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ANNEXURE A KEATON ENERGY HOLDINGS LIMITED SUMMARY COAL RESOURCE AND COAL RESERVE HOLDINGS AS AT 31 MARCH 2014 Introduction The Keaton Energy Group Coal Resource and Coal Reserve estimates have been compiled in terms of the South African Code for Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code) as prepared by the South African Mineral Resource Committee (SAMREC) under the auspices of The South African Institute of Mining and Metallurgy (SAIMM) (2009). Under the SAMREC Code particular reference is made to the South African guide to the systematic evaluation of coal resources – South African National Standard (SANS 10320:2004). With the exception of the Moabsvelden, Bankfontein and Roodepoort projects, the Coal Resource estimations and classifications were prepared under the supervision of Dr Philip John Hancox of Caracle Creek International Consulting Coal (Pty) Ltd. Dr Hancox is a member in good standing of the South African Council for Natural Scientific Professions (SACNASP No. 400224/04) as well as a Member and Fellow of the Geological Society of South Africa. He is also a member of the Geostatistical Association of South Africa, the Society of Economic Geologists, the Fossil Fuel Foundation, and a Core Member of the Prospectors and Developers Association of Canada. Recently he was appointed as a Council Member of the Fossil Fuel Foundation. He has 15 years’ experience in the South African Coal industry holds a Ph.D. from the University of the Witwatersrand (South Africa), and has authored a number of published and unpublished academic articles on the Karoo Basin and its contained coal deposits, as well as over 60 peer reviewed scientific papers on various aspects of sedimentary geology, basin analysis, coal and palaeontology. He is also a regular presenter and contributor at coal conferences, and is currently a member of the SABS TC-27 working group, which is currently re-writing the SANS 10320 guidelines. The Moabsvelden, Bankfontein and Roodepoort Project Coal Resource estimates were prepared by Kobus Dippenaar of Gemecs (Pty) Ltd. The estimates are extracts of Competent Persons' Reports authored by Mr Dippenaar in compliance with the recommendations and guidelines set out in the SAMREC Code. By virtue of his extensive experience in the South African Coal industry Mr Dippenaar meets the requirements of the definition of a Competent Person. Particular reference is made to Section 6 of the SAMREC Code, Commodity Specific Reporting for Coal, as well as the guidelines laid out in the South African Guide to the systematic evaluation of coal resources and coal reserves (SANS 10320:2004) which provides a detailed framework for the reporting of coal resources and coal reserves for the purpose of the Securities Exchanges and defines common terminology to be used in public reporting with the SAMREC Code. Definitions of Coal Resources and Coal Reserves The coal resource and coal reserve definitions have been extracted from the SAMREC CODE. An ‘Inferred Coal Resource’ is that part of a Coal Resource for which volume or tonnage and coal quality can be estimated only with a low level of confidence. It is inferred from geological evidence and sampling and assumed physical continuity with or without coal quality continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill-holes, information that is limited or of uncertain quality and reliability. An ‘Indicated Coal Resource’ is that part of a Coal Resource for which tonnage, densities, shape, physical characteristics and coal quality can be estimated with a moderate level of confidence. It is based on information from exploration, sampling and testing of material gathered from locations such as outcrops, trenches, pits, workings and drill holes. The locations are appropriate to confirm physical continuity, while the

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locations are too widely or inappropriately spaced to confirm the continuity of the coal quality. However, such locations are spaced closely enough for such continuity to be assumed. A ‘Measured Coal Resource’ is that part of a Coal Resource for which tonnage, densities, shape, physical characteristics and coal quality can be estimated with a high level of confidence. It is based on detailed and reliable information from exploration, sampling and testing of material gathered from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm physical and coal quality continuity. A ‘Run of Mine (ROM) Coal Reserve' is the tonnage and coal quality of Mineable In Situ Coal Reserves that are expected to be mined after all geological losses, mining losses, mining dilution, contamination and moisture-content factors have been applied. The Coal Resource and Coal Reserve estimates for each of Keaton Energy Holdings Limited's (Keaton) assets are summarised below and detailed per project on the pages that follow. The 31.3.2014 estimates are compared with the corresponding estimates for the previous financial year with material differences discussed overleaf.

