spaced with flat valleys. Elevations lie between 1,487m in
the valleys and 1,886m on the peaks. The elevation difference between the three farms forming the Southern
Cluster is about 400m. The climate of the area is typical of sub-tropical Highveld with warm moist summers
and cool dry winters. The rainfall on the escarpments is higher at 700mm compared to about 500mm in the
valleys. Temperatures recorded at Steelpoort vary between 300C and 17.6 0C in January and 21.60C to 3.8 0C
in July. Extremes of 40 0C and -2.3 0C have also been recorded.

Infrastructure and Accessibility:

The farms are relatively easy to access but field camps will have to be constructed. Access roads will be cut

Geological Setting and Deposit Type:

The Bauba prospects are located on the North Eastern Limb of the BIC, which lies on the eastern portion of

with the aid of bulldozers and water for drilling will have to be taken to site using bowsers.
the world's largest layered igneous intrusion and known to host more that 80% of the world's PGE's and

BUSHVELD IGNEOUS COMPLEX (BIC)

associated base and precious metal deposits. The farms lie down dip of existing mines and exploration
Northern Limb
Eastern Limb

Mokopane

Western Limb
Steelpoort

PROJECT
AREA
Rustenburg

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Chromitite, lies directly below the Main Zone. These two layers are expected to be at least a 1,050m below
o

surface and between 350 to 365m apart, with dips ranging between 7 W and 8 W in the Southern Cluster.
Middelburg

Pretoria
SCALE:

projects. Reconnaissance mapping carried out to-date shows that the farms lie in the Main and Upper Zones
of the BIC. The Critical Zone which is known to host both PGE targets, the Merensky Reef and the UG-2

100km

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 15

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
1.

LOCALITY, PROPERTY DESCRIPTION AND NEIGHBOURING


PROPERTIES
The Bauba farms lie along the Leolo mountain range in the Limpopo
Province, approximately 40km north-northwest of the Limpopo
Province town of Steelpoort and 245km northeast of Johannesburg.
The farms are surrounded, by operating PGE mines and development
projects on the eastern side. The Southern Cluster, in particular, lies
due west and down dip of Nkwe PGE prospects and Modikwa
Platinum Mine, which is owned by Anglo Platinum and ARM. The
location of these properties is shown in Figure 1.

The photograph in Figure 2, taken in February 2010 during a site visit,


serves to illustrate how some parts of the Southern Cluster can easily
be accessed using dirt roads that are already in place.
The climate of the area is typical of sub-tropical Highveld with warm
moist summers and cool dry winters. The rainfall on escarpments is
higher at annual averages of 700mm compared to about 500mm in the
valleys. Precipitation is usually in the form of thunderstorms during
summer. The sudden downpours pose some risk of flooding in lowlying areas. Temperatures recorded at Steelpoort vary between 300
and 17.60C in January and 21.60 to 3.80C in July. Extremes of 400 and -

2.

PHYSIOGRAPHY, ACCESS AND CLIMATE


The Southern Cluster lies along the Leolo mountain range in the
Limpopo Province, with elevations lying between 1,487m and
1,886m. The elevation difference between Groot Vygenboom 284 KT,
Genokakop 285KT and Houtbosch 323KT is about 400m. There are
some inter-mountain flat lying valleys where dirt roads are used by
vehicles and the local people to access the villages and will be used to
access some of the drilling sites. Accessibility to some of the drilling
sites could be a problem. Road building will be necessary.

2.30 C have also been recorded.


The mostly moderate climate means that exploration and mining
operations can be undertaken throughout the year, with no
extraordinary measures required. Field camps will be constructed for
the drilling.
Where necessary, access roads into the properties will be cut with the
aid of bulldozers. Water for drilling will be transported to site.

FIGURE 1: LOCATION MAP SHOWING THE BAUBA SOUTHERN CLUSTER ON THE EASTERN BIC
FIGURE 2. PICTURE TAKEN ON GENOKOP FARM
SHOWING THE ROAD THAT WILL BE USED TO
ACCESS THE SOUTHERN CLUSTER

Anooraq
(Bokoni)

Northern Cluster
Project Area

SCHOONOORD
462 KS

Lesego
Platinum
(Phosiri)

disp
port uted
ion

EASTERN CHROME MINES


(Chrometco)

AngloPlat/Anooraq
(Ga Phasha)

EASTERN CHROME MINES


(Mecklenburg)

INDIE 474 KS
ZWITZERLAND 473 KS

AngloPlat
(Twickenham)
FISANT LAAGTE 506 KS
MAGNEETSVLAAKTE 541 KS

Jubilee
Platinum

Central Cluster
Project Area

EASTERN CHROME
INES
(Clapham)

Implats
(Marula)

DINGAANSKOP 435 KS

MOOIHOEK
GROOTVYGENBOOM
Anglo Platinum Operating Mine
204 KT
Anglo Platinum Prospecting
E
Right/Option
Anooraq/Anglo Platinum
Southern Cluster
Project Area
Operating Mine
GENOKAKOP
Bauba Project Areas
285 KT
(Absolute Holdings Ltd)
Implats/Misc Operating Mine
HOUTBOSCH
African Rainbow/Anglo Platinum
323 KT
Operating Mine
Jubilee
Lesego
Nkwe Platinum
TABLE 1: LEGAL TENURE
Anooraq
FARM
Chrome Mines
COUNTRY PROVINCE CLUSTER
NAME
Smelters

South
Africa

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Limpopo

Southern

DILOKONG

Mooihoek

African Rainbow/
Angloplat
(Modikwa)

EASTERN
CHROME MINES
(Montrose)

Nkwe
Platinum

FARM
No.

Bothashoek

MR

CR

Steelpoort
7.5km

Scale:

AREA
(ha)

Grootvygenboom 284KT

1,610

Genokakop

285KT

1,304

Houtbosch

323KT

1,712

APPLICATION PROSPECTING
NAME
RIGHT No.
Bauba A
Hlabirwa
Mining
Investments
(Pty) Limited

256/2006PR

UG2 Reef
Merensky Reef
Chromite Reef
Fault
Road
Railway
River
Limit
Town
Cross Section Lines
DATE
ISSUED

EXPIRY
DATE

7-Jun-06

6-Jul-11

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 16

81

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


The Critical Zone
The Critical Zone, which lies below, contains well defined, and easy to
correlate, layers which can be broadly sub-divided into the rock types
dunite, harzburgite, pyroxenite, norite, anorthosite and chromitite.
These layers have both sharp and gradational contacts and progress
through subtle variations to produce leucocratic and melanocratic
variations of medium grained rocks. In places the rocks are
pegmatoidal and can form pipes and segregations. Later dolerite
dykes intruded into faults. The Critical Zone contains the main
economic targets namely the Merensky Reef and the UG2 chromitite
layer.

The Prospecting Right 256/2006PR was issued in June 2006 to King


Moruthane Ben Sekhukhune and Motubatse Ben Bokgobela, as
representatives of Sekhukhune Rhyne Thulare for and on behalf of the
Bapedi Nation. The Prospecting Right was ceded to Bauba on the 9th
April 2007. This is due to expire on the 6th July 2011. Absolute has now
entered into a binding agreement with Bauba where Absolute will hold
a 60% direct and indirect share in Bauba.
3.

REGIONAL GEOLOGY
The Bauba prospects are located on the eastern limb of the BIC as
shown in Figure 3. The limb forms part of three layered maficultramafic bodies, defined as the northern, western and eastern limbs.
These form an ellipse in plan, some 200km by 370km in extent with
granites and felsic volcanic in the central and southern regions.
The BIC exhibits remarkably consistent layering that can be
correlated extensively throughout the geologic expression of the
whole complex. Figure 3 portrays the plan view as well as the vertical
representation of the stratigraphy of the Bauba Project area in relation
to the geology of the Eastern BIC. The units in Table 2 are the units as
they have been described by S. Gain.

The Merensky Cyclic Unit and Merensky Reef


The Merensky Cyclic Unit occurs close to the top of the Critical Zone.
At Winnaarshoek this unit consists of a 2-5 meter thick feldspathic
orthopyroxenite that is overlain by norite-leuconorite, spotted
anorthosite and then mottled anorthosite. A similar stratigraphic
sequence is described on Nkwe's Garatau and Maandagshoek. The
Merensky pyroxenite is typically medium-grained, brownish-gray, and
can be described as feldspathic orthopyroxenite. Detailed
microscopic studies have shown the feldspathic pyroxenite to consist
of medium-grained (1-30mm) orthopyroxene with intercumulus
plagioclase.

The Main Zone


The Main Zone is generally poorly layered and contains a monotonous
sequence of norite and gabbro-norite, with only minor anorthosite
layers which allow for stratigraphic correlation.

FIGURE 3: SOUTHERN CLUSTER GEOLOGY ALONG THE EASTERN BIC


Lebowa Granite Suite
Alluvium
Upper Zone
Main Zone
Merensky Reef
UG2 Reef
Upper Critical Zone
Lower Critical Zone
Chromite Reef
Lower Zone
Southern Facies Lower Zone
Marginal Zone
UG2 Reef
Merensky Reef
Cross Section Lines

Anooraq
(Bokoni)

Lesego
Platinum
(Phosiri)
A

A
CR

VMR

Chromite Reef
Vandiferous Reef
Fault
Road
Railway
River
Limit
Town
Chrome Mines
Smelters

EASTERN CHROME MINES


(Chrometco)

SCHOONOORD
462 KS

INDIE
474 KS
ZWITZERLAND
473 KS

Northern Cluster
Project Area

AngloPlat/Anooraq
(Ga Phasha)

FISANT
LAAGTE
506 KS

EASTERN CHROME MINES


(Mecklenburg)

AngloPlat
(Twickenham)

MR

MAGNEETSVLAAKTE
541 KS

Central Cluster
Project Area

D
DINGAANSKOP
543 KS

Jubilee
Platinum

Implats
(Marula)

EASTERN CHROME MINES


(Clapham)

MOOIHOEK

RUSTENBURG LAYERED SUITE:


GROOTVYGENBOOM
204 KT

MERENSKY REEF
Upper
Group

UG2
UG1

Southern Cluster
Project Area

UPPER ZONE
MG4

PYROXENITE MARKER
Middle
Group

MAIN ZONE

MG3
MG2
MG1

DILOKONG
F

E
GENOKAKOP
285 KT

LEGEND:

African Rainbow/
Angloplat
(Modikwa)

Mooihoek

Bothashoek

EASTERN
CHROME MINES
(Montrose)

Chromitite
Anorthosite
F

HOUTBOSCH
323 KT

Norite
Pyroxenite

UPPER CRITICAL ZONE


LOWER CRITICAL ZONE
LOWER ZONE

LG7

Lower
Group

Nkwe
Platinum

LG6 & LG6A

MARGINAL ZONE

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Steelpoort

LG5

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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 17

Scale:

7.5km

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
This work, together with diamond drilling, has
allowed for the production of a map in which the
general structural setting is defined. S. Gain
outlines that this work has determined the
following:-

TABLE 2: STRATIGRAPHIC ZONES OF THE RUSTENBURG LAYERED SUITE


UNIT

THICKNESS

Upper Zone

Varies

Main Zone

3,900m

Upper Critical
Zone

DOMINANT LITHOGLOGY

DESCRIPTION

Gabbros with banded anorthosite and


magnetite layers.
Norite, gabbro-norite, anorthosite and
minor pyroxenite.

No chilled contact with the hanging wall rocks,


which consist of rhyolites and granophyres.
Comprises half of the RLS. Banding and layering
not well developed.
The base of the UCZ marked by cumulus
plagioclase. Norites dominate the UCZ, with
subordinate pyroxenites and anorthosites present
at intervals through the sequence.

Layered pyroxenites, norites,


anorthosites and chromitites.

both the Merensky Reef and the UG2 dip


constantly at angles varying from 6-8W.
Indications are that dip reduces with depth as the
Chromititeseams occur in three distinct groupings.
measurements on Maandagshoek showed an
The LG series of seams occur exclusively in the
average dip of 9-10W;
Lower Critical Zone, the MG series of seams
1,400m
straddle the contact between the Lower and UCZ,
!
the airborne magnetic information, combined
Pyroxenite inter-layered with
Critical Zone
whereas the UG2 group of seams occur within
with SPOT and conventional airborne
hartzburgite and chromitite.
the UCZ. EconomicPGEmineralisationis hosted in
photography and ground mapping, show the
the Merensky Reef and UG2, a laterally continuous
pyroxenite unit containing PGE and base metal
strike of the layering to be NNW-SSE;
sulphide mineralisation.
!
dykes of a Karoo to post-Karoo age occur in the
Thickness varies and thins over basement highs.
region. Two prominent dykes on Garatau trend
Varies ,
The most complete exposure is in the northeastern
N-S and show a positive magnetic polarity. The
reaches a
Cyclically layered units of duniteLower Zone
part of the Eastern Limb of the RLS which occurs
maximum of hartzburgite.
dykes are commonly vertical to sub-vertical. If
as a series of dunite-harzburgite cyclically layered
1,700m
there is a dip, it is towards the east;
units.
Several
Contamination of the basic magmas by the
!
the dolerite dykes intrude along fault lines and
metres to
Unlayered, heterogeneous ultramafic enclosing host rocks. Sedimentary rock fragments
Marginal Zone
structural zones of weakness. Displacements
hundreds of
rocks mostly norites.
are contained as xenoliths in the lower portions.
(faulting) are generally minimal, although one
metres
Exposures of this zone are poor.
dyke on Garatau shows a 65m normal throw; and
This rock can exhibit both poikilitic and porphyritic textures due the
!
various ultramafic pipes occur on Maandagshoek and Garatau.
presence of variably distributed, oikocrysts (10-20mm) of
There is no information on their composition and whether they have
clinopyroxene. Two thin chromitite layers occur to the top of the
been tested for their PGE content.
orthopyroxenite. At Garatau the lower stringer is defined as the bottom
reef contact or (BRC) and the top reef contact (TRC). The TRC
The Genesis of the PGE sulphide Mineralisation
occurs some 1,8m above the BRC (Winnaarshoek). The BRC is 1The origin of the PGE mineralisation in the BIC has been investigated
25mm thick and is generally less persistent than the 1-25mm thick
for 100 years and remains a matter of debate. A possibility exists that
TRC which is commonly present and laterally persistent. Sulphide
PGE's are concentrated in primary basaltic to komatiitic composition
mineralization is associated with both chromitite layers and can
magma when a high degree of partial melting (30%) of the upper
comprise up to 2% of the mode. The best combination of sulphide and
mantle occurs. Within this primary melt, some mechanism to induce
associated PGE mineralization occurs for about a metre below the
sulphide saturation was active to produce a sulphide liquid which
TRC. Diffuse segregations and selvages of pegmatoidal pyroxenite
segregates from the primary magma. Magma mixing, crustal
occur above the TRC and sometimes below the BRC.
contamination and fractional crystallisation are the most important
processes known to induce sulphide saturation in magma during
intrusion.

UG2 chromitite layer


The UG2 chromitite layer (UG2) is located some 350-360m below
the Merensky Reef (Gain, 1995). The following description of the UG2
pertains to work conducted on Garatau by Nkwe Platinum, but is
typical for this part of the Bushveld Complex. The UG2 is a composite
layer commonly, but not always, underlain by a basal pegmatoid. This
is overlain, through a dimpled contact, by a massive chromitite layer
which is 0,5 to 0,8m thick. This massive chromitite layer consists of
fine grained chromite grains with intercumulus orthopyroxene and
plagioclase and commonly has a sharp and planar upper contact. The
silicate minerals, found in the chromitite layer, form irregularly
distributed crystals which poikilitically enclose the chromite and form
mottles up to 15mm in diameter. The UG2 has up to 3 chromitite
stringers above which are enclosed within a fine- to medium-grained
feldspathic orthopyroxenite forming a composite package, 0,100,15m thick. PGE mineralization is associated with very meager
sulphide (<1% of the mode) and increases towards the top and bottom
of the chromitite layer. It can also occur within the overlying chromitite
stringers and the basal pegmatoid.

Once sulphide saturation of magma was reached, a sulphide liquid


segregated from the primary magma and strong partitioning of PGE's,
Ni and Cu into this segregated liquid took place. It is has been
suggested that these sulphide droplets act as a scavenging medium
for the PGE's and the droplets collect on the floor of the magma
chamber where the ore-bearing layers form (Eales, 2001).
4.

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LOCAL GEOLOGY
Reconnaissance mapping carried out has revealed that the farms lie in
the Main and Upper Zones of the BIC. The Critical Zone which is
known to host both PGE targets, the Merensky Reef and the UG2, lies
directly below the Main Zone.
Throughout the BIC the PGE and other mineral layers are tabular
bodies extending laterally over hundreds of square kilometres,
resulting in extensive mineral resources whose continuity has been
established over years of exploration and mining. Using exploration
information from public domain of companies surrounding the
Southern Cluster, a series of reef contours was constructed by S. Gain
and used to predict the behaviour of the mineralisation on the farms.
These showed that both the MR and the UG2 reefs should have

Later Dykes, Pipes and Structural Setting


A detailed aeromagnetic survey, under the supervision of GAP
Geophysics, was conducted on the Garatau during 2007. Line
spacing was 50m and the ground clearance was 20-30m.

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shallowed to dips of about 70 to 80 west under the Southern Cluster


farms.

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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 18

83

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
6.

The southern area of the Eastern BIC is traversed by faults and dykes
and has a known presence of unconformable pegmatoids on adjacent
properties. These together with potholes have been known to disturb
the Critical Zone on the Eastern Limb. The precise extent of the
structural complexity of the area will be a focus of the technical
assessment of the area by Absolute.
5.

DEPOSIT TYPE AND MINERALISATION


The mineralised Merensky Reef and UG2 are magmatic and layered,
segregation deposits containing economic quantities of PGE's and
base metals. The PGE's are associated with chromite and base metal
sulphides.

EXPLORATION TARGETS
Surrounding properties and projects were studied and used to predict
the resource parameters for the Southern Cluster target area.
Information was obtained from reports by S. Gain, Qinisele internal
reports, Snowden as well as projects and mines on the public domain.
The summary of these is shown in Table 3.
The parameters were then used to estimate a reconnaissance
estimate for the Southern Cluster in table 4. The areas used are as
given through the Deeds' office website.

7.

Depth of Mineralisation
The Merensky layer is expected to be at least 1,050m to 2,150m below
surface in the Southern Cluster and the parting between the Merensky
and UG2 is expected to be between 350 and 365m. Of the three
Clusters, mineralisation should be closest to surface under the
Southern Cluster.

EXPLORATION WORK STRATEGY


Desk top studies have already been carried out by S. Gain and
Snowden of the Clusters and surrounding properties. Due to the
remoteness of the area under review, a base camp will have to be built
and access roads to some of the drill sites be constructed by
bulldozers. The 1:10,000 topographic map has been used to lay
boreholes and roads for the Southern Cluster.
Reconnaissance mapping will be carried out in conjunction with the
diamond drilling. S. Gain suggests that field traverses using a portable
magnetometer be conducted to better define the positions of dykes,
faults and ultra-mafic pegmatoids. The results obtained will be plotted
onto a 1:10,000 maps. A phased diamond drilling programme was
designed by Snowden and reviewed by S. Gain. Wire-line logging and
relative density analyses of the holes will be included. The mother
holes are to be deflected into four short deflections from 6, 12, 15 and
24m above reef intersections.

Figure 4 illustrates a schematic cross sectional view of the Eastern BIC


including the Southern Cluster PGE prospect. The section is important
to illustrate the disposition of the chrome, Merensky and UG2 mines in
the area and the extent to which Absolute's strategy to explore the
deeper extension of the existing operation is technically feasible. The
figure also illustrates how the reefs outcrop on surface on the adjacent
Nkwe and Modikwa properties.

FIGURE 4: SCHEMATIC E-W CROSS SECTION OF THE SOUTHERN CLUSTER ILLUSTRATING THE MR, UG2 AND CHROMITITE LAYERS IN
THE EASTERN BIC
W

Main Zone
Upper/Lower
Critical Zone

Genokakop
285 kt

Groot
Vygenboom

ASA Metals
(Dilo Kong Chrome)

Angloplats
(Modikwa)

Nkwe

mamsl

Merensky Reef
UG2 Reef
Chromitite Layer

2000m

LEGEND:
Upper Zone

0m

Marginal Zone

-2000m

Lower Zone
0

3,9km

5km

Scale:

1:100 000

TABLE 3: EXPLORATION TARGETS FOR THE SOUTHERN CLUSTER AS DEDUCED FROM THE EASTERN NEIGHBOURS

Modikwa
Nkwe
Southern Cluster

MR-UG2
WIDTH
GEO
GRADE
PARTING (m) (m)
RD LOSS (%) 4E (g/t)
1.00
4.43
0.58 3.72
30
5.97
700
1.00 3.35
17
4.74
350-365
1,100
1.20 3.75
17
5.44
2,150
1.00 3.35
17
4.59
400
0.89 3.75
24
5.71

REEF DEPTH (m)


MIN
MAX

EXPECTED
DIPS
REEF
MR
100W
UG2
MR
UG2
MR
70 to 8 0W
UG2 70 to 8 0W

PROPERTY

0 to 350
0 to 700
1,050

TABLE 4: EXPLORATION TARGET ESTIMATE FOR THE SOUTHERN CLUSTER


FARM NAME
Southern Cluster*
Groot Vygenboom
Genokakop
Houtbosch
Total

AREA
(ha)
1,610
1,304
1,712
4,626

RD
3.35
3.35
3.35
3.35

WIDTH
(m)
1.00
1.00
1.00
1.00

Merensky
GRADE
(Mt)
4E (g/t)
53.9
43.7
57.4
155.0

GEO
LOSS (%)

4.59
4.59
4.59
4.59

17%
17%
17%
17%

MR
(Moz)

RD

7.89
6.39
8.39
22.67

3.74
3.74
3.74
3.74

WIDTH
(m)
0.89
0.89
0.89
0.89

(Mt)
53.5
43.4
56.9
153.8

UG2
GRADE
4E (g/t)
5.71
5.71
5.71
5.71

GEO
LOSS (%)

UG2
(Moz)

24%
24%
24%
24%

9.8
7.9
R 10
28.05

TOTAL
Moz
17.7
14.3
18.77
50.7

*The potential quantity, quality and content as expressed above are conceptual in nature and there has been insufficient exploration to define Mineral Resources and it is unclear if further
exploration will result in the determination of a Mineral Resource.

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D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 19

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


FIGURE 5: PLAN VIEW OF THE SOUTHERN
CLUSTER'S PROPOSED EXPLORATION
BOREHOLE POSITIONS
BAUBA - 004

LEGEND

GROOTVYGENBOOM
204 KT

Project Area
Chromitite Reef
UG2 Reef
Merensky Reef
Farm Boundary
Boreholes

BAUBA - 002
BAUBA - 003
BAUBA - 006

African Rainbow/
Angloplat
(Modikwa)

BAUBA - 007
BAUBA - 001
GENOKAKOP
285 KT

BAUBA - 005

FIGURE 6: PROPOSED BOREHOLE POSITION FOR


BAUBA-001 ON GENOKAKOP FARM,
SOUTHERM CLUSTER

Scale:

BAUBA-001

3km

Southern Cluster
Project Area
8.
0

HOUTBOSCH
323 KT
Scale:

3km

ESTIMATED EXPLORATION COSTS


The cost amounted to ZAR31.64m for drilling 14,000m.
Qinisele Resources and S. Gain provided the cost to drill the first 2 BQ
size holes down to a depth of 2,000m on the Southern Cluster.
Venmyn then used the cost to estimate the cost of drilling the first
seven holes on the Southern Cluster. The cost amounted to
ZAR31.64m. The cost breakdown is shown in Table 5.

These holes should go at least 1m into the footwall of the reef. S. Gain
has reviewed the Snowden work and has proposed starting with
seven exploration boreholes (BAUBA-001 to BAUBA-007) in the
Southern Cluster. A total of about 14,000m is expected to be drilled
initially. The approximate drilling positions are shown in Figure 5.

9.

The first borehole site, BAUBA-001, will be sited on an accessible and


flat inter-mountain area as shown in . The picture in Figure 6 was taken
looking east from Genokakop farm. The flat lying areas require the
minimum amount of site preparation and clearing in terms of drilling
sites.
TABLE 5: APPROXIMATE COSTS FOR DRILLING SEVEN HOLES
IN THE SOUTHERN CLUSTER

BRIEF REVIEW OF NEIGHBOURING PROPERTIES


Modikwa Platinum Mine
Modikwa Platinum is an underground mine that lies up-dip of the
Southern Cluster. Exploration started in the 1920s and by the 1980s
both the Merensky and the UG2 had been explored. The mine was
established in 1999. In 2001 a 50:50 joint Venture was entered into
between Anglo Platinum and ARM Mining Consortium Limited. The
igneous layering at Modikwa strikes north-northwest and dips at about
0

10 to the west. The UG2 gently undulates with amplitudes of less than
2m. This phenomenon is pervasive throughout the mine. Snowden
records a UG2 seam width of 0.60m.

SOUTHERN CLUSTER No. OF DEPTH PERTOTAL COST ZAR (m) COST ZAR (m)
COST ITEM
HOLES HOLE (m) METRES EXCL VAT
INCL VAT
Geology Staff
2.35
2.68
Road building
3.50
3.99
Diamond Drilling
19.25
21.95
7
2,000
14,000
Analytical costs
1.52
1.73
other
1.13
1.29
TOTAL
27.75
31.64

Potholes are recorded to be abundant in their North shaft area


decreasing southwards towards the South shaft area which has more
prevalence of faults compared to the North shaft area. There are also
records of large ultra-mafic pegmatoids intrusions that have disturbed
and replaced the UG2 around the Onverwacht Hill which lies south of
the South shaft. A mineral Reserve and Resource statement has been
collated from Anglo Platinum's website.

The exact positions of the rest of the boreholes will be determined after
geologic mapping and ground magnetometer surveys. The depth per
hole is expected not to exceed 2,000m.

Nkwe Platinum
Nkwe properties lie due east and up-dip of the Southern Cluster.
Diamond drilling has been carried out and over 37km worth of drilling
has been recorded. Both reefs outcrop to the east and have been
intersected at depths of no more than 700m for the Merensky and no
more than 1,100m for the UG2.

All the reef drilling, sampling, core storage, logging and database
management will be carried out in accordance with the accepted
industrial QA/QC normal practices as defined in Table 1 of the
SAMREC Code.
TABLE 6: MINERAL RESOURCE BY MINE/PROJECT AS AT 31ST December 2009
MINE/PROJECT

OWNERSHIP

Modikwa Platinum Mine

50% Anglo Platinum, 50% ARM

CATEGORY (Mt)
Proved
Probable
TOTAL

MERENSKY
4E PGE (g/t) 4E (Moz)

UG2
(Mt)
4E PGE (g/t) 4E (Moz)
21.4
5.02
3.4
26.8
4.87
4.2
48.2
4.94
7.6

TABLE 7: MINERAL RESOURCE BY MINE/PROJECT AS AT 31ST December 2009


MINE/PROJECT

OWNERSHIP

Modikwa Platinum Mine

50% Anglo Platinum, 50% ARM

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MERENSKY
CATEGORY (Mt) 4E PGE (g/t) 4E (Moz)
Measured
18.0
2.94
1.6
Indicated
54.0
2.73
4.8
Inferred
136.8
2.65
11.6
TOTAL 208.8
2.70
18.0

UG2
(Mt)
4E PGE (g/t) 4E (Moz)
54.2
5.84
10.2
94.8
5.88
17.8
75.6
6.19
15.0
224.6
5.97
43.0

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 20

85

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Southern Cluster Of The Bauba Mineral Platinum Properties For Absolute Holdings
th

As at 14 April 2010
On the Garatau reef widths have been recorded by Snowden as 2.42m
up to a depth of 350m for the Merensky and 0.79m to a depth 700m for
the UG2. On the Eerste Geluk farm the Merensky outcrops and
averages about 2.18m and the UG2 0.77m at a depth of about 300m.

The proximity of the well drilled Nkwe properties to the Southern Cluster will
expedite the understanding of the geology and mineralisation. In this area,
the mineral intersections are expected to be closest to surface compared to
the other two Clusters.
Though collectively the Clusters are considered potentially deep mines,
South Africa has the capabilities and the technology to mine down to
4,000m below surface as evidenced by the current deep mining in the
Witwatersrand gold mines.

FIGURE 7: COMPARATIVE SHAFT DEPTHS OF EXISTING AND


PLANNED PROJECTS

Nkwe
(Inferred)

Jubilee
(Feasibility)

Marikana

Bauba (Central Cluster)

Union Richard

Amandebult #3

Northam #1

Bauba (Northern Cluster)

Impala #17

Amandebult

500
1000

Northam #2

DEPTH (m)

12. REFERENCE TO RISK IN THE FULL CPR


As of the effective date, Venmyn is not aware of any significant risk that
could affect Absolute's business plan and production plans other than the
normal risks associated with a mining of the PGE's, construction and
operation of a PGE processing plant as detailed in Section 18 of the CPR.
13. COMPETENT PERSONS DECLARATION
Venmyn is an independent advisory company. Its consultants, have
extensive experience in preparing competent persons', technical advisors'
and valuation reports for mining and exploration companies. Venmyn's
advisors have, collectively, more than 75 years of experience in the
assessment and evaluation of mining projects and are members in good
standing of appropriate professional institutions. The signatories, advisors
and associates to this report are qualified to express their professional
opinions on the values of the mineral assets described. To this end,
Competent Persons and Competent Valuators Certificates are presented in
the full CPR.

2500

2000

1500

Bauba (Southern Cluster)

SHAFT DEPTH
0

10. EFFECT OF MINERALISATION DEPTH ON SHAFT DEPTHS


A study was carried out by Snowden to show the shaft depths of
existing mines and expected shaft depths of future mines. The
Southern Cluster lies in the middle range as shown in Figure 7.

Neither Venmyn, its staff, nor associates have or have had any interest in
this project capable of affecting their ability to give an unbiased opinion and
have not and will not, receive any pecuniary or other benefits in connection
with this assignment, other than normal consulting fees. Absolute Holdings
Limited has warranted in writing that it has openly provided all material
information to Venmyn, which, to the best of its knowledge and
understanding, is complete, accurate and true.

11. CONCLUSIONS AND RECOMMENDATIONS


The Southern Cluster is situated within a prime segment of the Eastern
Limb of the BIC, where numerous neighbouring companies are prospecting
and successfully mining PGE's from the Merensky Reef and UG2. The
expected target resource would be of a sufficient quantity to support the
exploration programme being suggested. The exploration approach for the
project is systematic and appropriate for the style of mineralisation.

Venmyn have prepared this Section 12 Executive Summary from the


Independent Competent Persons' Report on the Northern Cluster of the
Bauba Mineral Platinum Properties for Absolute Holdings Limited and state
that the Executive Summary is a true reflection of the full CPR.

The Southern Cluster has some relatively flat and easily accessible areas
that require the least amount of preparation in comparison to the other
Clusters.

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86

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation

PAGE 21

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Bauba Project Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


MINERAL ASSET VALUATION FOR THE BAUBA PROJECT
Venmyn was commissioned by Absolute to perform an independent valuation of the Bauba Projects. The valuation was compiled in accordance with the reporting
and assessment criteria stipulated for Mineral Asset Valuations in the SAMVAL Code (2009). The valuation results are reported as the full project values
attributable to the individual Cluster projects.
The valuation approaches and methodologies adopted by Venmyn are based upon the principle of determining market-related values for the mineral asset held
by Bauba and to be incorporated into Absolute. For the full details of the approach refer to the full CPR.
This report has valued the Bauba mineral assets using industry-standard methods, selected according to the development stage of the mineral asset. Each of the
Bauba Clusters are at an early exploration phase and require significant exploration drilling and geological evaluation work going forward. Therefore, each Cluster
has been valued using the cost and market approach. The selection of an appropriate valuation approach is dependent on the availability of information on the
property. The SAMVAL Code (item 24) prescribes the competent valuator to use at least two valuation approaches.
MARKET APPROACH
The market approach relies on the principle of willing buyer, willing seller and requires that the amount obtainable from the sale of the asset is determined as if in
an arm's length transaction. The conclusion of the Bauba agreement with Absolute transaction entails that a deemed amount for the mineral resources translated
into a straight equity paper swap. The basis of this was the Exploration Target Resources follows: REEF

EXPLORATION TARGET*
Northern Cluster

Merensky
UG2
Merensky
UG2
Merensky
UG2
GRAND TOTAL

Central Cluster
Southern Cluster

Moz
3 PGE+Au
35.70
44.69
10.61
15.33
22.67
28.05
157.05

*The potential quantity, quality and content as


expressed above are conceptual in nature and
there has been insufficient exploration to define
Mineral Resources and it is unclear if further
exploration will result in the determination of a
Mineral Resource.

The Absolute transaction results in the following share payments amounting to a total of ZAR445.57m expressed as follows: SHARES
68,124,600
21,189,600
89,314,200

Payment Shares
Additional
Total
Current Value

ZAR
ZAR/SHARE
340,623,000
5.00
105,948,000
5.00
446,571,000

CURRENT PRICE
5.20
5.20
464,433,840

The Exploration Target Resources were used to determine the transaction value and Venmyn provided the following market related value per PGE comparison
values resulting in a total of ZAR573.23m: 3 PGE+Au
Moz
80.39
25.94
50.72
7.3

PROJECT
Northern Cluster
Central Cluster
Southern Cluster
Exchange Rate (ZAR/USD)
* Low value used for current value estimate.

LOWER
0.50
0.50
0.50

UNIT VALUE
(USD/oz)
UPPER
1.00
1.00
1.00

PRE-SPEND PRE-SPEND
RAISE
RAISE
MID
(USDm) *
(ZARm) *
0.75
40.19
293.41
0.75
12.97
94.68
0.75
25.36
185.14
Total
78.52
573.23

UPSIDE
POTENTIAL
(ZARm)
586.81
189.36
370.28
1,146.45

For comparison the following table outlines six relevant transactions used by Venmyn to value the Bauba properties that occurred in the platinum industry,
obtained from public domain documentation, between August 2007 and October 2009:COMPARABLE ARM'S LENGTH PLATINUM INDUSTRY TRANSACTIONS
TRANSACTION

DATE

VALUE
(USDm)

Afriore Limited (Akani project)


19.885% in Aquarius by Kofir

Jan-08
Sep-09

432.00
388.12

Jubilee Platinum get 63% of Tjate Project


15% in Garatau/Tubatse project
51% in Bokoni Platinum Mine
Northam Bought 100% of Booysendal

Oct-09
Jun-09
Jun-09
Aug-07

119.46
47.67
328.67
928.48

MEASURED
(Moz)

INDICATED
(Moz)

25.76

9.72

27.74

0.40
20.02

INFERRED
(Moz)

UNIT VALUE
(USD/oz)

33.70
1.53

12.82
10.49

22.33
5.30
48.35
94.00

5.35
8.36
3.42
9.88

Venmyn maintains a comprehensive database of platinum transactions and unit market capitalisations of platinum companies, which is continually updated. This
information is collated to produce a Platinum Valuation Curve and is illustrated in the platinum curve. The curve which demonstrates the range of indicative
market-related values of in situ USD/oz attributed to the different categories of Mineral Resource and Mineral Reserve.
The Comparative Value per resource ounce was calculated upon the basis of Venmyn's database of historical PGE transactions within the southern African
context. Therefore, at this stage the value of the Bauba properties is ZAR573.23m or USD0.50/oz.

