CONTENTS

1. REPORT BY THE JOINT PROVISIONAL LIQUIDATORS RELATING TO THE PAMODZI GROUP OF COMPANIES TO THE MINERAL RESOURCES PORTFOLIO COMMITTEE 28 OCTOBER 2011

2. CONTENTS • Summary of events since January 2011 • Master’s enquiry in terms of section 381 of the Companies Act • Aurora removed from Orkney and East Rand Mines • State of Orkney and East Rand Mines on possession by the JPLs • Action taken by the JPLs since repossession of mines • Enquiry in terms of section 417 and 418 of the Companies Act • Way forward

3. SUMMARY OF EVENTS SINCE JANUARY 2011 • Master’s enquiry in terms of section 381 of the Companies Act • Aurora removed from sites • State of mines when possession handed back to JPL’s • Action by JPL’s since re-possession of mines • Enquiry in terms of section 417 and 418 of the Companies Act

4. MASTER ENQUIRY IN TERMS OF SECTION 381 OF THE COMPANIES ACT • Master convened enquiry into the administration of the Pamodzi Group of Companies estates; • All the liquidators were called to testify; • Master removed Messrs Gainsford and Motala; • The JPL’s cannot comment on the removal of the former JPLs as it is a decision of the Master and the matter is sub judice given a review application of Gainsford and Motala.

5. AURORA REMOVED FROM ORKNEY AND EAST RAND MINES • During May 2011 Aurora was put to terms for non-compliance with the terms of the Interim Contract Trading & Mining Agreement; • Aurora failed remedy breaches in terms of demand; • Aurora notified to vacate the mining sites; • JPL’s took possession of East Rand and Orkney mines.

6. STATE OF ORKNEY AND EAST RAND MINES ON POSSESION BY JPLS • Large scale removal and destruction of assets; • No accounting by Aurora in respect of Gold Removal in terms of ITCMA; • Un authorised sale of assets belonging to Pamodzi under the control of Aurora; • No insurance over the assets and a lack of sufficient security.

7. ACTION BY JPL’S SINCE POSSESSION OF MINES • Significantly secured both Orkney and East Rand Mines being cash constrained • Funded limited care and maintenance by limited gold clean-up at East Rand and Orkney Mines • Regular consultation with NUM and Solidarity • Engaged with the Department of Labour relating to the payment of workers, efforts frustrated by computer crash • Commenced with training lay off scheme under auspices of the CCMA

8. ACTION BY JPL’S SINCE POSSION OF MINES (Continued) Instituted a transparent process by Standard Bank to source alternate buyers for Orkney and East Rand Mines; Regular consultation with IDC and HVB the secured creditors of Orkney and East Rand Concluded and agreement to sell Orkney to CAPM for R150 million, subject to certain conditions precedent including labour consent for sale Currently considering offers for the sale of East Rand Mines

9. ACTION BY JPL’S SINCE POSSESSION OF MINES (Continued) Regular reporting to the Master; Water pumping – negotiations with DMR and DWAF; Ongoing and regular updates to Organised Labour; Responding to illegal mining and theft of assets; Enquiry by the Master in terms of section 417 and 418 of the Companies Act.

10. ENQUIRY IN TERMS OF SECTION 417 & 418 OF COMPANIES ACT • Master of the High Court ordered enquiry; • Scope of enquiry inter alia includes: • Non payment of workers; • Recovery of damages, including personal liability of parties • Appointment Aurora as preferred bidder; • Assets theft, including fixed assets and gold; • Location of proceeds from gold sales; • Investigation if any fraud, including on DMR and DWAF; • Improper relations; • Events that led to demise of Pamodzi. • Enquiry in progress and unable to comment on evidence.

11. WAY FORWARD Returned date extended by High Court to 25 April 2012 to enable finalisation of disposal process in the interest of creditors. Finalisation of disposal of Orkney mine and East Rand or realisation of assets on a piecemeal basis with the consequent issues arising therefrom. Workers claims to be paid on receipt of disposal proceeds subject to secured creditor consent. Legal action to claim damages.