Material changes to the 31.3.2013 Coal Resource and Coal Reserve estimate are largely accounted for by the resource model upgrade at Vanggatfontein and the incorporation of the Moabsvelden, Bankfontein and Roodepoort Project resources following Keaton’s acquisition of Xceed Resources Limited (Xceed) on 19 February 2014. The Vanggatfontein geological model update was commissioned with a view to optimising our exploitation of the resource to exclude non-geological boundaries, such as the provincial road which split the resource into discrete eastern and western resource blocks. With the opening of the VG3/VG4 boxcut, the manner in which we mined these pits brought into question the feasibility of diverting the road to enable more optimal mining of these two pits. The resource was therefore re-evaluated from a broader Mining Right point of view, adding 69Mt to the Vanggatfontein MTIS Coal Resource. Life of mine planning for Pits VG3 and VG4 was therefore revised to incorporate the broader resource footprint, supplementing the ROM Coal Reserve from these pits by 16Mt. The inclusion of the West Resource Block (WRB) into the Vanggatfontein Coal Resource is more a return to our historical reporting approach than the inclusion of new resources into our inventory. The WRB has been incorporated into the global Vanggatfontein model rather than being modeled as a separate geological block, which has returned a total of 80.8Mt on an MTIS basis to the previously reported 70.3Mt. The East Resource Block (ERB) contributes 64.8Mt to the total resource, which accounts for depletions during the 2014 financial year and the removal of a remnant block in advance of the now closed VG1 pit. The total MTIS Coal Resource for Vanggatfontein now stands at 145.6Mt. The inclusion of the Moabsvelden Project Coal Resource into the group Coal Resource inventory added 65.3Mt on a Gross Tonnes In-Situ (GTIS) basis (55.5Mt MTIS). The opencast ROM Coal Reserve at Moabsvelden was re-estimated after the acquisition of Xceed to take account of certain boundary pillar, dolerite and wetland buffer exclusion zones. Moabsvelden now contributes 42.6Mt to our 2014 ROM Coal Reserve. The Bankfontein and Roodepoort Projects added 16.1Mt and 26.3Mt respectively on a MTIS basis to our coal resource. Options are being evaluated to grow these resources through additional exploration and the possible consolidation of contiguous properties to create critical mass. The additional drilling and model update at Braakfontein during the latter part of 2013 and early 2014 improved the in-situ coal resource from 60.7Mt to 64.9Mt. Similarly, the additional drilling at Koudelager upgraded the resource to the Indicated category, as well as increasing the MTIS resource marginally from 11.8Mt to 12.3Mt. Geological work conducted at Vaalkrantz focused more on resource utilisation than on resource growth. The total coal resource decreased from 17.8Mt to 15.2Mt as a result of depletions and the removal of certain remnants that were unlikely to be mined using current infrastructure. The ROM Coal Reserve improved from 2.2Mt to 2.7Mt was largely due to the inclusion of Alfred Seam from the Central Block. All exploration activity during the period resulted in the estimation and/or modification of coal resource estimates on various of the Keaton assets. No Exploration Results are therefore reported on in this coal resource and coal reserve statement. Resource Modelling Procedures (CCIC Coal Consulting (Pty) Ltd) The geological models and volume and tonnage calculations for the Vanggatfontein, Vaalkrantz, Braakfontein, Sterkfontein and Koudelager resources were generated using the CAE Studio 3™ software (‘Studio 3’). In preparation for the geological model and estimation of the coal resource, three separate databases were compiled and validated, these being the collar, lithology and raw quality databases. The level of weathering (‘LOW’) and depth of soft overburden were identified where possible.

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To avoid estimation errors caused by differences in seam thicknesses, quality control performed on the qualities database involved ensuring that the sampling intervals matched the coal intervals in the lithology logs. Where differences were recorded between the coal thicknesses in the sampling and lithology logs, the sampling intervals were considered to reflect the true thickness, and the lithology logs were adjusted accordingly. Where possible these were also compared with the wireline logs. As a first pass of the modeling procedure, distances between borehole collars were measured to establish the approximate borehole spacing. The wireframes of the geological model were extended beyond the outermost boreholes by 1/3 of the average drilling spacing or to a fixed boundary such as the property boundary, projected outcrop and/or limit of weathering. Wireframes of the seams were produced and checked for geological integrity. The final wireframes of the different seams were verified and limited against the property boundary. These wireframes were then used to create block models consisting of cells of X = 50 m, Y = 50 m, Z = seam height in metres. Raw qualities were estimated into these cells using the Inverse Distance to the Power of 2 (‘IDP2’) method with a search radius depending on the average borehole spacing (Vanggatfontein 750 m, Koudelager except Gus Seam 750m, Vaalkrantz 500m, Braakfontein 1 200m and Koudelager Gus Seam 1 250m). The minimum number of samples was set as 1 and the maximum number of samples at 5. Prior to the calculation of volumes and tonnages, which were undertaken on the block model, the resource categories were established, according to the SAMREC guidelines, by calculating the average number of boreholes per 100 ha (BH/100ha). In order to estimate the gross tonnes in situ (‘GTIS’), a thickness cut-off was applied depending on an opencast or underground resource, as well as a raw ash cut-off of 50%, and a dry ash-free volatile matter cut-off depending on the coal type (>24% for bituminous coal, 24-16.5% for devolatilised coal, <16.5% for burnt/anthracitic coal). Furthermore, the average estimated raw relative density was used for the tonnage estimation. A geological loss factor depending on the resource category, structural complexity, dolerite intrusions and level of weathering was applied to the GTIS in order to receive total tonnes in situ (‘TTIS’) or MTIS as the case may be. Resource Modeling Procedures (Gemecs (Pty) Ltd) Geological, structural and coal quality models were built for the Moabsvelden, Bankfontein and Roodepoort resources using Gemcom MinexTM modeling software. The following surfaces were modeled for each of the mineable coal seams: seam floor and roof elevations; seam thickness; raw air-dried coal qualities; topography; limit of weathering and strip ratio (BCM/t). All the potential resource coal seams and the parting bands were modeled. The resource boundaries were based on the occurrence of the seams and the farm boundaries. Total seam thickness rather than selected horizons were used in the modeling process. The MINEX General Algorithm, also known as the Growth Technique, was used for modeling (gridding) of both structural and quality parameters and the gridding was conducted on a mesh size of 25 x 25 metres within a polygon limit for the existing data. A surface grid of the topography was created using a digital terrain model imported in a dxf format. A weathering surface determined by the limit of weathering as recorded in each borehole was also created. This is a very important surface because it defines the sub- outcrop limits and lateral extent of the seams. No coal resources are estimated between the surface grid (TOPS) and the limit of weathering surface (LOW). Quality grids for raw as well as washed coal qualities and yields are modeled. All the reported coal qualities, i.e. CV, Ash, VM, FC, IM, TS, TP and yield are modeled per coal seam to enable raw and washability reporting. Various coal quality grids were modeled on a project by project basis depending on market specifications. Principally, the main criteria for resource classification are based on the number of boreholes intersecting a particular coal seam(s) within a specified area and the confidence in projecting the coal quality across each seam based on the analysis performed on samples taken from the cores of the individual borehole