InterAction
Corporate Reporting & Identity Specialists,
Annual Reports, Graphics

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 22

87

EXECUTIVE SUMMARY SHORT FORM SAMREC COMPLIANT TECHNO ECONOMIC VALUATION STATEMENT
On The Bauba Project Of The Bauba Mineral Platinum Properties For Absolute Holdings

As at 14th April 2010


1,000.00

Unit Value (USD/oz)

100.00

10.00

1.00

2
3
1

USD/oz
0.50
1.00
0.75

1 LOW COMPARATIVE
2 HIGH COMPARATIVE
3 PREFERRED VALUE

0.10
0.5

1.5

June 2008 Market Cap

2.5

2000 - 2006 Transaction Values

COST APPROACH

Classification
June 2009 Market Cap

3.5

4.5

Dec 2008 Market Cap

2007 - 2009 Transactions

5.5

Feb 2010 Market Cap

Dec 2007 Market Cap

The SAMVAL Code definition states that the cost approach relies on historical and/or future expenditure on the Mineral Asset. Unfortunately, the cost approach
cannot be applied at this stage as no cash has transacted.
VALUATION SUMMARY AND CONCLUDING OPINION
The Absolute Bauba transaction is essentially a straight paper deal reflecting in an underlying market cap per ounce method and the equity purchase method
which are both part of the market approach. Absolute has managed to prepare the basis of the new PGE business on a relatively low USD0.50oz basis. Providing
the company exploration spend is systematically successful in moving Exploration Target resources into properly quantified SAMREC compliant mineral
resources the resources value should move up the value curve as shown in the valuation graph. Where the upside will settle will be dependent on demonstrating
the true value of the company's strategic drivers in the BIC
CONCLUSIONS
The global mineral resources market is experiencing unusual and exceptional circumstances, with commodity prices reaching record levels. This is particularly
relevant for PGE's and this has led to a significant revival of interest in the exploration of deeper mineral resource in the BIC. Absolute has acquired deeper level
PGE mineral resources in the Eastern BIC and needs to spend exploration monies to move the value proposition up the value curve. Venmyn will assist in the
future to assess the levels of statistical confidence that new borehole results generate for both the Merensky Reef and the UG2 so that the move towards
generating Indicated Resources and then Probable Reserves for commercial exploitation can be achieved.
COMPETENT PERSONS DECLARATION
Venmyn is an independent advisory company. Its consultants, have extensive experience in preparing competent persons', technical advisors' and valuation
reports for mining and exploration companies. Venmyn's advisors have, collectively, more than 75 years of experience in the assessment and evaluation of mining
projects and are members in good standing of appropriate professional institutions. The signatories, advisors and associates to this report are qualified to express
their professional opinions on the values of the mineral assets described. To this end, Competent Persons and Competent Valuators Certificates are presented in
the full CPR.
Neither Venmyn, its staff, nor associates have or have had any interest in this project capable of affecting their ability to give an unbiased opinion and have not and
will not, receive any pecuniary or other benefits in connection with this assignment, other than normal consulting fees. Absolute Holdings Limited has warranted in
writing that it has openly provided all material information to Venmyn, which, to the best of its knowledge and understanding, is complete, accurate and true.
Venmyn have prepared this Section 12 Executive Summary from the Independent Competent Persons' Report on the Northern Cluster of the Bauba Mineral
Platinum Properties for Absolute Holdings Limited and state that the Executive Summary is a true reflection of the full CPR.
REFERENCE TO RISK IN THE FULL CPR
As of the effective date, Venmyn is not aware of any significant risk that could affect Absolute's business plan and production plans other than the normal risks
associated with a mining of the PGE's, construction and operation of a PGE processing plant as detailed in Section 18 of the CPR.
MR. ANDY CLAY
M.Sc.(Geol), M.Sc.(Min. Eng.), Dip.Bus.M.,
Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA,
IOD, AAPG, CIMMP.
MANAGING DIRECTOR

InterAction
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88

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D795M_AbsoluteBauba'10FigNorthernCentralSouthern_Valuation
PAGE 23

C. A. TAYLOR
B.Sc.Hons (Geol),
Pr Sci Nat, MGSSA, MGASA,
MINERAL PROJECT ADVISOR

ANNEXURE 9

LOCATION MAP

89

ANNEXURE 10

INDEPENDENT EXPERT OPINION IN RELATION TO THE WAIVER OF THE OFFER TO


MINORITY SHAREHOLDERS

The Directors
Absolute Holdings Limited
Arcay House
Number 3 Anerley Road
Parktown
2193
22 April 2010
Dear Sirs
REPORT OF THE INDEPENDENT PROFESSIONAL EXPERT TO ABSOLUTE HOLDINGS LIMITED
REGARDING THE CHANGE IN CONTROL OF ABSOLUTE
Introduction
Moore Stephens Corporate Finance has been appointed by the board of directors of Absolute Holdings
Limited (Absolute, or the company) to provide an independent fairness opinion to the shareholders of
Absolute with regard to the conclusion of the following agreements:
(i) The acquisition of an effective 60% interest in Bauba A Hlabirwa Mining Investments (Proprietary) Limited
(Bauba) for a purchase consideration of R340 623 000 to be settled through the issue of 68 124 600
new shares in Absolute at an issue price of R5.00 per share; and
(ii) The proposed further acquisition of an effective 60% interest in the Houtbosch prospecting right, subject
to the notarial execution and registration of the already granted prospecting right, for a purchase
consideration of R105 948 000, which will be settled though the issue of 21 189 600 new shares in
Absolute at an issue price of R5.00 per share,
(together the transaction).
Following the transaction and after the capital raising and partial settlement of advisory fees via the issue of
new Absolute shares, the shareholders of Bauba will hold 89,314,200 shares, or an effective 65.1% equity
interest in the combined entity (which will be renamed Bauba Platinum Limited) . The transaction will result
in a change in control of Absolute and consequently is an affected transaction as defined in Section 440A of
the Companies Act, which is subject to the provisions of the Securities Regulation Code on Takeovers and
Mergers (the SRP Code).
Fairness opinion required in terms of the SRP Code
The transaction will result in an effective change in control of Absolute and the directors of Absolute are
required, in terms of Rule 3 of the SRP Code, to obtain appropriate external advice on the transaction as to
how it affects all holders of securities in Absolute.
Responsibility
Compliance with the SRP Code is the responsibility of the directors of Absolute. Our responsibility is to report
to the shareholders on the fairness of the terms and conditions of the proposed transaction.
Explanation as to how the term fair applies in the context of the transaction
The fairness of a transaction is based on quantitative issues. In the case of a sale of shares or assets, a
transaction may be said to be fair if the value of the consideration received is greater than or equal to the
value of the asset that is the subject of the transaction.

90

The transaction would be considered fair to the shareholders of Absolute if the value received by Absolute
shareholders in terms of the transaction is equal to or greater than the value of the 89,314,200 shares to be
issued to the Bauba shareholders, which consequently will result in the value of one Absolute share after
implementation of the transaction being equal to or greater than the value of one Absolute share before
implementation of the transaction.
Conversely, the transactions would be considered unfair if the value received by Absolute in terms of the
transaction is less than the value of the 89,314,200 shares to be issued to the Bauba shareholders, which
would result in the value of one Absolute share after implementation of the transaction being less than the
value of one Absolute share before implementation of the transaction.
Details and sources of information
In arriving at our opinion we have relied upon the following principal sources of information:
Signed Agreements in respect of the transaction;
Historical Financial information in respect of Absolute for the year ended 30 June 2009 and the period
ended 31 December 2009;
Historical Financial information in respect of Bauba for the years ended 28 February 2009 and
28 February 2010;
Selected additional financial information in respect of Absolute and Bauba up to 31 March 2010;
Draft Circular to Absolute shareholders relating to the transaction (the circular);
Independent competent persons report (CPR) and mineral asset valuation reports in respect of the
Platinum group elements mineral assets held by Bauba, including the Houtbosch project (the Bauba
projects), prepared by A Clay M.Sc (Geol), MSc (Min Eng), Pr.Sci.Nat, MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP and C Taylor, BSc.Hons (Geol), Pr.Sci.Nat, MGSSA, MGASA of Venmyn Rand (Pty) Limited
as at 14 April 2010;
Independent CPR and mineral asset valuation report in respect of the Lekkersing Quartzite project
attributable to Absolute, prepared by J Hattingh, BSc.Hons (Geol), M.Sc (Geol), PhD (Geol), Pr.Sci.Nat
and J Botha B.Sc (Geol), Pr.Sci.Nat of Creo Consulting as at 28 February 2010;
Short-form techno Economic report on the Lekkersing Quartzite project, prepared by A Clay and C Taylor
of Venmyn Rand (Pty) Limited as at 14 April 2010;
Short-form SAMREC compliant statement on the Greenfields Assets of Absolute Holdings Limited,
prepared by A Clay and C Taylor of Venmyn Rand (Pty) Limited as at 14 April 2010;
Discussions with Absolute and Bauba directors and management regarding the financial information
presented as well as the settlement calculations and the rationale for the transaction;
Discussions with Absolute and Bauba directors and management and advisors in respect of Absolute and
Baubas mineral assets and rights;
Discussions with Absolute and Bauba directors and management and advisors on prevailing market,
economic, legal and other conditions which may affect underlying value;
Publicly available information relating to Absolute and Bauba that we deemed to be relevant, including
company announcements, analysts reports and media articles; and
Publicly available information relating to the industry in which Absolute and Bauba operate that we deemed
to be relevant, including company announcements, analysts reports and media articles.
The information above was sourced from:
Directors and management of Absolute and Bauba and their advisors; and
Third party sources, insofar as such information related to publicly available economic, market and other
data applicable to or potentially influencing our valuation.

91

Assumptions
We arrived at our opinion based on the following assumptions:
That all agreements that will be entered into in terms of the transaction will be legally enforceable;
That reliance can be placed on the audited financial information of Absolute and Bauba; and
That reliance can be placed on the independent CPRs and mineral asset valuations in respect of the
mineral assets of Absolute and Bauba.
Appropriateness and reasonableness of underlying information and assumptions
We satisfied ourselves as to the appropriateness and reasonableness of the information and assumptions
employed in arriving at our opinion by:
Reliance on audit reports in the financial statements of Absolute and Bauba;
Conducting reviews on the financial and economic data and forecasts set out in the CPRs; and
Determining the extent to which representations from management were confirmed by documentary
evidence as well as our understanding of Absolute and Bauba and the economic environment in which
they operate.
Limiting conditions
This opinion is provided to the board of directors and shareholders of Absolute in connection with and for
the purposes of the transaction. The opinion does not purport to cater for each individual shareholders
perspective, but rather that of the general body of Absolute shareholders.
Individual shareholders decisions regarding the transaction may be influenced by such shareholders
particular circumstances and accordingly individual shareholders should consult an independent advisor if
in any doubt as to the merits or otherwise of the transaction.
We have relied upon and assumed the accuracy of the information provided to us in deriving our opinion.
Where practical, we have corroborated the reasonableness of the information provided to us for the purpose
of our opinion, whether in writing or obtained in discussion with management of Absolute, by reference
to publicly available or independently obtained information. While our work has involved an analysis of,
inter alia, the annual financial statements, and other information provided to us, our engagement does not
constitute an audit conducted in accordance with generally accepted auditing standards.
Where relevant, forward-looking information on Absolute relates to future events and is based on assumptions
that may or may not remain valid for the whole of the forecast period. Consequently, such information cannot
be relied upon to the same extent as that derived from audited financial statements for completed accounting
periods. We express no opinion as to how closely the actual future results of Absolute will correspond to
those projected. Where practicable, we have compared the forecast financial information to past trends as
well as discussing the assumptions inherent therein with management.
We have also assumed that the transaction will have the legal consequences described in discussions with,
and materials furnished to us by representatives and advisors of Absolute and we express no opinion on
such consequences.
Our opinion is based on current economic, regulatory and market as well as other conditions. Subsequent
developments may affect this opinion, and we are under no obligation to update, review or re-affirm our
opinion based on such developments.
Independence
We confirm that Moore Stephens Corporate Finance has no equity interest in Absolute or in any other party to
the transaction. We further confirm that there is no existing relationship between Moore Stephens Corporate
Finance and any of the parties to the transaction.
Furthermore, we confirm that our professional fees are not contingent upon the success of the proposed
transaction.

92

Valuation
Moore Stephens Corporate Finance performed a valuation of Absolute and Bauba to determine the value of
the shares to be issued to Bauba shareholders and the value received by Absolute shareholders, respectively.
We have used the net asset value (NAV) methodology as our primary basis for the valuation of Absolute
and Bauba.
Under the net asset valuation approach, total equity value is based on the sum of tangible net asset value
plus the value of intangible assets not recorded on the balance sheet.
The NAV method of valuation is normally most appropriate for the valuation of a pure investment company.
This valuation approach is considered to value an investment company, where the value attributable to such
company would be determined on a sum of the parts basis. As such, a net asset methodology is most
applicable for businesses such as Absolute and Bauba where the value lies in the underlying assets and not
the ongoing operations of the business.
Net asset value is determined by marking every asset and liability on and off the companys balance sheet
to current market values.
Absolute
Absolutes principal assets set out in the table below:
Dikopane NM Mining (Pty) Limited

49%

Coal prospecting
rights

Greenfields exploration
asset

Canyon Springs Investments 116


(Pty) Limited

100%

Limestone prospecting
rights

Greenfields exploration
asset

Niemller Marmer (Pty) Limited

100%

Picture Stone mining


and prospecting rights

Greenfields exploration
asset

90%

Quartzite mining
operation

Production asset

25.1%

Resources sector
advisory firm

Professional service
firm

Lekkersing Diamond Quartzite Mine


Qinisele Resources (Pty) Limited (QR)

Cash, loan accounts, receivables and payables were valued at amortised cost, whereas inventories were
valued at the lower of costs and net realisable value. The values of the mineral assets were assessed based
on the approaches prescribed in the South African Code for the Reporting of Exploration Results, Mineral
Resources and Mineral reserves (the SAMREC code) and the South African Code for the Reporting of
Mineral Asset Valuation (the SAMVAL code).
There are two generally accepted valuation approaches used in the valuation of exploration properties:
Cost approach; and
Market or comparative value method.
Where previous and future committed exploration expenditures are known, or can be reasonably estimated,
the Multiple of Exploration Expenditures (MME) method can be applied to derive a cost-based technical
value. The method requires establishing a relevant Expenditure Base (EB) from past and future committed
exploration expenditure. A premium or discount is then assigned to the EB through application of a
Prospectivity Enhancement Multiplier (PEM), which reflects the success or failure of exploration done to
date and the future potential of the asset. The basic tenet of this approach is that the amount of exploration
expenditure justified on a property is related to its intrinsic technical value.
Where comparable transactions relating to the sale, joint venture or farm-in/farm-out of mineral assets are
known, such transactions may be used as a guide to, or means of, valuation. For a transaction to be considered
comparable, it should be similar to the asset being valued in terms of location, timing and commodity and the
transaction regarded as of arms length.

93

Information in respect of the greenfields exploration assets is limited as all are at an early stage of development.
As such, we valued these mineral assets using the costs approach. The Lekkersing Quartzite project was
valued using a cash flow approach, which relies on the value in use principle, requiring determination of the
cash flows attributable to a project over the projects useful life. As set out in the CPR, because of the unique
characteristics of the Lekkersing quartzite deposit, market and cost approaches were not considered to be
applicable.
The valuation of QR has been determined based upon the Income Approach. The net present value is
considered to be equal to QRs forecast post-tax pre-finance income, discounted at a rate equal to the
required cost of capital.
Bauba
The Bauba project consists of Platinum Group Metals prospecting rights over nine farms. We applied the
standard comparative value method to the Bauba projects. The outcomes were also benchmarked against
current market value of listed entities holding similar assets.
Valuation considerations
The valuations were performed taking cognisance of risk and other market and industry factors affecting
Absolute and Bauba. Additionally, sensitivity analyses were performed considering key value drivers to the
mineral asset valuations.
Key internal value drivers to the valuations of the exploration mineral assets included estimated geological
data and expected future exploration expenditure. External value drivers, including commodity prices,
interest rates, CPI rates and prevailing market and industry conditions were also considered in assessing the
mineral asset valuations and risk profiles of Absolute and Bauba.
The most important value driver to the Lekkersing Quartzite project DCF is the commodity price assumption.
Other factors that were reviewed were production rates, the discount rate, working capital and capital
expenditure requirements.
Valuation summary
In undertaking the valuation exercise above, incorporating certain assumptions regarding the future realisable
value of Absolutes and Baubas mineral assets, we determined a valuation range for Absolute shares prior to
the transaction of R47.1 million to R82.5 million. Following the transaction, incorporating the valuation of the
Bauba assets and the net proceeds of the capital raising, we determined a valuation range for the shares in
the combined entity held by the Absolute shareholders of R60.3 million to R108.0 million. The value of a single
share held by an Absolute shareholder therefore increases by 28% to 31% as a result of the transaction.
Procedures
In arriving at our opinion we have undertaken the following procedures and taken into account the following
factors in evaluating the fairness of the transaction:
Reviewed the terms and conditions of the transaction;
Reviewed the terms and conditions of the agreements in respect of the secured loans;
Reviewed the audited and unaudited financial information related to Absolute and Bauba, as detailed
above;
Held discussions with directors and management of Absolute and Bauba and considered such other
matters as we considered necessary, including assessing the prevailing economic and market conditions
and trends;
Reviewed the CPRs and the basis of the assumptions therein, including the saleability and development
potential of the projects, as well as the reasonableness of the outlook assumed based on discussions with
management;
Compiled a financial model using the information contained in the CPRs and applied Moore Stephens
Corporate Finances assumptions and inputs to produce a valuation of the Absolute and Bauba mineral
assets;

94

Performed a sensitivity analysis on key assumptions included in the financial models, specifically relating
to in situ reserves and expected project advancement;
Assessed the long-term potential of Absolute and Bauba;
Evaluated the relative risks associated with Absolute and Bauba, its mineral assets and the industry in
which they operate;
Reviewed certain publicly available information relating to Absolute and Bauba that we deemed to be
relevant, including company announcements, analysts reports and media articles; and
Where relevant, representations made by management and/or directors were corroborated to source
documents or independent analytical procedures were performed by us, to examine and understand the
industry in which Absolute and Bauba operate, and to analyse external factors that could influence the
value of Absolute and Bauba.
Opinion
Moore Stephens Corporate Finance has considered the terms and conditions of the transaction and, based
on and subject to the conditions set out herein, is of the opinion that the transaction is fair to the shareholders
of Absolute.
Our opinion is necessarily based upon the information available to us up to 22 April 2010, including in
respect of the financial information as well as other conditions and circumstances existing and disclosed to
us. We have assumed that all conditions precedent, including any material regulatory and other approvals or
consents required in connection with the transaction have been fulfilled or obtained.
Accordingly, it should be understood that subsequent developments may affect this opinion, which we are
under no obligation to update, revise or re-affirm.
Yours faithfully
Moore Stephens (Jhb) Corporate Finance (Pty) Limited
Andrew Naude
Director

Nick Lazanakis
Director

Moore Stephens Corporate Finance


7 West Street
Houghton
2198

Moore Stephens (Jhb) Corporate Finance


7 West Street
Houghton
2198

95

ABSOLUTE HOLDINGS LIMITED


(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN: ZAE000144267
Share code: ABO

(Absolute or the Company)


Directors
MK Diale* (Chairman)
AM Sher*# (Deputy Chairman)
MW Rosslee (Chief Executive Officer)
GP Sequeira (Financial Director)
JJ Serfontein*
*Non-executive
#Independent

NOTICE OF GENERAL MEETING OF SHAREHOLDERS OF ABSOLUTE

Notice is hereby given that a general meeting of shareholders of Absolute will be held at Arcay House
II, Number 3 Anerley Road, Parktown, Johannesburg at 10h00 on Monday, 7 June 2010 to consider, and
if deemed fit, to pass, with or without modifications the special and ordinary resolutions set out below.
The definitions and interpretations set out on pages 4 to 11 of this circular, to which this notice is attached,
have been used in this notice of general meeting:
SPECIAL RESOLUTION NUMBER 1 Increase in authorised share capital
Resolved that the authorised share capital of the Company be and is hereby increased from R25 000 000
comprising 25 000 000 ordinary shares of R1.00 each through the creation of 175 000 000 new shares of
R1.00 each to R200 000 000 comprising 200 000 000 shares of R1.00 each.
Reason for and effect of Special Resolution Number 1:
The Company requires an increase in the authorised share capital in order to facilitate the acquisition of Bauba,
the share issue for cash, the Houtbosch payment shares and the issue of shares to Qinisele Resources. The
effect will be to increase the authorised share capital of the Company.
ORDINARY RESOLUTION NUMBER 1 Acquisition of Bauba and share issue for cash
Resolved that, subject to the approval of special resolution number 1 and ordinary resolution number 2, the
acquisition of an effective 60% interest in Bauba, in terms of the acquisition agreement dated 12 February
2010 between Absolute, Bauba, the Bauba sellers, NMR and the NMR sellers, for a purchase consideration
of R340 623 000, to be settled through the issue of 68 124 600 new shares in Absolute at R5.00 per share and
incorporating the minimum capital raising, as well as the potential acquisition of the Houtbosch prospecting
right, through the issue of a further 21 189 600 new shares in Absolute at R5.00 per share is hereby approved.
ORDINARY RESOLUTION NUMBER 2 Share issue for cash
Resolved that, subject to the approval of special resolution number 1 and ordinary resolution number 1,
the Company be and is hereby authorised to raise up to R150 million through the issue of up to 30 000 000
new shares at an issue price to be determined at the date of agreement to issue the shares based on market
conditions prevailing at the time of the capital raising, to various local and off-shore institutions and investors,
excluding related parties as defined in the JSE Listings Requirements, and that such placing and pricing of
shares be under the control of the directors of the Company.

96

In accordance with the Listings Requirements, approval of the specific issue for cash resolution by 75%
majority of the votes cast in favour of such resolution by all shareholders present or represented by proxy at
the general meeting, excluding any parties and their associates participating in the specific issue for cash,
are required to pass this resolution.
ORDINARY RESOLUTION NUMBER 3 Waiver of offer to minority shareholders
Resolved that, subject to the passing and becoming effective of ordinary resolution number 1 and ordinary
resolution number 2, (save for any condition in such resolution that this resolution be passed and become
effective) the obligation of the vendors, a waiver, as provided for in Rule 8.7 of the SRP Code, of any obligation
by the vendors to make a mandatory offer at R5.00 per share in terms of Rule 8.1 of the SRP Code be and is
hereby approved.
It is a requirement of the SRP Code that this ordinary resolution be passed by a majority of independent votes
cast, being the votes cast by shareholders of Absolute other than the Bauba Sellers and NMR Sellers and any
person acting in concert (as defined in the SRP Code) with the vendors.
As a result, this resolution is subject to a majority of shareholders of Absolute (excluding the Bauba Sellers
and NMR Sellers and any person acting in concert (as defined in the SRP Code) with the vendors) voting, in
person or represented by proxy, in favour of the resolution in General Meeting.
SPECIAL RESOLUTION NUMBER 2 Potential repurchase of shares
Resolved that the repurchase and cancellation of up to 37 033 200 (thirty-seven million, thirty-three
thousand, two hundred) shares of R1.00 each in terms of the claw back, sections 85(2), 85(3) and 89 of the
Act and in terms of the Rules and Requirements of the JSE, in the event that any or both of the prospecting
rights held by Bauba on the farms in the Southern Cluster, namely Groot Vygenboom 284KT and Genokakop
285KT are overturned or withdrawn, for no consideration or a maximum consideration of R1.00 in terms of the
Bauba acquisition agreement, which repurchase will have the effect of the voiding of the issue of such shares
ab initio, be and is hereby approved.
Reason for and effect of Special Resolution Number 2:
The Company requires a resolution to effectively provide for the potential repurchase and cancellation of
certain shares issued for the Bauba acquisition in terms of the claw back provisions of the Bauba acquisition
agreement. The passing and registration of this special resolution will have the effect of authorising the
Company to repurchase and cancel shares issued by the Company for the Southern Cluster prospecting
rights in the unlikely event that such rights are lost.
The following additional information, some of which may appear elsewhere in the circular of which this notice
forms part, is provided in terms of the Listings Requirements for purposes of this specific authority:
Directors and management see paragraph 13 of the circular;
Major beneficial shareholders see paragraph 11 of the circular;
Directors interests in ordinary shares see paragraph 13.2 of the circular;
Share capital of the Company see paragraph 12 of the circular;
Litigation statement see paragraph 18 of the circular;
Directors responsibility statement see paragraph 21 of the circular; and
Material changes see paragraph 17 of the circular.
Statement by the board of directors of the Company
Pursuant to, and in terms of, the Listings Requirements, the board of directors of the Company hereby state
that:

97

the Company and group will, after the repurchase, be able to pay their debts as they become due in the
ordinary course of business for the next 12 (twelve) months after the date of approval of this circular;
the consolidated assets of the Company and the group fairly valued and recognised and measured in
accordance with the accounting policies used in the latest consolidated audited financial statements, will,
after the repurchase, be in excess of the consolidated liabilities of the Company and its subsidiaries for
the next 12 (twelve) months after the date of this circular;
the issued share capital and reserves of the Company and the group will, after the repurchase, be adequate
for the ordinary business purposes of the Company and its subsidiaries for the next 12 (twelve) months
after the date of approval of this circular; and
the working capital available to the Company and the group will, after the repurchase, be sufficient for the
ordinary business requirements of the Company and its subsidiaries for the next 12 (twelve) months after
the date of approval of this circular.
ORDINARY RESOLUTION NUMBER 4 Approval of independent non-executive director appointment
KV Dicks
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of
Mr Kenneth Dicks as an independent non-executive director, be and is hereby approved.
A brief CV of Mr Dicks is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 5 Approval of chief executive officer appointment
PC (Pine) Pienaar
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of Mr Pine
Pienaar as the new CEO of Absolute, be and is hereby approved.
A brief CV of Mr Pienaar is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 6 Approval of non-executive director appointment
Dr NM (Mathews) Phosa
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of
Dr Mathews Phosa as a non-executive Director of Absolute, be and is hereby approved.
A brief CV of Dr Phosa is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 7 Approval of independent non-executive director appointment
JG Best
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of
Mr Jonathan Best as the Chairman of Absolute, be and is hereby approved.
A brief CV of Mr Best is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular to
shareholders, to which this notice of general meeting is attached.
ORDINARY RESOLUTION NUMBER 8 Approval of independent non-executive director appointment
SM Dolamo
Resolved that, subject to the approval of ordinary resolution numbers 1 and 2, the appointment of Mr Sholto
Dolamo as an independent non-executive Director of Absolute, be and is hereby approved.
A brief CV of Mr Dolamo is set out in Appendix 6 to the Revised Listing Particulars forming part of the circular
to shareholders, to which this notice of general meeting is attached.

98

SPECIAL RESOLUTION NUMBER 3 Change of Name of the Company


Resolved that, subject to the approval of special resolution number 1 and ordinary resolution number 1, the
name of the Company be changed from Absolute Holdings Limited to Bauba Platinum Limited.
Reason for and effect of Special Resolution Number 3:
The Company would like to align its name with its intended strategy to focus on the platinum mining industry
going forward. The effect will be that the name of the Company will be changed to Bauba Platinum Limited.
ORDINARY RESOLUTION NUMBER 9 Amendment to terms of share incentive scheme
Resolved that the amendment to clause 1.2.9 of the Absolute share incentive scheme to expand the
definition of employee to anyone employed in a full-time or part-time capacity by the Company or any group
company, who is entitled in terms of the Act, to acquire shares or rights from the trust such as referred to
therein, including executive directors, consultants and advisors but excluding non-executive directors, be
and is hereby approved.
ORDINARY RESOLUTION NUMBER 10 Enabling resolution
Resolved that, subject to the approval of special resolutions numbers 1 and 2 and ordinary resolutions
numbers 1 to 6, Mr MW Rosslee and/or Mr AM Sher and the Company Secretary be and are hereby authorised
to sign all documentation to give effect to the transactions.
Voting and proxies
Each shareholder, whether present in person or represented by proxy, is entitled to attend and vote at the
general meeting of shareholders. On a show of hands every shareholder who is present in person or by proxy
shall have one vote, and, on a poll, every shareholder present in person or by proxy shall have one vote for
each share held by him/her.
In terms of the Listings Requirements, any unlisted shares or shares held through a share incentive scheme
or treasury shares will be precluded from voting at the general meeting.
Certificated shareholders and dematerialised shareholders with own name registration
If you are a certificated shareholder or have dematerialised your shares with own name registration and you
are unable to attend the general meeting of shareholders to be held at 10h00 on Monday, 7 June 2010 at the
registered office of the Company at Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg and
wish to be represented thereat, you must complete and return the attached form of proxy in accordance with
the instructions contained therein and lodge it with, or post it to, the transfer office, namely Computershare
Investor Services (Proprietary) Limited, so as to be received by them no later than 10h00 on Thursday,
3 June 2010.
Dematerialised shareholders other than those with own name registration
If you hold dematerialised shares in Absolute through a CSDP or broker other than with an own name
registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the general
meeting of shareholders in order for your CSDP or broker to provide you with the necessary authorisation to
do so, or should you not wish to attend the general meeting of shareholders in person, you must timeously
provide your CSDP or broker with your voting instruction in order for the CSDP or broker to vote in accordance
with your instruction at the general meeting of shareholders.
By order of the board
Company Secretary
Johannesburg
17 May 2010

99

100

ABSOLUTE HOLDINGS LIMITED


(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN: ZAE000144267
Share code: ABO

(Absolute or the Company)

FORM OF PROXY
(for use by certificated and own name dematerialised shareholders only)
For use by certificated and own name registered dematerialised shareholders of the Company (shareholders) at the general meeting of shareholders
of Absolute to be held at the Companys registered office, Arcay House II, Number 3 Anerley Road, Parktown, Johannesburg at 10h00 on Monday,
7 June 2010 (the general meeting).
I/We (Please print names in full)
of (insert address)
being the holder/s of

ordinary shares of R1.00 each in Absolute appoint (see note 1):

1.

or failing him,

2.

or failing him,

3. the chairman of the general meeting,


as my/our proxy to act for me/us and on my/our behalf at the general meeting which will be held for the purpose of considering, and if deemed fit, passing,
with or without modification, the special and ordinary resolutions to be proposed thereat and at any adjournment thereof and to vote for and/or against
the special and ordinary resolutions and/or abstain from voting in respect of the shares registered in my/our name/s, in accordance with the following
instructions (see note 3):
Number of votes (one vote per share)
For

Against

Abstain

Special resolution number 1


Increase in authorised share capital
Ordinary resolution number 1
Acquisition of Bauba
Ordinary resolution number 2
Share issue for cash
Ordinary resolution number 3
Waiver of mandatory offer
Special resolution number 2
Repurchase of shares
Ordinary resolution number 4
Board appointment KV Dicks
Ordinary resolution number 5
Board appointment PC Pienaar
Ordinary resolution number 6
Board appointment Dr NM Phosa
Ordinary resolution number 7
Board appointment JG Best
Ordinary resolution number 8
Board appointment SM Dolamo
Special resolution number 3
Change in name of Company
Ordinary resolution number 9
Amendment to share incentive scheme
Ordinary resolution number 10
Enabling resolution
Signed at

on

2010

Signature
Assisted by me (where applicable)
Name
(Please print in BLOCK LETTERS)
Please read the notes on the reverse hereof.

Capacity

Signature

Notes:
1. Each member is entitled to appoint one or more proxies (who need not be members of the Company)
to attend, speak and, on a poll, vote in place of that member at the general meeting.
2. A member may insert the name of a proxy or the names of two alternative proxies of the members choice
in the space provided, with or without deleting the chairman of the general meeting. The person whose
name stands first on the form of proxy and who is present at the general meeting will be entitled to act
as proxy to the exclusion of those whose names follow.
3. A members instructions to the proxy must be indicated by the insertion of the relevant number of votes
exercisable by that member in the appropriate box/es provided. Failure to comply with the above
will be deemed to authorise the chairperson of the general meeting, if he is the authorised proxy,
to vote in favour of the special and ordinary resolutions at the general meeting, or any other proxy to
vote or to abstain from voting at the general meeting as he deems fit, in respect of all the members
votes exercisable thereat.
4. A member or his proxy is not obliged to vote in respect of all the ordinary shares held or represented
by him but the total number of votes for or against the special and ordinary resolutions and in respect
of which any abstention is recorded may not exceed the total number of votes to which the member
or his proxy is entitled.
5. Forms of proxy must be lodged with or posted to the transfer secretaries, Computershare Investor
Services (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg 2000 (PO Box 61051,
Marshalltown, 2107) to be received by no later than 10h00 on Thursday, 3 June 2010.
6. The completion and lodging of this form of proxy will not preclude the relevant member from attending
the general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed
in terms hereof, should such member wish to do so.
7. Any alterations or corrections to this form of proxy must be initialled by the signatory/ies.
8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative
capacity must be attached to this form of proxy unless previously recorded by the Companys transfer
office or waived by the chairman of the general meeting.
9. The chairman of the general meeting may reject or accept any form of proxy which is completed and/or
received other than in accordance with these instructions, provided that the chairman is satisfied as to
the manner in which a member wishes to vote.

ABSOLUTE HOLDINGS LIMITED


(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN: ZAE000144267
Share code: ABO

(Absolute or the Company)


Please read the instructions overleaf. Non-compliance with these instructions may result in the rejection of this
form. If you are in any doubt as to how to complete this form, please consult your stockbroker, banker, attorneys,
accountant or other professional advisor.
Note: A separate form is required for each shareholder.

FORM OF SURRENDER (for use by certificated shareholders only)


To:

Absolute Holdings Limited


c/o Computershare Investor Services (Proprietary) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61763, Marshalltown, 2107)

TO BE COMPLETED BY ABSOLUTE CERTIFICATED SHAREHOLDERS


I/We hereby surrender and enclose the Absolute ordinary share certificate(s) listed below:
Certificate number(s)

Number of Absolute shares covered by each certificate

Total
I/We irrevocably and in rem suam authorise you to produce the signature of such documents that may be necessary
to complete the replacement of the Absolute ordinary shares with shares in the new name of Bauba Platinum Limited.
I/We hereby instruct you to forward the replacement share certificate/s to me/us by registered post, at my/our own risk,
to the address overleaf and confirm that, where no address is specified, the share certificate/s will be forwarded to
my/our address recorded in the share register of Absolute.
My/Our signature(s) on the form of surrender constitutes my/our execution of this instruction.
Signature of shareholder
Assisted by (where applicable)
Name

Capacity

The shareholder must complete the following information


in BLOCK LETTERS:

Signature
Date

2010

Surname or Name of corporate body


First names (in full, if applicable)
Title (Mr, Mrs, Miss, Ms, etc)
Postal address (preferably PO Box address)

Postal code
Telephone number including area code (office hours) (

INSTRUCTIONS:
1. A receipt will not be issued for this form of surrender, or the documents lodged with it. Lodging agents
who require special transaction receipts are requested to prepare such receipts and submit them
for stamping with the other documents lodged.
2. A shareholder married in community of property or a minor must ensure this form of surrender is also
signed by his/her spouse or parent or guardian, as the case may be.
3. Where Absolute ordinary shares are jointly held, this form must be signed by joint holders.
4. If this form is signed under power of attorney, such power of attorney must be produced, unless it has
already been registered with the transfer office of Absolute.
5. If this form is signed on behalf of a company, close corporation, pension or provident fund, it must
be accompanied by a certified copy of the resolution authorising the signature, unless it has already
been registered with the transfer office of Absolute.

BAUBA PLATINUM LIMITED


(formerly Absolute Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN ZAE000145686
Share code: BAU

(Bauba Platinum or the Company)

REVISED LISTING PARTICULARS


These Revised Listing Particulars have been prepared on the assumption that the ordinary and special resolutions
proposed in the notice of general meeting of shareholders, forming part of the circular to shareholders dated
17 May 2010, to which these Revised Listing Particulars are attached, will be passed at the general meeting of
shareholders to be held on Monday, 7 June 2010 and that the special resolutions are registered with CIPRO.
These Revised Listing Particulars are not an invitation to the public to subscribe for shares in the Company, but are issued
in compliance with the Listings Requirements of the JSE for the purpose of giving information to the public with regard
to Absolute.
The JSE has, subject to the Company retaining the spread of shareholders as required in terms of the JSE Listings
Requirements, approved the application for the listing of an additional 99 555 217 ordinary shares of R1.00 each on
the Main Board of the JSE under the abbreviated name Bauba, JSE code BAU and ISIN ZAE000145686, resulting
in an authorised share capital of 200 000 000 ordinary shares of R1.00 each and a total issued share capital of
115 567 065 ordinary shares of R1.00 each. Pursuant to the receipt of the Houtbosch prospecting right, the JSE has
approved the further listing of the Houtbosch payment shares and Qinisele Resources shares, which will result in an
increased total issued share capital of 137 201 646 ordinary shares of R1.00 each.
The share premium before and after the Houtbosch payment shares is R510 633 000 and R597 171 000, respectively.
There are no treasury shares in issue.
Listing date of the new securities from commencement of business on

Monday, 12 July 2010

All the directors of the Company, whose names are given in paragraph 13.1 of the circular, collectively and individually,
accept full responsibility for the accuracy of the information given and certify that, to the best of their knowledge and
belief, there are no facts that have been omitted, which would make any statement false or misleading, and that all
reasonable enquiries to ascertain such facts have been made and that these Revised Listing Particulars contain all the
information required by law and the JSE Listings Requirements.
All the advisors, whose names and reports are included in these Revised Listing Particulars, have given and have not
withdrawn, prior to publication of these Revised Listing Particulars, their written consents to act in the capacity stated
and for the inclusion of their names and, where applicable, reports, in the form and context in which they appear in this
document.

Corporate Advisor

Sponsor

Independent Expert and


Independent Reporting
Accountants

Auditors to Absolute

Attorney

Competent Person

Date of issue: 17 May 2010

105

CORPORATE INFORMATION

Directors
PC Pienaar (Chief Executive Officer)
MW Rosslee (Financial director)
JG Best (Chairman) *#
KV Dicks *#
SM Dolamo *#
NM Phosa *
* Non-executive
# Independent
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Arcay House II
Number 3 Anerley Road
Parktown, 2193
(PO Box 62397, Marshalltown, 2107)
Corporate Advisors
Qinisele Resources (Proprietary) Limited
(Registration number 1997/022049/07)
6th Floor, West Towers
Sandton City Towers
Cnr Rivonia Road and 5th Street
Sandton, 2146
(PO Box 2345, North Riding, 2162)
Transfer Secretaries
Computershare Investor Services (Proprietary) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Banker
Nedbank Limited
(Registration number 1951/000009/06)
2nd Floor, Block F
Corporate Place
135 Rivonia Road
Sandown, 2196
(PO Box 1144, Johannesburg, 2000)

106

Secretary and Registered Office


Arcay Client Support (Proprietary) Limited
(Registration number 1998/025284/07)
Arcay House II
Number 3 Anerley Road
Parktown, 2193
(PO Box 62397, Marshalltown, 2107)

Independent Experts and Independent


Reporting Accountants
Moore Stephens (Jhb) Corporate Finance
(Proprietary) Limited
(Registration number 2007/02366/07)
7 West Street
Houghton, 2198
(PO Box, 1574, Houghton, 2041)
Competent Person
Venmyn Rand (Proprietary) Limited
(Registration number 1998/004918/07)
First Floor, Block G
Rochester Place
173 Rivonia Road
Sandton, 2146
(PO Box 782761, Sandton, 2146)
Auditors to Absolute
TAG Incorporated
(Practice number 961450)
Emwil House West, 15 Pony Street,
Tijgervallei Office Park, Silver Lakes, 0081
(Private Bag X35, Lynnwood Ridge, 0040)
Attorney
Routledge Modise Incorporated, trading as
Eversheds in association with Eversheds LLP
(Registration number 1992/006150/21)
22 Fredman Drive
Sandton, 2146
(PO Box 78333, Sandton, 2146)

CONTENTS

The definitions and interpretations commencing on page 4 of the circular apply, mutatis mutandis, to this
contents page.
Page
Corporate information

106

Definitions and interpretations

109

Revised Listing Particulars


1. Introduction

110

2. Incorporation, history and prospects

110

3. Directors

114

4. Share capital

116

5. Controlling and major shareholders and shareholder spread

119

6. Rights attaching to shares

119

7. Dividends

119

8. Share trading history

120

9. Historical financial information

120

10. Material changes

120

11. Material borrowings, inter-company balances, material commitments and loan capital

120

12. Loans receivable

121

13. Immovable property owned and leased

121

14. Other information

121

15. Adequacy of working capital

121

16. Material contracts

121

17. Litigation

121

18. Code of Corporate Practice and Conduct

122

19. Promoters and other fees

122

20. Advisors consents

122

21. Directors responsibility statement

122

22. Documents available for inspection

123

107

Page
Appendices
1. Historical financial information of Absolute for the three years ended 30 June 2009 and
the six months ended 31 December 2009

124

2. Extracts from the articles of association of Bauba Platinum

162

3. Details of directors other directorships and partnerships

169

4. Code of Corporate Practice and Conduct

171

5. Details of material borrowings, loans receivable and inter-company transactions

174

6. Profiles of directors and key management

175

7. Subsidiaries of Bauba Platinum

177

8. Competent Persons Report on Lekkersing Diamond Quartzite Natural Stone Tile Project
and Other Mineral Assets

178

9. Salient terms of the Share Incentive Scheme

193

10. Organogram/Group structure of Absolute (pre-acquisition) and of Bauba Platinum


(post-acquisition)

200

11. Leasehold properties

202

108

DEFINITIONS AND INTERPRETATIONS

The definitions and interpretations contained in the circular, commencing on page 4, apply to these Revised
Listing Particulars.