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intersections. Classification was guided by the following: borehole density; geological and grade continuity; geological structure and its influence on mining; geological complexity. The borehole density and spatial distribution of cored boreholes, sampled and analysed for raw ash content, is sufficient to allow for confident extrapolation of physical and quality parameters between boreholes and also allows for the coal resources to be adequately categorised into Inferred, Indicated and Measured Resources as per the SAMREC Code. Coal Resource classification based on borehole density (points of observation supported by analytical data) is as follows: Measured: 16 boreholes per 100Ha (250x250m grid), Indicated 4 boreholes per 100Ha (500x500m grid spacing).

Geological Setting The Vanggatfontein Colliery is located in the Witbank Coalfield. The Vryheid Formation in this region hosts the complete sequence of Witbank Coalfield coal seams, namely the No’s 1, 2, 3, 4 and 5 seams, although the No 3 Seam is not developed in certain areas. The prime economic seams at Vanggatfontein are the No 2, No 4 and No 5 seams which are mined using opencast methods. History Data from the Council of Geoscience (‘CGS’) Geode database shows that between 1962 and 1963 a total of forty (40) boreholes were drilled on Vanggatfontein 251IR by Brakfontein Navigation Steam Collieries, with an additional hole drilled by the CGS itself (undated). The No 5, No 4 and No 2 coal seams were intersected in the historical drilling programmes, and all of the holes, with the exception of one in the east, intersected coal. Only borehole collar co-ordinates and coal intersections were made available to Keaton. Analytical results were not included in the information received from the CGS. Due to the fact that no quality information was available from the historical data set the historical holes were not utilised in the estimation of the 31.3.2014 coal resource. It is not known why the project area was not turned to account. Between 2007 and 2010, three (3) phases of exploration drilling were undertaken by Keaton on the property, with a total of two-hundred and thirty (230) boreholes drilled including seven (7) twin, and five (5) orientated geotechnical boreholes. FY 14 Exploration Summary No further exploration drilling was conducted during the financial year under review. A high-resolution aeromagnetic and radiometric survey was however conducted by GAP geophysics (Pty) Ltd during February 2014 in order to understand the local dolerite structure and any potential impact on the mining of Pits VG3 and VG4. The results helped to identify the positions of various dolerite intrusions including both dykes and sills, as well as the positions of two potential faults extending into the Western Resource Block. A total of R137 700 was spent during the period, exclusively on the geophysical survey conducted during February 2014. No further feasibility studies were conducted during the 2014 financial year.

Cut-offs and Modifying Factors Applied in the calculation of this ROM Coal Reserve: Coal thickness > 1m Volatile matter > 15% CV > 10MJ/kg Contamination 4% Surface moisture 4% Layout, mining losses: 12% on 5 Seam, 16% on 2 and 4 Seams ROM Reserve average stripping ratio 2.54BCM/t * Inferred Coal Resources have not been included in the calculation of the ROM Coal Reserve

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The Vanggatfontein Colliery Coal Reserve estimate was compiled by independent consultant Mr L Raaths, BTech Mining, BSc (Operations Research), MBL. Mr Raaths has more than 25 years experience in coal mining, of which the largest portion was on the technical and projects disciplines, where the determination of coal reserves was part of his responsibility. This was mainly for BHP’s South African coal mines, Xstrata South Africa, CIC Energy and now as an independent consultant for various smaller operations. Mr Raaths is currently responsible for all short, medium and long-term planning as well as data management and reconciliations for Vanggatfontein Colliery. Mr Raaths is also a member of the South African Colliery Manager's Association.