109

BAUBA PLATINUM LIMITED


(formerly Absolute Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
ISIN: ZAE000145686
Share code: BAU

(Bauba Platinum or the Company)


Directors
PC Pienaar (Chief Executive Officer)
MW Rosslee (Financial Director)
JG Best (Chairman) *#
KV Dicks *#
SM Dolamo *#
NM Phosa *
* Non-executive
# Independent

REVISED LISTING PARTICULARS

1. INTRODUCTION
1.1

At the general meeting of shareholders held on Monday, 7 June 2010, shareholders approved the
transaction, which included the acquisition of Bauba, shares issues, a change in control of the
Company and a change in the name of the Company to Bauba Platinum Limited.

1.2

These Revised Listing Particulars are issued to provide shareholders with additional information on
Bauba Platinum after the transactions.

1.3

Shareholders are referred to the circular to which these Revised Listing Particulars are attached,
which sets out the rationale for the transactions and the details thereof.

2. INCORPORATION, HISTORY AND PROSPECTS


2.1

History of Bauba Platinum


The Company was incorporated in the Republic on 14 November 1986 as Raydo (Proprietary)
Limited. On 17 February 1987 the Company was converted from a private company to a public
company and was subsequently listed on the Main Board of the JSE as an investment holding
company, holding the shares of Bergers Trading Holdings Limited. The Company became a cash
shell pursuant to a scheme of arrangement announced on 12 May 1995, in terms of which scheme
all the assets of the Company were disposed of.
Control of the Company was acquired by Gilboa (SA) (Proprietary) Limited and YH Investments
(Proprietary) Limited on 19 July 1995, the listing was transferred from the Main Board of the
JSE to the VCM and the Companys name was changed to Gilboa Properties Limited. A further
change in control through the injection of property assets, comprising a property development of
210 stands known as Waterkloofspruit and a rental property known as Gilboa House, by CMT Trust
was approved by shareholders on 15 January 1999.
A decision was taken by the Company at the beginning of 2001 to diversify its activities away
from long-term property development and also to focus on the mining sector. To achieve
this objective, Absolute acquired various rights to mine marine diamonds on the west coast
of South Africa and had appointed directors with diamond and mining expertise to the board.

110

Significant funding was required to commence the diamond mining operations. Following the
termination of negotiations for a capital injection into the Company with Ifa Lesizwe Investments
(Proprietary) Limited as announced on 23 April 2003, the marine diamond mining rights lapsed.
The acquisition of Absolute Tiles provided a relationship between the property industry and the
mining industry. Absolute Tiles supplied tiles to the property development industry, and had two
retail outlets in Fourways and Pretoria. Effective 1 March 2009 the Company disposed of its interest
in Absolute Tiles.
On 20 January 2005 shareholders approved the acquisition of 51% of Lenopodi from Calulo
Investments, which acquisition resulted in the injection of assets, turnover and profits into the
Absolute group in the area of mining, which was to be the focus of the group going forward. The
Companys name was changed from Gilboa Properties Limited to Absolute Holdings Limited with
effect from 31 January 2005.
In terms of a circular to shareholders dated 22 September 2008, Absolute raised R12 840 485
by way of an unconditional, fully underwritten, renounceable rights offer for 214 008 081 new
ordinary shares in Absolute at a subscription price of 6 cents per rights offer share in the ratio of
1 right offer share for every 4.00160 Absolute shares held. These monies were applied to fund the
capitalisation of the mining projects at the Diamond Quartzite and Picture Stone quarries as well
as provide additional working capital to the Absolute group. The rights offer was underwritten by
Calulo Resources, which resulted in a change in control of the Company to Calulo Resources.
At a general meeting held on 10 December 2008, shareholders approved the purchase of 25.1%
of the Qinisele Resources shareholders shareholding in Qinisele Resources with effect from 1 July
2008. In terms of the sale of shares agreement, the consideration of R20 000 000.04 was settled
through the issue of 333 333 334 new ordinary shares in Absolute at an issue price of 6 cents per
share (equating to 3 333 333 shares at R6.00 post consolidation).
On 29 July 2009 Absolute purchased 49% of the issued share capital in and 49% of the shareholders
claims against Dikopane from African Wilddogs Resources (Pty) Limited and Mafatiki Mining
Resources (Pty) Limited (the Dikopane shareholders) for an initial purchase price of R1 million,
which was settled in equal proportions of cash of R500 000 and via the issue of 8 333 333 new
ordinary shares in Absolute at an issue price of 6 cents per share (equating to 833 333 shares at
R6.00 post consolidation). Upon conclusion of a Bankable Feasibility Study, Absolute shall have an
option to purchase a further 11% of the issued share capital of and claims against Dikopane via the
issue of new ordinary shares in Absolute.
At the end of August 2009, the Company raised R7 million through the issue of 189 135 135 new
shares for cash at an issue price of 3.7 cents per share (equating to 1 891 351 shares at R3.70 post
consolidation).
On 17 February 2010, shareholders approved the consolidation of the share capital of the Company
on the basis of 1 share for every 100 shares held as well as an odd lot offer to repurchase shares at
R4.00 per share post the consolidation.
At a general meeting on 7 June 2010, shareholders approved, inter alia, the acquisition of Bauba,
the share issue for cash, the Houtbosch payment shares and the change in name of the Company
to Bauba Platinum Limited, which resulted in a change in control to Highland.
2.2

Nature of business and prospects


The primary business of Absolute going forward will be:
the exploration and developing of the Bauba Project with the intention of establishing a mine
that produces an initial 350 000 ounces of PGMs per annum in the next 10 years, expanding
production to 1 million ounces per annum within 20 years from the overall resource base;
the pursuit of acquisitive opportunities in the PGM sector which will enhance shareholder value;
and
to consider projects with joint venture partners with technical deep level mining expertise and/or
funding.

111

Bauba Platinum
The Bauba Project consists of prospecting rights over eight farms which are prospective for platinum
mineralisation in the Eastern Bushveld Igneous Complex, encompassing an area of approximately
50km in length and 6km in width along the Leolo mountain range in the Limpopo Province. The
farms cover the down dip extent of several current development projects and operating mines on
the Eastern limb of the Bushveld Igneous Complex. The geological location should reveal both
Merensky Reef and UG-2 Chromitite Layer occurrences as extensive exploration programs are
being conducted on the properties neighbouring the Bauba Project.
A targeted resource has been estimated by geologist Stephen Gain (Pr.SciNat Msc) using average
modifying factors from projects and mines on adjacent properties. An estimate of the in situ resource
tonnages on the farms is 700 Mt which could include in excess of 100 m oz Platinum Group Metals
(PGM) metal content. This in situ targeted resource estimation is considered conservative but is
not SAMREC Code compliant.
Bauba has designed a detailed investigative exploration programme that will be initiated by
diamond drilling, geological and geophysical mapping, and sophisticated interpretation of the areas
of interest. The drilling sequence will commence on the Southern Cluster, followed by the Central
and Northern Clusters to determine the mineral resource base and the style of mineralisation. The
drilling programme will extend through to the base of the Bushveld Igneous Complex to establish
the form and style of the PGM mineralisation in the Middle and Lower groups of the Bushveld
Igneous Complex, based on public information from adjacent properties. The programme will focus
on the known mineralisation targets of the Merensky Reef and UG-2 Chromitite.
Results from the initial drilling which commenced in April 2010, will form the basis of the balance
of the drilling programme on the Southern Cluster with the aim of establishing the extent of the
resource, which would be converted to a fully compliant reserve statement to form the basis of the
Bankable Feasibility Study.
Bauba has advised Absolute that they are aware of a review application pending in respect of
two prospecting rights which have already been executed. The Sellers and Absolute have both
obtained an independent view that this application is unlikely to succeed.
Lenopodi Natural Stone
Lenopodi commenced business in the second half of 2003 when it applied for a prospecting permit
and later a mining licence for permission to mine slate, dimension stone and other sedimentary
deposits in the North West Province. Subsequently, Lenopodis subsidiary, Lubtalk Investments,
has secured a mining right to develop a quartzite deposit at the Diamond Quartzite quarry in
Namaqualand. A Competent Persons Report was included in a circular to shareholders dated
22 December 2004, which report ascribed a base valuation of R110 million for the Diamond
Quartzite deposit.
The group, through Lenopodi, has identified an opportunity to enter into the mining and marketing
of natural stone products. Natural stone entails dimension stone (granite, marble and sandstone)
and natural cleft stone (quartzite and slate). This niche segment of mining offers relatively high
returns and has significant job creation capabilities, as it is generally labour intensive. Lenopodi
also offers the opportunity to consolidate medium sized mining operations into the group. To this
extent, granite is specifically excluded from the Lenopodi natural stone portfolio, as the local and
export market is volatile to worldwide colour trends.
Lekkersing Diamond Quartzite Sandstone
As announced on 30 June 2008, Lubtalk entered into a Sale of Business Agreement with Richtersveld
Quartzite and Allied Quartzite to acquire the businesses of these two companies, at a cost of
R1.8 million, which purchase price was settled through the vendor issue of shares in Absolute.
A mining licence from the Department of Minerals & Energy (DME) was initially applied
for in terms of the Minerals Act, subject to the approval of the Environmental Management
Programme Report (EMPR), which was submitted on 15 September 2003. An updated
application was required to be submitted under the new mining order which included a social
responsibility programme, and which was resubmitted in October 2004. The mining rights were
finally registered in the Mineral and Petroleum Titles Registration Office in Pretoria on 27 July 2007.

112

Diamond Quartzite is in essence sandstone, over 800 million years old, the hardness of which
distinguishes it from most quartzite worldwide, hence the reference to diamond in its name.
Diamond Quartzite is a metamorphic high grade assemblage of quartz (96% 98%), micas
(2% 3%) and other metallic minerals in trace. It is a continuous alternate of thick quartzite beds
(ex sand sandstone) and thin micaceous layers (ex silt siltstone), the softening and weathering
of the latter resulting in the natural separation of quartzite slabs (natural cleft stone). The Hilda
formation (quartzite) extends from 20km south of the Steinkopf Port Nolloth road northwards,
past Lekkersing, to the Orange River and represents an almost internationally unique deposit.
Although this type of deposit does occur elsewhere, nowhere else in the world is it of such a high
quality as the Richtersveld deposit (96% 98% quartz content) with associated smooth edges and
parallel bedding.
The formation consists of thinly bedded Flagstone quartzitic sandstone of sufficient strength and
quality to be used for tile manufacturing. The difference between this quartzite and other dimension
stone operations (in massive deposits) is that the bedding of this quartzite is of a suitable thickness
and therefore does not require cutting to obtain the tile thickness required by customers. The only
cutting necessary is that which is required to cut the stone into square shapes. Micaceous bedding
planes separate the beds/layers of quartzite.
Picturestone Sandstone
Lenopodi acquired the entire issued share capital of Niemller Marmer (Eiendoms) Beperk
(Niemller Marmer) on 31 March 2008 for R2 000 000, which purchase price was settled through
the issue of shares for 3 cents per share by Absolute. Niemller Marmer holds a valid mining and
prospecting right over a sandstone deposit in the Northern Cape Province, known as Picturestone.
The company is in the process of finalising the conversion of the mining right to a new order mining
right and operations at the site are planned to commence before the end of the year. The majority
of the product to be mined is earmarked for the export market.
Dikopane Coal
Dikopane has been granted a Prospecting Right over various farms located in the Northern part
of the Free State Province, approximately 26km south-southeast of Sasolburg and 28km north of
Heilbron.
This Prospecting Right has been secured over 14,500ha in the Vereeniging-Sasolburg coalfields.
According to the geological model an estimated 1.4 billion tons (gross in-situ resource tonnage)
of coal is present on the prospecting area. The coal deposit can be classified as an inferred coal
resource with borehole grid spacing in the order of 1 km and a drilling density average of less than
1 borehole per 100 Ha (K Dippenaar: Pr Sci. Nat).
The acquisition of the shareholding in Dikopane presents Absolute with an opportunity to develop a
prospective coal exploration project in line with the Companys stated strategy.
Qinisele Resources
Qinisele Resources is a specialist resources corporate finance boutique focussed on providing
advisory services to companies operating in the mining sector, with a specific emphasis on merger
and acquisition transactions, capital raising and investment advice.
Prospects
To maximise shareholder value, the immediate objectives of the Company are:
to produce a SAMREC compliant resource statement, through the execution of a detailed
investigative exploration programme focussed on the known mineralisation targets of the
Merensky Reef and UG-2 chromatite, initiated by diamond drilling, geological and geophysical
mapping, an interpretation of the areas of interest;
followed by a scoping study and bankable feasibility study.

113

3. DIRECTORS
3.1

Details of directors
The full names, ages, business addresses as well as occupations of the directors of Absolute,
pursuant to the reverse listing are as follows:
Name and designation

Age

Business address

Occupation

Pine Pienaar
(Chief Executive Officer)
Mark Rosslee
(Financial Director)
Jonathan Best
(Chairman) *#
Kenneth Dicks *#
Sholto Dolamo *#

44

2nd Floor, West Wing


Longpoint Office Park, Fourways
2nd Floor, West Wing
Longpoint Office Park, Fourways
19 Pagoda Crescent
Fourways Gardens, Sandton
85 Otto Street, Wikkopies, Klerksdorp
17 Melrose Boulevard, Melrose Arch

Chartered
Accountant
Chartered
Accountant
Businessman

Dr Mathews Phosa *

48
61
70
38
57

1st Floor Floor, Block G, Pinmill Farm


164 Katherine Street, Sandton

Businessman
Analyst/Fund
Manager
Businessman

* Non-executive
# Independent
Also directors of subsidiaries of the Company

All the directors are South African. Details of other directorships and/or partnerships held by the
directors are set out in Appendix 3 to these Revised Listing Particulars.
None of the directors have been convicted of an offence involving dishonesty, declared bankrupt,
insolvent or entered into voluntary compromise arrangements, nor have they been publicly criticised
by any statutory or regulatory authorities or disqualified by a court from acting as a director, manager
or conducting the affairs of a company.
There were no receiverships, compulsory liquidations, creditors voluntary liquidations,
administrations, company voluntary arrangements or any compromise with creditors generally or
any class of creditors, where any director is or was a director with an executive function of such
company at the time of, or within 12 months preceding such events.
All of the above directors have completed directors declarations in terms of Schedule 21 of the
Listings Requirements relating to the appointment of new directors. Copies of the declarations are
available for inspection.
3.2

Profiles of directors and senior management


Profiles of directors and senior management are included in Appendix 6 to these Revised Listing
Particulars.

3.3

Directors interest
The directors interests in the ordinary share capital of the Company after the transactions are as
follows:
2009

Total shares
held

Total

PC Pienaar
MW Rosslee
Dr NM Phosa *
JG Best *#
KV Dicks *#
SM Dolamo *#

3 499 993

8 871 973

3 499 993

8 871 973

2.6%

6.5%

Total

12 371 966

12 371 966

9.1%

* Non-executive
# Independent

114

Beneficially held
Direct
Indirect

Changes in directors interests which have occurred between 30 June 2009 and the last practicable
date are detailed in paragraph 13.2 of the circular. PC Pienaar and NM Phosa acquired their
shareholding as part of the transactions through the Orata Trust and the Math-Pin Trust, respectively,
as vendors.
3.4

Directors interests in transactions and emoluments


None of the directors has been interested in any transaction during the current or previous financial
year or during an earlier period which remains in any respect outstanding or unperformed.
The remuneration of the existing directors of Bauba Platinum will not be varied as a result of the
transactions as contained in the circular.
The Company has signed service agreements with PC Pienaar and MW Rosslee which provide
for one months termination period and contains a restraint of trade for one year after termination.
MW Rosslees employment agreement provides for MW Rosslee to be issued 300 000 shares
(30 000 000 shares before the share consolidation), in terms of a share incentive scheme, which is
still to be registered. The shares will vest over a two-year period.
No service agreements are in place for the other directors of the Company. The fees payable to the
non-executive directors are, however, agreed and authorised at a meeting of the board of directors
and then paid subsequent thereto.
All directors receive fees for attendance at board meetings. The remuneration paid to directors
for the year ended 30 June 2009 is detailed in paragraph 13.4 of the circular: The proposed
remuneration of the new board of directors for the forthcoming year is set out below:

PC Pienaar
MW Rosslee
NM Phosa *
KV Dicks *#
JG Best *#
SM Dolamo *#

Salaries
R

Bonuses
R

2 500 000
2 400 000

**
**
**
**

Total

Share
options
R

Share
benefits
R

Fees Expenses
R
R

* Non-executive
# Independent
^ Refer to paragraph 3.4 above
** Fees are payable to directors on attendance per meeting as follows:
Position
Chairman of the board
Member of the board
Chairman of board committee
Member of board committee

Rand
34 000
27 200
30 000
25 500

3.4.1 Other than as disclosed above, no material benefits were received by the directors.
3.4.2 Other than MW Rosslee, the directors do not hold any share options.
3.4.3 The group does not have a pension or provident plan. The shareholders have approved
a share incentive scheme at a general meeting held on 31 March 2009. The scheme
is pending registration with the Master of the High Court. A minor amendment to the share
incentive scheme was made at the general meeting held on 7 June 2010, which amendment
will also be lodged with the Master of the High Court. Salient features of the share incentive
scheme are set out in Appendix 9 to these Revised Listing Particulars.
3.4.4 There have been no commission, gain or profit sharing arrangements entered into with the
directors other than the interest in the underwriting agreement as detailed in paragraph 13.3
of the circular and paragraph 19.3 below.

115

3.4.5 Arcay Client Support (Proprietary) Limited acts as company secretary to the Company at a
fee of R8 000 per month.
3.4.6 No fees have been paid, or are payable, to third parties in lieu of directors fees for any of the
directors.
3.4.7 No other technical, consulting or other fees are payable, directly or indirectly, a part of which
is then paid to a director of the Company.
3.4.8 No payments have been made to any director, either directly or indirectly, by the Company or
any other person in the three years preceding the date of these Revised Listing Particulars
to induce him to become, or to qualify him as a director on in connection with the promotion
or formation of the Company, other than as disclosed in the attached circular.
3.4.9 No loans have been made by the Company to any of its directors nor has any security been
furnished by the Company on behalf of any of its directors or managers.
3.5

Qualifications, borrowing powers and appointment of directors


3.5.1 The relevant provisions of the articles of association of Absolute relating to the qualification,
appointment, remuneration, voting and borrowing powers of directors are set out in
Appendix 5 to these Revised Listing Particulars. The borrowing powers of the Company and
its subsidiaries exercisable by the directors may only be varied by way of a special resolution
in general meeting. The borrowing powers have not been varied in the past three years.
3.5.2 None of the directors of Absolute have:
3.5.2.1 been declared bankrupt, insolvent or have entered into any individual voluntary
compromise arrangements;
3.5.2.2 entered into any receiverships, compulsory liquidations, creditors voluntary
liquidations, administrations, company voluntary arrangements or any compromise
or arrangement with creditors generally or any class of creditors of any company
where such directors are or were directors with an executive function during the
preceding 12 months;
3.5.2.3 entered into any compulsory liquidations, administrations or partnership voluntary
arrangements of any partnerships where such directors are or were partners during
the preceding 12 months;
3.5.2.4 been publicly criticised by a statutory or regulatory authority, including recognised
professional bodies or been disqualified by a court from acting as a director of a
company or from acting in the management or conduct of the affairs of any company;
and/or
3.5.2.5 been involved in any offence of dishonesty, fraud or embezzlement.

4. SHARE CAPITAL
4.1

After the implementation of the transactions and assuming the issue of the Houtbosch payment
shares, the share capital of the Company will be as follows:
R000
Authorised
200 000 000 ordinary shares with a par value of R1.00 each
Issued
137 201 646 ordinary shares with a par value of R1.00 each
Share premium
No treasury shares are held at the last practicable date.

116

200 000

137 202

4.2

Details of alterations to the share capital:


4.2.1

At the Annual General Meeting held on 27 November 2007, shareholders approved the
increase in the authorised share capital of the Company from R10 000 000 divided into
1 000 000 000 ordinary shares with a par value of R0.01 per share by R5 000 000 to
R15 000 000 by the creation of an additional 500 000 000 ordinary shares with a par value
of R0.01 per share.

4.2.2

At the Annual General Meeting held on 10 December 2008, shareholders approved the
increase in the authorised share capital of the Company from R15 000 000 divided into
1 500 000 000 ordinary shares with a par value of R0.01 per share by R10 000 000 to
R25 000 000 by the creation of an additional 1 000 000 000 ordinary shares with a par value
of R0.01 per share.

4.2.3

At the General Meeting held on 17 February 2010, shareholders approved the consolidation
of the authorised share capital of the Company from R25 000 000 divided into 2 500 000 000
ordinary shares with a par value of R0.01 per share to R25 000 000 divided into 25 000 000
ordinary shares with a par value of R1.00 per share and the consolidation of the issued
share capital of the Company from R16 011 848 divided into 1 601 184 758 ordinary shares
with a par value of R0.01 per share to R16 011 848 divided into 16 011 848 ordinary shares
with a par value of R1.00 per share.

4.2.4

At the General Meeting held on 17 February 2010, shareholders approved the repurchase
of up to 21 414 odd lot offer shares at R4.00 per share, subject to the approval of the
consolidation of the share capital of the Company as detailed in paragraph 4.2.3 above.
The odd lot offer closed on 1 April 2010 and the Company repurchased 17 996 odd lot offer
shares, which shares were immediately placed under the Companys general authority to
issue shares for cash. The Company does not hold any treasury shares at the last practicable
date.

4.2.5

Details of shares issued during the preceding three years at the last practicable date are as
follows:
Date issued

Details

12 May 2008

5 000 000 shares at 3 cents per share to WP Boshoff in settlement of


employment contract being a premium of 2 cents per share

18 July 2008

45 000 000 shares at 4 cents per share for the acquisition of both
Allied Quartzite and Richtersveld Quartzite Company Ltd, being a
premium of 3 cents per share

13 October 2008

214 008 081 shares at 6 cents per share in terms of a renounceable


rights offer, being a premium of 5 cents per share

9 December 2008

333 333 334 shares at 6 cents per share for the acquisition of 25.1%
of Qinisele Resources being a premium of 5 cents per share

2 September 2009

189 135 135 ordinary shares, raising approximately R7 million in


terms of a private placing, at a price of 3.7 cents per share, being a
premium of 2.7 cents per share, which equated to a 9.62% discount
to the 30 day volume weighted average price of Absolutes shares on
the JSE as at 11 August 2009

21 October 2009

8 333 333 shares at 6 cents per share for the acquisition of Dikopane
Coal, being a premium of 5 cents per share

117

Shares consolidated on a 1-for-100 shares basis on 29 March 2010


Date issued

Details

18 June 2010

68 124 600 new shares at R5.00 per share for the acquisition of Bauba
being a premium of R4.00 per share

18 June 2010

30 000 000 shares at R5.00 per share for the share issue for cash
(assumed), being a premium of R4.00 per share

18 June 2010

21 189 600 new shares at R5.00 per share for the Houtbosch
prospecting right, being a premium of R4.00 per share

18 June 2010

1 875 598 shares at R5.00 per share (assumed) in terms of an issue


of shares to Qinisele Resources, being a premium of R4.00 per share

4.2.6

The ordinary shares are listed on the JSE. All the authorised and issued ordinary shares are
of the same class and rank pari passu in all respects, including voting, par value, dividends
and capital distributions. In terms of a resolution passed at the Annual General Meeting held
on 27 January 2010, the unissued ordinary shares are under the control of the directors of
Absolute until the next annual general meeting of the Company, subject to the provisions of
section 221 of the Act and the Listings Requirements. No other class of shares exists.

4.2.7

In terms of a circular to shareholders dated 22 September 2008, the Company made an


unconditional, fully underwritten, renounceable rights offer, as supported by an irrevocable
undertaking, of 214 008 081 new ordinary shares of R0.01 each to Absolute shareholders
recorded in the register at the close of business on Friday, 10 October 2008 at a subscription
price of 6 cents per rights offer share, in the ratio of one rights offer share for every 4.00160
Absolute shares held. The purpose of this rights offer was to enlarge the Companys capital
base in order to provide the equity to fund the mining projects at the Diamond Quartzite and
Picturestone quarries as well as to provide working capital in order to expand the business
operations of the Absolute group.
This rights offer was fully underwritten by Calulo Resources. MK Diale and GP Sequeira,
former directors, hold an indirect interest in Calulo Resources through Calulo Investments,
in which they hold a 20% and 5% interest respectively. JJ Serfontein holds a 5% interest
in Calulo Resources directly. No other commission or consideration has been paid by the
Company during the two years preceding the date of the circular, nor is it intended to pay
a commission or a consideration to any person subscribing for or agreeing to subscribe for
any of the Companys securities.

4.2.8

In accordance with the Companys articles of association, any variation of rights attaching
to the ordinary shares will require the consent of the shareholders in general meeting.

4.2.9

In accordance with the Companys articles of association, at any general meeting, every
member present in person or by proxy (or, if a body corporate, duly represented by an
authorised representative) shall have one vote on a show of hands and, on a poll, every
member present in person or by proxy, shall have one vote for each ordinary share of which
he is a holder.

4.2.10 Pursuant to the transactions, 68 124 600 new ordinary shares of R1.00 each have been
issued as purchase consideration for the acquisition and settlement thereof, 30 000 000
shares have been assumed to be issued in terms of the share issue for cash, 21 189 600
new shares have been assumed to be issued in terms of the Houtbosch payment shares
and 1 875 598 shares have been assumed to be issued to Qinisele Resources, resulting in
a total issued share capital of 137 201 646 ordinary shares.

118

4.3

Other than the repurchase of shares pursuant to the odd lot offer detailed in paragraph 4.2.4 above,
there have been no repurchases of the Companys securities, nor any repurchases of any of the
subsidiaries securities, over the past three years. The shares repurchased under the odd lot offer
were immediately reissued under the Companys general authority to issue shares for cash.

4.4

At the Annual General Meeting held on 27 January 2010, the requisite majority of shareholders
approved special and ordinary resolutions:

4.4.1 Placing the authorised but unissued shares under the control of the directors of Absolute
until the next annual general meeting, subject to the provisions of Sections 221 and 222 of
the Companies Act and the Listings Requirements; and
4.4.2 approving a general authority to issue up to 15% of the issued shares for cash, subject to the
following limitations:
this authority shall not endure beyond the next annual general meeting of the Company
nor shall it endure beyond 15 months from the date of that meeting;
there will be no restrictions in regard to the persons to whom the shares may be issued,
provided that such shares are to be issued to public shareholders (as defined by the JSE
in its Listings Requirements) and not to related parties;
upon any issue of shares which, together with prior issues during any financial year, will
constitute 5% or more of the number of shares of the class in issue, the Company shall
by way of an announcement on SENS give full details thereof, including the effect on net
asset value of the Company and earnings per share;
the aggregate issue of a class of shares already in issue in any financial year will not exceed
15% of the number of that class of shares (including securities which are compulsorily
convertible into shares of that class); and
the maximum discount at which shares may be issued is 10% of the weighted average
traded price of the Companys shares over the 30 business days prior to the date that the
price of the issue is determined or agreed by the directors of the issuer.
5. CONTROLLING AND MAJOR SHAREHOLDERS AND SHAREHOLDER SPREAD
Shareholders, excluding directors that, directly or indirectly, are beneficially interested in 5% or more in
the ordinary share capital of the Company pursuant to the transactions is as follows:
Number of shares

Percentage

Highland (direct)

61 085 027

44.5%

Total

61 085 027

44.5%

6. RIGHTS ATTACHING TO SHARES


The provisions of the articles of association of Bauba Platinum relating to the voting rights of shareholders,
the variation of rights and the rights to dividends, profits or capital including redemption rights and
rights on liquidation or distribution of capital assets are set out in Appendix 2 to these Revised Listing
Particulars.
There are no preferential conversion and/or exchange rights of any securities with the Absolute group.
7. DIVIDENDS
7.1

In terms of the Companys articles of association, any dividend that remains unclaimed for three
years after having been declared and become payable by the Company, may be forfeited by the
directors for the benefit of the Company.

7.2

No dividends were declared or paid by the Company in the past three years, there is no dividend
policy in place at present and there are no fixed dates on which entitlement to dividends arises.

7.3

The provisions of the articles of association of the Company relating to dividends are set out in
Appendix 2 to these Revised Listing Particulars.

119

8. SHARE TRADING HISTORY


8.1

The share trading history of the Company is set out in Annexure 7 to the circular to which these
Revised Listing Particulars are attached.

8.2

The JSE is the only stock exchange on which Bauba Platinum shares are listed.

9. HISTORICAL FINANCIAL INFORMATION


The historical financial information of Bauba Platinum (formerly Absolute) for the six months ended
31 December 2009 and the years ended 30 June 2009, 30 June 2008 and 30 June 2007, is summarised
in Appendix 1 to these Revised Listing Particulars. Shareholders are reminded that in terms of IFRS 3
Business Combinations, that the historical comparative information of Bauba Platinum pursuant to the
Bauba acquisition will not be that of the former Absolute other than the share capital and share premium,
but will be the historical information relating to Bauba. This audited historical financial information for the
year ended 28 February 2010 in included as Annexure 2 to the circular to which these Revised Listing
Particulars are attached.
The pro forma financial effects of the acquisition on the historical financial information are set out in
paragraph 3.7 and Annexure 4 to the circular to which these Revised Listing Particulars are attached.
10. MATERIAL CHANGES
There have been no material changes in the financial or trading position of Bauba Platinum or its
subsidiaries since 31 December 2009, other than the acquisition, share issue for cash, Houtbosch
prospecting right and the issue of shares to Qinisele Resources that forms the subject of the circular to
which these Revised Listing Particulars are attached.
11. MATERIAL BORROWINGS, INTER-COMPANY BALANCES, MATERIAL COMMITMENTS AND LOAN
CAPITAL
11.1 Details of the borrowing powers exercisable by the directors, as set out in the Companys articles of
association, are included in Appendix 2 to these Revised Listing Particulars. The borrowing powers
exercisable by the directors of each subsidiary of the Company are the same as those included in
Appendix 2 to these Revised Listing Particulars, in accordance with the requirement of the JSE to
adopt articles in compliance with the Listings Requirements. There have been no instances where
the borrowing powers of Bauba Platinum or its subsidiaries have been exceeded during the past
three years, nor have there been any exchange control or other restrictions placed on borrowing
powers of directors.
11.2 Material loans outstanding as at the last practicable date, are set out in Appendix 5 to these Revised
Listing Particulars. There is no loan capital and there are no debentures in issue or convertible loans
as at the last practicable date.
11.3 Inter-company loans as at the last practicable date are set out in Appendix 5 to these Revised
Listing Particulars.
11.4 Details of the Companys and its subsidiaries current material commitments, lease payments and
contingent liabilities are set out below:
11.4.1 Capital expenditure commitments
At the date of these Revised Listing Particulars, Bauba Platinum and its subsidiaries have no
capital expenditure commitments. Funds to meet expenditure will be financed from funds on
hand and internally generated by the Company.
11.4.2 Mortgage bonds, suspensive sale and lease commitments
At the date of these Revised Listing Particulars, Bauba Platinum has no mortgage bond or
suspensive sale commitments or financial lease commitments.

120

11.4.3 Off-balance sheet financing


At the date of these Revised Listing Particulars, Bauba Platinum has no off-balance sheet
financing or commitments.
11.4.4 Options or preferential rights
No contract or arrangement or proposed contract or arrangement exists, where any option
or preferential right is proposed to be given to any person for any company within the Bauba
Platinum group, other than to MW Rosslee as described in Appendix 1 and paragraph 7.2
of the circular.
12. LOANS RECEIVABLE
Details of loans receivable by the Company and its subsidiaries are contained in Appendix 5 to these
Revised Listing Particulars. There are no material loans receivable by the Company and its subsidiaries,
other than inter-company loans. Neither the Company nor its subsidiaries have made any loans or
furnished any security to any director or manager or any associate of any director or manager of the
Company or its subsidiaries.
13. IMMOVABLE PROPERTY OWNED AND LEASED
There is no immovable property owned or leased at the last practicable date. Details of property to be
leased subject to the approval of the transactions are set out in Appendix 11 to these Revised Listing
Particulars.
14. OTHER INFORMATION
14.1 Details of subsidiaries of Bauba Platinum are set out in Appendix 7 to these Revised Listing
Particulars.
14.2 Neither Bauba Platinum nor its subsidiaries benefit from any form of government protection or any
investment encouragement law, other than the requirements for new order mining licences.
15. ADEQUACY OF WORKING CAPITAL
After considering the effect of the transactions, the directors of Bauba Platinum are of the opinion that
the working capital available to the Company and its subsidiaries, and pursuant to the transactions, is
sufficient for the groups present requirements for a period of 12 months as at the date of the circular.
16. MATERIAL CONTRACTS
Details of material contracts are set out in paragraph 15 of the circular to shareholders, to which these
Revised Listing Particulars are attached.
17. LITIGATION
The Company is not party to any legal or arbitration proceedings, nor, as far as the directors of the
Company are aware are there any legal or arbitration proceedings pending or threatened against Bauba
Platinum, which may have, or have had in the 12 months preceding the date of the circular, a material
effect on the groups financial position, as enlarged by the acquisition of Bauba and NMR.
As detailed in paragraph 3.1.2 of the circular, there is currently a review application pending in the North
Gauteng High Court of South Africa, Pretoria brought by Rustenburg Platinum Mines Limited and ARM
Mining Consortium Limited against a decision of the DMR and citing certain other Parties in respect of the
refusal of the DMR of an application to grant prospecting rights in respect of certain farms, some of which
are farms forming part of the Southern Cluster in respect of which the DMR has granted prospecting
rights to Bauba on 19 December 2007 (Southern Rights). Those prospecting rights have been notarially
executed. Bauba is not a party to, nor has it been cited in the above High Court application. Accordingly,
the parties have no reason not to proceed with the transaction recorded in the acquisition agreement on
the terms and conditions stipulated.

121

18. CODE OF CORPORATE PRACTICE AND CONDUCT


The board of directors is committed to the principles of openness, integrity and accountability and the
provision of timeous, meaningful reporting to stakeholders. A corporate governance report addressing
the guiding principles as set out in the Code of Corporate Practice and Conduct as contained in the
King II and King III Reports on Corporate Governance (the King Report), together with details of
Bauba Platinums compliance with the various aspects of the King Report as required by the Listings
Requirements, is set out in Appendix 4 attached to and forming part of these Revised Listing Particulars.
19. PROMOTERS AND OTHER FEES
19.1 No amounts have been paid, or have accrued as payable, to any promoter within the three years
preceding the Revised Listing Particulars.
19.2 No royalties have been paid or are payable by Bauba Platinum or any of its subsidiaries to third
parties.
19.3 Bauba Platinum entered into an underwriting agreement with Calulo Resources in terms of which
Calulo Resources had fully underwritten the unconditional, renounceable rights offer of 214 008 081
new ordinary shares of R0.01 each to Bauba Platinum shareholders recorded in the share register
at the close of business on Friday, 10 October 2008 at a subscription price of 6 cents per rights
offer share, in the ratio of one rights offer share for every 4.00160 Bauba Platinum shares held.
A circular detailing same was posted to shareholders on 22 September 2008. The underwriting fee
payable in this respect was R642 024, being 5% of the total amount committed and which amount
did not exceed the current market rate payable to independent underwriters, payable on the date
on which the underwriter fulfilled its obligations in terms of the underwriting agreement. MK Diale
and GP Sequeira, former directors, hold an indirect interest in Calulo Resources through Calulo
Investments, in which they hold a 20% and 5% interest, respectively. JJ Serfontein, also a former
director, holds a 5% interest in Calulo Resources directly.
19.4 Details of the costs associated with the issue of shares for the acquisition are detailed in
paragraph 23 of the circular to which these Revised Listing Particulars are attached.
19.5 Qinisele Resources is paid a monthly retainer of R75 000 and, in terms of its mandate, can earn a
success fee of 5% on introduction of a transaction with a deal value of up to R100 000 000 and 3%
thereafter. In addition, a capital raising fee of 5% will be payable in the event that Qinisele Resources
is mandated to raise capital for any transaction. Bauba Platinum holds 25.1% in Qinisele Resources,
and thus the Company and its directors have an indirect benefit from Qinisele Resources. However,
the directors of Bauba Platinum do not have any direct interest in this fee as at the last practicable
date. Qinisele Resources has agreed to accept approximately 1 875 598 new shares in Absolute in
settlement of a portion if its fee as detailed in paragraph 7.1 of the circular.
20. ADVISORS CONSENTS
The reporting accountants and each of the advisors, whose names appear on page 106 of these Revised
Listing Particulars, have consented in writing to act in the capacity stated and to the inclusion of their
names in these Revised Listing Particulars in the form and context in which they appear and have not,
prior to the publication hereof, withdrawn such consent.
21. DIRECTORS RESPONSIBILITY STATEMENT
The directors of Bauba Platinum, whose names are given in paragraph 3 of these Revised Listing
Particulars, collectively and individually, accept full responsibility for the accuracy of the information
given and certify that, to the best of their knowledge and belief, there are no facts that have been omitted
which would make any statement false or misleading, and that all reasonable enquiries to ascertain such
facts have been made and that these Revised Listing Particulars contains all information required by law
and the Listings Requirements.

122

22. DOCUMENTS AVAILABLE FOR INSPECTION


Documents, or copies thereof, as detailed in paragraph 26 of the circular to shareholders, will be available
for inspection at the registered office of Bauba Platinum during normal business hours, from the date of
issue of the circular up to and including Monday, 7 June 2010.

MW Rosslee
BAUBA PLATINUM LIMITED
Johannesburg
17 May 2010
FOR AND ON BEHALF OF ALL THE OTHER DIRECTORS OF BAUBA PLATINUM LIMITED, IN TERMS
OF POWERS OF ATTORNEY GRANTED TO HIM BY SUCH DIRECTORS.

123

Appendix 1

HISTORICAL FINANCIAL INFORMATION OF ABSOLUTE FOR THE THREE YEARS


ENDED 30 JUNE 2009 AND THE SIX MONTHS ENDED 31 DECEMBER 2009

This appendix contains a report on the historical financial information of Absolute, which Company has
been renamed Bauba Platinum Limited. The information is taken from the Companys published unaudited
financial statements for the six months ended 31 December 2009 and the audited results for the years ended
30 June 2009, 30 June 2008 and 30 June 2007. The accounting policies adopted for purposes of this report
comply, and have been consistently applied in all material respects, with International Financial Reporting
Standards. The same accounting policies and methods of computation have been followed as compared to
the prior year. The financial statements have been audited by Tag Incorporated and they were reported on
without qualification.
GENERAL INFORMATION
CURRENT EVENTS, NATURE OF BUSINESS AND FUTURE PROSPECTS
Extract from the directors report for the year ended 30 June 2009
RESULTS
Group Transition
The group has effectively completed its transition to a mining company as the tile retail operation has been
disposed of and the focus will move to the mining activities of the group. As at the date of this report, the
group employs approximately 78 employees most of which are in the mining division and the remainder in
the head office of the Company.
Early stage mining activities commenced at the Diamond Quartzite Quarry in the second quarter of 2008
following the granting of the mining rights, with revenues which have commenced from both local and limited
export sales. A second mining operation has been secured, whereby mining of the Picture Stone deposit
will commence before the end of the next financial year. This mining operation has been delayed due to the
downturn in European economies, the primary markets earmarked for the output from this operation.
Lenopodi
Mining rights for Lekkersing, (held 90% by Lenopodi through Lubtalk Investments (Proprietary) Limited
(Lubtalk), were granted in the first half of last year and preliminary mining activities commenced involving,
inter alia, the rehabilitation of the quarry mining areas and beneficiation factory, the employment of staff and
contractors and the finalisation of agreements with the local authorities. Commencement of development
activities began in the second quarter of this year in order to develop the mining areas for production
build up.
The remaining 10% of Lubtalk is held by Richtersveld Ontwikkelings Maatskappy Beperk, a company
representing over 2,700 residents of the Richtersveld Community in Namaqualand. The effective BEE
shareholding of Lubtalk exceeds 26%, as required by the Mineral and Petroleum Resources Development
Act.
Absolute Tiles
Included in the overall loss for the year of R8 million of the Group and reflected as Discontinued Operations
is a loss of R2.3 million which is attributable to the losses incurred by Absolute Tiles in the financial year until
28 February 2009, this being the date of disposal.
Shareholders are also referred to subsequent events below.

124

RIGHTS OFFER
The Company has issued a rights offer circular to raise capital by way of a renounceable rights offer of new
Absolute shares to shareholders on the basis of a subscription price of 6 cents per rights offer share, in the
ratio of one rights offer share for every 4.0016 Absolute shares held. The proceeds of the rights offer have
been applied to the initial mining activities, the retirement of long-term debt as well as the provision of working
capital for the group. Calulo Resources (Proprietary) Limited (Calulo Resources), being the principal BEE
shareholder of the Company, fully underwrote the rights offer.
FINANCIAL RESULTS
The results are more fully set out in the annual financial statements. The accounting policies adopted have
been consistently applied in all material respects, with International Financial Reporting Standards (IFRS),
the Companies Act of South Africa, No 61 of 1973, as amended, and the Corporate Laws Amendment Act,
No 24 of 2006, and the JSE Listings Requirements. There has been no change to the audited financial
information with regard to any change in accounting policies or in relation to any fundamental error.
GOING CONCERN
The directors have continued to adopt the going concern basis for the preparation of the financial statements.
As is common with many junior mining companies, the Company raises money resources for exploration
and capital projects as and when required. However, the availability of these resources is dependent new
shareholder funding and revenue streams from investments, and there can be no certainty in relation to
these matters. There can be no assurance that the Groups projects will be fully developed in accordance
with current plans or completed on time or to budget. Future work on the development of these projects, the
levels of production and financial returns arising there from may be adversely affected by factors outside the
control of the Group.
ACQUISITIONS AND DISPOSALS
During the year ended 30 June 2009 Absolute acquired a 25.1% interest in Qinisele Resources settled by
means of the issue of 333 333 334 shares at 6 cents in Absolute Holdings Limited.
Shareholders are referred to subsequent events for acquisitions after the year end, being 30 June 2009.
During the year ended 30 June 2009 Absolute disposed of 100% of its shareholding in Absolute Tiles for a
cash consideration of R500 000 effective 1 March 2009.
AUDITORS
TAG Incorporated is the auditor for the holding Company as well as the subsidiaries. The audit committee is
satisfied as to the independence of the auditors.
SPONSOR
The sponsor of the Company is Arcay Moela Sponsors (Proprietary) Limited.
COMPANY SECRETARY
All the directors have access to the advice and services of the company secretary. The board is of the
opinion that the management representing the company secretary has the requisite attributes, experience
and qualifications to fulfil its commitments effectively. Arcay Client Support (Proprietary) Limited remains in
office as company secretary.
SHARE CAPITAL AND ISSUE OF SHARES
The authorised and issued share capital of the Company at 30 June 2009 is set out in note 15 to the financial
statements. As at 30 June 2009 there were 1 403 716 290 ordinary shares of one cent each in issue and
1 096 283 710 unissued ordinary shares.

125

During the year ended 30 June 2009, the Company issued 214 008 081 new shares in terms of a rights offer
to raise capital by way of a renounceable rights offer of new Absolute shares to shareholders on the basis
of a subscription price of 6 cents per rights offer share, in the ratio of one rights offer share for every 4.0016
Absolute shares held. The proceeds of the rights offer have been applied to the initial mining activities, the
retirement of long-term debt as well as the provision of working capital for the group. Calulo Resources, being
the principal BEE shareholder of the Company, had fully underwritten the rights offer in order to guarantee
its success. At the Annual General Meeting held on Wednesday 7 November 2008, eligible shareholders
approved a waiver from making a mandatory offer to minority shareholders in accordance with Section 8.7
of the SRP Code, in the event of Calulo Resources shareholding increasing to over 35% of the Companys
share capital as a result of the underwriting of the rights offer.
In addition, 333 333 334 shares were issued to shareholders of Qinisele Resources at 6 cents in consideration
for a 25.1% interest in Qinisele Resources.
Shareholders are also referred to subsequent events below.
DIVIDEND
No dividend was declared for the year ended 30 June 2009 (2008: R Nil).
SUBSEQUENT EVENTS
Issue of shares for cash
In accordance with the general authority to issue shares for cash as approved by shareholders on
10 December 2008, the Company successfully placed 189 135 135 ordinary shares (the placed shares),
equating to 13.47 per cent of the Companys issued share capital, thereby raising approximately R7 million.
In terms of the private placing, the placed shares were issued at a price of R0.037 per ordinary shares, which
equates to a 9.62% discount to the 30-day volume weighted average price of Absolutes shares on the JSE
as at 11 August 2009.
Coal Prospecting right
In addition, African Wilddogs Resources (Proprietary) Limited and Mafatiki Mining Resources (Proprietary)
Limited (the Dikopane shareholders) accepted a binding offer by Absolute to purchase 49% of the issued
share capital in and 49% of the shareholders claims against Dikopane. Dikopane has been granted a
Prospecting Right over various farms located in the Northern part of the Free State Province, approximately
26km south-southeast of Sasolburg and 28km north of Heilbron. This Prospecting Right has been secured
over 14,500 hectares in the Vereeniging Sasolburg coalfields. The acquisition of the shareholding in
Dikopane presents Absolute with an opportunity to develop a prospective coal exploration project in line with
the Companys stated strategy. The acquisition price of R1 million, was settled in equal proportion in cash
and via the issue of 8 333 333 new ordinary shares at 6 cents per share in Absolute.
Limestone Prospecting rights
The Board also announce that the applications submitted by Canyon Springs Investments 116 (Proprietary)
Limited, a subsidiary of Absolute, for prospecting rights for shale/brick clay and limestone in respect of the
following properties has been granted in terms of section 23(1) of the Mineral and Petroleum Resources
Development Act, 2002 (Act 28 of 2002).
The Remhoogte Project, Western Cape This prospecting right area is approximately 868 hectares in
size. Geological interpretations have indicated that the area contains the strike extension of the limestone
horizon mined at the Soutkloof and Vondeling quarries by Pretoria Portland Cement;
The Zoutrivier Project, Western Cape This prospecting right area is approximately 1,971 hectares in
size. The target area was selected on the basis of geological interpretations that shows that the area is
underlain by the same limestone horizon as that already being mined in the Riebeeck West area;
The Brakfontein Project, Western Cape this prospecting right area is situated to the north of the Zoutrivier
Project and is thus also interpreted to contain the extension of the limestone deposit mined at a quarry
near Riebeeck West. This area is approximately 4,023 hectares in size; and

126

The Oude Bosch Kloof Project, Eastern Cape The prospecting right area measures approximately
1,418 hectares. It is understood that the same limestone horizon was mined on the adjoining property
(Loerie Quarry) until recently. Extensive exploration drilling has been done on the Oude Bosch Kloof
limestone deposit in the late 1980s and early 1990s, and it is understood that a limestone deposit (cement
grade) was present on the property.
NUMBER OF EMPLOYEES
At 30 June 2009 the group had 78 employees (30 June 2008: 80) and the Company had three employees
(30 June 2008: Nil).
Analysis of profits/(losses) for the year:
R
Absolute
Lenopodi
Stand 315
Lubtalk
Diamond Quartzite
Niemoller
Canyon Springs

(8 898)
10
(1)
(32)
(81)
(16)
(34)

Total

(9 051)

Income statements
for the year ended 30 June 2009
Notes
Continuing operations
Revenue
Profit on sale of subsidiary
General and administrative expenses
Impairment of investment in subsidiaries
Loss on disposal of subsidiary
Loss from operations
Finance charges
Interest income
Dividend income from subsidiary
Loss before taxation
Taxation
Loss for the year from continuing
operations
Discontinued operations
Loss for the year from discontinued operations

30 June
2009
R000

30 June
2008
R000

30 June
2007
R000

602

(3 002)

(2 400)
(538)
13

956
250
(7 110)

(5 904)
(44)
55

(2 269)

(2 269)
(81)
37

(1 079)

(1 149)
(760)
28

(2 925)

(5 893)

(2 313)
15

(1 881)

(2 925)

(5 893)

(2 298)

(1 881)

(2 331)

(5 723)

(4 114)

(2 925)

(8 224)

(8 021)

(5 995)

19
19

(0.19)

(0.69)
(0.67)

(1.07)
(1.07)

(0.81)
(0.81)

19

(0.19)

(0.49)

(0.31)

(0.25)

19

(0.20)

(0.76)

(0.56)

19.2

(0.48)

(0.31

(0.25)

19.2

(0.19)

(0.76)

(0.56)

9
3
4

7.2

Loss for the year


Loss per share (cents)
Diluted loss per share (cents)
Loss per share from continuing
operations (cents)
Loss per share from discontinued
operations (cents)
Diluted loss per share from continued
operations (cents)
Diluted loss per share from discontinued
operations (cents)

31 December
2009
R000

127

Balance sheets
At 30 June 2009
31 December
2009
R000

30 June
2009
R000

30 June
2008
R000

30 June
2007
R000

51 875

46 394

20 536

16 245

30 365
20 000

25 987
20 000

407

20 536

3 110

3 455

1 022

4 631

11
12
13
20.4

1 553
942
330
285

2 015
985
142
313

462
102
123
335

3 327
959
107
238

1 183

3 710

54 985

49 849

22 741

24 586

28 338

24 115

745

4 816

16 011
112 063
(99 736)

14 037
106 889
(96 811)

8 563
80 769
(88 587)

7 397
77 985
(80 566)

19 426

18 138

14 991

6 217

18 904

522

17 616

522

14 991

6 202

7 221

7 596

5 822

9 955

18
16
20.4

4 225

2 996

4 199
521
2 876

953

4 869

4 908
33
5 009

1 183

3 598

54 985

49 849

22 741

24 586

Notes
Assets
Non-current assets
Property, plant and equipment
Investments in financial assets
Investments in subsidiaries
Long-term receivables
Loans to group companies

6
8
9
10

Current assets
Inventory
Trade and other receivables
Short-term loan receivable
Cash and cash equivalents
Disposal group held for sale
Total assets
Equity and liabilities
Capital and reserves
Share capital
Share premium
Accumulated loss

15
15

Non-current liabilities
Other financial liabilities
Loans from group companies
Rehabilitation liability

16
10
17

Current liabilities
Trade and other payables
Other financial liabilities
Bank overdraft
Liabilities associated with disposal
group held for sale
Total equity and liabilities

128

Summary of key performance indicators


for the year ended 30 June 2009
Group
30 June
2009
Net asset value (R000)
Tangible net asset value (R000)
Number of shares in issue
Net asset value per share (cents)
Tangible net asset value per
share (cents)
1

24 115
24 115
1 403 716 289
1.72
1.72

30 June
2008

Company
30 June
30 June
2009
2008

745
30 429
30 429
7451
856 374 874 1 403 716 289
0.09
2.17
0.09

7 733
7 733
856 374 874
0.90

2.17

0.90

Share Accumulated
premium
loss
R000
R000

Total
R000

Refer to note 6 where Mineral Rights have been reclassified and are part of tangible assets

Statements of changes in equity


for the year ended 30 June 2009
Group

Share
capital
R000

Balance at 1 July 2006


Net loss for the year

7 397

77 985

(74 571)
(5 995)

10 811
(5 995)

Balance at 30 June 2007


Shares issued
Net loss for the year

7 397
1 166

77 985
2 784

(80 566)

(8 021)

4 816
3 950
(8 021)

Balance at 30 June 2008


Shares issued
Costs offset against share premium
Net loss for the year

8 563
5 474

80 769
27 367
(1 247)

(88 587)

(8 224)

745
32 841
(1 247)
(8 224)

Balance at 30 June 2009


Shares issued
Costs offset against share premium
Net loss for the six months

14 037
1 974

106 889
5 524
(350)

(96 811)

(2 925)

24 115
7 498
(350)
(2 925)

Balance at 31 December 2009

16 011

112 063

(99 736)

28 338

129

Cash flow statements


for the year ended 30 June 2009
Notes
Net cash outflow from operating activities
Cash utilised in operations
Interest paid
Interest income
Cash flows from discontinued operations
Taxation paid

20.1

20.5
20.3

Net cash (outflow)/inflow from investing


activities
Loans to subsidiaries (advanced)
(Additions to)/Proceeds from disposal group
held for sale
Property, plant and equipment acquired
Discontinued operations
Proceeds on disposal of property, plant and
equipment

30 June
2009
R000

30 June
2008
R000

30 June
2007
R000

(7 658)

(7 823)

(4 717)

(5 338)
(44)
55
(2 331)

(2 514)
(777)
21
(4 548)
(5)

(874)
(1 467)
28
(2 404)

(5 092)

2 923

(157)
(4 935)

3 860
(993)

(84)

56

88

Net cash inflow from financing activities

14 721

5 143

4 270

Proceeds from issue of shares


Costs associated with issue of shares
Proceeds from long-term borrowings
Advances of short-term borrowings
(Repayment)/Advances of short-term
receivables/borrowings
Repayment of liabilities associated with
disposal group
Repayment of loans from subsidiaries

204
(1 247)
15 262
(19)

8 757

4 342

Net increase/(decrease) in cash and cash


equivalents
Cash transferred to disposal group held for sale
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

130

20.4

521

(16)

(69)

(3 598)

(3)

1 971

(4 534)

243
(6)
(4 771)

(531)

(4 240)

(2 563)

(4 534)

(4 771)

Notes to the financial statements


for the year ended 30 June 2009
1. ACCOUNTING POLICIES
Significant accounting policies
Absolute Holdings Limited is a company domiciled in the Republic of South Africa. The consolidated
financial statements for the year ended 30 June 2009 comprise the Company and its subsidiaries
(together referred to as the Group) and the Groups interest in associates and jointly controlled entities.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards, the Companies Act of South Africa, No 61 of 1973, as amended (the Companies
Act) and the Corporate Laws Amendment Act, No 24 of 2006 of SA, as amended and its interpretations
adopted by the International Accounting Standards Board (IASB).
At the date of authorisation of these annual financial statements, the following Standards and Interpretations
were in issue but not yet effective and have therefore not been applied, except for IAS 3:
Standard, details of amendment and interpretations

Effective date

IFRS 1 First-Time Adoption of International Financial Reporting Standards


Measurement of the cost of investments in subsidiaries, jointly controlled entities and
associates when adopting IFRS for the first time

01-Jul-09

Amendments relating to oil and gas assets and determining whether an arrangement
contains a lease

01-Jan-10

IFRS 2 Shared-based Payments


Amendments to vesting conditions and cancellations
Clarification of scope IFRS 2 and IFRS 3 revised
Accounting for group cash-settled share-based payment transactions clarity of the
definition of the term Group
IFRS 3 Business Combinations

01-Jan-09
01-Jul-09
01-Jan-10
01-Jul-09

Amendments to accounting for business combinations


IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Plan to sell the controlling interest in a subsidiary
Disclosures of non-current assets (or disposal groups) classified as Held for Sale
or discontinued operations
Amendments resulting from IFRIC 17 for assets held for distribution to owners

01-Jul-09
01-Jan-10
01-Jul-09

IFRS 7 Financial Instruments: Disclosures


Presentation of finance costs

01-Jan-09

Amendments dealing with improving disclosures about Financial Instruments

01-Jan-09

Amendments enhancing disclosures about fair value

01-Jan-09

IFRS 8 Operating Segments


New standard on segment reporting (replaces IAS 14)

01-Jan-09

Disclosure of information about segment assets

01-Jan-10

IAS 1 Presentation of Financial Statements


Amendments to structure of Financial Statements

01-Jan-09

Current/Non-Current classification of derivatives

01-Jan-09

Current/Non-Current classification of convertible instruments

01-Jan-10

IAS 7 Statement of Cash Flows


Cash flows from assets held for rental classified as Operating Activities

01-Jan-09

Classification of expenditures on unrecognised assets

01-Jan-10

131

Standard, details of amendment and interpretations

132

Effective date

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors


Status of implementation guidance

01-Jan-09

IAS 10 Events After the Reporting Period


Dividends declared after the end of the reporting period
Amendment resulting from the issue of IFRIC 17

01-Jan-09
01-Jul-09

IAS 16 Property, Plant and Equipment


Recoverable amount definitions
Accounting for sale of assets held for rental

01-Jan-09
01-Jan-09

IAS 17 Leases
Classification of leases of land and buildings

01-Jan-10

IAS 18 Revenue
Costs of originating a loan

01-Jan-09

IAS 19 Employee Benefits


Curtailments and negative past service costs
Plan administration costs
Replacement of term fall due
Guidance on contingent liabilities

01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09

IAS 20 Accounting for Government Grants and Disclosure


of Government Assistance
Government loans with a below market rate of interest
Consistency of terminology with other IFRSs

01-Jan-09
01-Jan-09

IAS 23 Borrowing Costs


Amendment requiring capitalisation only model
Components of borrowing costs

01-Jan-09
01-Jan-09

IAS 27 Consolidated and Separate Financial Statements


Amendment dealing with measurement of the cost of investments when adopting
IFRS for the first time
Consequential amendments from changes to Business Combinations
Measurement of subsidiary held for sale in separate financial statements

01-Jan-09
01-Jul-09
01-Jul-09

IAS 28 Investments in Associates


Required disclosures when investments in associates are accounted for at fair value
through profit or loss
Impairment of investment in associate
Consequential amendments from changes to business combinations

01-Jan-09
01-Jan-09
01-Jul-09

IAS 29 Financial Reporting in Hyperinflationary Economies


Description of measurement basis in financial statements
Consistency of terminology with other IFRSs

01-Jan-09
01-Jan-09

IAS 31 Interests in Joint Ventures


Required disclosures when interests in jointly controlled entities are accounted for at
fair value through profit or loss
Consequential amendments from changes to Business Combinations

01-Jan-09
01-Jul-09

IAS 32 Financial Instruments


Certain financial instruments will be classified as equity whereas, prior to these

01-Jan-09

IAS 34 Interim Financial Reporting


Earnings per share disclosures in interim financial reports

01-Jan-09

Standard, details of amendment and interpretations

Effective date

IAS 36 Impairment of Assets


Disclosure of estimates used to determine recoverable amount
Unit of accounting for goodwill impairment test

01-Jan-09
01-Jan-10

IAS 38 Intangible Assets


Advertising and promotional activities
Unit of production method of amortisation
Additional consequential amendments arising from revised IFRS 3
Measuring the fair value of an intangible asset acquired in a business combination

01-Jan-09
01-Jan-09
01-Jul-09
01-Jul-09

IAS 39 Financial Instruments: Recognition and Measurement


Reclassification of derivatives into or out of the classification of at fair value through
profit or loss
Designating and documenting hedges at the segment level
Applicable effective interest rate on cessation of fair value hedge accounting
Clarifies two hedge accounting issues: Inflation in a financial hedge item
A one-sided risk in a hedged item
Amendments for embedded derivatives when reclassifying financial instruments
Annual Periods on or after 30 June 2009
Treating loan prepayment penalties as closely related embedded derivatives
Scope exemption for business combination contracts
Cash flow hedge accounting

01-Jan-10
01-Jan-10
01-Jan-10

IAS 40 Investment Property


Property under construction or development for future use as investment property
Consistency of terminology with IAS 8
Investment property held under lease

01-Jan-09
01-Jan-09
01-Jan-09

IAS 41 Agriculture
Discount rate for fair value calculations
Additional biological transformation
Examples of agricultural produce and products
Point-of-sale costs

01-Jan-09
01-Jan-09
01-Jan-09
01-Jan-09

IFRIC 9 (amended) Re-assessment of Embedded Derivatives


Scope of IFRIC 9 and revised IFRS 3
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes

01-Jan-09
01-Jan-09
01-Jan-09
01-Jul-09
01-Jul-09

01-Jul-09
01-Jan-08
01-Jul-08

IFRIC 14/IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding


Requirements and their Interaction

01-Jan-08

IFRIC 15 Agreements for the Construction of Real Estate

01-Jan-09

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

01-Oct-08

IFRIC 16 (amended) Hedges of a Net Investment in a Foreign Operation


Amendment to the restriction on the entity that can hold hedging instruments

01-Jul-09

IFRIC 17 Distribution of Non-cash Assets to Owners

01-Jul-09

IFRIC 18 Transfers of Assets from Customers

01-Jul-09

These standards will be adopted on their effective date and the potential effect of these standards, where
applicable, is not likely to be material.
IAS 23 Borrowing Costs, have been adopted in the current year which resulted in the capitalisation of
borrowing costs relating to qualifying assets.

133

Basis of preparation and Presentation of Annual Financial Statements


The annual financial statements are prepared on the historical cost basis except for the following
assets and liabilities which are stated at their fair value: financial instruments and investment property.
Non-current assets and disposal groups held for sale are stated at the lower of the carrying amount
and fair value less costs to sell.
The preparation of financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts
of assets and liabilities, income and expenses. The estimates and associated assumptions are based
on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
In particular, information about significant areas of estimation, uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the amount recognised in the
financial statements are described in the following notes:
Measurement of depreciation and amortisation of property, plant and equipment;
Measurement of provision for closure and restoration costs;
Determination of fair values.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
The accounting policies are consistent with the previous period and have been applied consistently
by Group entities.
The financial statements are prepared on the going concern as the projected cash flows of the group
are sufficient to meet its continuing obligations for the next 12 months.
In preparing the annual financial statements, management is required to make estimates and
assumptions that affect the amounts represented in the annual financial statements and related
disclosures. Use of available information and the application of judgement is inherent in the formation
of estimates. Actual results in the future could differ from these estimates which may be material to the
annual financial statements. Significant judgement includes:
Trade Receivables
The group assesses its trade receivables for impairment at each balance sheet date. In determining
whether an impairment loss should be recorded in the income statement, the group makes judgements
as to whether there is observable data indicating a measurable decrease in the estimated future cash
flows from a financial asset.
Fair value estimates
The fair value of financial instruments traded in active markets (such as trading and available-for-sale
securities) is based on quoted market prices at the balance sheet date. The quoted market prices used
for financial assets held by the group is the current trading prices.
The fair value of financial instruments that are not traded in an active market (for example, over-thecounter derivatives) is determined by using valuation techniques. The group uses the net assets value
method.
The carrying value less impairment provision of trade receivables and payables are assumed to
approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the
group for similar financial instruments.

134

Expected manner of realisation of deferred tax


Deferred tax is provided for on the fair value adjustments of investment properties based on the expected
manner of recovery, i.e. sale or use. This manner of recovery affects the rate used to determine the
deferred tax liability.
Taxation
Judgement is required in determining the provision for income taxes due to the complexity of legislation.
There are many transactions and calculations for which the ultimate tax determination is uncertain during
the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on
estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different
from the amounts that were initially recorded, such differences will impact the income tax and deferred
tax provisions in the period in which such determination is made.
The group recognises the net future tax benefit related to deferred income tax assets to the extent that
it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing
the recoverability of deferred income tax assets requires the group to make significant estimates related
to expectations of future taxable income. Estimates of future taxable income are based on forecast cash
flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future
cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net
deferred tax assets recorded at the balance sheet date could be impacted.
Share options-based payments
The group issued equity-settled share-based payments to an employee. Equity-settled share-based
payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at
the date of grant. The fair value determined at the grant date of the equity-settled share-based payments
is expensed as services are rendered over the vesting period, based on the groups estimate of the
shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions. Fair
value is measured using the Black-Scholes pricing model. The expected life used in the model has
been adjusted, based on managements best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
Rehabilitation obligations
Rehabilitation costs and related accrued liabilities, based on the groups assessment of current
environmental and regulatory requirements, are accrued to reflect the net present value of the estimated
cost of restoring the environmental disturbance that has occurred up to the balance sheet date. The costs
so provided are capitalised as part of mineral assets and depreciated accordingly. Annual increases in
the provision is split between finance costs relating to the change in the net present value of the provision,
inflationary increases in the provision estimate and restoration costs relating to additional environmental
disturbances that have occurred.
Basis of consolidation
Subsidiaries are entities, including special purpose entities, controlled by the Group. Control exists
when the Group has the power, directly or indirectly, to govern the financial and operating policies of
an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that
presently are exercisable or convertible are taken into account. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that control commences until the
date the control ceases.
Intra-group balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.
Business combinations
Acquisition of subsidiaries and businesses are accounted for using the purchase method. The cost
of the business combination is measured as the aggregate of the fair values of assets given, liabilities
incurred or assumed, and equity instruments issued by the group in exchange for control of the
acquiree, plus any costs directly attributable to the business combination.

135

The acquirees identifiable assets, liabilities and contingent liabilities that meet the conditions for
recognition under IFRS 3, Business Combinations, are recognised at their fair values at the acquisition
date, except for non-current assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are
recognised and measured at fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the
excess of the cost of the business combination over the groups interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Groups
interest in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities
exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
date are translated into Rands at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on transactions are recognised in profit or loss. Non-monetary assets and liabilities
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies
that are stated at fair value are translated into Rands at foreign exchange rates ruling at the dates the
fair value was determined.
Financial instruments
Financial instruments carried on the balance sheet include cash and bank balances, investments,
receivables, trade payables, loans and borrowings. The particular recognition methods adopted are
disclosed in the individual policy statements associated with each item.
Initial recognition
Financial assets and financial liabilities are recognised on the balance sheet when the group becomes
a party to the contractual provisions of the instruments.
The group classifies financial instruments and their component parts, on initial recognition, as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement.
Fair value determination
The fair values of quoted investments are based on current trading prices. If the market for a financial
asset is not active (and for unlisted securities), the group establishes fair value by using valuation
techniques. These include the use of recent arms length transactions, reference to other instruments
that are substantially the same, discounted cash flow analysis, and option pricing models making
maximum use of market inputs and relying as little as possible on entity-specific inputs.
Measurement
Financial instruments are initially measured at fair value, net of directly attributable transaction costs.
The only exception to these financial instruments classified at fair value through profit or loss in which
case these transaction costs are expensed immediately. Subsequent to initial recognition these
instruments are measured as set out below.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term
highly liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. These are initially and subsequently recorded at fair value.
Trade and other receivables
Trade receivables are classified as loans and receivables and measured at amortised cost. Appropriate
allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective
evidence that the asset is impaired.

136

Financial liabilities
Financial liabilities are recognised subsequently at amortised cost, namely original debt less principal
payments and amortisations, except for derivatives, which are subsequently measured at fair value.
Loans to/(from) group companies
These include loans to subsidiaries and are recognised initially at fair value plus direct transaction
costs.
Subsequently these loans are measured at amortised cost using the effective interest rate method.
On loans receivable, an impairment loss is recognised in profit or loss when there is objective evidence
that it is impaired. The impairment is measured as the difference between the investments carrying
amount and the present value of estimated future cash flows discounted at the effective interest rate
computed at initial recognition.
Impairment losses are reversed in subsequent periods when an increase in the investments recoverable
amount can be related objectively to an event occurring after the impairment was recognised, subject
to the restriction that the carrying amount of the investment at the date the impairment is reversed
does not exceed what the amortised cost would have been had the impairment not been recognised.
Derivative instruments
Derivative financial instruments consisting of forward exchange contracts are initially measured at fair
value on the contract date and are re-measured to fair value at subsequent reporting dates. Fair value
is based on the value of equity instruments at balance sheet date.
Gains and losses on subsequent measurement
Gains and losses arising from a change in the fair value of financial instruments that are not part of a
hedging relationship are included in profit or loss in the period in which the change arises.
Gains and losses from measuring the hedging instruments relating to a fair value hedge at fair value
are recognised immediately in net profit or loss.
Gains and losses from re-measuring the hedging instruments relating to a cash flow hedge to fair
value are initially recognised directly in equity. If the hedged firm commitment or forecast transaction
results in the recognition of an asset or liability, the cumulative amount recognised in equity up to the
transaction date is adjusted against the initial measurement of the asset or liability. For other cash flow
hedges, the cumulative amount recognised in equity is included in net profit or loss in the period when
the commitment or forecast transaction affects profit or loss.
Where the hedging instrument or hedge relationship is terminated but the hedged transaction is
still expected to occur, the cumulative unrealised gain or loss at that point remains in equity and is
recognised in accordance with the above policy when the truncation occurs. If the hedged transaction
is no longer expected to occur, the cumulative unrealised gain or loss is recognised in the income
statement immediately.
Trade and other payables
Trade payables are initially measured at fair value less transaction costs and are subsequently
measured at amortised cost using the effective interest rate method.
Bank overdraft and borrowings
Bank overdrafts and borrowing are initially measured at fair value less transaction costs and are
subsequently measured at amortised cost using the effective interest rate method.
Property, plant and equipment
Development costs
Development costs relating to major programmes at a mine are capitalised. Development costs consist
primarily of expenditure to expand the capacity of the mine. Day-to-day mine development costs
to maintain production are expensed as incurred.

137

Initial development and pre-production costs relating to a new ore body, including amortisation,
depreciation and interest on borrowed funds used to develop the ore body, are capitalised until
commissioning of production facilities and commercial levels of production are achieved. This is
evaluated on a quarterly basis and would occur when the mine has achieved breakeven profitability
and is likely to maintain these levels for at least the next quarter.
The Group reviews the carrying amount of mineral assets and development costs when circumstances
suggest the carrying amount may not be recoverable. Recoverability is assessed using estimates
of future cash flows on a discounted basis, including revenues, operating costs and future capital
expenditures. Where necessary a reduction in carrying amount is recorded.
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses (see note 7). Certain items of property, plant and equipment that have been revalued to fair
value on or prior to 1 July 2005, the date of transition to IFRS, are measured on the basis of deemed
cost, being the revalued amount at the date of the revaluation. Thereafter the cost model continued
to be used. Where parts of an item of property, plant and equipment have different useful lives or
depreciation methods, they are accounted for as separate items of property, plant and equipment if
they have a cost that is significant in relation to the cost of the remainder of the asset.
Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are
classified as finance leases. Lease payments are accounted for as described in accounting policy
above.
Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost
of replacing part of such an item when the cost is incurred if it is probable that the future economic
benefits embodied with the item will flow to the Group and the cost of the item can be measured
reliably. All other costs are recognised in profit or loss as an expense as incurred.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of
each part of property, plant and equipment so as to write it down to its residual value. Land is not
depreciated. The estimated useful lives are as follows:
Office furniture and equipment
Computer software
Motor vehicles and leasehold improvements

10 years
2 years
5 years

The estimated useful lives, residual values and depreciation method are reviewed at each year-end.
Intangible assets
Goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents
amounts arising on acquisition of subsidiaries, associates and joint ventures. In respect of business
acquisitions that have occurred since 1 January 2003, goodwill represents the difference between the
cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cashgenerating units and is tested annually for impairment. In respect of associates, the carrying amount
of goodwill is included in the carrying amount of the investment in the associate.
Any excess of the interest in the net fair value of the acquirees identifiable assets, liabilities and
contingent liabilities over cost arising on an acquisition is recognised immediately directly in profit or
loss.

138

Exploration and evaluation assets


Expenditure related to the acquisition, exploration and development of exploration properties, net of
any recoveries, and including an appropriate allocation of administration costs is capitalised. If an
exploration property is abandoned, continued exploration is not planned in the foreseeable future or
when other events and circumstances indicate that the carrying amount may not be recovered, the
accumulated costs and expenditures are written-off. Capitalised expenditure relating to exploration
projects represents costs to be charged against income in the future and do not necessarily reflect the
present or future values of the particular projects.
Other intangible assets
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation
and impairment losses. Expenditure on internally generated goodwill and brands is recognised in
profit or loss as an expense as incurred.
Subsequent costs
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the
future economic benefits embodied in the specific asset to which it relates. All other expenditure is
expensed as incurred.
Amortisation
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of the
intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite
useful life are automatically tested for impairment at each balance sheet date and whenever there is
an indicator of impairment. Other intangible assets are amortised from the date they are available for
use in the manner intended by management.
The difference between the net disposal proceeds and the carrying amount of the intangible asset is
the gain or loss on disposal of the asset. These gains and losses are recognised in profit or loss.
Inventories
Inventories are stated at the lower of cost or net realisable value. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
The cost of inventories is based on the weighted average principal and includes expenditure incurred
in acquiring the inventories and bringing them to their existing location and condition. Where necessary,
provision is made for obsolete, slow-moving and defective inventory.
Consumable stores and materials are valued at the lower of cost and net realisable value on a weighted
average cost basis. Obsolete, redundant and slow-moving inventory is identified and written down to
recoverable amounts/net realisable values.
Natural stone inventories are valued at the lower of average cost of production or net realisable value
if lower. Stock-pile and in-process inventories are valued at the lower of moving average cost of
production and estimated net realisable value. The average cost of production is taken as total cost
incurred on mining, including amortisation costs, and is allocated to inventory on a unit of production
basis.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are
repayable on demand and form an integral part of the Groups cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
Impairment
The carrying amounts of the Groups assets, inventory (see accounting policy) and deferred tax assets
(see accounting policy), are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If such an indication exists, the assets recoverable amount is estimated.

139

For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available
for use, the recoverable amount is estimated at each balance sheet date and whenever there is an
indicator of impairment.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating
unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the
carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce
the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
When a decline in the fair value of an available-for-sale financial asset has been recognised directly
in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been
recognised directly in equity is recognised in profit or loss even though the financial asset has not been
derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference
between the acquisition cost and current fair value, less any impairment loss on that financial asset
previously recognised in profit or loss.
Calculation of recoverable amount
The recoverable amount of the Groups investments in held-to-maturity investments and loans and
receivables carried at amortised cost is calculated as the present value of estimated future cash
flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial
recognition of these financial assets). Receivables with a short duration are not discounted unless the
effect thereof is material.
The recoverable amount of other assets is the greater of their fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. For an asset that does not generate largely independent cash inflows,
the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Reversals of impairment
An impairment loss in respect of a held-to-maturity investment and loans or receivables carried at
amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively
to an event occurring after the impairment loss was recognised.
An impairment loss in respect of an investment in an equity instrument classified as available for sale
is not reversed through profit or loss. If the fair value of a debt instrument classified as available-forsale increases and the increase can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss, the impairment loss shall be reversed, with the amount of the
reversal recognised in profit or loss.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the assets carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any
difference between cost and redemption value being recognised in profit or loss over the period of the
borrowings on an effective interest basis.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value
of money and, where appropriate, the risks specific to the liability.

140

Where some or all of the expenditure required to settle a provision is expected to be reimbursed
by another party, the reimbursement is recognised when, and only when, it is virtually certain that
reimbursement will be received if the group settles the obligation. The reimbursement is treated as
a separate asset. The amount recognised for the reimbursement does not exceed the amount of the
provision.
If the group has a contract that is onerous, the present obligation under the contract is recognised and
measured as a provision.
Environmental rehabilitation
Long-term environmental obligations are based on the groups environmental management plans, in
compliance with current environmental and regulatory requirements in the jurisdiction in which the
group operates. Full provision is made based on the estimated cost of restoring the environmental
disturbance that has occurred up to the balance sheet date with a corresponding increase in the
related property, plant and equipment. Increases due to additional environmental disturbances are
capitalised and amortised over the life of the mine.
Annual increases in the provision relating to the change in the provision and inflationary increases are
shown separately in profit or loss, except where the related mine is under development and has not
yet reached commercial levels of production, in which case such adjustment is charged or credited in
the balance sheet to the carrying value of mineral assets.
The estimated costs of rehabilitation is reviewed annually and adjusted as appropriate for changes in
legislation or technology.
Annual contributions are made to fund the estimated cost of rehabilitation during and at the end of the
life of the mine. The funds contributed are included under cash and cash equivalents and shown as
restricted cash.
Revenue
Goods sold and services rendered
Revenue from the sale of goods is recognised when all the following conditions have been satisfied:
the group has transferred to the buyer the significant risks and rewards of ownership of the goods;
the group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the group; and
the costs incurred in respect of the transaction can be measured reliably.
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction is recognised by reference to the stage of completion of the
transaction at the balance sheet date. The outcome of a transaction can be estimated reliably when
all the following conditions are satisfied:

the amount of revenue can be measured reliably;


it is probable that the economic benefits associated with the transaction will flow to the group;
the stage of completion of the transaction at the balance sheet date can be measured reliably; and
the costs incurred for the transaction and the costs to complete the transaction can be measured
reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
revenue is recognised only to the extent of the expenses recognised that are recoverable.
Revenue is measured at the fair value of the consideration received or receivable and represents the
amounts receivable for goods and services provided in the normal course of business, net of trade
discounts and volume rebates, and value-added tax.
Interest income is recognised in profit or loss as it accrues, using the effective interest method.