Geological Setting The Moabsvelden Project is located in the Witbank Coalfield. The Vryheid Formation in this region hosts the complete sequence of Witbank Coalfield coal seams, namely the No’s 1, 2, 3, 4 and 5 seams, although the No 3 Seam is not developed in certain areas. The prime economic seams at Moabsvelden are the No 1, 2, 4 and 5 seams which are to be mined using opencast methods. In the Moabsvelden area of the Witbank coalfield the typical seam sequences of seams 1 to 5 are present but structurally somewhat different. The area is characterised by a thicker than usual lower seam which is a combination of the 4U and 4L seams, the 2U and 2L seams and the number 1 seam. The thinner upper seam represents the 5 seam. In order to clear up any misconceptions that exist regarding seam nomenclature it was decided to embark on the more neutral approach that is commonly adopted in this area by naming the thick lower seam the Bottom seam and the top seam the Mid seam. The Bottom Sseam was sub-divided into six plies identified using geophysical log data with relation to the in-seam partings. The plies are well developed and extend over the total project area History Prospecting for coal on Moabsvelden portion 8 began in 2010 and was carried out on behalf of Neosho Trading 86 (Pty) Ltd, a 74% held subsidiary of Xceed. Ten boreholes were drilled during the 2010 calendar year. In 2011 a further twenty-nine boreholes were drilled in an effort to increase the geological confidence over the property. During June 2013 an additional 3 core boreholes were drilled in order to generate sample product for submission to electrical utility Eskom for analysis and combustion testing. The current database therefore consists of a total of 43 boreholes. FY 14 Exploration Summary No additional exploration was conducted on the Moabsvelden Project during the 2014 financial year subsequent to the conclusion of the Xceed acquisition in February 2014. The current coal resource estimate is therefore based on drilling conducted by Xceed Resources during 2010, 2011 and 2013. The Bankable Feasibility Study (BFS) conducted on the Moabsvelden Project by Xceed Resources contemplated a stand-alone 3.0Mtpa Colliery on Portion 8 of Moabsvelden 248IR. The rationale behind the acquisition of Xceed was the ultimate integration of Moabsvelden into the greater Vanggatfontein complex. A Project Implementation Study will be compiled during the first half of the 2015 financial year detailing the feasibility paramaters of the revised operating model for Moabsvelden.

Cut-offs and modifying Factors Applied in the calculation of this ROM Coal Reserve: Coal thickness > 0.5m Volatile matter > 15% CV > 10MJ/kg Contamination 4% Surface moisture 4% Layout, mining losses: 12% on 5 Seam, 16% on 2&4 Seams ROM Reserve average stripping ratio 2.58BCM/t

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Inferred Coal Resources have not been included in the calculation of the ROM Coal Reserve As with the Vanggatfontein Colliery Coal Reserve estimate, the Moabsvelden Project Coal Reserve estimate was compiled by independent consultant Mr L Raaths.

Geological Setting

The Sterkfontein Project area is located in the easternmost part of the Highveld Coalfield which extends from Nigel and Greylingstad in the west to Davel in the east, with its eastern boundary formed by a straight line joining Hendrina, Davel and Morgenzon. Five depositional sequences are recognised within the Vryheid Formation in the Highveld Coalfield, each with the potential for coal seam development at the top. These are numbered from seam No 1 at the base to seam No 5 at the top. Of these, by far the most important economic seam in the Highveld Coalfield is the No 4 seam, and it is the only seam of economic interest on the Sterkfontein Project. It consists of a dull to dull-lustrous coal which is normally only suitable for local power generation, or Sasol feedstock. The Sterkfontein Project area is bordered to the west by Sasol’s Twistdraai (and Syferfontein) collieries and to the south by Anglo Coal’s New Denmark Colliery. The Twistdraai mine and washing plant are part of Sasol Mining’s Secunda Collieries complex. Within the Twistdraai reserve area the No 3 and No 4 Lower seams converge into a single unit, forming the feedstock for the beneficiation process to produce an export bituminous coal and a middlings product suitable for Sasol’s gasification process. Anglo Coal’s New Denmark Colliery is situated approximately 18 km south of the Sterkfontein property, and mines the No 4 seam at an average thickness of 2m using underground longwall mining methods. The raw run-of-mine coal is supplied to Eskom’s 3 600-MW Tutuka power station. History Prior to Keaton’s involvement, only four historical boreholes had been drilled on the Sterkfontein Project area. These were drilled by Anglo American Corporation of SA Limited (‘Anglo’) in 1969 and although they all intersected coal. No information regarding the lithologies and coal qualities is currently available. Subsequent to Anglo relinquishing its rights, no additional boreholes were drilled on the property prior to the Keaton exploration programmes. Keaton’s recent work on the property (Coffey Mining and GeoCoal Services, 2008; GeoCoal Services, 2010) had shown the Sterkfontein Project to be a significant, circa 69Mt thermal coal resource, which is only amenable to underground extraction. Previous compliant resource estimates exist for Sterkfontein (GeoCoal Services, 2010); however in 2012 Keaton decided that the company required a new geological model and SAMREC compliant resource statement for the Project. To this end Keaton engaged CCIC Coal to re-model all of the borehole data pertaining to the Sterkfontein Project area, and to estimate coal volumes, tonnages and raw coal qualities for the project. A total of 257 boreholes were available for modelling, of which 228 were used in the generation of a new model during FY 13 which similarly forms the basis of the Coal Resource estimate presented in this report. FY 14 Exploration Summary No further exploration drilling was conducted during the financial year under review.

* Inferred Coal Resources have not been included in the calculation of the ROM Coal Reserve 12.11(iii)(9)

This Coal Reserve estimate was compiled by Mr A Johnson, PrEng, BSc (Hons) FSAIMM from RSV Enco Consulting (Pty) Ltd. Mr Johnson is a registered Professional Engineer and Fellow of the South African Institute of Mining and Metallurgy, and has 30 years’ experience in the mining of this type of deposit.

Geological Setting The coal bearing areas of northern KZN have been subdivided into three geographically distinct coalfields, these being from west to east, the Klip River, Utrecht and Vryheid coalfields. Vaalkrantz Colliery is located on the eastern edge of the Vryheid Coalfield and is characterised by a dolerite capped mountain (Pondwaan hill), the slopes of which are formed by rocks of the Vryheid Formation. All the major seams of the Vryheid Coalfield are present (the Fritz, Alfred, Gus, Dundas and Coking Seams) but only four of these exceed 0.30m in thickness, and only the Gus and the Alfred seams currently have any economic potential. Within the resource area the Gus Seam averages 1.01m in thickness, with a maximum recorded thickness of 1.46m. The depth ranges from outcrop to about 200m. The Gus seam sandstone roof is up to 14m thick which forms the parting between the Alfred and Gus seams. The Alfred Ssam ranges in thickness from less than a metre in the extreme southwest of the resource area, to over 3.10m in the northwest, averaging some 2.35m. On the basis of coal quality the seam has been divided into two sections: a lower portion, and an upper non-select portion. The select seam averages 1.61m in thickness, the thickness of non-select coal increases from zero in the south to 1.58m in the north, averaging 0.75m. History A total of 90 core boreholes were drilled by Anglo Coal prior to the disposal of the KZN Coal assets to Leeuw Mining & Exploration (“LME”) in 2001. The majority of these holes were drilled in the opencastable blocks which were mined out prior to 2001. Thirty of these holes had, however, been drilled in to the deeper extensions of the Alfred and Gus seams. While historical and non-SAMREC Compliant, the Coal Resource estimates that were compiled by Anglo Coal led to the development of the Vaalkrantz Colliery in 2003 by LME. An additional 17 core boreholes were drilled by LME during 2007 and 2008. Subsequent to Keaton's acquisition of LME in December 2011 the decision was taken to digitise and re-model the entire Vaalkantz database, including both Anglo Coal and LME data sets, in order to upgrade the historical coal resource estimates to SAMREC standards. FY 14 Exploration Summary A total of 15 core holes were drilled on Mining Rights 225MR and 211MR during the period under review. The drilling programme was managed and supervised by CCIC Coal, drilling was conducted by Discovery Drilling (Pty) Ltd and analyses conducted by Vryheid Coal Laboratories. Vryheid Coal Laboratories is not a SANAS accredited laboratory, however all applicable anthracite analysis protocols have been audited by CCIC and Keaton. All laboratory protocols are based on ISO standards and specific round-robin test analyses are conducted at specified intervals in order to test the accuracy of the Vryheid Coal Laboratories’ analyses. The results of the round-robin tests have been of a consistently high standard, the quality parameters are therefore considered to be of an acceptable standard for inclusion into resource calculations. The drilling was conducted in four areas - Enyati Gus, Rustplaats Alfred, West Adit Alfred and the Central Block Alfred. A total of 1 769m of core drilling was completed and sampled. The results of the respective drilling exercises have been incorporated into the geological model and therefore into the 31.3.2014 coal resource estimate. Drilling expenditure for the period totaled R1.34m which includes drilling, geophysical surveys, coal analyses and geological management services.