141

Dividend income is recognised in profit or loss on the date the groups right to receive payments
is established which, in the case of quoted securities, is usually the ex-dividend date. Where the
income relates to investments in the mining and associated industries, the income is reflected as trade
investment income
The interest expense component of finance lease payments is recognised in profit or loss using the
effective interest rate method.
Expenses
Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental
to ownership to the lessee. All other leases are classified as operating leases.
Operating lease payments
Payments made under operating leases are recognised on the straight-line bases over the term of
the lease. Lease incentives received are recognised as an integral part of the total lease expenses.
The difference between the amounts recognised as an expense and the contractual payments are
recognised as an operation lease liability. This liability is not discounted.
Any contingent rents are expensed in the period in which they are incurred.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining balance of the liability.
Income tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount
already paid in respect of current and prior periods exceeds the amount due for those periods, the
excess is recognised as an asset.
Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected
to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the
deferred tax liability arises from:
the initial recognition of goodwill; or
the initial recognition of an asset or liability in a transaction which:
is not a business combination; and
at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss).
A deferred tax liability is recognised for all taxable temporary differences associated with investments
in subsidiaries, except to the extent that both of the following conditions are satisfied:
the parent, investor or venturer is able to control the timing of the reversal of the temporary difference;
and
it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset is recognised for all deductible temporary differences to the extent that it is
probable that taxable profit will be available against which the deductible temporary difference can
be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in
a transaction that:
is not a business combination; and
at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss).

142

A deferred tax asset is recognised for all deductible temporary differences arising from investments in
subsidiaries, to the extent that it is probable that:
the temporary difference will reverse in the foreseeable future; and
taxable profit will be available against which the temporary difference can be utilised.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included in profit or loss for
the period, except to the extent that the tax arises from:
a transaction or event which is recognised, in the same or a different period, directly in equity; or
a business combination.
Current tax and deferred taxes are changed or credited directly to equity if the tax relates to items that
are credited or charged, in the same or a different period, directly to equity.
Share-based payment expenses
Goods or services received or acquired in a share-based payment transaction are recognised when
the goods or as the services are received. A corresponding increase in equity is recognised if the
goods or services were received in an equity-settled share-based payment transaction. For equitysettled share-based payment transactions, the goods or services received are measured, and the
corresponding increase in equity, directly, at the fair value of the goods or services received, unless
that fair value cannot be estimated reliably. If the share-based payments granted do not vest until the
counterparty completes a specified period of service, company accounts for those services as they
are rendered by the counterparty during the vesting period (or on a straight-line basis over the vesting
period). If the share-based payments vest immediately the services received are recognised in full.
Non-current assets held for sale and discontinued operations
Immediately before classification as held for sale, the measurement of the assets (and all assets and
liabilities in a disposal group) is brought up-to-date in accordance with applicable IFRSs. Thereafter,
on initial classification as held for sale, non-current assets and disposal groups are recognised at the
lower of carrying amount and fair value less costs to sell.
Impairment losses on initial classification as held for sale are included in profit or loss. The same
applies to gains and losses on subsequent measurement.
A discontinued operation is a component of the Groups business that represents a separate major
line of business or geographical area of operations or is a subsidiary acquired exclusively with a view
to resale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the
criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also
qualify.
Share capital and equity
An equity instrument is any contract that evidences residual interest of the asset of an entity after
deducting all of its liabilities.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred, except to the
extent that they are capitalised where they are directly attributable to the acquisition, construction or
production of a qualifying asset and are capitalised as part of the cost of that asset.
Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to
ownership to the lessee. A lease is classified as an operating lease if it does not transfer substantially
all the risks and rewards incidental to ownership to the lessee.
Operating segments
A segment is a distinguishable component of the group that is engaged in providing products or
services which is subject to risks and rewards that are different from those other segments. The groups
primary format for segment reporting is based on its business activities.

143

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

2. REVENUE
An analysis of the revenue of the group for the
year is as follows:
Retail sales
Dividend income
Administration fees are paid to the Company
by its subsidiaries.

4 673
956

4 402

956

600

5 629

4 402

1 556

Attributable to:
Continuing operations
Discontinued operations

956
4 673

4 402

1 556

Total revenue

5 629

4 402

1 556

Auditors remuneration

230

169

123

82

Audit fees
Other services

192
38

165
4

98
25

81
1

Attributable to:
Continuing operations
Discontinued operations

166
64

109
60

123

82

230

169

123

82

Operating lease charges

1 479

2 089

144

Premises
Office equipment
Vehicles

1 354
31
94

1 718
52
319

144

Attributable to:
Continuing operations
Discontinued operations

144
1 335

113
1 976

144

1 479

2 089

144

Staff costs

4 140

2 656

3 076

532

Attributable to:
Continued operations
Discontinued operations

3 076
1 064

930
1 726

3 076

532

4 140

2 656

3 076

532

3. LOSS FROM OPERATIONS FOR


CONTINUED AND DISCONTINUED
OPERATIONS is arrived at after
charging/(crediting) the following items:
3.1

3.2

3.3

3.4

144

(Loss)/Profit on disposal of property,


plant and equipment

(57)

102

(4)

Attributable to:
Continued operations
Discontinued operations

(4)
(53)

150
(48)

(4)

(57)

102

(4)

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

Loss from operations for continued and


discontinued operations (continued)
3.5

3.6

Depreciation

48

167

Office equipment
Computer equipment
Leasehold improvements
Furniture and fittings
Motor vehicles
Mining equipment

2
7
6
7
26

8
9
87
13
29
21

Attributable to:
Continuing operations
Discontinued operations

6
42

21
146

48

167

217

172

214

172

Directors remuneration*

2 104

56

2 104

56

Executive directors
Non-executive directors

2 024
80

16
40

2 024
80

16
40

195
672
21

(656)

684

12
81

10
672
11

232

777

693

44
188

81
696

693

232

777

693

Profit on foreign exchange


Continuing operations
Discontinued operations

3.7

Share options granted to directors have


no income statement impact.
* For detailed analysis refer to note 25.

4. FINANCE CHARGES
Bank accounts
Group companies
Payables
Long-term loans
Less: Amounts capitalised to mining development

Attributable to:
Continuing operations
Discontinued operations

145

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

5. TAXATION
Continuing operations:
Deferred tax
Reversal of timing differences.

15

15

1 575

3 317

Unrecognised deferred tax assets


The following deferred tax assets have not
been recognised at the balance sheet date
because it is uncertain when future taxable
profit will be available to utilise the tax losses.
Tax loss is R000 5 624 (2008: R000 11 847)

No provision has been made for normal taxation by the group as the group had no taxable income for the
year. As the Company does not trade it has no taxable income or losses available to be set-off against
future income.
6. PROPERTY, PLANT AND EQUIPMENT
Group

Motor
vehicle
R000
At cost 1 July 2007
Less: Accumulated depreciation
Carrying value as at 1 July 2007
Plus: Additions
Less: Depreciation
Less: Disposals
Transfers to disposal group held
for sale
Carrying value as at 30 June 2008

Computer
equipment
R000

Total
R000

338
(154)

893
(743)

303
(290)

209
(75)

9 717

184

(29)
(89)

150
133
(87)

13

(9)

134
9 849
(21)
(15)

9 717
858

(66)

(63)
133

(4)

(98)

19 566

837

(231)
20 536

19 566
(21)

858
(21)

20 557

96
(17)
(10)

19 566
5 355

718

837
19
(44)

(585)

20 536
5 525
(65)
(10)

10 840
(21)

11 460
(1 262)
10 198
(167)
(104)

At cost 1 July 2008


Less: Accumulated depreciation

133

Carrying value as at 1 July 2008


Plus: Additions
Less: Depreciation
Less: Disposals
Transfers to mining development

55
(4)

133

(133)

Carrying value as at 30 June 2009

51

69

25 639

228

25 987

Cost
Accumulated depreciation

55
(4)

84
(15)

25 639

292
(64)

26 070
(83)

146

Leasehold
improvements
R000

Mining
Furniture
developand
ment and
and office prospecting
Mining
equipment
right1 equipment
R000
R000
R000

Included in property above are mineral rights in respect of Diamond Quartzite and Picture Stone. Mineral rights have not been
amortised yet as the activities for the year consisted mostly of clearing the area to start active mining of the quarry.

6. PROPERTY, PLANT AND EQUIPMENT (continued)


Company
Computer
equipment
R000

Total
R000

Cost
Less: Accumulated depreciation

Carrying value as at 1 July 2008


Plus: Additions
Less: Depreciation
Less: Disposals
Transfers

34
(6)

34
(6)

Carrying value as at 30 June 2009

28

28

Cost
Less: Accumulated depreciation

34
(6)

34
(6)

At 1 July 2008

7. DISPOSAL GROUP HELD FOR SALE AND DISCONTINUED OPERATIONS


7.1

Disposal group classified as held for sale


Absolute Tiles (Proprietary) Limited business
As described in note 7.2, the Group has disposed of its retail outlet and the disposal was effective
on 1 March 2009. The major classes of assets and liabilities comprising the operations classified as
held for sale at the balance sheet date are as follows:
Group
30 June
30 June
2009
2008
R000
R000
Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Impairment loss on write-down of disposal group

231
1 506
501
6
(1 061)

Assets of retail outlet business classified as held for sale

1 183

Trade and other payables


Provisions

(1 147)
(36)

Liabilities of retail outlet business classified as held for sale

(1 183)

Net assets or liabilities of retail outlet business classified as held for sale

147

7.2

Discontinued operations
Disposal of the tile retail outlet of the group
The group has concluded an agreement to dispose of the retail outlet of the group, Absolute Tiles
(Propriety) Limited effective from 1 March 2009.
The results of the discontinued operations included in profit or loss are set out below. The
comparative loss and cash flows from discontinued operations have been represented to include
those operations classified as discontinued in the current period.
Group
30 June
30 June
2009
2008
R000
R000
Revenue
Cost of sales

4 673
(3 202)

4 402
(3 277)

Gross profit
Other income
Expenses
Impairment loss on write down of disposal group

1 471

(3 802)

1 125
190
(5 977)
(1 061)

Net loss from discontinued operations

(2 331)

(5 723)

8. INVESTMENT IN FINANCIAL ASSETS


Percentage
held
2009
Classified as available-for-sale
Unlisted:
Investment in Qinisele Resources (Proprietary)
Limited whereby the Company owns 25.1%
314 ordinary shares of the issued share capital

25.1%

Percentage
held
2008

30 June
2009
R000

30 June
2008
R000

20 000

The Companys investment in Qinisele Resources has not been equity accounted for but has been treated
as an investment as the Company cannot exercise significant influence over its operating philosophies
and strategic direction.
The fair value of the above asset approximates the cash flows discounted using a rate based on market
interest rate 12% and the risk premium specific to these securities.

148

9. INVESTMENT IN SUBSIDIARIES
Company
Percentage
held
2009
R000

Absolute Tiles (Proprietary) Limited


Lenopodi (Proprietary) Limited
Canyon Springs Investments 116
(Proprietary) Limited
Stand 315 Waterkloof Ridge
(Proprietary) Limited

Percentage
held
2008
R000

30 June
2009
R000

30 June
2008
R000

20 000

31 244

100

100
100

20 000

7 710
20 000

100

100

3 534

(11 244)

(7 710)

(3 534)

Accumulated impairment of investment in


subsidiaries
Absolute Tiles (Proprietary) Limited
Stand 315 Waterkloof Ridge
(Proprietary) Limited
Carrying value

20 000

20 000

Absolute Tiles (Proprietary) Limited


Lenopodi (Proprietary) Limited
Stand 315 Waterkloof Ridge
(Proprietary) Limited

20 000

20 000

All subsidiaries are incorporated in the Republic of South Africa.


Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

10. LOANS TO/(FROM) GROUP COMPANIES


Stand 315 Waterkloof Ridge
(Proprietary) Limited
Absolute Tiles (Proprietary) Limited
Canyon Springs Investments 116
(Proprietary) Limited
Lenopodi (Proprietary) Limited

Lubtalk Investments (Proprietary) Limited


Diamond Quartzite Processing
(Proprietary) Limited
Niemoller Marmer (Eiendoms) Beperk

Comprising:
Non-current assets:
Loans to subsidiaries
Non-current liabilities:
Loans from subsidiaries

(5)
(4 090)

339
2 586
2 716

3 327
1 908

7 981
13

1 946

13 635

3 086

13 635

7 181

13 635

(4 095)
3 086

Loans are unsecured, interest free and there are no fixed repayment terms, except for the loan to Diamond
Quartzite Processing (Proprietary) Limited which bears interest at prime.

149

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

11. INVENTORY
The amounts attributable to the different
categories are as follows:
Finished goods
Less: Classified as part of disposal group
held for sale

2 015

2 015

1 968

(1 506)

75

462

The cost of inventories recognised as an


expense includes R Nil (2008: R422 333) in
respect of write downs of inventory to net
realisable value.
12. DEBTORS
12.1 Trade and other Receivables
Trade receivables
Provision for doubtful debts
VAT
Deposits and other receivables
Less: Classified as part of disposal
group held for sale.

181

760
44

211
(80)
263
210

417

(502)

985

102

417

75

80

49
31

80

142

123

142

123

12.2 Provision for doubtful debts


Movement in the provision for doubtful
debts is as follows:
At 1 July
Provision raised
Provision disposed of as part of
disposal group
At 30 June

(80)

13. SHORT-TERM LOANS RECEIVABLE


Richtersveld Ontwikkelings Maatskappy
Beperk
The loan is repayable from future dividend
declared by Lubtalk Investments
(Proprietary) Limited, bears interest at prime
and is secured by a pledge of the shares held
by Richtersveld Ontwikkelings Maatskappy
Beperk in Lubtalk Investments
(Proprietary) Limited.

150

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

14. DEFERRED TAX


Balance at the beginning of the year
Current charge

Balance at the end of the year

Authorised
2 500 000 000 ordinary shares of
1 cent each (2008: 1 500 000 000)
Issued
1 403 716 289 ordinary shares of
1 cent each (2008: 856 374 874)

15
(15)

25 000

15 000

25 000

15 000

14 037

8 563

14 037

8 563

106 889

80 769

106 889

80 769

856 374 874

214 008 081

739 708 208


116 666 666

856 374 874

214 008 081

739 708 208


116 666 666

333 333 334

333 333 334

856 374 874 1 403 716 289

856 374 874

For deferred tax asset not raised, see note 5.


15. SHARE CAPITAL

The unissued shares are under the control of


the directors until the next annual general
meeting.
Share premium
Reconciliation of number of shares
issued:
Opening balance on shares in issue
Issues of shares in 2008
Issues in terms of the rights issue
Issues in terms of the acquisition of
Qinisele Resources (Proprietary) Limited
Closing balance on shares in issue

1 403 716 289

151

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

16. OTHER FINANCIAL LIABILITIES


Other unsecured loans:
Calulo Resources (Proprietary) Limited
The loan is unsecured, has no fixed repayment
terms, but it is not repayable for the next
12 months and did bear interest at prime in
respect of funds provided for the purpose of
funding mining development expenditure for
this financial year. The loan will bear interest at
prime for the next financial year.
Richtersveld Ontwikkelings Maatskappy Beperk
The loan has no fixed repayment terms and will
be repaid from dividends.
Tucker Boys Trust
The loan is unsecured, has no repayment terms
and bears interest at prime plus 2%.

17 526

14 901

17 526

14 851

90

90

521

521

Non-current liabilities
Current liabilities

17 616
521

14 991

17 526
521

14 851

Total other financial liabilities

18 137

14 991

18 047

14 851

Environmental rehabilitation provision at


beginning of the year
Charged to Mining Development Asset

522

Environmental rehabilitation provision at the


end of the year

522

17. REHABILITATION LIABILITY

In terms of the Mineral and Petroleum Resources Development Act, 2002, there is a responsibility
to execute an environmental management programme approved for the Lekkersing Quartzite mine. Refer
note 21. To facilitate this, an amount of R261 708 held in a call account and included in cash and cash
equivalents serves as collateral for a guarantee from Nedbank Limited of R200 000 on behalf of Lubtalk
Investments (Proprietary) Limited for the rehabilitation of land disturbed by mining activities.

152

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

18. TRADE AND OTHER PAYABLES


Payables
Leave pay accrual
Less: Classified as part of disposal group held
for sale

4 040
159

Payables

4 199

2 100

(1 147)
953

2 981
154

608

3 135

608

No. of
shares

No. of
shares

19. LOSS PER SHARE


Reconciliation between net loss
and diluted loss attributable to
ordinary shareholders:
Net loss for the year

Reconciliation between net loss and diluted


loss attributable to ordinary shareholders
for continued operations:
Net loss for the year

Reconciliation between net loss and diluted


loss attributable to ordinary shareholders
for discontinued operations:
Net loss for the year

(8 224)

(8 021)

(8 224)

(8 021)

(5 893)

(2 298)

(5 893)

(2 298)

(2 331)

(5 723)

(2 331)

(5 723)

No. of
shares

No. of
shares

Reconciliation of the weighted average


number of ordinary shares for diluted loss
per share:
Weighted average number of ordinary
shares (used in the calculation of loss
per share)
1 193 293 873
Less: Share options granted as per note 25
30 000 000

749 329 212

1 223 293 873

749 329 212

153

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

19.1 Headline loss per share


Reconciliation between loss
and headline loss:
Net loss for the year
Decrease in the value of non current
asset held for sale
Profit on disposal of subsidiary
Loss/(Profit) on disposal property, plant
and equipment
Headline loss
Headline loss per share (cents)

(8 224)

(250)

(8 021)

1 061

57

(102)

(8 417)

(7 062)

(0.71)

(0.94)

(8 417)

(7 062)

(0.69)

(0.94)

(5 893)

(2 313)

19.2 Diluted headline loss per share


Reconciliation between headline loss
and diluted headline loss attributable
to ordinary shareholders:
Net headline loss for the year
Diluted headline loss per share (cents)
20. NOTES TO THE CASH FLOW STATEMENT
20.1 Reconciliation of loss before taxation
to cash utilised in operations:
Loss before taxation
Adjustment for:
Impairment of investment in and loans to
subsidiaries
Dividend received
Profit on disposal of property, plant and
equipment
Interest paid
Depreciation
Expenses settled through the issue of
share capital
(Profit)/Loss on disposal of subsidiary
Investment income
Cash utilised before working capital
Changes
Working capital changes
Decrease/(Increase) in accounts
receivable
Increase in inventory
(Decrease)/Increase in accounts payable
Cash utilised in operations

154

(8 898)

(6 276)

6 509
(1 581)

44
6

(150)
81
21

693
6

(250)

150

2 912

150

(55)

(21)

(666)

(6 148)
810

(2 232)
(282)

(5 953)
2 185

(1 197)
(254)

(883)
(1 553)
3 246

123
(91)
(314)

(342)

2 527

(76)

(178)

(5 338)

(2 514)

(3 768)

(1 451)

Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

20.2 Mineral rights acquired


Total cost of acquisition

(2)

(2)

Balance at beginning of year


Balance at end of year

(5)

Taxation paid

20.3 Reconciliation of taxation paid


during year:

20.4 Cash and cash equivalents


Cash and cash equivalents
Bank overdraft

313
(2 876)

335
(4 869)

(2 876)

31

(2 563)

(4 534)

(2 876)

31

Cash and cash equivalents consist of cash on hand and balances with banks.
The bank overdraft is secured via a letter of support from Calulo Resources (Proprietary) Limited
and the facility is limited to R 3 million. It is repayable on demand and bears interest at prime plus
2% (2008: prime plus 2%).
In terms of the Mineral and Petroleum Resources Development Act, 2002, there is a responsibility to
execute an environmental management program approved for the Lekkersing Quartzite mine. Refer
note 17. To facilitate this, an amount of R261 708 held in a call account and included in cash and
cash equivalents serves as collateral for a guarantee from Nedbank Ltd of R200 000 on behalf of
Lubtalk Investments (Proprietary) Limited for the rehabilitation of land disturbed by mining activities.
Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

20.5 Cash flows from discontinued operations


Net loss from discontinued operations
Depreciation on property, plant and
equipment of discontinued operations
Interest paid by discontinued operations
Loss on disposal of property, plant and
equipment
Impairment loss on disposal group
Movement in provisions:
Cash utilised in working capital
In provisions Cash utilised
In working capital

(2 331)

(5 723)

146
696

48

1 061
37
(813)

(4 548)

(2 331)

155

21. COMMITMENTS AND CONTINGENCIES


21.1 Commitments
The following liabilities in terms of mineral leases would arise if the mining licences were granted:
Commitment of a surface lease in accordance with the Richtersveld Municipality. The lease requires:
R5 per hectare per year with a 7% escalation rate.
R10 000 per month for the mining area with a 7% escalation rate.
In terms of the Minerals and Petroleum Resource Development Act, 2002, a responsibility will
become incumbent on Lubtalk Investments (Proprietary) Limited to execute an environmental
management program approved by the Department of Minerals and Energy when mining activities
commence at the Lekkersing Diamond Quartzite mine.
The purpose of the environmental management program will be to rehabilitate the land disturbed
by the mining activities.
As rehabilitation currently takes place during development and a detailed evaluation of the potential
rehabilitation liability has been done by an independent expert who is qualified to do so. This
liability has been accounted for and an amount of R 522 000 provided for in these annual financial
statements. Nedbank Limited has guaranteed an amount of R200 000 to Lubtalk Investments
(Proprietary) Limited for the purposes of the environmental management program. A call account
deposit of R261 708 is included in cash and cash equivalents and serves as collateral for the
guarantee.
22. POST BALANCE SHEET EVENTS
22.1 Acquisition of 49% of Dikopane
Subsequent to year-end and in line with Absolutes stated strategy of transforming itself into a
resources exploration and development company, the Company acquired a 49% stake in Dikopane
(Proprietary) Limited for a cash consideration of R500 000 and 8 333 333 shares. This transaction
was effective after year end. Dikopane has been granted a Prospecting Right over various farms
located in the Northern part of the Free State Province, approximately 26km out east of Sasolburg
and 28km north of Heilbron. This Prospecting Right has been secured over 14,500 hectares in
the Vereeniging Sasolburg coalfields. The acquisition of the shareholding in Dikopane presents
Absolute with an opportunity to develop a prospective coal exploration project in line with the
Groups stated strategy.
22.2 Placement of shares
The Company successfully placed 189 135 135 ordinary shares (the placed shares), equating to
13.47 per cent of the Companys issued share capital, thereby raising approximately R7 million. The
Company will apply the proceeds to fund exploration and resource definition on its new coal project
at Sasolburg and the limestone projects in the Eastern and Western Cape.

156

23. RELATED PARTY TRANSACTIONS


Holding company

Absolute Holdings Ltd

Significant shareholders

Calulo Resources (Pty) Ltd


Tucker Boys Trust

Associates (not equity accounted)

Qinisele Resources (Pty) Ltd

Subsidiaries

Absolute Tiles (Pty) Ltd


Lenopodi (Pty) Ltd
Canyon Springs Investments 116 (Pty) Ltd
Stand 315 Waterkloof Ridge (Pty) Ltd
Lubtalk Investments (Pty) Ltd
Diamond Quartzite Processing (Pty) Ltd

Members of key management

MK Diale
MW Rosslee
GP Sequeira
AM Sher
JJ Serfontein
Group
30 June
30 June
2009
2008
R000
R000

Related party balances subsidiaries


Loan to/(from) Stand 315 Waterkloof Ridge
(Pty) Ltd
Loan to/(from) Absolute Tiles (Pty) Ltd
Loan to/(from) Canyon Springs Investments 116
(Pty) Ltd
Loan to/(from) Lenopodi (Pty) Ltd
Loan to/(from) Lubtalk Investment (Pty) Ltd
Loan to/(from) Diamond Quartzite Processing
(Pty) Ltd
Loan to/(from) Niemoller Marmer (Pty) Ltd

Company
30 June
30 June
2009
2008
R000
R000

(5)
(4 090)
339
2 586
2 716
7 981
13
13 635

Shareholder loan:
Calulo Resources (Pty) Ltd
Tucker Boys Trust
Related party balances Associates
Qinisele Resources (Pty) Ltd (included under
accounts payable)
Related party transactions
Admin fees received from Diamond Quartzite
Processing (Pty) Ltd
Corporate advisory fee paid to Qinisele
Resources (Pty) Ltd
Interest paid on shareholders loan Calulo
Resources (Pty) Ltd
Interest paid on shareholders loan
Tucker Boys Trust
Office rent paid to Calulo Resources (Pty) Ltd
Dividends received Qinisele Resources (Pty) Ltd
Compensation to directors and other key
management
Directors remuneration (see note 25)

17 526
521

14 901

1 189

3 327
1 908
1 946
3 086

17 526
521

14 851

1 189

(600)
900

225

651
21
144
(956)

2 104

900

225

651
21
144
(956)

56

2 104

56

157

24. RISKS
The Companys activities expose it to a variety of financial risks: these include market risk (including
interest rate risk and foreign exchange risk), credit risk and liquidity risk. The Companys overall risk
management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Companys financial performance.
24.1 Liquidity risk
Liquidity risk is the risk that the group will encounter difficulty in raising funds to meet commitments.
Whilst the group manages liquidity risk by monitoring cash flows and ensuring that adequate cash
is available or by maintaining or renewing borrowing facilities as appropriate, formal policies and
procedures regarding these risks have not been drawn up.
The group does however manage its borrowings by only dealing with well-established financial
institutions of high credit standing or through enacting secured funding through its direct or indirect
shareholders.
As at 30 June 2008

Trade and other payables


Calulo Resources loan
Bank overdraft

Less than
1 year
R000

Between
1 and
2 years
R000

Between
2 and
5 years
R000

Over
5 years
R000

953
12 000

2 901

Less than
1 year
R000

Between
1 and
2 years
R000

Between
2 and
5 years
R000

Over
5 years
R000

953
12 000

1
2 901

As at 30 June 2009

Trade and other payables


Calulo Resources loan
Bank overdraft
24.2 Interest rate risk

The Group is exposed to cash flow interest rate risk as it borrows funds at floating interest rates.
The risk is managed by the Group by policies adopted to ensure all its borrowings are at marketrelated rates. The impact of any changes in interest rates would be as follows: Bank overdraft a
2% increase would impact net profit by R60 000 on annual basis.
Shareholders loans a 2% increase would impact net profit by R350 000 on annual basis.
24.3 Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
Financial assets, which potentially subject the Group to concentrations of credit risk, consist
principally of investments, loans, trade and other receivables and cash and cash equivalents.
Loans are granted to subsidiaries. The loans have no repayment terms however the Group considers
all loan balances to be recoverable and therefore no impairment provision is required.
The Group only deposits cash surpluses with major banks of high quality credit standing.
At balance sheet date the Group had trade receivables and sundry debtors amounting to
R985 000 (2008: R102 000).

158

24.4 Foreign currency risk


The Company operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the US Dollar and the Euro. The Company does not
hedge foreign exchange fluctuations.
At year end the following unhedged and uncovered foreign currency items existed:
Trade receivables Euro 2 940 at R11.0465.
24.5 Fair values
At 30 June 2009 the fair values of all financial instruments are substantially identical to carrying
amounts reflected in the balance sheet.
24.6 Capital management
The board considers working capital management critical to the business, and in doing so, manages
the balance between current and non-current liabilities. However is typical of early stage mining
and exploration companies, they are dependent of funding from shareholders, the certainty of
which cannot be guaranteed.
Group
30 June
30 June
2009
2008
R000
R000

Company
30 June
30 June
2009
2008
R000
R000

25. DIRECTORS EMOLUMENTS


Executive directors for services as directors
MW Rosslee
GP Sequeira

2 000
24

16

2 000
24

16

2 024

16

2 024

16

40

40

40

16

40

16

80

40

80

40

2 104

56

2 104

56

MW Rosslee is entitled to 30 million share


options that vest over a period of two years.
They are offered at a price of 6 cents and at
year-end 7.5 million can be exercised. The
value ascribed to these options is however nil
and thus no costs associated with these have
been accounted for using the following input
variables in the option pricing model. At the
date of this report the trust deed has still to be
registered with the Master.
Volatility 25%
Interest free rate 8%
Non-executive directors for services as directors:
MK Diale
JJ Serfontein
AM Sher

Total directors remuneration

159

25.1 Share-based payments


The scheme is intended as an incentive to employees to promote the continued growth of the
Company and its subsidiaries by giving them an opportunity to acquire ordinary shares or rights
therein. The scheme acquires the shares on behalf of the participant at the exercise date and retains
ownership of the shares until such time as the amounts due in terms of the scheme are repaid by
the participant. The scheme may not trade in the Companys securities, 25% of the options vest at
regular intervals commencing three years after them being granted, the balance vesting annual for
the next three years. At the date of the report the scheme has not being registered with the Master
and thus the option referred to below have not being issued although they have vested:
Group
30 June
30 June
2009
2008
R000
R000
25.2 Outstanding options
Balance at beginning of the year
Options granted
Options taken up

7 500 000

Balance at the beginning of the year

7 500 000

Average grant price

6 cents

25.3 Outstanding options that may be taken up during the


following financial year
2010
2011

15 000 000
7 500 000

25.4 Fair value


The group accounts for share option expenses in accordance
with IFRS 2: Share-based Payments, which requires the fair
value of share options granted to employees to be valued at
the grant date and expensed through the income statement
over the vesting period of the option.
The fair value of the options granted has been estimated
on the grant date using the Black-Scholes option pricing
model. The assumptions used in determining the fair value
of the options granted is as follows:
Risk free rate 8%
Volatility 25%
25.5 Share-based payment expense
Continuing operations

Group
30 June
30 June
2009
2008

Company
30 June
30 June
2009
2008

26. PERSONNEL
Number of personnel employed by the group

160

78

80

27. SEGMENTAL INFORMATION

Corporate
R000
2009
Revenues from external
customers
Interest expense
Depreciation and amortisation
Net profit/(loss)
Assets
Non-current assets classified
as held for sale
Liabilities
Capital expenditure
2008
Revenues from external
customers
Interest expense
Depreciation and amortisation
Net loss
Assets
Non-current assets classified
as held for sale
Liabilities
Capital expenditure

44
6
(6 697)

Continuing
operations
Mining Investment
R000
R000

(152)

956

956

Discontinued
operations
Total
Trading
R000
R000

956
44
6
(5 893)

4 673
188
42
(2 331)

852

28 997

20 000

49 849

10 420
34

15 314
5 491

20 000

25 734
25 525

4 402

81

(1 369)

21
(929)

81
21
(2 298)

696
146
(5 723)

107

21 451

21 558

1 138

1 138

13 147

7 667
10 840

20 813
10 840

1 138

161

Appendix 2

EXTRACTS FROM THE ARTICLES OF ASSOCIATION OF BAUBA PLATINUM

The information below has been extracted from the articles of Bauba Platinum:
JOINT HOLDERS OF SHARES
7. Where two or more persons are registered as the holders of any share they shall be deemed to hold
that share jointly, and:
7.1

notwithstanding anything to the contrary in these articles, on the death, sequestration, liquidation
or legal disability of any one of such joint holders the remaining joint holders may be recognised,
at the discretion of the directors, as the only persons having title to such share;

7.2

anyone of such joint holders may give effectual receipts for any dividends, bonuses or returns
of capital or other accruals payable to such joint holders;

7.3

only the joint holder whose name stands first in the register shall be entitled to delivery of the
certificate relating to that share, or to receive notices from the Company (and any notice given
to such joint holder shall be deemed to be notice to all the joint holders);

7.4

any one of the joint holders of any share conferring a right to vote may vote either personally
or by proxy at any meeting in respect of such share as if he were solely entitled thereto, and if more
than one of such joint holders is present at any meeting, either personally or by proxy, the joint
holder who tenders a vote and whose name stands in the register before the other joint holders who
are present in person or by proxy shall be entitled to vote in respect of that share.

8. Similarly in the case of joint beneficial owners of an uncertificated share, where it is indicated in the share
register that the beneficial owner has requested to receive notices, then only the joint beneficial owner
whose name stands first in the register shall be entitled to receive notices from the Company (and any
notice given to such joint beneficial owner shall be deemed to be notice to all the joint beneficial owners).
VARIATION OF RIGHTS
35. If at any time the share capital is divided into different classes of shares, the rights attached to any class
(unless otherwise provided by the terms of issue of the shares of that class) may be amended, modified,
varied or cancelled with the consent in writing of the holders of three-fourths of the issued shares
of that class or with the sanction of a resolution passed at a separate general meeting of the holders
of the shares of that class, and the provisions of Section 199 of the Act shall mutatis mutandis apply
to the said resolution and meeting as if the resolution were a special resolution. To every such separate
general meeting the provisions of these articles relating to general meetings shall mutatis mutandis apply
but so that the necessary quorum, unless the Company has only one member, shall be three persons
holding or representing by proxy at least one-third of all the issued shares of the class, provided that
if a quorum is not so present the meeting shall be adjourned to the fifth business day thereafter and the
members present or represented at the meeting to which the adjournment takes place shall constitute
a quorum.
36. Unless otherwise provided by the terms of issue or by these articles, any right or restriction attached
to all or any class of shares shall be deemed not to be directly or indirectly adversely affected by:
36.1 the creation or issue of any other shares ranking pari passu with (but not in priority to) any such
shares already issued by the Company;
36.2 the cancellation in terms of the Act of any shares of any class in the capital of the Company, other
than the class of shares which is being cancelled.

162

GENERAL MEETINGS
37. Subject to the provisions of the Companies Act:
37.1 a general meeting shall be held at such time and place as may be determined by the directors;
37.2 for so long as the shares of the Company are listed on the JSE notices of general or annual general
meetings shall in addition to being sent to members also be:
37.2.1 sent to the JSE at the same time it is sent to the members;
37.2.2 sent to all beneficial owners of uncertificated shares that are not members who have elected
to receive notices, provided that such election has been appropriately recorded in the
Companys register of beneficial owners; and
37.2.3 announced through SENS,
however, any failure to do so shall not affect the validity of any general meeting; and
37.3 the notice of a general meeting shall state the place, day and hour of, and the nature of the business
to be transacted at the general meeting.
38. A member shall be entitled to appoint a proxy to attend, speak and vote (whether on a show of hands
or on a poll) in his stead at any general meeting in accordance with the Act.
PROCEEDINGS AT GENERAL MEETINGS
45. Subject to the provisions of the Act, it shall not be necessary to give notice of any adjournment
of a general meeting.
46. Subject to any rights or restriction as to voting, to which any member, or to which any class or classes
of shares, may be subject, a member who is present:
46.1 in person, by authorised representative or by proxy shall have one vote on a show of hands;
46.2 in person, by authorised representative or by proxy shall, on a poll, have that proportion of the total
votes in the Company which the aggregate amount of the nominal value of the shares held by that
member bears to the aggregate of the nominal value of all the shares issued by the Company.
47. The parent or guardian of a minor, and the curator bonis of a lunatic member, and also any person
entitled under the transmission clause to transfer any shares, may vote at any general meeting in respect
thereof in the same manner as if he were the registered holder of those shares: Provided that forty-eight
hours at least before the time of holding the meeting at which he proposes to vote he shall satisfy the
directors that he is such parent, guardian or curator or that he is entitled under the transmission clause to
transfer those shares, or that the directors have previously admitted his right to vote in respect of those
shares. Co-executors of a deceased member in whose name shares stand in the register shall, for the
purpose of this article, be deemed to be joint holders of those shares.
DIRECTORS
63. Subject to the provisions of the Act, unless otherwise determined by a general meeting, the number
of directors shall be not be less than four or more than twenty and the names of the first directors may
be determined in writing by a majority of the subscribers of the memorandum. Until directors are
appointed, whether or not the directors have been named by a majority of the subscribers of the
memorandum every subscriber of the memorandum shall be deemed for all purposes to be a director
of the Company.
64. The directors shall have the power at any time and from time to time to appoint anyone as a director,
either to fill a casual vacancy in the directors or as an additional director, provided that the total number of
directors shall not at any time exceed the maximum number fixed by or in accordance with these articles
and the appointment of any director so appointed shall cease at the conclusion of the next annual general
meeting, unless it is confirmed at that annual general meeting. Notice of such meeting shall be sufficient to
allow nominations to be sent to the Companys office from any part of the Republic of South Africa.

163

65. The continuing directors may act, notwithstanding any vacancy in their number, but if and for so long
as their number is reduced below the minimum number of directors required to act as such for the time
being, the continuing directors may act only to:
65.1 increase the number of directors to the required minimum; or
65.2 summon a general meeting for that purpose, provided that if there is no director able or willing
to act, then any member may convene a general meeting for that purpose.
66. Neither a director nor an alternate director shall be obliged to hold any qualification shares. A director
who is not a member shall be entitled to receive notice of and to attend and speak, but not vote, at any
general meeting of the Company.
67. The Company in a general meeting as such shall determine the remuneration of the directors for their
services from time to time.
68. The directors shall be paid all their travelling, subsistence and other expenses properly and necessarily
incurred by them in and about the execution of their duties in the Company or in and about the business
of the Company, and in attending meetings of the directors or of committees thereof; If any director
is required to perform extra services or to go to reside abroad or otherwise shall be specifically occupied
about the Companys business, or perform services which, in the opinion of the directors, are outside
the scope of the ordinary duties of a director, they shall be entitled to receive such extra remuneration
as is determined by a disinterested quorum of directors, which may be either in addition to or in substitution
for any other remuneration.
69. Subject to the provisions of the Act, a director may be employed in any other capacity in the Company
or as a director or employee of a company controlled by, or itself a subsidiary of, this company, other
than that of auditor of the Company or of any subsidiary company, and that in this event, the terms
of their appointment, remuneration and otherwise in respect of such other office must be determined
by a disinterested quorum of directors, and any remuneration so paid may be in addition to any other
remuneration payable.
BORROWING POWERS OF THE DIRECTORS
75. The directors may exercise all the powers of the Company to borrow money and to mortgage or encumber
its undertaking and property or any part thereof (both present and future) and to issue debentures
or debenture stock (whether secured or unsecured), whether outright or as security for any debt, liability
or obligation of the Company or of any third party, as they deem fit.
76. Debentures, debenture stock and other securities may be made assignable, free from any equities
between the Company and the person to whom the same may be issued.
77. Any debentures, debenture stock, bonds or other securities may be issued at par or at a discount
or at a premium, and with any special privileges as to redemption, surrender and drawings, but no special
privileges as to allotment of shares or stock, attending and voting at general meetings, appointment
of directors or otherwise shall be given without the sanction of the Company in general meeting.
78. The directors shall cause a proper register to be kept in accordance with the provisions of the Act
of all mortgages and charges specifically affecting the property of the Company, and they shall cause
to be entered in such register in respect of each mortgage or charge a short description of the property
mortgaged or charged, the amount of the charge created, the name of the mortgagee or person entitled
to such charge and such further particulars as the provisions of the Act require.
79. For the purpose of the provisions of article 75, the borrowing powers of the directors shall be unlimited.

164

INTERESTS OF THE DIRECTORS


80. Subject to compliance with the provisions of the Act, a director shall be liable to account to the
Company for any profit or other benefit arising out of any contract entered into by the Company in which
he is directly or indirectly interested.
81. Subject to the provisions of Sections 234 to 241 of the Act, a director shall not vote in respect of any
contract or proposed contract with the Company in which he is interested, or any matter arising there
from, and if he does so vote, his vote shall not be counted: Provided that this article shall not apply where
the Company has only one director.
82. Notwithstanding anything contained in these articles, the Company shall not make any loan to a director
or enter into any guarantee or provide any security in connection with a loan made to a director by any
other person if and so far as any such loan, guarantee or provision of security is at any time prohibited
by the Act.
DISQUALIFICATION OF THE DIRECTORS
83. A director shall cease to hold office as such if he:
1.1

is prohibited from being, or is removed as, or is disqualified from acting as, a director of a company
in terms of the Act;

1.2

without the consent of the Company in general meeting holds any other office of profit under the
Company except that of managing director or manager; or

1.3

is directly or indirectly interested in any contract or proposed contract with the Company and fails
to declare his interest and the nature thereof in the manner required by the Act;

1.4

gives notice to the Company and the registrar of his resignation as a director with effect from the
date thereof, or such later date as is provided for in, such notice;

1.5

absents himself from meetings of directors for six consecutive months without the permission of the
other directors, and they resolve that his office shall be vacated; Provided that this provision shall
not apply to a director who is represented by an alternate director who does not so absent himself;

1.6

is given notice, signed by members holding in the aggregate more than 50% of the total voting
rights, on a poll of all members then entitled to vote on a poll, at a general meeting, of the termination
of his appointment.

ROTATION OF DIRECTORS
94. The directors shall retire from office in the following manner:
94.1 At the first annual general meeting of the Company all the directors shall retire from office, and at
the annual general meeting in every subsequent year one-third of the directors for the time being, or
if their number is not three or a multiple of three, the number nearest to but not less than one-third,
shall retire from office, provided that:
94.1.1 a managing director and any executive director referred to in article 92 are excluded;
94.1.2 no account shall be taken of any director appointed pursuant to article 92 where such
directors appointment has not been confirmed pursuant to article 92;
94.2 the directors who retire in terms of 94 shall be those who have been longest in office since their last
election, provided that:
94.2.1 if more than one of them were elected a director on the same day, those to retire shall be
determined by lot unless those directors agree otherwise between themselves;
94.2.2 if at any general meeting any director will have held office for three years since his last
election, he shall also retire at such annual general meeting, either as one of the directors to
retire in terms of the foregoing or additionally thereto. The length of time a director has been
in office shall, save in respect of directors appointed or elected in terms of the provisions of
article 92 be computed from the date of his last election or appointment;

165

94.3 any director appointed as such after the conclusion of the Companys preceding annual general
meeting shall retire from office at the conclusion of the annual general meeting held immediately
after his appointment;
94.4 a retiring director shall act as a director throughout the meeting at which he retires;
94.5 a retiring director shall be eligible for re-election, and, if re-elected, shall be deemed not to have
vacated his office;
94.6 the annual general meeting at which a director retires may elect another person to fill the vacated
office, and if it is not so filled the retiring director shall, if he has offered himself for re-election,
be deemed to have been re-elected unless the annual general meeting expressly resolves not to fill
such vacated office or not to re-elect such retiring director;
94.7 no person other than a retiring director shall be eligible for election as a director at any
annual general meeting unless the directors recommend otherwise, or unless not less than
three nor more than twenty-one days before the date appointed for the annual general meeting
a member who is entitled to attend and vote at such annual general meeting shall have lodged
written notice proposing or nominating such person as a director, together with the consent of that
person to be elected as a director.
DIVIDENDS
98. Subject to the provisions of the Statutes:
98.1 The Company may make payments to its members (or any of its members) from time to time.
For the purpose of this article and without detracting from the definition of payment ascribed
to the word in the Act, payment will include any writing off or reduction in the Companys issued
share capital or share premium account in any manner authorised. Provided that capital shall not
be repaid on the basis that it may be called up again.
98.2 The Company in general meeting (subject to obtaining the declaration of the directors referred
to in article 98.8 or the directors, may from time to time declare a dividend to be paid or make
any other payment to the members and to the holders of share warrants (if any) in proportion
to the number of shares held by them in each class. Dividends shall be declared payable
to members recorded in the register on a date subsequent to the date of the declaration of the
dividend or subsequent to the date of confirmation of the dividend, whichever is the later.
98.3 No larger dividend or other payment to members shall be declared by the Company in general
meeting than is recommended by the directors, but the Company in general meeting may declare
a smaller dividend.
98.4 The directors may, before recommending any dividend, set aside out of the profits of the Company
such sums as they think fit as a reserve or reserves, which shall, at the discretion of the directors,
be applicable for any purpose to which the profits of the Company may be properly applied and,
pending such application may, at the like discretion, either be employed in the business of the
Company or be invested in such investments as the directors may from time to time think fit.
The directors may also without placing the same to reserve carry forward any profits that they may
think prudent not to divide.
98.5 Any dividend so declared or other payments approved may be paid either wholly or in part,
by the distribution of specific assets, and in particular of paid up shares or debentures of any
other company, or in cash or in any one or more of such ways as the members in general meeting
or directors may at the time of declaring the dividend or approving the payment determine and
direct, and where any difficulty arises in regard to the distribution, the directors may settle the same
as they think expedient, and in particular may fix the value for distribution of such specific assets
or any part thereof, and may determine that cash payments shall be made to any members upon
the basis of the value so fixed in order to adjust the rights of all parties, and may vest any such
assets in trustees upon such trusts for the persons entitled to the dividend or other payment as may
seem expedient to them.

166

98.6 Unless otherwise determined by the board of directors in respect of any particular dividend
to be declared by the Company, dividends shall not carry interest as against the Company.
Dividends may be declared either free of or subject to the deduction of income tax and any other
tax or duty in respect of which the Company may be chargeable.
98.7 Where any business, property or other asset is acquired by the Company as from a past date on
the terms that the Company shall as from that date take the profits and bear the losses thereof, such
profits or losses, as the case may be, at the discretion of the directors and so far as the Statutes
allow, be credited or debited wholly or in part to the revenue account and in that case the amount so
credited or debited shall so far as the Statutes allow be treated for all purposes as profits or losses
of the Company. Subject as aforesaid, if any shares or securities are acquired by the Company cum
dividend or interest, that dividend or interest may be treated at the discretion of the directors as
revenue and it shall not be obligatory to capitalise the same or any part thereof.
98.8 The declaration of the directors as to whether:
98.8.1 the Company is, or would after the payment be able to pay its debts as they become due
in the ordinary course of business; and
98.8.2 the consolidated assets of the Company, fairly valued, would after the dividend or other
payment not be less than the consolidated liabilities of the Company, shall be conclusive.
98.9 In the case where several persons are registered as joint holders of any share any one of such
persons may give effectual receipts for all dividends and payments in respect of such share.
98.10 Any dividend, interest or other moneys payable to the registered certificated or dematerialised
holder of shares may be paid by cheque, electronically, warrant, coupon or otherwise as the
directors may from time to time determine, and the payment of such cheque or warrant if purporting
to be duly endorsed, or the surrender of any coupon, shall be a good discharge to the Company in
respect thereof.
98.11 Dividends or other payments shall be declared in the currency of the republic. The declaration
of any dividend or other payment may, however, provided that all or any members whose registered
addresses are outside the Republic or who have given written instructions requesting payment
at addresses outside the Republic subject to any Exchange Control Regulations then in force,
be paid in such other currency or currencies as may be stipulated in the declaration. The declaration
may also stipulate the date (hereinafter referred to as the currency conversion date) upon which,
and a provisional rate of exchange at which, the currency of the Republic shall be converted into
such other currency or currencies, provided that the currency conversion date shall be a date not
earlier than the date of the declaration of the dividend or other payment and not later than the date
of its payment. If, in the opinion of the directors, there is no material difference between the rate/s
of exchange ruling on the currency conversion date and the provisional rate/s of exchange
stipulated in the declaration then the currency of the Republic shall be converted at such provisional
rate/s. If, in the opinion of the directors, there is a material difference, then the currency of the
Republic shall be converted into such other currency or currencies at the rate/s of exchange ruling
on the currency conversion date, or at rate/s of exchange which, in the opinion of the directors,
is/are not materially different. Any subsequent rise or fall of rate/s of exchange determined
as above shall be disregarded for payment of the dividend or other payment in question.
98.12 The Company shall be entitled at any time to delegate its obligations to any member, in respect
of unclaimed dividends or other payments, to any one of the Companys bankers, from time to time.
98.13 All entitlements by certificated shareholders of the Company to shares or dividends with a value
of 5 (five) Rand or less per shareholder transaction will be aggregated and the proceeds donated
to a registered charity approved by the directors of the Company.
98.14 The Company may transmit any dividend or other amount payable in respect of a share by ordinary
post to the address of the holder thereof recorded in the register or such other address as the
holder thereof may previously have given to the Company in writing, and the Company shall not be
responsible for any loss in transmission, whether or not it was sent at his request.

167

98.15 Any dividend payable on or in respect of a share:


98.15.1 which is unclaimed, may be retained by the Company and may be invested or used
as the directors may deem fit for the benefit of the Company until claimed by the member
concerned;
98.15.2 which is retained and unclaimed,
for three years, after the payment date of the dividend in question, or for three years,
after the payment date of the dividend in question, should the Company be wound
up or deregistered, shall be forfeited and revert to the Company or its assigns and may
be dealt with by the directors or such assigns as they deem fit; Provided that monies
other than dividends due to shareholders must be held in trust indefinitely until lawfully claimed by
the shareholders.
98.16 The Company shall, for the purpose of facilitating its winding up or deregistration, or the reduction
of its share capital, any share premium account or capital redemption reserve fund, be entitled
by special resolution to delegate to any bank, registered as such in accordance with the laws of the
Republic, the liability for payment of any such dividend, payment of which has not been forfeited
in terms of the foregoing.
98.17 Notice of any dividend that may have been declared shall be given in the manner hereinafter
provided to the persons entitled to share therein.

168

Appendix 3

DETAILS OF DIRECTORS OTHER DIRECTORSHIPS AND PARTNERSHIPS

Details of the companies, excluding subsidiaries, and partnerships of which directors of the Company and its
subsidiaries have been a partner at any time during the five years preceding the circular are set out below:
Company
PC Pienaar
Mvelaphanda Resources
TransHex
Northam
Gold Fields SA
Harmony subsidiaries only
AVMIN (Anglovaal)
Grootvlei Gold Mining
East Rand Proprietary Mine
Orata Resources (Proprietary) Limited
MW Rosslee
Tekiba 10
Cinzaco 103
Absolute Holdings
Central African Gold Mining and Exploration (SA)
Central African Gold Technical Services
Chessboard Trade and Invest 106
Dancarl Diamonds
Messina
Messina Platinum Mines
Metallon Gold
Southernera Management Services South Africa
Southernera Mining and Exploration South Africa
Vleiloerie Beleggings
Dr NM Phosa
African Legal Networks
Alliance Mining Corporation Limited
Altivex 354 (Proprietary) Limited
Asambeni Holdings (Proprietary) Limited
Braemore Resources Plc
Business Venture Investments No 930 (Proprietary) Limited
Comati Logging (Proprietary) Limited
Corridor Development Corporation
Day Star Technology Limited
du Toit Smuts & Mathews Phosa Incorporated
Earthwize Group
Echo Structured Investments (Proprietary) Limited
Empowergro Investments (Proprietary) Limited
Enercorp Africa (Proprietary) Limited
Enterprise Outsourcing Holdings Limited
Eveni Investments & Consulting (Proprietary) Limited
Forge Marketing (Cedar Point Trading 5 (Proprietary) Limited)
Forum Trust
Hans Merensky Holdings (Proprietary) Limited
HWJ Timbers (Proprietary) Limited
Indiza Terra Housing Projects (Proprietary) Limited

Current

Past
*
*

*
*
*
*
*
*
*

*
*
*
*
*
*
*
*
*
*
*
*
*

*
In liquidation
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*

169

Company
Dr NM Phosa (continued)
Karimu 2005 Investments (Proprietary) Limited
Kgato Investments (Proprietary) Limited
Mafika Group
Main Street 169 (Proprietary) Limited
Majorshelf 33 (Proprietary) Limited
Mathews Phosa & Associates (Proprietary) Limited
Mbombela Group
Multisource Telecoms (Proprietary) Limited
Ndarama Mineral Resources (Proprietary) Limited
Nelspruit Project Management & Development Service
Ndonsa Investments (Proprietary) Limited
Power Matla (Proprietary) Limited
SJW Motors (Proprietary) Limited
Time Business Innovations Consultancy (Proprietary) Limited
Tornado Transport (Proprietary) Limited
Tsb Sugar Holdings (Proprietary) Limited
Ubuntu-Botho Investments (Mpumalanga) Limited
Value Logistics Limited
VelaVKE Consulting Engineers (Proprietary) Limited
Vuka Alliance (Proprietary) Limited
Vuka Forestry Holding Group of Companies
Zero Pollution Motors South Africa (Proprietary) Limited

Current
*

*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*

JG Best
Metair Investments
Metair Management Services
JSC Polymetal
Anglogold Ashanti Holdings Plc (Isle of Man)
Sentula Mining Limited

*
*
*
*
*

SM Dolamo
Mmaditsela Road Logistics

KV Dicks
Harmony Gold Mining Company

170

Past

Appendix 4

CODE OF CORPORATE PRACTICE AND CONDUCT

The board has continued implementing various aspects of compliance with the King Report during the
financial year ended 30 June 2009 and to the last practicable date, as more fully detailed below. The Company
is in the process of reviewing and implementing the new requirements in terms of King III.
THE BOARD
Structure of the board
The Company has a unitary board with an independent non-executive chairman. The directors bring a wide
range of experience, diversity, insight and independence of judgment on issues of strategy, performance
resources and standards of conduct, to the board.
Independence of the board
The roles of the chairman and the chief executive officer are separate. The non-executive directors
do not have service contracts and their remuneration is not tied to the groups performance.
Board responsibilities
The board is responsible for the strategy, acquisition and disinvestment policy, risk management, financing
and corporate governance policies of the Company, is accountable for stakeholder relations, protecting
and enhancing the Companys wealth and resources, timely and transparent reporting and for acting
at all times in the best interest of the Company and its shareholders. The board ensures that there
is an appropriate balance of power and authority on the board, such that no one individual or block
of individuals can dominate the boards decision taking.
Appointments to the board
No formal procedure exists for appointment to the board or for the delegation of the functions of the board
and the company does not have a nomination committee at present due to the nature and size of the
Company. Future appointments to the board will, however, be considered by the board as a whole. With the
resignation of the chief executive officer, the chairman and financial director are responsible for reviewing
the content and implementation of the authorised delegation of functions and will report thereon to the board.
Access to company secretary
The directors all have unfettered access to the Company Secretary who, inter alia, is responsible for ensuring
that proper procedures are followed regarding board matters. It requires a decision of the board as a whole
to remove the company Secretary, should this become necessary. directors are furthermore entitled to ask
any questions of any personnel and enjoy unrestricted access to all company documentation, information
and property.
Board and committee meetings and attendance thereof
Directors board packs are prepared and distributed before each board meeting, so as to ensure that
the directors are fully informed of the issues at hand and to give full consideration to all the matters
under discussion.
Two board meetings and three audit committee meetings were held during the financial year ended
30 June 2009. The remuneration committee, although constituted has not formally met as of yet.

171

AUDIT COMMITTEE AND CONTROLS


The board considers the internal controls to safeguard stakeholders interests and the Companys assets.
This function is managed by the Audit Committee, which has been formally constituted and consists
of non-executive directors and is attended by the Company Secretary. The current members of the audit
committee are Messrs Abe Sher (Chairman), Jan Serfontein and Mpho Diale. Pursuant to the approval
of the transactions, the audit committee composition will be reconstituted. The financial director does not sit
on the committee, but is invited to attend its meetings. The committee operates in accordance with written
terms of reference as confirmed by the board, which sets outs its authority and duties. The external auditors
have free access to this committee and are invited to attend all of its meetings, which occur at least twice
per year.
The primary objective of the audit committee is to promote the overall effectiveness of corporate governance
within the group, whilst additional objectives include:
Ensuring the integrity of the Companys accounting and financial reporting systems;
Ensuring that the appropriate systems are in place for monitoring risk, financial controls and compliance
with the law and codes of conduct adopted by the Company;
Satisfying itself with the appropriateness of the expertise and experience of the Financial Director;
Evaluating the effectiveness of the risk-and compliance-management functions of the Company;
Maintaining appropriately transparent relationships with the external auditors, who are appointed each
year based on the recommendations of the committee;
Advising on the appointment of the external auditors with regard to the handling of non-audit functions;
Reviewing the scope and quality of the statutory audit; and
Reporting on the going concern concept.
The audit committee has explicit authority to investigate any matter under its terms of reference and has
access to all resources and information it requires to act on this authority. The audit committee has confirmed
the appropriateness of the expertise and experience of the Financial Director.
INTERNAL AUDIT
The Company does not have an internal audit function in place but the directors are of the opinion that
there is currently no need to establish this function. The external auditors perform a detailed audit of the
records of the group. Once the activities of the group warrant this function, it will be outsourced to a suitably
independent service provider.
SUSTAINABILITY, CORPORATE AND SOCIAL RESPONSIBILITIES
The Company believes in the necessity of social development and its innovative involvement in the upliftment
of historically disadvantaged communities is largely based on community-focused initiatives in the areas
in which its mining activities are to take place. To this end the group has directly involved the Richtersveld
community in its Lekkersing mining project which promotes training of employees as well as providing for
social needs such as medical assistance.
The Company seeks to promote a healthy, secure and participative social and working environment with its
staff, business associates and at large. The duty of being a responsible, caring and exemplary corporate
citizen is considered to be an obligation and not a choice.
COMMUNICATION WITH STAKEHOLDERS
The Company is committed to a policy of effective communication and engagement with its stakeholders
on issues of mutual interest. It subscribes to a policy of open, frank and timeous communication with its
stakeholders in its activities on both financial and non-financial matters.
CLOSED AND PROHIBITED PERIODS
The Company enforces a restricted period for dealing in its shares, in terms of which any dealings in shares
by all directors and senior personnel is disallowed by the board from the time that the reporting period has
elapsed to the time that results are released and at any time that the Company is trading under cautionary
announcement or if the directors are in possession of price sensitive information.

172

REMUNERATION COMMITTEE
A remuneration committee consisting of the non-executive directors has been established comprising
Messrs Abe Sher and Jan Serfontein. Pursuant to the approval of the transactions, the composition
of the remuneration committee will be reconstituted. The committee is, inter alia, responsible for making
recommendations to the board, within agreed terms of reference, on the Companys framework of executive
remuneration and its costs. The committee will strive to ensure that levels of remuneration are sufficient
to attract and retain directors and senior management of the calibre required to ensure the successful running
of the Company.
COMPANY SECRETARY
The directors all have unfettered access to the company secretary who, inter alia, is responsible for ensuring
that proper procedures are followed regarding board matters. It requires a decision of the board as a whole
to remove the company secretary, should this become necessary. Directors are furthermore entitled to ask
any questions of any personnel and enjoy unrestricted access to all group documentation, information and
property.
The company secretary is required to provide the members of the board with guidance and advice regarding
their responsibilities, duties and powers and to ensure that the board is aware of all legislation relevant
to or affecting the Company. The company Secretary is required to ensure that the Company complies with
all applicable legislation regarding the affairs of the Company, including the necessary recording of meetings
of the board, board committees and shareholders of the Company.
CODE OF ETHICS
The board subscribes to the highest level of professionalism and integrity in conducting its business and
dealing with all of its stakeholders.
In adhering to its code of ethics, the board is guided by the following broad principles:
Businesses should operate and compete in accordance with the principles of free enterprise;
Free enterprise will be constrained by the observance of relevant legislation and generally accepted
principles regarding ethical behaviour in business;
Ethical behaviour is predicated on the concept of utmost good faith and characterised by integrity,
reliability and a commitment to avoid harm;
Business activities will benefit all participants through a fair exchange of value or satisfaction of needs;
and
Equivalent standards of ethical behaviour are expected from individuals and companies with whom
business is conducted.

173

Appendix 5

DETAILS OF MATERIAL BORROWINGS, LOANS RECEIVABLE AND INTER-COMPANY


TRANSACTIONS

At the last practicable date and including the acquisition included in the circular but excluding the application
of funds from the share issue for cash, Bauba Platinum had the following material borrowings and intercompany loans:
Loans payable and inter-company loans
Amount
payable/(receivable)
R000

Borrower

Lender

Unsecured
Bauba Platinum

Nedbank Limited

2 996

Bauba Platinum

Calulo Resources*

18 814

Bauba Platinum
Bauba Platinum
Bauba Platinum
Bauba Platinum

Lenopodi
Lubtalk
DQP
Canyon Springs
Investments 116
Niemoller Marmer

Bauba Platinum

Repayment
terms

Interest
rate

Overdraft facility of
R3 million, repayable
on demand, initially
advanced in
June 2009

Prime
plus 2%

No fixed terms of
repayment

Prime

(2 568)
(2 716)
(10 641)
(1 048)

None inter-company
None inter-company
None inter-company
None inter-company

Interest free
Interest free
Prime
Interest free

(13)

None inter-company

Interest free

* The loan is secured by the investments in Lekkersing Diamond Quartzite, other Absolute Mineral Assets and Qinisele Resources
and arose through Calulo Resources funding the working capital requirements of the group and the commencement of mining
activities of Absolute. The remaining balance owed at the last practicable date amounted to approximately R19 million and will be
settled out of cash flow generated by the above investments as well as the proceeds from any disposal of all or part of the above
investments over the next 18 months, following which any remaining balance of the loan may be capitalised in accordance with the
requirements of the Listings Requirements at that point in time. There was no initial loan amount or loan agreement and the above loan
has increased and decreased on an ad hoc and monthly basis over the last four years.

There are no debentures in issue or convertible loans as at the last practicable date. There is no loan capital
outstanding at the last practicable date.
Loans receivable from third parties
Entity
Secured
N/A

Lender

Amount
R

Repayment
terms

Security

Interest
rate

Inception
date

Period
of loan

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Loans receivable from related parties


Unsecured
Entity
N/A

174

Lender

Amount
R

Repayment
terms

Security

Interest
rate

Inception
date

Period
of loan

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Appendix 6

PROFILES OF DIRECTORS AND KEY MANAGEMENT

Abridged curriculum vitae on each of the directors follow below:


Executive directors
Petrus Cornelius (Pine) Pienaar (CEO)
Pine is a Chartered Accountant (CA(SA)) with 15 years experience in the mining industry. He was
appointed CEO of Mvela Resources in May 2005. He was a director of GFI-SA, Trans Hex, Northam,
Anglovaal (Avmin), ERPM and Grootvlei Gold Mining. Before taking up his position with Mvela Resources,
he was the executive responsible for new business at Harmony Gold Mining Company Ltd (Harmony).
He also served for a time as the operations executive of Harmonys Free State mines.
Mark William Rosslee (Financial Director)
Mark is a Chartered Accountant with some 18 years experience in the mining industry. Mark has a CA(SA),
with a Certificate in Mining Tax and holds a Graduate Diploma in Mining Engineering. He previously held
the position of Chief Financial Officer and Director of Central African Gold, having held similar positions with
Metallon Gold, Southern Era Diamonds and Southern Platinum Limited. He has gained extensive experience
in the mining industry with the De Beers group at both a corporate and operational level over a period
of 12 years. Until recently he was chief financial officer of Braemore Resources Plc reporting to the Board.
The audit committee has confirmed that it is satisfied with the expertise and experience of the financial
director.
Non-executive directors
Jonathan Gourlay Best (Chairman)
Jonathan has over 40 years experience with companies associated with the mining industry. He brings
strong financial expertise and Audit Committee experience from his previous role as Chief Financial Officer
and Executive Director of AngloGold Ashanti Limited. He currently holds the following additional board
positions: non-executive independent director and Chairman of the Audit Committee of JSE Polymetal,
a Russian-based mining company listed on the London Stock Exchange and non-executive independent
director and member of the Audit Committee of Metair Investments Limited.
Kenneth Victor Dicks (Independent Non-Executive)
Kenneth has 39 years experience in the mining industry, two years of which related to coal mining and
37 years of which related to gold mining experience in the Anglo American group. Kenneth has managed
the worlds largest gold mine, namely Freegold, with 26 operating shafts, seven gold plants and a labour
force of around 86 000 persons. He also managed Western Deep Levels together with Elandsrand Gold Mine.
Kenneth holds Mine Managers Certificates (Metalliferous and Fiery Coal Mines), a Management Development
Diploma and a Management Diploma. He has served on the boards of mining companies such as Freegold,
Western Deep Levels and Kusasalethu. He is also a non-executive director of Gold One International, following
a reverse take-over by Aflease Gold Limited.
Sholto Mokgoaje Dolamo (Independent Non-Executive)
Currently employed by Stanlib and holds the following qualifications BSc Chemistry, BTech Ceramics
Science, MSc Materials Engineering, MBA (GIBS). Sholto had 10 years experience within the mining and
manufacturing industry before joining Stanlib. This includes six years as a research scientist/engineer for
De Beers research laboratory, where he was instrumental in developing a variety of new materials and
technologies for applications both above and underground in rock drilling and cutting. Prior to joining Stanlib
Sholto was head of Lonmin Platinums research and development for the precious metals refinery.

175

Dr Nakedi Mathews Phosa (Non-Executive Director)


Dr Phosa, an attorney by profession and recently non-executive chairman of Braemore Resources plc
is a leading figure in South Africas business and political world. He served as Premier of Mpumalanga
from 1994 to 1999 where he pioneered planning interaction between the private sector and government.
He serves on the National Executive Committee of the ANC, is Treasurer General of the ANC and currently
holds chairman, vice-chairman and board member duties in a number of prominent South African companies
including Vuka Forestry Holdings Pty Ltd, the University of South Africa and Technikon Southern Africa
Council.
Key management and consultants
Jurie Hendrik Wessels
Jurie is a minerals lawyer with over 12 years experience in the exploration sector and has significant
experience in the management of mineral rights and properties. He currently is a director of various unlisted
exploration companies. He holds a bachelors degree in economics and a post-graduate degree in law (LLB)
from the University of Stellenbosch.
Nicolaas Phillipus Jacobus (Nico) van der Hoven
Nico has over 15 years experience in the mining exploration sector. He has co founded a number of mining
exploration companies in South Africa and currently is a director of various unlisted exploration companies.
He has degrees in commerce (B.Comm) and law (LLB) from the University of Stellenbosch.
Certain of the above directors act as directors on subsidiary companies and the company has no other key
management at the last practicable date.

176

Appendix 7

SUBSIDIARIES OF BAUBA PLATINUM

Name and
registration
number
Diamond Quartzite
Processing
(2007/026130/07)
Golden Dividend 40
(2005/008812/07)
Lenopodi
(2002/004142/07)

Canyon Springs
Investments 116
(Pty) Limited
(2007/028950/07)

Date
business
commenced

Date of
becoming a
subsidiary

Issued
share
capital

Percentage
held

12 September
2007

11 January
2008

R100

24 March
2005

24 April
2005

22 February
2002

Held
by

Nature of
business

100%

Lubtalk
Investments

General
trading in all
aspects

R100

100%

Lenopodi

General
trading in all
aspects

11 July
2003

R100

100%

Bauba
Platinum

Mining of
slate,
quartzite and
other
dimensional
stone

9 October 17 September
2007
2008

R100

100%

Bauba
Platinum

Dormant

1 October
2003

31 December
2005

R120

90%

Lenopodi

Investments
in movable
and
immovable
property

8 February
1967

31 March
2008

R200

90%

Lenopodi

Investments
in movable
and
immovable
property

R25

60%

Bauba
Platinum
and NMR

Platinum
exploration
and mining

3 June 2010* R11 509

100%

Bauba
Platinum

Investment
holding

Lenopodi
International S.L.
Lubtalk Investments
(2003/024338/07)

Niemller Marmer
(Pty) Limited
(2967/001191/07)
8 February 1967
Bauba

NMR

19 December
2006
9 November
2006

3 June 2010*

* Expected date

Shareholders are also referred to Appendix 10, detailing Bauba Platinums group structure.

177

Appendix 8

COMPETENT PERSONS REPORT ON LEKKERSING DIAMOND QUARTZITE NATURAL


STONE TILE PROJECT AND OTHER MINERAL ASSETS

Executive Summary of the Independent Competent Person's Report on the Lekkersing


Quartzite Mine for Absolute Holdings Limited
TABLE OF CONTENTS
! Purpose
! Introduction and Scope
! Project Outline
! Locality
! Legal Aspects and Tenure
! Geological Setting
! Exploration Programme and Budget

KEY FEATURES

! Key Environmental Issues

! Reference to Risk in the Full CPR

! Modifying Factors

! Competent Persons Declaration

! Mineral Resources
! Valuation Summary
! Valuation Summary and Conclusions
! Previous Valuations
! Sources of Information
! Conclusion

These documents comply with the Executive Summary requirements of Section

Project Name:
Compliance:

Study on the Exploitation of the Quartzite Deposits at Lekkersing, Northern Cape.


This Executive Summary is based on the new Section 12 of the JSE Listing Requirements and summarises the
Independent Competent Persons Report (CPR) on the Lekkersing Quartize Mine held by Absolute Holdings
Limited. The CPR is fully compliant to the SAMREC Code. This Executive Summary is designated with the
relevant Section 12 Item numbers but for full SAMREC Code Table 1 items, refer to the full CPR document.
Dr Johan Hattingh, Ph.D. (Geology) Pr.Sci.Nat., Mr Johan George Botha, B.Sc. (Geol), Pr. Sci. Nat.
Mr Andy Clay, M.Sc. (Geol), M.Sc. (Min.Eng.), Dip. Bus.M., Pr. Sci. Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mr Derick de Wit, Pr. Tech. Eng., B. Tech. (Chem. Eng), M.A.P. (Wits.), MSAIMM, MECSA, MIASSA.
Venmyn reviewed and made use of a CPR by Dr Johan Hattingh and Mr J.G. Botha of Creo Design (Pty) Ltd,
(Creo Design). Furthermore, Venmyn had discussions with Mr. Marinus Hesselink, industry specialist familiar
with the Lekkersing Mine, with more than 30 years of natural stone experience.

Competent Persons:
Other Experts:

Reliance on Other Experts

28th February 2010.


Absolute Holdings Limited (Absolute).
This statement, an update of the previous work, was prepared as an Executive Summary Report in order to
present the mining assets of Absolute Holding's Lekkersing Mine in an investor friendly manner and complies
with JSE Section 12.9 (h).
The Competent Person and a representative from Creo Design visited the property during February/March
2008.
DIMENSION STONE DEPOSITS IN SOUTH AFRICA

Effective Date:
Prepared For:
Purpose:

Personal Inspection:

PURPOSE
Absolute Holdings Limited (Absolute) is a junior mining and exploration company listed
on the Venture Capital Market bourse of the JSE Limited (JSE). Absolute has developed
a natural stone portfolio, produced and marketed by Lenopodi (Pty) Limited (Lenopodi), a
wholly-owned subsidiary of Absolute. The current company structure is depicted in
Figure 1.

Polokwane

Pretoria
Witbank
Klerksdorp

The directors of Absolute requested that Venmyn Rand (Pty) Limited


(Venmyn) prepare an Executive Summary on the Lekkersing Quartzite
Mine and processing facility (Lekkersing Mine) in conjunction with the
authors of the Competent Persons Report (CPR) (Creo Design (Pty)
Ltd). This Technical Statement was prepared as part of the
documentation required for disclosure by a company listed on the JSE
Securities Exchange (JSE Limited), South Africa.

Vryheid

This was prepared in accordance with the


South African Code for the Reporting of
Exploration Results, Mineral Resources
and Mineral Reserves (SAMREC Code,
2008) to determine the merits of the
Lekkersing Mine. This Executive
Summary was based on a CPR written by
Dr Johan Hattingh of Creo Design dated
th

28 February 2010.

Upington

LEGEND:
Sishen

Travertine
Slate
Sandstone
Quartzite
Marble
Granite
Project Area

This Technical Statement was done for the Lekkersing Mine held by
Absolute, in the form of an Executive
Summary of the CPR to be included in the
reverse-listing documents as required by
Section 12 of the JSE Listing
Requirements.

Welkom
Ladysmith
Richardsbay
Pietermaritzburg

Kimberley
Bloemfonetin

DURBAN

Prieska
De Aar
Umtata
Saldanha

CAPE TOWN

Bisho

East London

Port Elizabeth
Mosselbay

SCALE:
0

FIGURE 1: CURRENT CORPORATE STRUCTURE


Absolute Holdings Limited
(Listed on JSE)

100%

100%

Lenopodi (Pty) Ltd


(previously Absolute Coleccion (Pty) Ltd)

Absolute Tiles (Pty) Ltd

90%

Richtersveld
Onwikkelsings
Maatsappy Bpk

10%

Lubtalk Investments
(Pty) Ltd

100%

Niemller
Marmer
(Edms) Bpk

100%

Diamond Quartzite Processing (Pty) Ltd

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate

PAGE 1

178

JOHANNESBURG

100%

Taung Marble
(Pty) Ltd

200 km

Executive Summary of the Independent Competent Person's Report on the


Lekkersing Quartzite Mine for Absolute Holdings Limited
1. INTRODUCTION AND SCOPE

FIGURE 2: LOCALITY OF LEKKERSING WITHIN NAMAQUALAND


th

am

ib

ia

Durban

PROJECT
AREA
Cape Town

Nababeeps Mountains
(Swartberge)

N1

Lekkersing

an d
lex
y
Ba
er

Apart from the mine being temporarily closed, there are no material
changes. Neither Venmyn nor its staff or Creo Design have or have
had any interest in this project capable of affecting their ability to give
an unbiased opinion, and have not and will not receive any pecuniary
or other benefits in connection with this assignment, other than
normal consulting fees.

Johannesburg

er
eRiv
Orang

A
To

Venmyn carried out a high leveldue diligence, as independent


expert, based on a CPR completed by Dr Hattingh (Creo Design)
and discussions with Mr Hesselink.

Vioolsdrif To

Eksteenfontein

Atlantic Ocean

The directors of Absolute requested Venmyn on 17 March 2008 to


prepare an Executive Summary Report on the Lekkersing Mine in
compliance with the Listing Requirements of the JSE and the
SAMREC Code. This document has been compiled in order to
incorporate newly available and material information.

Steinkopf

PORT NOLLOTH
382

382

N1

LEGEND:

Powerline
River
Neighbouring Country (Namibia)
Project Area

National Road
Route
Gravel Road
Old Railway Line

2. PROJECT OUTLINE
Absolute has developed a natural stone resource portfolio with
deposits in the Northern Cape and North West Provinces. These are housed
by Lenopodi (Pty) Ltd (Lenopodi), a wholly owned subsidiary of Absolute.
Projects which have been secured by Lenopodi but not yet developed
include a sandstone deposit, known as Picture Stone, near the town of
Vioolsdrif in the Northern Cape. The converted old order mining rights are
owned by Niemoller Marmer Edms Bpk, which Lenopodi acquired in March
2008. Operations are expected to commence in the latter half of 2008. A
marble deposit near the North West town of Taung, known as Taung Marble,
was identified and a new order mining right application was submitted by
Golden Dividend 40 (Pty) Ltd, a subsidiary of Lenopodi, in August 2008.
Currently the project is under care and maintenance.
3. LOCALITY
The Lekkersing quartzite mine is located directly adjacent to the town
Lekkersing on the south western outskirts of the town Lekkersing
(Coordinates 28 59' 58 S, 17 05' 23 E), Northern Cape Province, South
Africa, in an area known as the Richtersveld.
The area is characterised by a mountainous to slightly undulating terrain.
Some minor perennial streams drain the area in a westerly direction south of
the mine site.
The town of Lekkersing lies about 40km northeast of Port Nolloth (see Figure
2) and about 120km northwest of Springbok at an altitude of 350masl and
approximately 35km north of the Steinkopf - Port Nolloth main road. The
mine itself lies directly adjacent to the town on a quartzite ridge. This very
conspicuous north-south trending quartzite ridge, rising in places some
400m above its surroundings is visible in the north from the Steinkopf - Port
Nolloth main road some 20km east of Port Nolloth.
Infrastructure is generally well established, with a good quality tarred and
gravel roads. Lekkersing has no surface water available for mining and
quartzite processing, however, abundant ground water is extracted from the
quartzite aquifer underlying the Lekkersing area. Lekkersing received
Eskom electricity supply in 2000, with power line runs alongside the gravel
road from the junction at the Steinkopf - Port Nolloth road. The Eskom power
is supplied through a 1 MVA line to the town with a 100 kVA supply line
dedicated to the processing factory.