VAALKRANTZ COLLIERY COAL RESERVE ESTIMATE 31.3.2014

BLOCK ID East A East B West N West S Total

ROM Tonnes (from Indicated Resource) 856,735 737,572 79,556 293,389 1,967,252

ROM Tonnes (from Measured Resource) - - - 42,863 42,863

Total ROM (From Measured and Indicated) 856,735 737,572 79,556 336,253 2,010,115

Inferred Tonnes - - - - -

Unclassified Tonnes - - - - -

Total ROM Tonnes 856,734 737,572 79,556 336,253 2,010,115

Scraper Drill and Blast 856,734 729,016 79,556 317,751 1,983,058

Scoop Drill and Blast - 8,556 - 18,501 27,057

Raw Ash

Ash 30.06 33.77 30.96 35.38 32.35

16% Ash Product

Theoretical Yield 46.21% 36.12% 67.07% 27.00% 40.12%

Product Tonnes 369,584 248,690 49,813 84,765 752,852

Ash 16.41 16.19 15.99 12.50 15.87

19% Ash Product

Theoretical Yield 64.77% 60.33% 82.93% 49.27% 61.26%

Product Tonnes 517,986 415,411 61,590 154,650 1,149,637

Ash 18.98 19.08 18.95 16.76 18.71

BLOCK ID West N West S Enyati W West E Total

ROM Tonnes (from Indicated Resource) 184,691 23,488 264,573 142,039 614,790

ROM Tonnes (from Measured Resource) 26,847 12,226 12,772 13,627 65,472

Total ROM (FROM Measured and Indicated) 211,538 35,714 277,345 155,665 680,262

Inferred Tonnes - - - - -

Unclassified Tonnes - - - - -

Total Mineable Tonnes 211,538 35,714 277,345 155,665 680,262

Scoop ROM 166,378 30,226 238,582 138,275 573,461

Scraper ROM 45,159 5,489 38,763 17,390 106,801

Raw Ash

Ash 21.88 20.07 17.43 23.46 20.33

16% Ash Product

Theoretical Yield 86.78% 85.44% 79.42% 85.99% 83.53%

Product Tonnes 171,374 28,485 205,615 124,966 530,441

Ash 14.81 15.10 10.96 14.41 13.24

19% Ash Product

Theoretical Yield 99.31% 95.52% 21.78% 88.93% 65.13%

Product Tonnes 196,116 31,847 7,914 129,234 365,110

Ash 15.67 16.86 15.38 15.28 15.63

ROM Tonnes (from Indicated Resource) 1,041,425 761,061 344,128 435,428 2,582,042

ROM Tonnes (from Measured Resource) 26,847 12,226 12,772 56,490 108,335

Total ROM (From Measured and Indicated) 1,068,272 773,287 356,901 491,918 2,690,377 TOTA

LA

LFRE

D S

EAM

RES

ERV

E ES

TIM

ATE

Alfred ROM Reserve Estimate

Alfred Saleable Reserve Estimate

GU

S SE

AM

RES

ERV

E ES

TIM

ATE

Gus ROM Reserve Estimate

Gus saleable Reserve estimate

* Inferred Coal Resources have not been included in the calculation of the ROM Coal Reserve The ROM coal tonnage estimates and classification for Keaton Energy’s Vaalkrantz Colliery was prepared by Messrs Ronnie van Eeden and Eugene Schutte, and signed-off by Mr Piet van der Linde of Mindset Mining Consultants (Pty) Ltd (Mindset). Mr van der Linde is a registered certified engineer with the Engineering Council of South Africa (Reg No 200690043).

Geological Setting The coal bearing areas of northern KZN have been subdivided into three geographically distinct coalfields, these being from west to east, the Klip River, Utrecht and Vryheid coalfields. The Braakfontein Project occurs on the northern part of the Klip River Coalfield, the largest and historically most important coalfield in KZN. The Klip River Coalfield comprises Carboniferous to Permian aged sedimentary rocks of the Dwyka, Ecca and Beaufort groups, which were deposited on an undulating, glaciated surface. No pre-Karoo aged rocks are exposed within the area, with the nearest basement outcrop being granite in the Nondweni region, east of the Klip River Coalfield. Within the Klip River Coalfield two major economic coal seams occur within this succession, these being the Bottom (Number 2b or Gus seam) and Top (Number 3 or Alfred seam). The Bottom and Top seams are separated by between 0.3-15m of predominantly coarse-grained, pebbly, cross-stratified sandstone, which fines upwards into carbonaceous siltstone and mudstone. A number of minor seams are also inconsistently developed. The Braakfontein Project area hosts the complete succession of coal seams of the northern Klip River Coalfield, from the base up namely the Extra Bottom (Lower Bottom or Dundas seam), Bottom (or Gus seam), Top (or Alfred seam) and the Marker seam (Fritz or Leader seam). The target coal within the Braakfontein Project area may therefore be defined as multiple seam type as per the South African Guide to the systematic evaluation of coal resources and coal reserves (SANS 10320:2004). Neither the Extra Bottom nor Marker seams are considered economic, the Extra Bottom because of its variable thickness and qualities, and the Marker Seam due to its thin nature, usually being less than 0.2m thick. The 2001 Anglo Coal Information Memorandum notes that the Braakfontein Thermal Coal Deposit is preserved as a well-defined north-northwest-south-southeast trending synform, which plunges gently to the south. They further documented the average thickness of the seams as being 2.21m (Top) and 1.88m (Bottom) respectively. CCIC Coal’s re-modelling of Braakfontein has confirmed these findings, and the model estimates an average thickness (at a 0.5m cut-off) for the Top seam of 2.68m and 1.87m for the Bottom seam. The parting between the Bottom and Top seams averages around 12m in the project area. History Prior to its acquisition by LME in 2001, the Braakfontein Project was owned by Anglo Coal, a Division of Anglo American PLC, and most of the geological information pertaining to the project was generated by Anglo Coal. Prior to 2001, a total of 105 boreholes were been drilled by the Council for Geoscience (“CGS”) and Anglo Coal within the confines of the Braakfontein block, which partially equates to the Braakfontein Project area. At the time this gave a drilling density of approximately 12 boreholes per hundred hectares, based on a resource area of 788 hectares. Subsequent to Anglo Coal selling its assets to LME, a further 28 boreholes have been collared in the project area. A total of 172 boreholes from the Council for Geoscience (“CGS”) and 97 KLR (Anglo Coal) and BK (LME) boreholes were available to be used in the generation of the new geological model. The boreholes presented in the CGS database however contained only collar co-ordinates and therefore were not used. Previous work on the property had shown the Braakfontein Project to contain (a greater than 40 million tonnes) thermal coal (non SAMREC compliant) resource, most of which is only amenable to underground extraction. Keaton decided that a new geological model and SAMREC compliant resource statement for the Project was necessary in order to consolidate all historical data. To this end Keaton engaged CCIC Coal to capture, verify, validate and re-model all of the historic borehole data and to estimate coal volumes, tonnages and raw coal qualities for the project.

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FY 14 Exploration Summary A total of 17 core drill holes were drilled on the Braakfontein 4278HT property during October and November 2013 during which a total of 1 351m was drilled. The drilling programme was managed and supervised by CCIC Coal, drilling conducted by Discovery Drilling (Pty) Ltd and analyses conducted by Vryheid Coal Laboratories. The programme comprised 9 in-fill boreholes to close a number of quality gaps in the model, and a further 8 flank structural boreholes designed to provide more detail on the floor structure of the Top and Bottom seams. The additional drilling and model update at Braakfontein during the latter part of 2013 and early 2014 improved the in-situ coal resource from 60.7Mt to 64.9Mt. The 100m spacing of the 8-hole flank decline drill hole line provided sufficient motivation to continue with a tighter 50m spacing programme in order to firm up on the near-surface stratigraphy and its potential implication on underground access. This drilling is planned for the first half of FY2015. Drilling expenditure for the period totaled R2.25m which includes drilling, geophysical surveys, coal analyses and geological management services.

* Inferred Coal Resources have not been included in the calculation of the ROM Coal Reserve The Braakfontein Project Coal Reserve estimate was compiled by Mr W Marais, Pr Cert Eng, Managing Director Mindset Mining Consultants (Pty) Ltd.Mr Marais has 43 years' experience in coal mining and the mining equipment supply industry and is the founder of Mindset Mining Consultants. He has completed a number of feasibility studies and due diligence studies on coal projects, has travelled extensively to study mining methods, mining technology, new equipment design, labour utilization and productivity, as well as safety and health management systems. He has participated in several mine health and safety audits as well as due diligence audits. He has also advised on technical matters, coal procurement contracts and also health and safety issues.

Geological Setting

The Koudelager Project is located approximately 25km east of Vaalkrantz Colliery and similarly consists of a dolerite capped mountain located at the eastern extremity of the Vryheid Coalfield. The Insuzi Group, which is exposed in the neighbouring Swart Umfolozi valley, is overlain by about 50- 90m of Dwyka Group tillite, followed by about 100m of Pietermaritzburg Formation siltstones and mudstones. The entire overlying Vryheid Formation averages about 300m in thickness. All 5 of the coal seams intersected on Koudelager are anthracitic. History Prior to its acquisition by LME in 2001, Koudelager was held by Anglo Coal and most of the geological information pertaining to the project was generated by Anglo Coal. The 2001 information memorandum supplied by Anglo Coal noted that only seven boreholes had been drilled within the confines of the Koudelager project (RE Koudelager 115HU). At the time this gave a drilling density of approximately 1.8 boreholes per hundred hectares, based on a resource area of 915 hectares. Two confirmatory holes were drilled on the property by LME in September of 2004. In the past very small scale mining has taken place on farms surrounding Koudelager from adits along the seam outcrop, while slightly larger operations have been sustained on Spitzkop. Mining activity on Koudelager itself is confined to prospecting adits that have now been rehabilitated. FY 14 Exploration Summary A total of 13 core boreholes were drilled during August and September 2013 totaling total of 2 096m drilled. The drilling programme was managed and supervised by CCIC Coal, drilling conducted by Discovery Drilling (Pty) Ltd and analyses conducted by Vryheid Coal Laboratories. The objective of the programme was to upgrade the resource estimates for the respective coal horizons from Inferred to Indicated Coal Resource classification. The drilling pattern further focused on the near-outcrop resource to provide structural, quality and geotechnical data for mine access and underground planning purposes. The programme highlighted the location of numerous structural features, most likely dolerites intruded into pre-existing fault planes, across the property. The drilling programme further increased the in-situ resource marginally from 11.8Mt to 12.3Mt. Drilling expenditure for the period totaled R2.29m which includes drilling, geophysical surveys, coal analyses and geological management services.