4. LEGAL ASPECTS AND TENURE


Ownership of the land (Portion 5 of the farm The Richtersveld No 11 and
Remainder of Farm The Richtersveld No. 11) on which the Lekkersing
Quartzite mine is located is held by the State in trust on behalf of the
Richtersveld Community through the registered State Title T58935/1996.
The Richtersveld Community won a historic land claim legal case against the
state in 2007 and transfer of the disputed land, including this farm, is
expected to be effected to The Communal Property Association,
representing the community.
The mineral rights to portions of the property (see Table 1 & Figure 2) have
however been granted by the State as 99 year leases, which were ceded to
Lubtalk Investments (Pty) Ltd by Richtersveld Quartzite (Pty) Ltd and Allied
Quartzite (Pty) Ltd. The leases expire in 2066 and 2069. Whilst these leases
are no longer valid in terms of the new mining legislation, it enabled Lubtalk
Investments to apply for a new order mining right from the Department of
Minerals Resources (DMR), in terms of the Mineral and Petroleum
Development Act of 2003.
The mining right, under reference number (NC) 30/5/1/2/2/506 MR, and the
Environmental Management Programme Report, which was submitted on
15 September 2003, was approved and granted in August 2007 on a thirty
(30) year term. The mining right area granted is identical to the old order
leases listed in Table 1 below.
TABLE 1: MINERAL RIGHTS
LEASE AREA
NUMBER
269
270
271
272
273
Sub Total (Area)
2/71
3/71
4/71
5/71
Sub Total (Area)

LEASE HOLDER AREA (HA)


Allied Quartzite
Allied Quartzite
Allied Quartzite
Allied Quartzite
Allied Quartzite
Allied Quartzite
Richtersveld
Richtersveld
Richtersveld
Richtersveld
Richtersveld
TOTAL AREA

178.998
305.328
337.177
191.93
337.079
1 350.315
189.762
397.432
372.838
256.687
1 216.719
2 567.034

LEASE EXPIRY
DATE
29-Jun-66
29-Jun-66
29-Jun-66
29-Jun-66
29-Jun-66
29-Jun-66
26-Jan-69
26-Jan-69
26-Jan-69
26-Jan-69
26-Jan-69

The assets and quartzite business, including the cessions of the old-order
mineral leases, were acquired for R 2,300,000. Lubtalk has negotiated a
surface rental agreement with the Richtersveld Community, including a

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate

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179

Executive Summary of the Independent Competent Person's Report on the


Lekkersing Quartzite Mine for Absolute Holdings Limited
LEGAL ASPECTS AND TENURE (cont...)
comprehensive social and labour plan, as directed by the Mineral and
Petroleum Resources Development Act. The main principles agreed upon
are a R5 per hectare annual surface rental, a monthly rental of R10 000 for
the factory facilities and the outsourcing by the mine of its Human
Resource Management function to representatives of the community for a
fixed fee. A royalty of 1% is payable to the State.

FIGURE 2: LOCATION OF LEASE AREAS


Koedoes 64km
Remainder of farm
The Richtersveld # 11

2/71

3/71

LEGEND:

Venmyn has reviewed the legal title documentation and, whilst this does
not constitute a legal opinion, Venmyn has satisfied itself, after
consultation with Absolute's legal advisors, that the information as
presented here is materially correct.

Unregistered sub-divisions of
farm The Richtersveld # 11
Registered portion (Ptn 5) of
farm The Richtersveld # 11
Existing Mining Lease Areas
Roads
Lease owner - Richtersveld
Lease owner - Allied Quartzite

5. GEOLOGICAL SETTING
The Lekkersing quartzite deposits occur in a quartzite horizon, the
Lekkersing Formation, belonging to the Stinkfontein Subgroup of the
Gariep Supergroup. The formation consists of two quartzite horizons
separated and overlain by conglomerate units. Sediments of the
Stinkfontein Subgroup were deposited during the Pre-Cambrian Namibian
era (approximately 900ma years ago) in a shallow marine environment
(see Figure 3).

Brakfontein Section

4/71

5/71

269
270

Existing Blommyn Quarry


271
272

The Lekkersing area occupies the upper near horizontal limb of a major
regional asymmetric fold verging east. The main fold axis is orientated
north-northeast to south-southwest, gently plunging in a southsouthwesterly direction (Figure 4).

Lekkersing

273
Remainder of farm
The Richtersveld # 11

Remainder of farm
The Richtersveld # 11

The main axial plane is generally parallel to the upper limb resulting in the
bedding planes being very regular, unfolded and therefore always parallel.

Remainder of farm
The Richtersveld # 11
SCALE:
0

2.5 km

Steinkopf - 7km

The Lekkersing quartzite is a whitish, laminated micaceous quartzite


which is generally recrystallised, with muscovite mica on the beddingplanes giving the surface an attractive
silvery appearance with a vitreous lustre.
The quartzite is a metamorphic
assemblage of quartz (96-98%), mica (23%) and trace amounts of iron, aluminium
and titanium.

FIGURE 3: GEOLOGY OF THE SOUTHERN RICHTERSVELD


f

The quartzite is made up of well-sorted,


medium to coarse silica grains and is
slightly porous with a high compressive
strength. The high mica content in the
micaceous layers allowed for easy
separation of layers and therefore good
recovery of quartzite slabs at depths
exceeding 30m below surface.
The dominant structural feature that has
significant influence on the mining and
recovery of quartzite is the well-developed
joints present in the quartzite (Cosi, 1994).
Cleavage predominantly follows the
layering of primary sedimentary bedding
planes dipping 35 to 45 on a bearing of
290 west-northwest. In the weathered
zone near the surface, cleavage planes
have been accentuated by weathering and
are particularly enhanced by the
limonitisation along the mica rich layers.

SCALE:
0

4 km

Lekkersing
B

LEGEND:

Upper conglomerate and grit, Lava, tuff


Quartsite, sandstone, grit
Agglo
Phyllite (sheared tuff)
Older sand, rock waste, etc.
Surface-limestone, calcrete

Older sand, rock waste, etc


Porphyroblastic biotite gneiss
Mafic dykes: gabbro, amphibolite, etc
Arkose, quartzite, shale, conglomerate
Fault
Fault

FIGURE 4: CROSS SECTION VIEW OF FOLDING AND LAYERING AT LEKKERSING

West

East

Blommyn Quarry
Strykop Quarry

Lekkersing Factory
and Office Complex
f

Road to Brackfontein
SCALE:
f

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate

PAGE 3

180

150m

Executive Summary of the Independent Competent Person's Report on the


Lekkersing Quartzite Mine for Absolute Holdings Limited
GEOLOGICAL SETTING (cont...)
Good exposures of laminated grey quartzite outcrops occur in the excavations of the main
quarry. Cross bedding layers are relatively even in thickness and display fairly smooth
surfaces. Sterile bands of greywacke approximately 150m wide run north-south across
the flat bedded quartzite.

FIGURE 5: FOLDED QUARTZITE IN THE


AREA SOUTH
OF LEKKERSING.

At Lekkersing the best quality quartzite is obtained from the beds that exhibit bedding with
a pronounced lamination, the planes of which are from approximately 2.5mm to 80mm
apart.
Mica rich layers tend to enhance the cleavability of the quartzite and therefore the recovery
of good quality cleft stone. The uniqueness of the deposit lies in the nature and quality of
the flat-bedded quartzite, traditionally referred to as flagstone.
The quartzite slab exhibits a very uniform thickness and sufficient hardness to allow the
production of high quality natural tiles at a very low cost. These factors render the
Lekkersing quartzite highly suitable for the manufacture of a range of products by the
processing facility on site. Figures 5 to 7 are examples of the quartzite formation.
6. EXPLORATION PROGRAMME AND BUDGET
There is no exploration programme planned for the future. However on-going exploration
will be initiated once the measured mineral resources are near exhaustion. However, for
the operation to be reopened the following capital is required new equipment and working
capital:-

FIGURE 6: FLATBEDDED QUARTZITE


DIPPING AT 40 ADJACENT
TO BLOMMYN QUARRY

TABLE 2: ESTIMATED SETUP COSTS AND CAPITAL EXPENDITURE


PHASE 1
PHASE 2
TOTAL (ZAR)
2,590,000.00
Plant and Machinery
1,320,000.00 1,270,000.00
Motor Vehicles - Refurbished
1,470,000.00
500,000.00
1,970,000.00
Furniture and Office Equipment
130,000.00
130,000.00
Project Management - Commissioning
150,000.00
150,000.00
Upgrade of Existing Infrastructure and Quarries
1,560,000.00
1,560,000.00
Total Capex Costs - Lekkersing 4,630,000.00 1,770,000.00
6,400,000.00
Total Start-up Costs 4,630,000.00 1,770,000.00
6,400,000.00
Acquisition of Diamond Quartzite Business
1,800,000.00
1,800,000.00
(Paid by issue of Shares)
Rehabilitation Guarantee (Paid)
200,000.00
200,000.00
Administration Set-up Costs
150,000.00
150,000.00
Working Capital (1st 6 months)
2,612,546.00
2,612,546.00
TOTAL (ZAR) 9,392,546.00 1,770,000.00 11,162,546.00

The existing stone cutting equipment currently being utilised is outdated and inefficient. A
complete new set of tile cutting production lines will be installed, over a phased two year
period, as production increases. Materials handling and factory processes will be
improved through the installation of the required workstations and the acquisition of a
forklift.

FIGURE 7: A MASSIVE BENCH OF


FLAGSTONE QUARTZITE AS PART OF THE
MINING FACE IN THE QUARRY.

Heavy earthmoving equipment will improve productivity at the quarries and to this extent a
front-end loader with a hydraulic forklift adapter will be essential. A front-end loader will be
required towards the end of the first year of operation as forecast production increases
toward 180 000 m2 per annum. One tractor and a customised trailer will be purchased
initially and a second tractor will be required in the second year of operation.
A small office and accommodation facility will be upgraded with communications,
computing equipment and furniture. The capex budget forecast would be implemented in
a phased approach over a two year period as and when production volumes increase.
Approximately half of the total budget as indicated in Table 2 will be required initially whilst
the remainder is forecast for the beginning of the second year of operation.
Total working capital funding of approximately ZAR 2.6 million is forecast, which will be
repaid by the end of the first year of operations.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate

PAGE 4

181

Executive Summary of the Independent Competent Person's Report on the


Lekkersing Quartzite Mine for Absolute Holdings Limited
7. KEY ENVIRONMENTAL ISSUES
Absolute Holdings through its subsidiary Lubtalk Investments (Pty) Ltd,
acquired a cession of the entire old order mineral leases held by
Richtersveld Quartzite (Pty) Ltd and Allied Quartzite (Pty) Ltd. These leases,
valid for another 65 and 62 years respectively, have been consolidated by
these two companies and cover most of the economically exploitable
quartzite resources in the area. Lubtalk Investments applied in April 2004 to
the DMR for a new order quartzite-mining license for Lekkersing, which was
granted and issued in August 2007.

FIGURE 8: THE 2008 BLOMMYN RESOURCE BOUNDARY PLAN


AND DRILLING RESULTS

6 790 400

LSK_07
LSK_08
LSK_09
LSK_10
6 790 350

LSK_05

The license includes approval of the Environmental Management

LSK_06

LSK_12
6 790 300

Programme Report (Site Plan Consulting, 2003) that was submitted on 15th
September 2003. The EMPR is very clear in the type of mining and
rehabilitation methodology to be employed thus ensuring minimal future
liabilities.

LSK_03
LSK_04
LSK_11
LSK_01

6 790 250

The rehabilitation process is an integral function of the mining operations as


required by the programme and both operations will be performed
sequentially. The DMR has further deemed that all past quarrying operations
worked by the previous holders of the mining licence will not form part of the
rehabilitation programme that has been recently submitted by Lubtalk
Investments (Pty) Ltd.

LSK_02
LEGEND:

6 790 200

Borehole Positions
Resource Boundary
703 600

703 650

703 700

703 750

703 800

FIGURE 9: AERIAL VIEW OF LEASE AREAS AND RESOURCE EXTENTS


8. MODIFYING FACTORS
Not applicable.
9. MINERAL RESOURCES
The Lekkersing Quartzite deposit is considered to be a mineral
resource, being an occurrence of economic interest in such form,
quality and quantity that there are reasonable and realistic prospects
of quartzite extraction for the market. The location, quantity, grade,
continuity and other geological characteristics of this mineral resource
are known, estimated from specific geological evidence and
knowledge.

Indicated Resource

At Blommyn Quarry, Lekkersing Mine, the quarry and immediate


surroundings was identified by Creo Design and classified into the
following Mineral Resource, for which tonnage, densities, shape,
physical characteristics, and grade were estimated (Table 3):TABLE 3: MINERAL RESOURCES
RESOURCE CATEGORY SURFACE AREA AVE THICKNESS VOLUME
(m 2)
(m)
(m 3)
Indicated
861,150
19.51 16,804,668
Measured
27,500
15.21
418,332
TOTAL
888,650
19.38 17,223,000

These parameters were determined from exploration, sampling and


testing of material from locations spaced closely enough to confirm
geological and grade continuity. Figures 8 and 9 show drilled positions
for the deposit.
The method used to estimate volumes of the deposit was a
combination of geostatistical calculations of the historic mining yield
and surface mapping of the deposit. The quartzite outcrop was
surveyed in terms of the surface exposure of the quartzite and in the
case of the indicated resource, the assumption was made that the
quartzite body maintains the same degree of structural deformation
and weathering throughout. Recent boreholes have added additional
confidence to the mineral resource.
For a centralised mining operation in an area with a proven history of
sustainable quartzite production for the market, the Blommyn Quarry
was identified as an area close to the existing processing facility and

Measured Resource

LEGEND:
th

Mining lease areaNor


Contours
Gravel road
Episodic stream
Factory site
Indicated
Indicated Resource
Resource

with the prospects of a reasonable life-of-mine. A 50m x 50m strike-orientated


borehole grid of twelve drilling positions were laid out and drilled east-southeast of
the existing workings, in order to establish continuity of the quarry deposit with the
aim of declaring a Mineral Resource suitable for a substantial life-of-mine. A
Mineral Resource Statement was prepared on the quartzite deposit at Blommyn
Quarry (part of Lekkersing Mine), using all geological, drilling and mining data
available as at end 2008 in accordance with the SAMREC Code (2008) and
updated to February 2010.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate

PAGE 5

182

Executive Summary of the Independent Competent Person's Report on the


Lekkersing Quartzite Mine for Absolute Holdings Limited
10. MINERAL RESERVES
Since the mine is on care and maintenance no Mineral Reserves are
considered in this report.
11. SOURCES OF INFORMATION
Information was supplied to Venmyn by Absolute and included:th
! annual financial statements for the year ended 30 June 2008;
th
th
! production statistics (26 May to 28 October 2008); and
! independent CPR on the Exploitation of the Quartzite Deposits at
Lekkersing, Northern Cape, written by Dr. Hattingh (Creo Design).
12. CONCLUSION
The Lekkersing quartzite slabs exhibit a very uniform thickness and
sufficient hardness to allow the production of high quality natural tiles at a
very low cost. These factors render the Lekkersing quartzite highly suitable
for the manufacture of a range of products by the processing facility on site.
While the mine is currently on care-and-maintenance, once working capital
is raised, the operation can be restarted in a very short space of time.
13. REFERENCE TO RISK IN THE FULL CPR
Not Applicable.

Mr. Andy Clay


M.Sc.(Geol), M.Sc.(Min. Eng.),
Dip.Bus.M., Pr.Sci.Nat., MSAIMM,
FAusIMM, FGSSA, IOD, AAPG,
CIMMP.
MANAGING DIRECTOR (Venmyn)

MS. CAROL. TAYLOR


B.Sc.Hons (Geol),
Pr Sci Nat, MGSSA, MGASA,
MINERAL PROJECT ADVISOR
(Venmyn)

14. COMPETENT PERSONS DECLARATION


Venmyn is an independent advisory company. Its consultants, have
extensive experience in preparing competent persons', technical advisors'
and valuation reports for mining and exploration companies. Venmyn's
advisors have, collectively, more than 75 years of experience in the
assessment and evaluation of mining projects and are members in good
standing of appropriate professional institutions. The signatories, advisors
and associates to this report are qualified to express their professional
opinions on the values of the mineral assets described.
Neither Venmyn, or Creo Design, their staff, nor associates have or have had
any interest in this project capable of affecting their ability to give an
unbiased opinion and have not and will not, receive any pecuniary or other
benefits in connection with this assignment, other than normal consulting
fees. Absolute Holdings Limited has warranted in writing that it has openly
provided all material information to Venmyn and Creo Design, which, to the
best of its knowledge and understanding, is complete, accurate and true.
Venmyn have prepared this Section 12 Executive Summary from the
Independent Competent Persons' Report on the Lekkersing Quartzite Mine
for Absolute Holdings Limited and state that the Executive Summary is a true
reflection of the full CPR.

DR. JOHAN HATTINGH


Ph.D. (Geology) Pr.Sci.Nat.
CHAIRMAN (Creo Design)

MR. JOHAN GEORGE BOTHA


B.Sc. (Geology) Pr.Sci.Nat.
GEOLOGIST (Creo Design)

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
AbsoluteBauba'10FigLekkersingupdate

PAGE 6

183

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On the Greenfields Assets of Absolute Holdings Limited
as at 14th April 2010
TABLE OF CONTENTS
?
General (T1.1, T1.2)
?
Introduction (T1.1, T1.2)
?
Corporate Structure
?
Absolute's Vereeniging- Sasolburg Coalfield Licences
?
Absolute's Limestone Assets

?
Absolute's Vioolsdrift Picture Stone
?
SAMREC Table 1, Items 2-9
?
SAMVAL Valuation (JSE 12.9 (f))
?
JSE Listing Requirement 12.9 (e)
?
Concluding Opinion

KEY FEATURES
Compliance:

Competent Persons:

Effective Date (JSE 12.9:


Purpose:

Sources of Information:

Personal Inspection:
Reliance on Other Experts:
Access:
Property Description and Location:

Licence Status:

Ownership Details:

This Competent Persons Report (CPR) is compliant with the SAMREC- and SAMVAL Codes (Table 1) and the
JSE Ltd (JSE) Listings Requirements and has been annotated with T for Table 1 of the SAMREC Code and JSE
for the JSE Listings Requirements, respectively.
Mr. Andy Clay, M.Sc. (Geol), M.Sc. (Min. Eng.), Dip.Bus.M. Pr.Sci.Nat., MSAIMM, FAusIMM, FGSSA, IOD,
AAPG, CIMMP.
Mrs. Carol Taylor, B.Sc. Hons (Geol.), Pr. Sci. Nat., MGSSA, MGASA.
5th May 2010.
This is an Independent assessment and verification of Absolute's Greenfields Exploration Assets on behalf of
Absolute. Absolute's strategy is to develop its PGE assets as their priority and to package all other mineral
commodities for potential disposal within the next 12 months. It must be noted that the properties described here
have recently been acquired and are at an early stage. Therefore, a full Competent Persons Report per project
would largely result in statements of not applicable or not available and hence this Short Form summary has
been prepared to describe the assets location, basic geology and prospectivity. Absolute intends providing ongoing feedback to its shareholders as geological assessment information becomes available.
Historical and Technical Reports as supplied by Qinisele Resources (Pty) Limited namely:?
Report Back On A Desktop Coal Resource Study and Geological Model For The Farms Boomplaats 566:
Portions 1, 3, 4, 7 & 8; Modderkuil 1804: Portions 1 & 2;Schaapplaats 1789: Portions 1-17, 19-24, 27-29,
32-34, 36, 38, 41 & 42; and Soetmelksvlei 1791; Magisterial District of Heilbron, Free State,' by Kobus
Dippenaar, July 2009;
?
Presentation Calula_Limestone.pptx' undated; and
?
A Preliminary Report on the Picture Stone Deposit South of Vioolsdrift, Northern Cape by J.G. Botha dated
20th October 2009.
The information available with regards to the coal, limestone and picture stone assets is limited, since all projects
are at their early stages of exploration.
No site inspections were carried out at this stage.
None
No information available
Absolute's exploration assets are geographically dispersed throughout four provinces of South Africa. The coal
properties are found in the Vereeniging-Sasolburg Coalfield of the Free State Province, the Limestone Assets in
the Western and Eastern Cape Provinces and Picture Stone in the Northern Cape.
One Coal Prospecting Right No.30/5/1/1/2/711-PR due to expire in December 2014. Four Limestone Prospecting
Rights, namely (WC)30/5/1/1/2/365PR, (WC) 30/5/1/1/2/362PR, (WC)30/5/1/1/2/364PR and (EC)
30/5/1/1/2/0119PR are due to expire in December 2014. One Old Order Mining Right No.ML 6/99 on Portion of
Vioolsdrift South Commonage due to expire in 2014 which mining right is currently being converted into a New
Order Mining Right and Prospecting Right 296/2007 in the Portion of Remainder Lot 226 Vioolsdrift Settlement in
Namaqualand. Both are for the picture stone.
Dikopane NN Mining (Pty) Limited, a 49% owned subsidiary of Absolute owns the Coal Rights. Canyon Springs
Investments 116 (Pty) Limited a wholly-owned subsidiary of Absolute owns the Limestone Rights. Niemoller
Marmer (Pty) Limited a wholly-owned subsidiary of Absolute owns the Picture Stone Mining Right On Portion Of
Vioolsdrift South Commonage and a Prospecting Right in the Portion Of Remainder Lot 226 Vioolsdrift Settlement
In Namaqualand.

GENERAL
Venmyn was requested by Absolute, a company listed on the JSE Limited
(JSE), to prepare an Independent Competent Person and Valuation Report
on Bauba A Hlabirwa Mining Investments (Pty) Limited's (Bauba) Platinum
Group Elements (PGE) mineral properties as well as a Short-Form Report
on other greenfields mineral assets held by Absolute. This is in order for
Absolute to describe its mineral assets in accordance with the JSE Listings
Requirements (the Listings Requirements) and to fulfil the
obligations of the SAMCode.
Venmyn's primary obligation in preparing mineral asset reports in the public
domain is to describe the mineral projects in compliance with the reporting

codes applicable under the jurisdiction in which the company is listed or the
project's geographical location. In this case, the information that can be
presented includes the licences, basic location, limited geology and a
description of prospectivity. Absolute has not yet determined exploration
activities and budgets.
Venmyn's professional advisors and directors are Competent Persons as
defined by the SAMREC Code and the JORC Code. Venmyn's advisors are,
therefore, internationally accredited. They are also members of the
Australasian Institute of Mining and Metallurgy (AusIMM) which embodies
the Code and Guidelines for Assessment and Valuation of Mineral Assets

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 1

184

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
GENERAL continued...
and Mineral Securities for independent Expert Reports 2005 (The Valmin Code).The competent persons involved in this report are members in good standing
with their respective professional institutions.
INTRODUCTION
It must be noted that the properties described here
have recently been acquired and are at an early
stage. Accordingly, a full Competent Persons Report
(CPR) per project would largely result in statements
of not applicable or not available and hence this
Short Form CPR has been prepared to describe the
assets location, basic geology and prospectivity.
Absolute intends providing on-going feedback to its
shareholders as geological assessment information
becomes available.

po

FIGURE 1: MAP SHOWING THE ABSOLUTE GREENFIELDS EXPLORATION ASSETS


Messina

Li

m
po

Windhoek
BOTSWANA

Polokwane
Gaborone

Pretoria
NAMIBIA
SWAZILAND

Vryburg

Vioolsdrift
Lekkersing Mine

Figures 1 and 2 illustrate the locality and regional


geology of South Africa with respect to the Absolute
properties.

Kroonstad
Heilbron
Coal Assets

Upington

Bethlehem

ge
an
Or

Okiep

Kimberley
Bloemfontein

Richard's
Bay
LESOTHO
Durban

30

LEGEND
RemhoogteCalvinia
Vanrhynsdorp

Coal Assets
Limestone Assets
Quartzite Assets
Roads
Railway
Rivers
Towns
Capital Cities

Brakfontein - Zout Rivier


East London
Saldanha

Oude Bosch

Cape Town

Port Elizabeth

EON
Cenozoic ERA

30

22

FIGURE 2: GENERALISED SOUTH AFRICAN GEOLOGY


22E

30E

22S

26E

Li

po

po

U
IQ
MB
ZA
MO

Mussina

pop
o

Schweizer-Reineke

ts
ar

Bloemhof

l
Vaa

SWAZILAND
Mbabane

Heilbron Coal Assets

Kimberley

Tu
g

el

Klein Zee u
B

Durban

IC
NT
LA
AT

Remhoogte
Middleburg

N
EA
OC

Brakfontein - Zout Rivier


n
dia

ea
Oc

Archaeozoic
Randian
Swazian

In

Oude Bosch

34S

De Aar

Cape Town

Drakensburg and Lebombo Groups

250

Molteno, Elliot and Clarens Formation


Beaufort Group
Dwyka and Ecca Group
Cape Supergroup and Natal Group
Cape Granite Suite
Vanrynsdorp and Nama Groups
Malmesbury, Kaaimans, Gamtoos and
Kango Groups

Maseru
LESOTHO

ng
ra
O

30S

Bloemfontein
Okiep
ls
ffe

Cenozoic deposits
Kalahari Group
Uitenhage and Zululand Groups

570

Vioolsdrift
Orange

65

Namibian

NAMIBIA

Proterozoic
Mokolian

26S

Pretoria
Johannesburg
Witbank

Phanerozoic
Mesozoic
Palaeozoic

Lim

Rustenburg

Lekkersing Mine

LITHOSTRATIGRAPHIC UNIT

BOTSWANA

Vaalian

18E

Port Elizabeth

Namaqua and Natal Metamorphic Provinces


Waterberg and Soutpansburg Groups
and Olifantshoek Supergroup
900

Alkaline Complexes
Bushveld Complex felsic rocks

2050

Bushveld Complex basic rocks


Transvaal and Griqualand West Supergroups
Ventersdorp Supergroup

2650

Witwatersrand and Pongola Supergroups


and Dominion Group
Archaean Granite
Barberton Supergroup and Gravelotte, Pietersburg
and Kraaipan Groups

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 2

185

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
CORPORATE STRUCTURE
Absolute's corporate structure reflecting the ownership of the assets is illustrated in Figure 3:FIGURE 3: CORPORATE STRUCTURE OF ABSOLUTE
Absolute
Holdings Limited
(JSE listed)

25.1%

100%

Qinisele

Lenopodi

Resources (Pty)
Ltd

(Pty)
Ltd

90%

Lubtalk

Dikopane

Niemller
Marmer (Pty) Ltd
(Picture Stone)

100%

Taung Marble

Canyon Springs

(Pty) Ltd

(Pty) Ltd
(Limestone)

296/2007

Lekkersing Diamond
Quartzite Mine
(NC) 30/5/1/2/2/506 MR

NN

Mining (Pty) Ltd


(Coal)

100%

100%

Investments
(Pty) Ltd

49%

Brakfontein
(WC) 30/5/1/1/2/365 PR

Zout Rivier
(WC) 30/5/1/1/2/364 PR

Remhoogte
(WC) 30/5/1/1/2/362 PR

Oude Bosch Kloof


(EC) 30/5/1/1/2/0119 PR

Heilbron Coal
30/5/1/1/2/711 AR

ML 6/99

ABSOLUTE'S VEREENIGING-SASOLBURG COALFIELD LICENCES


LOCATION
These properties are located in the northern part of the Free State Province,
approximately 26km south-southeast of the town Sasolburg and 28km north
of Heilbron. Figures 4 and 5 show the location of the Heilbron coal licences.

FIGURE 4: LOCALITY OF THE SASOLBURG COALFIELD IN


RELATION TO SOUTH AFRICAN COALFIELDS 12.9h(iii)

LEGAL ASPECTS AND TENURE


Dikopane NN Mining (Pty) Limited, a 49% owned subsidiary of Absolute,
was granted the Prospecting Right to four farms in the Heilbron District of the
Free State Province. The Right is due to expire in December of 2014. Table 1
summarises the tenures of the Heilbron coal assets. Table 2 shows the
corner co-ordinates for the property.
FIGURE 5: LOCALITY OF HEILBRON COAL ASSETS

1
4

80 000

90 000

Sharpeville
?
100000
? Viljoensdrif
?
Loch Vaal
?
Gauteng
Vaal
?
Sasolburg
?
Coalbrook
?

North
West

Mpumalanga
North West
Sasolburg
Coalfield

Gauteng
11

7
12

Swaziland

13

10
9

Free State

15

16
17

14
18

Kwazulu Natal
Lesotho

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Limpopo (Tuli)
Waterberg (Ellisras)
Soutpansberg West (Mopane)
Soutpansberg Central (Tshipise)
Soutpansberg East (Venda-Pafuri)
Springbok Flats
Witbank
Kangwane
Free State
Vereeniging-Sasolburg
South Rand
Highveld
Ermelo
Klip River
Utrecht
Vryheid
Nongoma
Somkhele
Molteno-Indwe

Wolwehoek ?
?
?
MpumaCoalbrook Collieries ?
Sasolburg langa

Oranjeville
Dover
?

Free State
Koppies
?
Heilbron
?

B
Z

CD
-2 990 000

-2 980 000

Wolwehoek

Northern Province

E
F

G
Y

J
X S
W V
T
U

Q
M

19

Eastern Cape

Lebombo/Drakensburg Group
Molteno, Elliot, Clarens Formations
Beaufort Group
Ecca Group

-3 000 000

LEGEND

LEGEND
Project Area
Secondary Roads
Urban Area

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 3

186

Scale:
0

5km

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
ABSOLUTE'S VEREENIGING-SASOLBURG COALFIELD LICENCES continued...
TABLE 1: TENURE SUMMARY OF THE HEILBRON COAL ASSETS
FARM
AREA
NAME
(ha)
PORTION
Boomplaats 566
1, 3, 4, 7 and 8
Modderkuil 1004
1 and 2
13,577
Schaapplaats 1789
1-24, 27- 29, 32-34, 36, 38, 41 and 42
Soetmelksvlei 1791

PROSPECTING
RIGHT No.

DATE
ISSUED

EXPIRY
DATE

30/5/1/1/2/711-PR

8th Jul 2009

9th Dec 2014

TABLE 2: TENURE SUMMARY OF


THE HEILBRON COAL ASSETS
HEILBRON FARMS- COORDINATES
NORTHING
EASTING
A
2656'18.285"S
2752'24.218"E
B
2657'57.590"S
2755'42.985"E
C
2700'10.944"S
2756'24.050"E
D
2700'14.659"S
2756'33.681"E
E
2700'32.292"S
2757'19.265"E
F
2701'32.923"S
2757'52.807"E
G
2701'41.943"S
2756'39.819"E
H
2703'19.955"S
2756'47.120"E
I
2703'14.285"S
2757'10.561"E
J
2702'35.919"S
2757'07.573"E
K
2702'15.847"S
2758'15.952"E
L
2703'25.375"S
2758'53.935"E
M
2704'46.810"S
2759'39.234"E
N
2706'02.463"S
2759'14.355"E
O
2705'35.089"S
2757'37.657"E
P
2706'26.603"S
2755'24.595"E
Q
2703'52.081"S
2754'13.643"E
R
2703'17.594"S
2752'20.423"E
S
2703'00.101"S
2751'23.053"E
T
2703'28.231"S
2751'17.294"E
U
2703'31.484"S
2750'53.537"E
V
2703'05.031"S
2750'42.551"E
W
2702'56.758"S
2750'41.006"E
X
2702'47.185"S
2750'40.700"E
Y
2702'36.021"S
2750'04.094"E
Z
2658'51.088"S
2752'07.985"E
A
2656'18.258"S
2752'24.218"E

GEOLOGY
Regional Geology
The farms are located in the Vereeniging-Sasolburg Coalfield as shown in Figure 4. According to the 1:250 000
geological map, mudstone and sandstones of the overlying Beaufort Group (Adelaide Subgroup) are found on
surface on Modderkuil1804 and the southeast of Schaapplaats 1789 properties. These are underlain by the
Volksrust Formation of the Permian Ecca Group, a formation with a thickness of approximately 100m in the
Heilbron area. It consists mostly of argillaceous rocks which are found on the surface of the farms Schaapplaats
1789, Modderkuil 1804, Boomplaats 566 and Soetmelksvlei 1791. The Volksrust Formation consists
predominantly of grey to black silty shale, whereas thin siltstone and sandstone lenses/beds, that are frequently
bioturbated, generally occur near the upper and lower boundaries of the succession. This formation is not known
to contain significant coal-bearing strata in the Vereeniging-Sasolburg Coalfield (Kobus Dippenaar, 2009).

The Vryheid Formation underlies the Volkrust Formation and is the main coal-bearing formation. Outcrops occur
in the far north of Schaapplaats 1789. The coal zone in this coalfield is approximately 40m thick and consists of
three coal units;?
the lower coal unit can be separated into at most three benches by sandstone partings. The unit has an
average thickness of 3m;
?
the middle coal unit consists of the No. 2A and 2B Seams and their associate rock layers (resulting in
successions that can each be up to 8m thick). This middle unit, however, is not always split by clastic
partings; and
TABLE 3: VARIATION IN COAL PROPERTIES (AIR-DRY BASIS),
?
the upper coal unit has a thickness of nearly 5m and includes the No
VEREENIGING-SASOLBURG COALFIELD
3 Seam and the Coal Marker Seam.
ASH
(%)

VM
(%)

CV
(MJ/kg)
19.1

Top Unit

5.2

29.7

21.3

Middle Unit

5.2

29.6

20.8

18.6

Bottom Unit

6.3

25.6

21.8

19.2

HISTORY
Anglo American Corporation of SA Limited (Anglo), Iscor Limited (Iscor),
Goldfields of South Africa Limited (Goldfields) and Sasol explored for coal in
this area between 1960 and 1985. Despite the drilling that the companies
carried out, no interest was shown in the potential commercial extraction of
the coal and no mining has taken place on the Heilbron farms. Data for the 49
boreholes drilled by Anglo, Iscor, Goldfields and Sasol between 1960 and
1985 was obtained by Absolute from the Council for Geosciences. Figure 6
shows the location of historical boreholes drilled on the Heilbron Farms.

Deposit Type and Mineralisation


The coal mined in the neighbouring mines is predominantly dull while the low
rank coal from Sigma Mine is prone to spontaneous combustion. Table 3
summarises key average qualities of the three coal units in the VereenigingSasolburg Coalfield. The coal units include clastic or argillaceous partings.

FIGURE 6: HISTORICAL BOREHOLES DRILLED


ON THE HEILBRON FARMS
88 000

94 000

-2 982 000

82 000

-2 988 000

Local Geology
Drilling done on the Heilbron Farms (see Figure 6) supports the general
geological description stated in the regional geology section. The borehole
information revealed the following:?
the depth of the coal zone varies between 125m and 270m. The
average for the area being between 180 and 220m in depth for the
coal zone. General stratigraphic columns of the Sigma area suggest
that the roof of the 40m thick coal zone (Coal Marker Seam) occurs
at a depth of roughly 180m;
?
the upper coal unit is situated approximately 20m above the middle
unit. This unit is in close proximity to a prominent dolerite sill of 80 to
100m thickness that is situated above the coal zone. This has
resulted in strata-displacement as well as the coal of the upper unit
having a lower volatile content;
?
the lower and middle coal units are separated by a clastic parting
with a thickness of roughly 5m; and
?
the Vryheid Formation is underlain by basement rocks comprising
diamictites of the Dwyka Group and unidentified volcanic rocks.

IM
(%)

-2 994 000

The general dip in the area is to the south-south-east following the basinmorphology.

COAL UNIT

LEGEND
Licence Boundary
Boreholes
-3 000 000

Later intrusions in the form of dolerite dykes and sills have disturbed the
strata. Displacements of up to 85m, by the sills, are a common occurrence in
this coalfield. Minor faults with maximum displacements of 5m are also
encountered in the region.

Scale:
0

5km

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 4

187

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
Only two mines, the Sigma and New Vaal Collieries, are operating in the
Vereeniging-Sasolburg Coalfield. These mines are situated north of
Absolute's Heilbron Properties and are mining the Vryberg Formation. There
have been attempts to exploit the area immediately north of Schaapplaats
1789, one of the Absolute farms, for its coal content. At this stage, Absolute
intends preparing a new geological model and potential exploration
programme with a budget. Pre-determined decision points will be identified
which will guide the progressive development or cancellation of the work
effort.

PROSPECTIVITY OPINION
The farms fall within an area that is known to contain coal and neighbouring
farms actively mine coal. Only further exploration can reveal if the coal found
by historic exploration could possibly be economically extracted on these
farms. Absolute intends to remodel historical information and prepare a
comprehensive exploration program that should reveal reef thickness, coal
grade, properties and geological losses and the potential to mine the coal.
However, at this early stage, too little information is known to reveal any
potential upside or downside.

ABSOLUTE'S LIMESTONE ASSETS


LOCATION
The four limestone project areas in South Africa
identified are
Western Cape Province;
?
?
Brakfontein (See Figure 10);
?
Remhoogte (See Figure 8);
?
Zout Rivier (See Figure 9);
?
Eastern Cape Province;
?
Oude Bosch Kloof (See Figure 7).
Tables 5 and 6 are prospects co-ordinates. The areas
are mostly agricultural land known for growing grapes,
citrus trees, wheat and some vegetables. Rearing of
animals such as cattle, sheep, goats and horses are
some of the land uses in the area. All the areas are
accessible through national roads and farm roads.
The main topographical features in the Western Cape
are the Swartberg, Koningberg and Piketberg
Mountains. The terrain is undulating, with the nearest
towns being Koninberg and Moorreesberg.
The Oude Bosch Kloof prospect is located in the
Eastern Cape close to the old agricultural town of
Hankey (established in 1826). There are some heritage
sites in the area and there is an old, rehabilitated,
limestone quarry that was closed in 2003. The PPC
Loerie Quarry in the area had been in operation for over
60 years.

TABLE 4: TENURE SUMMARY OF THE LIMESTONE ASSETS


PROVINCE/
DISTRICT

FARM
NAME
Biesiesfontein 413
Brakfontein 339
Brakfontein 341
Brakfontein 107
Brakfontein 1137
Western Cape/
Hartebeestfontein 412
Malmesbury
Hooggelegen 329
Karnemelksvalley 379
Kraalbosch Vlei 396
Swartfontein 331
Zwartfontein 414
De Koppies 224
Western Cape/
Malmesbury Maatjesfontein 217

Y
22,849.40
21,775.60
19,516.19
21,213.15
18,167.92
16,967.97
14,092.78
15,484.04
16,080.62
18,157.85
19,686.76
21,642.13

X
Brakfontein
3,676,524.68
A
3,675,864.19
B
3,675,381.04
C
3,677,478.07
D
3,678,992.58
E
3,680,297.69
F
3,682,558.39
G
3,683,803.72
H
3,683,430.69
J
3,681,731.91
K
3,680,006.22
L
3,678,242.73
M
N

AREA
(ha)

PORTION
3, 8 and 9
6, 12, 17 and 20
1

3,8
Remhoogte

Groot and Klein Kllpvlei


Outspan 410
Hartebeestfontein 412
Western Cape Kleinvalley 480
Zout Rivier
/Piketburg Vlakkerug 500
Zout Rivier 479
Malkopsvlei A 1002
Malkopsvlei 1003

868

(WC)
6, 10, 16, 17,25,26-28
30/5/1/1/2/362PR
and 33
3 and 6
1

1,971

1-5 and 6
10 and 14

(EC)
30/5/1/1/2/0119PR

TABLE 6: CO-ORDINATES - REM HOOGTE AND OUDE BOSCH KLOOF


LIMESTONE PROJECT AREAS

X
3,657,813.21
3,656,705.66
3,660,508.39
3,665,347.50
3,666,299.38
3,668,009.98
3,673,963.55
3,675,381.04
3,675,864.19
3,676,524.68
3,670,585.04
3,664,434.40
3,662,866.21

29,411.17 3,661,629.08

30,159.82 3,660,663.82

30,349.88 3,660,141.93

30,732.31 3,659,800.44

Rem Hoogte
A
B
C
D
E
F
G
H
J
K
L
M
N

Y
15,465.75
15,404.34
15,320.64
15,262.58
15,185.66
15,140.81
15,112.35
15,089.37
14,652.64
14,537.92
14,455.65
14,057.39
13,999.89

X
Oude Bosch
3,657,847.72
A
3,657,809.13
B
3,657,786.16
C
3,657,770.84
D
3,657,741.10
E
3,657,714.38
F
3,657,683.46
G
3,657,141.97
H
3,657,230.94
J
3,657,681.73
K
3,657,186.23
L
3,657,714.47
M
3,657,807.88
N

PAGE 5

Y
11,805.34
9,806.31
7,221.60
6,824.32
6,321.61
5,989.78
5,859.74
5,591.56
6,080.58
6,153.83
6,333.93
6,560.97
7,758.30

X
3,737,908.35
3,737,764.67
3,739,011.50
3,739,641.10
3,739,559.28
3,739,505.27
3,739,484.14
3,740,656.53
3,740,753.22
3,740,769.35
3,740,808.95
3,740,858.91
3,741,122.35

12,516.73 3,661,964.15

7,969.93 3,741,168.70

9,997.72 3,659,503.70

10,346.28 3,740,090.04

10,906.49 3,662,874.58

10,947.45 3,741,095.76

R
S
T
U
V

15,509.31
15,452.35
14,582.27
13,783.78
12,232.08

R
S
T
U
V
W

10,942.73
11,047.54
11,146.98
11,181.23
11,217.54
11,220.92

11,388.10 3,740,669.27

11,629.49 3,739,592.29

3,661,893.90
3,659,971.06
3,658,793.17
3,657,983.08
3,657,902.79

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

188

(WC)
30/5/1/1/2/364PR

2 and 4

Eastern Cape/ Klein Rivier 158


Oude Bosch
1,391
Humansdorp
Kloof
Oude Bosch Kloof 159

Y
32,057.99
30,490.92
27,810.06
25,535.41
25,043.23
24,270.35
21,858.80
21,213.15
21,775.60
22,849.40
25,228.36
28,116.40
28,732.93

PROSPECTING
RIGHT

(WC)
Brakfontein 4,023 6, 1 Or 4
30/5/1/1/2/365PR
1 and 6
5, 8 and Portion 9
1-3, 7-0, 12-14, 16-18
1, 2 and 3
11

Remhoogte 222

TABLE 5: CO-ORDINATES - BRAKFONTEIN AND ZOUT RIVIER


LIMESTONE PROJECT AREAS
Zout Rivier
A
B
C
D
E
F
G
H
J
K
L
M

PROJECT
NAME

3,741,026.04
3,740,971.26
3,740,887.43
3,740,844.55
3,740,752.84
3,740,612.85

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
ABSOLUTE'S LIMESTONE ASSETS continued...
FIGURE 8: LOCALITY OF REMHOOGTE
PROSPECTING RIGHT AREA

Eastern Cape
Steytlerville

Northern
Cape

Citrusdal

-15 000

-10 000

Kirkwood

Velddrif

Prospecting Right Area

FIGURE 7: LOCALITY OF
OUDE BOSCH KLOOF 159

G
E
ABC FH
D
V
U

Uitenhage

Hankey

Port Elizabeth

Kruisfontein

-10 000

Prospecting Right
Area
Piketberg

JK L

-5 000

Humansdorp

Porterville

M
N

Moorreesburg
Saron
Western Cape
Ceres

Darling
Hermon

Malmesbury

Wolseley

Mamre

Wellington

Worcester

Paarl

Z
-3 740 000

Oude Bosch Kloof 159

E F

-3 660 000

C
G

P
X W
V T
R
S Q

MLK
O N

LEGEND

Project Area
Secondary Roads
Urban Area
Rivers

Scale:

2.5 km

Scale:
0

2.5 km

FIGURE 10: LOCALITY OF BRAKFONTEIN


PROSPECTING RIGHT AREA

LEGEND

Western Cape

-30 000

Urban Area
Railway Line

Project Area
Secondary Roads

-20 000

Velddrif

Piketberg

Vredenburg
Saldanha

Prospecting Right Area

Hopefield

Western Cape
Velddrif

-3 675 000

-20 000

-15 000
Piketberg

Vredenburg

-3 660 000

Moorreesburg

FIGURE 9: LOCALITY OF ZOUTRIVER


PROSPECTING RIGHT AREA

Saldanha

Darling

Q
P

C
O

Hopefield
Moorreesburg

Prospecting Right Area

Malmesbury

Darling
Malmesbury

Mamre

M
F

-3 670 000

-3 680 000

Moorreesburg

H
J

Kilometers

Kilometers
0

2km

LEGEND

LEGEND
Project Area
Arterial Route
Main Road
Secondary Road

Project Area
Urban Area
National Road
Main Road

Other Access Roads and Streets


Tracks
Rivers and/or Streams

Secondary Road
Other Access Roads and Streets
Tracks
Rivers and/or Streams

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 6

189

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
ABSOLUTE'S LIMESTONE ASSETS continued...
LEGAL ASPECTS AND TENURE
Canyon Springs Investments 116 (Pty) Limited, a subsidiary of Absolute,
applied for the prospecting rights on 9th September 2009. The rights are for
the purpose of prospecting Shale/Brick Clay and Limestone and are valid for
a period of 5 years. The prospecting rights are due to expire on 9th December
2014. Table 4 is a tenure summary of the limestone assets.
GEOLOGY
The limestone prospecting rights encompass shale, brick clay as well as
limestone. The information available with regards to the limestone assets is
limited, since the Project is at its early stages of prospecting.
The assets are found in the Cape granites (Malmesbury) and sediments,
which contain Limestone as their main mineral. The ages of the rocks range
between 320 to 500Ma.

HISTORY
The Project is at an early stage of prospecting. No work has been conducted
in this area to the knowledge of Venmyn or Absolute. The only work done so
far on the Project is the Environmental Impact Assessment. Absolute's aim is
to identify, package and dispose of these properties within a 12 month
period.
PROSPECTIVITY OPINION
The farms fall within an area known to host limestone deposits. However,
due to the lack of information on the farms, neither Venmyn nor Absolute can
provide any information to adequately demonstrate any potential upside or
downside.

ABSOLUTE'S VIOOLSDRIFT PICTURE STONE

Due to the extremely hot and arid climate, sheep and goat farming are the
main activities. Lucerne is grown using irrigation water from the Orange
River.

-3 205 500

FIGURE 12: LOCALITY OF MINING RIGHT FOR VIOOLSDRIFT


-723 500

-720 000

LEGEND

LEGAL ASPECTS AND TENURE


Niemoller Marmer (Pty) Limited, a wholly-owned subsidiary of Absolute,
owns an Old Order Mining Right as well as a New Order Prospecting Right
for Jasper (Picture Stone) in the Namaqualand District of the Northern Cape
Kilometers
0

FIGURE 11: LOCALITY OF PROSPECTING


RIGHT FOR VIOOLSDRIFT

2km

Project Area
Urban Area
Main Road
Secondary Road
Tracks

NAMBIA

-720 000
?

Vioolsdrif

-716 500

Vioolsdrif

-3 209 000

LOCATION
The deposit lies directly south of Vioolsdrift in the South African Province of
the Northern Cape. Vioolsdrift is a small border-post town directly south of
the Orange River. It is located between Cape Town in South Africa and
Windhoek in Namibia. The town is accessed by the National route N7
highway. Figures 11 and 12 show the location of the farms. Vioolsdrift is
within a 10km radius of the Lekkersing Quartzite Mine, which is also owned
by Absolute.

Kotzehoop
Vioolsdrif

Province of South Africa. The Old Order Rights are in the process of being
converted to New Order Rights. The current tenure period is for 10 years.
Table 7 is a summary of the Rights of the Vioolsdrift Picture Stone assets:-

Prospecting Right Area

-3 210 000

Northern Cape

Kilometers
0

2km

LEGEND
Project Area
Urban Area
Main Road

Secondary Road
Tracks

GEOLOGY
The material belongs to the Nama Sedimentary Formation of the Vioolsdrift
Suite of the Namaqualand Metamorphic Complex. The occurrence at
Vioolsdrift is a classic example of a sedimentary outlier, surrounded by rocks
of the much older Nama Group. The Vioolsdrift Picture Stone deposit rests
discordantly on the flat top of a Dwyka limestone horizon. The material is
only found above a certain contour in the Vioolsdrift area (+/-280m) and
varies in depth from 10cm to several metres.
The so-called Picture Stone are metamorphosed light brown siltstone to
fine-grained sandstone which displays decorative wood grain type patterns
throughout the texture of the rock. Figure 13 shows some specimens of the
rock patterns.
The patterns, known as Liesegang bands, form by precipitation of iron
oxides precipitating from groundwater that has permeated the slightly
porous rock after deposition. According to J.G. Botha there are only a few of
these type of deposits in the world and in South Africa none that are nearly as
appealing as the ones directly south of Vioolsdrift, where they mainly occur
as erosion resistant small hilltops within the large Orange River valley.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 7

190

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
ABSOLUTE'S VIOOLSDRIFT PICTURE STONE continued...
FIGURE 13: PICTURE OF STONE
SPECIMENS - J BOTHA, 2009

TABLE 7: TENURE SUMMARY OF THE VIOOLSDRIFT PICTURE STONE ASSETS


FARM
NAME

RIGHT
No.

Portion of
Vioolsdrift
South
Commonage

ML 6/99

Portion of
Remainder
Lot 226
Vioolsdrift
Settlement

296/2007

TYPE OF
RIGHT

AREA APPLICATION
(ha)
NAME

Old Order
34.97
Mining Right

New Order
Prospecting
Right

DATE
ISSUED

EXPIRY
DATE

17-Aug-04

2014

17-Aug-04

2014

Niemoller
Marmer (Pty)
Limited
664.8

HISTORY
No information is available on previous work done on these farms. Prospecting has shown
that Picture Stone occurs in the area.
The metamorphosed quartzitic sediments that make up the
Picture Stone are, internationally, a very rare occurrence.
Absolute holds the largest Picture Stone deposit in South
Africa.

PROSPECTIVITY OPINION
Not enough information is known to provide a potential upside or downside to the project.
The area is known to host occurrences of a rare form of Picture Stone that could be
economic if it is present in sufficient volume but further exploration would be needed to
delineate the deposit and the properties of the deposit.

SAMREC TABLE 1, ITEMS 2-10


Due to the lack of information on the Heilbron Coal, Limestone Assets and Vioolsdrift Picture Stone Projects, items 2 10 of the SAMREC Table 1 are not
available and as outlined in the following table could not be validated or commented on by the Competent Person.
CODE

ASSESSMENT CRITERIA

Heilbron Coal

Limestone
Assets

Vioolsdrift
Picture Stone

T2

Project Data

Not Available

Not Available

Not Available

T3

Sampling

Not Available

Not Available

Not Available

T4

Interpretation / Modelling

Not Available

Not Available

Not Available

T5

Techno-Economic Study (Inc. Modifying Factors)

Not Available

Not Available

Not Available

T6

Risk Analysis

Not Available

Not Available

Not Available

T7

Resource and Reserve Classification Criteria

Not Available

Not Available

Not Available

T8

Balanced Reporting

Not Available

Not Available

Not Available

T9

Audits and Reviews

Not Available

Not Available

Not Available

T10

Other Considerations

Not Available

Not Available

Not Available

SAMVAL VALUATION
Due to the lack of historical data, a lack of historical expenditure, no committed future exploration budget, no SAMREC Code compliant mineral resources or
reserves, the Project is ascribed a value ZAR0.00.
The Absolute Greenfields projects have no value at this stage. Only if money is available in the future will Absolute consider further exploration and valuation
of the properties. No allowance for future exploration expenditure on the Project has been made as of yet.
COMPLIANCE
These properties are still at the Greenfields stage. To-date, Absolute has only incurred minimal expenditure and the exploration programmes are still to be
designed. At this stage insufficient information is available for the Project upon which to present SAMREC/SAMVAL compliant documentation, and this will be
prepared in the future if exploration is to be undertaken. That information will be reported to shareholders at an appropriate time.
Neither Venmyn nor Absolute can provide additional geological and prospectivity information for the Project in a manner that can adequately demonstrate
potential downside or upside. No value is ascribed to these properties.

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 8

191

EXECUTIVE SUMMARY SHORT FORM SAMREC SAMVAL COMPLIANT CPR


On The Greenfields Assets Of Absolute Holdings Limited
th
As At 14 April 2010
CONCLUDING OPINION
These properties are still at the Greenfields stage. To-date, Absolute has only incurred minimal expenditure and the exploration programmes are still to be
designed. At this stage insufficient information is available for the Project upon which to present SAMREC/SAMVAL compliant documentation, and this will be
prepared in the future if exploration is to be undertaken. That information will be reported to shareholders at an appropriate time.
Neither Venmyn nor Absolute can provide additional geological and prospectivity information for the Project in a manner that can adequately demonstrate
potential downside or upside. No value is ascribed to these properties.

MR. ANDY CLAY


M.Sc.(Geol), M.Sc.(Min. Eng.), Dip.Bus.M., Pr.Sci.Nat., MSAIMM,
FAusIMM, FGSSA, IOD, AAPG, CIMMP.
MANAGING DIRECTOR

C. A. TAYLOR
B.Sc.Hons (Geol),
Pr Sci Nat, MGSSA, MGASA,
MINERAL PROJECT ADVISOR

Information in this statement is to be used for marketing and illustrative purposes only. The diagrams and the information
herein may not be edited or transmitted in any form or by any means without prior written permission.
D807R_AbsoluteBauba'10Greenfields_2nd Draft.cdr

PAGE 9

192

Appendix 9

SALIENT TERMS OF THE SHARE INCENTIVE SCHEME

The salient terms of the Absolute Holdings Limited Share Incentive Scheme are set out below:
1.
1.2.3 Capitalisation Issue means the issue of Shares on a capitalisation of the Companys
profits and/or reserves (including the Share premium account and the capital redemption
reserve fund);
1.2.9

Employee means anyone employed in a full-time capacity by the Company or any Group
company, who is entitled, in terms hereof or in terms of any provision of the Act, to acquire
Shares or rights from the Trust such as is referred to therein; including executive directors
but excluding non-executive directors;

1.2.13 Involuntary Termination of Employment means where the employment of an Employee


of the Group ceases due to the death, serious disability, serious incapacity, retrenchment or
retirement of the Employee;
1.2.14 Issued Shares means all issued Shares in the capital of the Company including Scheme
Shares and Capitalisation Shares and Rights Issue Shares linked thereto (if any);
1.2.18 Offer means an Offer made under the Scheme to an Offeree to acquire Shares or rights
from the Trust by way of purchase, an Option or as otherwise contemplated in this Deed;
1.2.19 Offeree means an Employee nominated in terms of the provisions of the Scheme to receive
an Offer;
1.2.20 Offer Date means the date on which an Offer is made to an Offeree in terms of the
Scheme;
1.2.21 Options means an option in regard to a Share or rights to the delivery of Shares granted
to a grantee in terms of the Scheme;
1.2.22 Ordinary Share means an Ordinary Share in the capital of the Company;
1.2.23 Participant means an Offeree who has accepted an Offer and, where required by the
context, his heirs, executors, administrators or trustees;
1.2.24 Purchase Price means in respect of each Scheme Share, an amount calculated
in accordance with the following formula:
A
Where:
A
B
C

BxC

=
=
=

the Purchase Price to be determined;


> 90% (ninety percent); and
VWAP of an Ordinary Share;

1.2.27 Reserved Share means a Scheme Share which a Participant has undertaken to purchase,
or has purchased, from the Trust in terms of this Deed;
1.2.29 Scheme means the Scheme set out in this Deed, as may be amended from time to time
in terms of clause 26;
1.2.30 Scheme Allocation means, initially, the amount of 100 000 000 (one hundred million)
Ordinary Shares which will initially be the subject matter of the Scheme, together with any
further Shares or rights which are allocated by or in terms of this Deed or in terms of an
authority granted by the Company in general meeting for purposes of the Scheme, subject
to the limits stated in this Deed and the Listings Requirements;
1.2.31 Scheme Share means any Share acquired by the Trustees in terms of the Scheme while
it is either an Unreserved Share or a Reserved Share;

193

1.2.32 Secretary means the Secretary for the time being of the company or another person
nominated by the Directors as the secretary for the purposes of the Deed;
1.2.34 Share Debt means the original Purchase Price of the Scheme Shares together with any
interest levied in respect thereof from time to time by the Trustees;
1.2.35 Share means an Ordinary Share in the capital of the Company;
1.2.40 Unreserved Share means a Scheme Share which is not a Reserved Share;
1.2.41 Vesting Date/s means the date(s) the Ordinary Shares will vest in the Participants,
as set out in clause 18.1.3;
1.2.42 Voluntary Termination of Employment means the lawful dismissal of the Employee by the
Group or the resignation of the Employee from the Group or if a Participant is finally
sequestrated or liquidated or where the Scheme Shares of a Participant are attached for
purposes of a sale in execution; and
1.2.43 VWAP means the 30 (thirty)-day volume weighted average price for the period ending
on the trading day immediately preceding the Offer Date.
2. PURPOSE
The Scheme is intended as an incentive to Employees to promote the continued growth of the
Company and its subsidiaries by giving them an opportunity to acquire Ordinary Shares or rights therein.
The Scheme may not trade in the Companys securities.
8. DUTIES OF TRUSTEES
In addition to any other duty imposed by this Deed, the Trustees shall:
8.1

administer the Scheme in order to achieve and maintain the objectives of the Scheme;

8.2

make Offers to Offerees as directed in terms of clause 16, but always subject to the provisions of
the Act and the Listings Requirements;

8.3

procure that all Reserved Shares and Capitalisation Shares be registered in the names of the
relevant Offeree subject thereto that the Offeree pledges those Shares to the Trust until such time
as the Offerees obligation to pay for Scheme Shares has been extinguished in terms hereof (and
subject to the provisions of clauses 21 and 27) and provides the Trust with signed Share transfer
forms in respect of the Shares so pledged (as detailed in clause 25) and ensure that they remain so
pledged and registered for so long as they remain Scheme Shares;

8.4

procure that all circulars, letters and other documents issued to Shareholders of the Company in
any Rights Issue are issued to Participants as well;

8.5

cause to be released to a Participant upon his complying with the provisions of clause 20, the
Reserved Shares and all Capitalisation Shares linked thereto;

8.6

ensure that all Reserved Shares and Capitalisation Shares in respect of which an Offer has been
accepted and which are transferred to an Offeree, are pledged to the Trustees by way of security
for the payment of the full Purchase Price and interest thereon payable by such Offeree in respect
thereof, the form of such pledge to be determined by the Trustees.

14. FINANCIAL ASSISTANCE


14.1 Upon every issue of Shares in terms of clause 13 and whenever the Trustees propose to acquire
any other Shares for purposes of the Scheme, an amount equal to the total consideration payable
on account of those Shares shall be lent and advanced to the Trustees in terms of the further
provisions hereof, as and when they become obliged to pay the consideration in respect thereof,
except to the extent that the Trust has funds available for that purpose.

194

14.2 The purchase or subscription price of Shares acquired by the Trust in terms of clause 13, the costs
incurred by the Trust in the acquisition thereof, any duties payable by the Trust upon the transfer
thereof to Participant and any monies required to effect payment of any previous borrowings
by the Trustees, as for the proper execution of their duties in terms hereof, will be met out of:
14.2.1 the Trusts own resources, if any; and/or
14.2.2 loans to be made to the Trust by Group companies in accordance with the provisions
of Section 38(2)(b) of the Act; and/or
14.2.3 loans by third parties to the Trust to be procured by the Directors or the Trustees upon such
terms as the Directors or the Trustees are able to arrange; and/or as the Directors may from
time to time direct.
14.3 The Company shall be entitled to levy interest in respect of any loans made to the Trust at such rate
as may be agreed between it and the Trustees at the time when any such loan is made, and shall be
repaid from amounts received by the Trustees in terms of clauses 20 and 21. The aforementioned
provision shall also be applicable to loans from third parties.
15. ELIGIBILITY
15.1 Employees shall be eligible to and shall participate in the Scheme only if and to the extent that
Offers are made to and are accepted by them.
15.2 The Directors, in their sole Discretion, but subject to the provisions hereof and of the Act, may from
time to time by resolution direct the Trustees to Offer Unreserved or Reserved Shares or rights
to Offerees named or referred to therein.
15.3 Every resolution in terms of clause 15.3 shall specify:
15.3.1 the name of the Offeree;
15.3.2 the number of Unreserved Shares or Options Offered;
15.3.3 the Offer Date;
15.3.4 the Vesting Date; and
15.3.5 the Purchase Price.
16. OFFERS
16.1 The maximum number of Scheme Shares in respect whereof any one Offeree shall be entitled
to accept an Offer pursuant to the Trust shall not exceed such number of Shares as may
be determined from time to time by the Directors, in consultation with the JSE, which number
of Shares shall not exceed 60 000 000 (sixty million) (6 000 000 or six million post consolidation
on 100:1 basis) of the issued Ordinary Shares of the Company: provided that no such maximum
imposed shall be less, in respect of any Participant, than the number of Shares in respect of which
such Participant has already accepted Offers prior to that date.
16.3 An Offer:
16.3.1 shall be made at the Purchase Price, subject to such provisions applicable to Shares
reserved or issued in terms of clause 13.1, on the Offer Date;
16.3.2 shall be governed by the provisions of this Deed and shall, without limiting the generality
of the aforegoing, be subject to clause 20, and the conditions that until the full Purchase
Price has been paid to the Trustees:
16.3.2.1 those Shares and all Capitalisation Shares linked thereto shall be registered as
provided in clause 8.3 and such Shares shall be deemed to have been pledged
to the Trustees as required in terms of clause 8.6;

195

16.3.2.2 those Shares and all Capitalisation Shares linked thereto may not be sold,
lent or transferred (other than to the Trustees in the manner and on the basis
as is expressly provided in clause 21), or, subject to the provisions of clause 8.6,
in any way be mortgaged, pledged or otherwise encumbered, unless the Trustees
in their Discretion consent thereto in writing;
16.3.2.3 the sale resulting from the acceptance thereof may be cancelled in terms of this
Deed;
16.3.2.4 the voting rights attaching to all Shares sold to Participants in terms of the Scheme
and the Capitalisation Share linked thereto shall at all times vest in the Trustees
until final payment of the Share Debt in respect thereof has been received by the
Trust and until the period as detailed in clause 22 has elapsed, provided that
Scheme Shares will have no voting rights for approval of resolutions in respect
of the Listings Requirements or for determining categorisation of transactions
in terms of the Listings Requirements;
16.3.3 shall be personal to and only accepted by the Offeree to whom it is addressed (or the
executor of the deceased estate of the Employee concerned);
16.3.4 shall, unless otherwise specified in it, be accepted by notice in writing in such form as the
Company may stipulate, delivered to the Secretary within 1 (one week) after it is made;
16.3.5 may be accepted in part (in respect only of 100,000 (one hundred thousand) Shares
or multiples thereof) or in full; and
16.3.6 to the Directors shall, to the extent required by law, be approved by the Shareholders of the
Company.
16.4 Each acceptance of an Offer shall:
16.4.1 be accompanied by an amount per Share stipulated in the Offer, payable in respect
of the number of Shares in respect of which the Offer is accepted;
16.4.2 be regarded as complete only when the relevant cheque or other instrument of payment
has been honoured or full payment in respect thereof has been made;
16.4.3 be in terms of and be subject to and governed by the provisions of this Deed; and
16.4.4 specify an address.
17. SHARE OPTIONS
17.1 Notwithstanding anything to the contrary contained herein, the Trustees will first Offer Options or
rights to the Companys Chief Executive Officer, upon such terms and conditions and in form and
substance substantially similar to that contained in the Offer letter as more fully described and
attached hereto marked annexe A. Thereafter, any further Offers of Options or rights will be made
in accordance with the provisions of clause 17.2.
17.2 Subject to the provisions of clause17.1, the Directors may at their Discretion direct the Trustees to
Offer Options or rights to eligible persons, and in the event of their doing so the following provisions
will apply:
17.2.1 for the purposes of this clause17.2, exercise price means the price per Option Share
payable by an eligible person upon the exercise of an Option and will not be less than the
Purchase Price;
17.2.3 in the event of a capitalisation of its distributable or non-distributable reserves at any time
during which an Option is outstanding, the Company may, at its Discretion, either:
17.2.3.1 reduce the exercise price and increase the number of Shares relative to that Option
by multiplying the exercise price by a fraction of which the numerator will be the
number of Shares ranking for the Capitalisation Issue prior to capitalisation and
the denominator the aggregate number of Shares in issue after the Capitalisation
Issue, and by multiplying the number of Shares relative to that Option on the
registration date for the Capitalisation Issue by the inverse of the above fraction;
or

196

17.2.3.2 not alter the number, exercise price and other terms relating to the Option but issue
additional Shares to the Participant after a Capitalisation Issue for no consideration
at the time he exercises the Option, such additional Shares to be determined
on the basis of the ratio used in the Capitalisation Issue. The Company will ensure
that it has sufficient reserves available to issue the additional Shares fully paid;
17.2.4 if at any time the Shares of the Company are consolidated or subdivided then the
number of Shares that may be acquired in terms of Options after such consolidation
or sub-division will be reduced or increased proportionately so that the Shares to be issued
on the exercise of an Option will have the same aggregate par value as they would have
had if the consolidation or subdivision had not taken place, and the exercise price will be
increased or reduced proportionately in accordance with the consolidation or sub-division.
18. VESTING
18.1 Subject to the provisions of clause 17.1, any Offer made under the Scheme will be either exercised:
18.1.1 in full on the Offer Date; or
18.1.2 in the proportions contemplated in clause 18.1.3 at least 10 (ten) days prior to the relevant
Vesting Dates.
18.1.3 Notwithstanding payment of the Purchase Price the Shares will only vest on the Vesting
Dates listed below:
18.1.3.1 25% (twenty-five percent) on the third anniversary of the Offer Date;
18.1.3.2 25% (twenty-five percent) on the fourth anniversary of the Offer Date;
18.1.3.3 25% (twenty-five percent) on the fifth anniversary of the Offer Date;
18.1.3.4 25% (twenty-five percent) on the sixth anniversary of the Offer Date;
18.1.4 if a Participants Vesting Date falls within a closed period in respect of the Companys
shares, as defined in the Listings Requirements, then the Vesting Date shall be postponed
until the first business day following the end of such closed period, and Vesting Date shall
be construed accordingly; and
18.1.5 the Participants shall upon issue or transfer of the Shares to them be entitled to exercise
all rights attached to such Shares including to receive distribution of the assets or capital
of the Company (including dividends, other payments to which holders of Ordinary Shares
are entitled or subject to the provisions of clause 12.2 distributions upon winding-up of the
Company).
22. DISPOSAL OF SCHEME SHARES
22.1 When a Participant becomes entitled to dispose of his Scheme Shares in terms hereof or in terms
of his unique Offer document a Participant will only be entitled to dispose of his Scheme Shares
by first offering it for sale, in writing, to the Trust for a period of 24 (twenty-four) hours if the offer
in writing is received by the Trustees before 9:00 am in the morning, otherwise for 48 (forty-eight)
hours, within which time the Trust must indicate in writing if it wishes to acquire the Scheme Shares
and at what price. The Participant shall be entitled to accept or decline the offer of the Trust. Should
the Participant decline the Offer of the Trust, if any, the Participant may then only dispose of his
Scheme Shares on the JSE.
22.2 Should a Participant cease to be an Employee at any time after this Deed takes effect then the
following terms and conditions will apply to any Offer made to the Participant:
Voluntary Termination of Employment:
22.2.1 Where the Participants shares are not subject to any restrictions on the sale thereof and
subject thereto that the Share Debt has been paid in full, the Participant will be entitled
to dispose of his Scheme Shares in accordance with the provisions of clause 22.1.

197

22.2.2 In respect of Scheme Shares which the Participant is not entitled to dispose of due
to restrictions on the sale, transfer or disposal thereof the Trustees shall be entitled at their
sole discretion but upon notice in writing within 10 (ten) trading days from the lapsing
of the 60 (sixty) trading days referred to below, to re-acquire the shares at the lower of any
average price achieved by the Shares over 10 (ten) consecutive trading days during the
60 (sixty) trading days after the voluntary termination of the employment of the Employee or
at the value of the Share Debt. The amount which then remains outstanding shall be repaid
by the Participant on demand.
22.2.3 Where no restrictions are applicable in respect of the disposal of Scheme Shares but the
Participant has not extinguished his Share Debt the Trustees will at their sole Discretion, but
within 10 (ten) trading days from the lapsing of the 60 (sixty) trading days referred to below
and upon notice in writing to the Participant, be entitled to re-acquire, in whole or in part,
the Scheme Shares from the Participant at the lower of any average price achieved by the
Shares over 10 (ten) consecutive trading days during the 60 (sixty) trading days after the
Voluntary Termination of Employment of the Participant. The amount which then remains
outstanding will be repaid by the Participant on demand.
Involuntary Termination of Employment:
22.2.4 Where the Participants shares are not subject to any restrictions on the sale thereof and
subject thereto that the Share Debt has been paid in full, the Participant will be entitled
to dispose of his Shares in accordance with the provisions of clause 22.1.
22.2.5 In respect of Scheme Shares which the Participant is not entitled to dispose of due
to restrictions on the sale, transfer or disposal thereof, the Trustees shall be entitled
at their sole Discretion but upon notice in writing, within 5 (five) trading days from the
lapsing of the 20 (twenty) trading-day period referred to below to re-acquire the Shares
at the higher of any average price achieved by the Shares over 5 (five) consecutive trading
days during the 20 (twenty) trading days after the involuntary termination of the employment
of the Participant, or the value of the Share Debt and apply set-off.
22.2.6 Where no restrictions are applicable in respect of the disposal of scheme Shares but
the Participant has not extinguished his Share Debt, the Trustees will be entitled at their
sole Discretion but within 5 (five) trading days from the lapsing of the 20 (twenty) day
trading period referred to below and upon notice in writing to the Participant, be entitled
to re-acquire, in whole or in part, the Scheme Shares from the Participant at the higher
of any average price achieved by the Shares over 5 (five) consecutive trading days during
the 20 (twenty) trading days immediately after the Involuntary Termination of Employment
of the Participant.
Procedure after the Scheme Shares fully paid:
22.2.7 An Offeree may trade in his Scheme Shares solely in terms of his unique Offer Document.
22.2.8 Notwithstanding the provisions of clause 21.1, the Trustees may in their sole Discretion
determine by notice in writing, not to enforce the restrictions applicable to the disposal
of the Scheme Shares of that Participant and the Participant or his trustee or executor
or curator may then within 60 (sixty) days from receipt of such notice pay the Share Debt
and dispose of the Scheme Shares as is contemplated in clause 22.
22.2.9 Notwithstanding the provisions of clause 22.2.7, if so determined by the Directors at any
time after an offer to all shareholders of the Company other than to the Participant, to acquire
their Shares, or a scheme of arrangement between the Company and its Shareholders
(or any class of them), or any other scheme of arrangement including a sale, reorganisation
or reconstruction of the Companys Share capital by virtue of which control of the Company
would pass, becomes unconditional (whether in its original or revised form), or is sanctioned
by the court, as the case may be, the Shares may be disposed of pursuant to such offer.

198

25. TRANSFER OR ALLOTMENT AND PLEDGE OF SHARES


25.1 The transfer or allotment and issue of Scheme Shares to any Participant entitled thereto will be
effected within a period of 14 (fourteen) days from the relevant Vesting Date, provided that:
25.1.1 the Participants acceptance of an Offer to acquire Scheme Shares will incorporate
a pledge of the Scheme Shares accruing from such acceptance in favour of the Trust
in terms of which the Participant acknowledges that he is aware of, and is deemed to
have pledged or ceded his Scheme Shares in accordance with the terms contained
in clause 25.2;
25.1.2 the Trustees are entitled, irrevocably and in rem suam, to receive the certificates relating
to the relevant Scheme Shares, including any scheme Capitalisation Shares and Rights
Issue Shares related thereto from the Companys transfer secretaries on behalf of the
relevant Participant; and
25.1.3 the Trust will bear any stamp duty payable on transfer of Scheme Shares to Participant.
25.2 The pledge of Scheme Shares by the Participant to the Trust will be upon the terms that:
25.2.1 that pledge includes the pledge of any scheme Capitalisation Shares and Rights Issue
Shares relating to the Scheme Shares to be pledged;
25.2.2 those Scheme Shares serve as security for the due payment by the Participant of his Share
Debt;
25.2.3 upon payment in full being received by the Trust from any Participant for any Scheme
Shares but subject to the provisions of clause 21.1, the Trustees will deliver to him the
certificate/s in his name in respect of those Scheme Shares, which will be released from
the operation of that pledge; and
25.2.4 the Trust is irrevocably and in rem suam empowered to execute any instrument of transfer
in respect of Scheme Shares to give effect to the implementation by them of the powers
conferred on them in terms of this clause.
25.3 For purposes of any pledge and security in terms of this Deed, each Participant which acquires
Shares hereby agrees and undertakes to procure that its Shares are held by it in their certificated
form despite same being issued in dematerialised format. Each Participant will procure that its
shares are delivered to the Trustees in materialised format and waives any rights it may have
in terms of section 91A of the Act to require the dematerialisation of the Companys shares contrary
to the provisions thereof.

199

Appendix 10

ORGANOGRAM/GROUP STRUCTURE OF ABSOLUTE (PRE-ACQUISITION) AND OF


BAUBA PLATINUM (POST-ACQUISITION)

Absolute group structure pre-Bauba acquisition


Absolute
Holdings Limited
(JSE listed)

25.1%
Qinisele
Resources (Pty)
Ltd

90%
Lubtalk
Investments
(Pty) Ltd
100%
Diamond Quartzite
Processing
(Pty) Ltd

200

100%
Lenopodi
(Pty)
Ltd

100%
Niemller
Marmer (Pty) Ltd
(Picture Stone)

49%
Dikopane NN
Mining (Pty) Ltd
(Coal)

100%
Taung Marble
(Pty) Ltd

100%
Canyon Springs
(Pty) Ltd
(Limestone)

Bauba Platinum group structure post acquisition

Bauba
Platinum
Limited
(JSE listed)

25.1%

100%

Qinisele
Resources
(Pty) Ltd

90%
Lubtalk
Investments
(Pty) Ltd

Lenopodi
(Pty)
Ltd

100%

Niemller
Marmer (Pty)
Ltd
(Picture Stone)

49%

100%

Dikopane NN
Mining (Pty) Ltd
(Coal

100%

Taung Marble
(Pty) Ltd

100%
Canyon Springs
(Pty) Ltd
(Limestone)

Ndarama
Mineral Res.
(Pty) Ltd

34.4%

25.6%

Bauba A
Hlabirwa
Mining Inv.
(Bauba)1

100%
Diamond
Quartzite
Processing
(Pty) Ltd

Note 1: Combined (direct and indirect) shareholding of Bauba Platinum in Bauba = 60%

201

Appendix 11

LEASEHOLD PROPERTIES

The Company did not have any leasehold properties at the last practicable date. The Company has signed
a lease agreement which is subject to the approval of the transactions set out in the circular to shareholders,
which lease details are set out below:

Company

Address

Lease

Tangmere
Investment
Corporation
(Pty) Ltd

2nd Floor
West Wing
Longpoint
Fourways

Premises

202

Lease
term
3-year
lease
commencing
1 May 2010

Current
rental
per
month
R39 182
(excluding
VAT)

End of
lease
date
30 April
2013

Escalation

Date of
increase

10% per 1 May 2011


annum

203

204

PRINTED BY INCE (PTY) LTD

REF. W2CF00000

The authorised share capital of the Company at the date of issue of this circular is R25 000 000 comprising
25 000 000 ordinary shares with a par value of R1.00 each. The issued share capital is R16 011 854,
comprising 16 011 854 ordinary shares, with a par value of R1.00 each. The share premium of the Company
is R112 063 000. There are no treasury shares. The reverse listing will be subject to the Company retaining
the spread of shareholders as required in terms of the JSE Listings Requirements.
All the advisors, whose names and reports are included in this circular, have given and have not withdrawn,
prior to publication of this circular, their written consents to act in the capacity stated and for the inclusion of
their names and, where applicable, reports, in the form and context in which they appear in this document.

Corporate Advisor

Sponsor

Independent Expert and


Independent Reporting
Accountants

Auditors to Absolute

Attorney

Competent Person

Date of issue: 17 May 2010