Geological Setting The project area lies within the Eastern Mpumalanga Coalfield situated to the south-east of the Middelberg-Hendrina portion of the Witbank Coalfield, and east of the Highveld coalfield. There are 5 principal coal seams within this coalfield with a potential of up to 8 seams locally due to seam splits. The seams which are named alphabetically from top to bottom as: A-seam, B-Zone (B-Upper/B- Lower seams), C-Zone (C-Upper/C-Lower seams), D-Zone (D1/D2-seams) and E-seam. Locally inconsistently developed seams are found at other levels within the sequence. The coal seams which are considered as having significant economic potential are the A-Lower, B-Lower, C-Lower and D seams History Historic drilling activities were concentrated on portion 13 of the farm Bankfontein 215IS with only four boreholes drilled on portions 1 and 10. In November 2011 four boreholes were drilled on portion 13 of Bankfontein to twin four historical boreholes extracted from the CGS database and to validate the data from these boreholes. Two of the four twinned boreholes indicated that the data obtained from the historical boreholes is acceptable regarding depth and thicknesses of the coal seams. Subsequently, 17 exploration boreholes were drilled in the early part of 2012 to evaluate the potential of the coal resources on the project area. Fifteen boreholes were drilled on portion 13 and another two were drilled on portions 1 and 10. The geological model therefore includes a total of 21 boreholes across the three contributing properties. Due to the fact that Portion 13 is not contiguous with Portions 1 and 10, the coal seams were modeled across the entire area, but coal resources were estimated within the respective farm boundaries only. FY 14 Exploration Summary No further exploration drilling was conducted during the financial year under review. Focus Coal Investments (Pty) Ltd, a 100% held subsidiary of Xceed, holds an option to fund further exploration to earn up to 74% in the project. A decision on whether to proceed with further exploration on the project will be taken during FY 15.

Geological Setting The Roodepoort Project is located in the Witbank Coalfield. The 2U and 2L seams are the most widely distributed over the area and were intersected in most of the boreholes drilled. A total of 26 boreholes were used in the Roodepoort geological model. The No 1 and 1A seams are also present. The 2 Upper seam averages 2.5m in thickness and was intersected in most boreholes drilled in project area. The depth from surface varies between 5 and 36m with an average depth of 21m. The 2 Lower seam averages 1.4m in thickness in this area. The parting thickness between the 2U and the 2L averages 0.6m. The 2L seam pinches out towards the north and eastern side of Portion 6 of the Roodepoort farm, but was intersected again on portion 6 of the Diepspruit property.

The No 1 seam is situated on average 9m below the S2L with an average thickness of 0.9m. The 1A seam is also present at an average depth of 3.5m below the No 1 seam with an average thickness of 0.8m. History Information for five historical boreholes on portions 6 and 12 of Roodepoort 40IS and portion 6 of the farm Diepspruit 41IS was obtained from the CGS. During November 2011, an additional 4 boreholes were drilled on portions 12 and 6 of the farm Roodepoort 40IS. The purpose of these boreholes was to twin each of the historical boreholes and to thereby validate the data received from the CGS. All four boreholes correlated well with the historical boreholes. The historical drillholes were therefore included into the geological model. In February 2012 another 21 boreholes were drilled on portions 6 and 12 of Roodepoort and on portion 6 of Diepspruit. All the boreholes were diamond-drilled using conventional equipment and TNW core size. As with the historical data, intersections are vertical and intersection widths are regarded as true thicknesses given the near-horizontal nature of the seams. Most boreholes were geophysically logged to verify depths and thicknesses. FY 14 Exploration Summary No further exploration drilling was conducted during the financial year under review. Focus Coal Investments (Pty) Ltd, a 100% held subsidiary of Xceed, holds an option to fund further exploration to earn up to 74% in the project. A decision on whether to proceed with further exploration on the project will be taken during FY 15.